… Wants Education, Health Subsidised On A Large Scale
The Federal Government has been urged to put in place the right economic policy framework in order to make its economy globally competitive, face up with the environmental sustainability challenge of phasing out fossil fuel and achieving zero net emission in a few decades away.
He also advised that the country to diversify her export base with a strong emphasis on manufacturing for exports and seriously position herself to become the factory of Africa, taking ample advantage of the tremendous opportunities the Africa Continental Free Trade Agreement (AfCFTA) offers – but above all, to benefit the lot of the Nigerian people.
This was stated by Mr. Goodie Ibru while delivering the Lagos State University, LASU, Ojo 2022 Distinguished Personality Lecture Series Titled: Imperatives of a 21st Century Nigerian Economy: An Entrepreneur’s Perspective on Thursday.
According to him, all stakeholders however especially business people, investors and entrepreneurs, have a role to play to engage with government to improve the business environment.
He added that Nigerian economy, despite its present challenges, presents huge opportunities for the discerning investor, local and foreign.
“And as far as the enabling environment for business is concerned, I am optimistic it will get better. However, we must move away from the subsidy mentality, especially the subsidy of consumption, which is wasteful.
“Instead of subsidizing petrol, subsidize education and health on a larger scale so that every Nigerian can be equipped to compete more equally in the market place of opportunities,” he stated.
He explained further that Nigeria with the Annual GDP growth averaged an anemic 1.68% in the last four years (2017 – 2020), very much below the GDP growth rates of African peers and oil producing and exporting countries.
“This is because the Nigerian Naira (NGN) exchange rate has historically been on a downward trend and steep depreciation since the introduction of Structural Adjustment Programme (SAP) in July 1986.
“However, the rate of depreciation has assumed a free fall in the last few years, due largely to the financial crisis induced by the collapse of oil prices a couple of years ago, the ambivalence of the government to market based economic reforms, (which are inevitable) and COVID-19 shut down of the economy in 2020.”
Ibru explained further that the current economic challenges the Nigerian economy is facing is largely because of the slow pace of economic reform.
“However, we must first commend the current Administration for a number of innovations it has brought to bear on the management of the budget cycle, specifically the passing of the Appropriation Bill by December every year and the maintenance of the January to December Fiscal Year, which has allowed for a great amount of certainty in business and financial planning both for government and business entities in Nigeria, thereby improving the business climate.”
“Another innovation it has introduced is the passage of an annual Finance Bill to go along with the Appropriation Bill. The innovations in the annual Finance Bill has led to a significant increase in the number of taxable entities, especially corporate firms paying their taxes, thereby expanding the tax base and increasing the ratio of revenue to GDP to 7 to 8 percent in the last three years, a significant feat.
“The passage and signing into law of the Petroleum Industry Bill in 2021, after 20 years of political bickering and legislative tinkering is a milestone achievement, as it has created the enabling Act for the transformation of the energy sector in Nigeria.
“However, overall, the Administration seems to have adopted an economic policy framework that does not give the pride of place to free market forces or the unfettered determination of prices in the market place. As a corollary, it has also been reluctant to put the private sector in the driver’s seat in the running of the economy.
The overall consequence of this according to him has been a slow pace of economic reform, the type that unleashes the pent-up energy of non-state economic actors who globally are the movers and the shakers of the economy.
“The Nigerian economy is currently characterized by price controls or a reluctance to allow market forces determine the prices of goods and services in key sectors of the economy: foreign exchange, downstream oil and gas, the electricity industry; and until the very recent, gas.
“But the blame is not entirely for the government, public policy makers or politicians. The reality is that there is a deep-seated opposition to the type of economic reform that will lead to market determination of the prices of these key commodities in Nigeria,” he said.
The reforms according to him should include Reform of the Nigerian Foreign Exchange Market; Reform in the downstream oil and gas sector; Cost of Subsidy; Reform in the Nigeria Power Industry; Need for privatization of public enterprises; Use of Public –Private partnership to deliver infrastructure and improving the environment for doing business in Nigeria among others.
Highlighting the role of entrepreneurship in national development, Mr. Ibru said entrepreneurs are great nation builders and there was the need to encourage it among the youth for national development.
“Nigerians are globally recognized for their entrepreneurial spirit and are ever willing to throw in their hats in the ring of entrepreneurship. Even as a society with an emerging entrepreneurial culture we have come a long way.
“The Federal Government must also be commended for its role in promoting entrepreneurship development through agencies like the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the Bank of Industry (BoI), which has been providing finance to Nigerian entrepreneurs, both large and small; and the recently established Development Bank of Nigeria (DBN), which was specifically established to finance small and medium scale enterprises, with financial contributions from multilateral and international financial institutions.
“However, government still needs to address many of the economic policy issues and administrative and regulatory lapses required for Nigerian and indeed foreign investors and entrepreneurs to unleash to the fullest their potential as innovators, problem solvers and nation builders.
He added that all sectors of the Nigerian economy are in need of entrepreneurial intervention, but sectors like Iron and Steel, the Power sector, the Gas sector, Manufacturing, Transportation, Infrastructure, Real Estate, Hospitality and Tourism, Solid Mineral and Agriculture and in Agro-processing are among the key areas where the massive involvement of Nigerian and foreign entrepreneurs are very much needed to turn the Nigerian economy around.
“I will want to encourage the leadership and management of LASU to take its promotion of Entrepreneurship Education to the next level by designing Bachelors and higher degree programmes in Entrepreneurship and Innovation, leading to the award of B.Sc. MSc. and Ph.D degrees.
I will also suggest the university sets up a leading and advanced innovation hub and enterprise development centre that will be a reference point for other universities in Nigeria and across Africa.
In all of this, at the back of our mind should be giving our youth the greatest opportunity to develop and realize their fullest potential as agents and standard bearers of growth and development in our great nation, Nigeria and beyond.