WERE Nigeria’s government to be taken seriously, its roll-out, two weeks ago, of a pair of plans for an industrial revolution should have greatly excited investors, development partners and the long-suffering populace. But economic miracles are made by more substantial, purposeful policies and actions than the flip-flops of our fickle policymakers.
Industrialisation requires the right mix of policies, honest leadership, discipline, sacrifice and the elevation of national interest above self and primordial interests by the leaders. These are precisely the qualities that are signally absent in Nigeria’s leadership. As President Goodluck Jonathan sees it, the Nigerian Industrial Revolution Plan and the National Enterprise Development Programme will transform the industrial landscape, boost skills development, enhance job creation and conserve foreign exchange. Not only would NIRP “address all the major physical constraints impeding industrialisation, improve the investment climate and promote made-in-Nigeria goods,” he said it would also leverage on “areas” of competitive and comparative advantage, such as agriculture, metals and solid minerals, oil and gas, construction and light manufacturing. Its twin, NEDEP, would “re-position the micro, small and medium enterprises sector as the major driver of job creation and inclusive economic growth.”
But Jonathan immediately betrayed the shallowness of his vision when he promised that the government would support local manufacturers by buying vehicles made in Nigeria. There are no made-in-Nigeria vehicles; only a few assemblers of completely knocked down components are available! The Nigerian economy is disjointed and disarticulated. Evidence of this is easily found in its automotive policy where tariffs were hurriedly raised last October on imported vehicles when there was no viable local industry in place, and without the basic building blocks for one. Our steel sector, the backbone of any vehicle industry, is weak and inefficient; there is no support industry to provide substantial local value-added components and no infrastructure to support heavy industry. Japan’s ambassador to Nigeria, recently reminded us that it could take up to 10 years to build up a truly viable local auto industry.
Nigeria’s leaders are not serious. The Asian Tigers – the highly developed economies of Hong Kong, Singapore, South Korea and Taiwan – achieved rapid industrialisation (1960s-1990s) by prioritising development policies that, according to the World Bank, still propel them to this day. By concentrating on factor accumulation and sound macroeconomic management accompanied by very high investment levels in infrastructure and human capital, avoiding external debts and maintaining fiscal discipline, the four became advanced high income economies specialising in their areas of competitive advantage. “Stable macroeconomic environments were the foundations upon which the Asian Miracle was built,” the International Monetary Fund enthused.
The reverse is the case in Nigeria. Abuja is completely lacking in fiscal discipline, running down external reserves, savings and special funds and borrowing irresponsibly. It has failed to invest enough in infrastructure, health and education. Electric power supply, at about 4,000 megawatts, is laughable with industries generating 72 per cent of their own power; transport is chaotic with a miserable rail sector, dilapidated roads, poor water and aviation sub-sectors and low investment. Agriculture and minerals, in which the country is richly endowed, are neglected, contributing about 41 per cent and 0.3 per cent respectively to Gross Domestic Product.
Industrial revolutions, since the first one in the 18th century England, are driven by innovation, massive investment in infrastructure, education and training, sound macroeconomic policies, private investment and railways. As in England and continental Europe, railways were pivotal to industrial revolution in the United States in the 19th century, creating national markets, facilitating movement of goods and persons and employing millions. They are also ubiquitous in Japan, Europe, India, South Korea, China and Brazil, all of which have industrialised. A government that refuses to break the state’s railway monopoly and open the sector to private investment, but continues to borrow from China to sink into an archaic system, is a joker.
There must be linkages in the economy, with policies that will deploy our natural advantages in agriculture, mining and human capital to a coherent whole, creating industries and an export-led economy. The government only pays lip service to export diversification while continuing to rely on oil and gas revenues. But China adopted research from the West, encouraged commodity markets and reformed its land tenure system which, by the 1980s, had enabled 200 million small holder farms to feed 1.3 billion people.
We do not need new grand slogans; we have enough master plans to drive rapid development. The master key is policy. Jonathan needs to understand that it is the private sector that can drive development and create jobs. The IMF, in recommending the Asian Miracle model for developing nations, said budget deficits should be kept within their financial limits; Hong Kong, Singapore and Taiwan eliminated external debts altogether and South Korea’s debts were sustained by its high levels of exports.
Moving forward, we need to invest in roads, dams, education, health, environment and water . The urgency to remove government from managing downstream oil and gas, ports, power, steel and railways, among others, is brought home by the total rot in companies run by the state. Ramping up the privatisation programme and developing the export processing zones along with promoting commodity exchanges, are crucial. We need to reverse a situation where farming that employs over 60 per cent of the labour force, contributes only 41 per cent to GDP, and manufacturing five per cent.
Revolution is not achieved by cheap talk; our leaders will need to roll up their sleeves, imbibe the lessons that created the Asian Miracle and propelled Japan and Germany from the ashes of defeat in World War II to become two of the world’s largest economies in just two decades. There is no foundation for an industrial revolution in Nigeria today until we invest massively in infrastructure, education and training, and put the right policies in place that will allow the private sector to take the lead in development.
No comments:
Post a Comment