What Nigeria must do now

As the economic retreat convened by the government to offer solutions to the current economic challenges facing the nation begins today, BusinessDay is at pains, once more, to point out that the current economic crisis faced by Nigeria, while been externally induced, its severity is clearly our own making. And the answers to the crisis are so obvious and have been enumerated severally by so many Nigerians, summits and institutions. What is required is the necessary political will to embark on the required reforms to take Nigeria out of this quagmire. This retreat cannot and must not be another ‘talk shop’ as we must now move from constant talk to solving problems.

BusinesDay enumerates below what we feel the government must do to kick-start the economy and launch Nigeria on the path of sustainable growth and development.

The government needs to end the current budget farce, commence immediate spending to reflate the economy and thereafter begin the process of preparing the budget for next year. Happily enough, one party controls the federal government and both chambers of the National Assembly.

The government also needs to ensure appropriate pricing of the naira so as not only to remove the widespread pain and dislocation faced by manufacturers but also to unlock stranded flows waiting to come into the country. Appropriate pricing will ultimately ensure rate convergence between official and parallel market rates and remove the arbitrage opportunities, corruption and inefficiencies the current situation promotes.

In the same light, the government must immediately end the controversial fuel subsidy policy and deregulate the downstream sector to attract badly needed investments that will take Nigerian away from mere crude exporting to value addition as a first step towards diversifying the oil industry.

It should also be clear to the government by now that it’s preferred statist approach to handling the economy is, at best, outdated. The government just cannot single-handedly develop the country. The money just isn’t there. Therefore, it must end its perceived disdain for private capital and the philosophy that drives it. It needs to enter into honest dialogue with the private sector to identify and assuage concerns. What better way to demonstrate its seriousness and belief in diversification of the economy especially in these days of declining oil revenues than by diversifying away from crude oil to refined products, promoting petrochemicals and freeing government clutches on gas pricing and delivery. This will fund and enable diversification in more difficult sectors.

Similarly, the government should fast track power reforms, name successors to the National Electricity Regulatory Commission (NERC) speedily, open up the gas sector to investments and resolve disputes over Production Sharing Contracts (PSC) gas discoveries.

Furthermore, there should be engagement with the private sector in an honest Public Private Partnership (PPP) arrangement to develop the country’s infrastructure with tolled roads, bridges and railway. A mutually beneficial engagement with the private sector is not just good economics; it is already a matter of survival. The spate of arbitrary cancellations of negotiated PPP contracts should stop immediately.

Currently, four of the top five largest global companies are ICT firms. This clearly shows us the way to the future. The government needs to engage with stakeholders to open up the ICT sector to massive investment and participation. We do not see why Nigeria cannot take the place of Kenya as the technology hub for Africa.

The government also should do the simple things needed to open the agric sector and also get global players in to revolutionalise the sector.

One of the most potent yardsticks of measuring human development is access to healthcare. The government must expand health insurance to include all Nigerians by using individual GSM numbers. The government must also stem the tide of medical tourism by partnering with the private sector to establish at least three top world-class hospitals in different parts of the country – say in Abuja, Lagos and Enugu.

Finally, the government should do more to open up the solid mineral sector by getting global giants in mining into the country. This sector alone could challenge the petroleum sector in terms of revenue generation.

The economic summit or whatever the government chooses to call it, may very well be the necessary first steps in this regard, however sensible, tough pro growth decisions must follow if we are to put Nigeria on the path to prosperity again