The Next Big Thing — Economic Confidential

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The Next Big Thing — Economic Confidential
President Muhammadu Buhari

Post COVID-19: The Next Big Thing

By Ademola Bakare

As nations embark on measures to mitigate the effects of the novel coronavirus, COVID-19 pandemic, on its populace and reset their economies, it is no longer news that the virus which the world is frantically seeking its cure is not leaving any time soon.
The pandemic has also by virtue exposed the abysmal state of our systems in every facet, most especially, the education and health sectors.
In the early 50s to 80s, the continent was known as the food basket of the world, providing raw materials for the industrialized nations. Nigeria especially prided itself in its outstanding agricultural capacity.
This was evident in the Western region where late Chief Obafemi Awolowo used cocoa as its main source of revenue to do exploits in the region, building the first 25 storey building in the continent.
He, through the product established the first Radio/Television in Africa and also, the Liberty Stadium in Ibadan. This is not to talk about his novel educational policy – free education, in the entire region among his other laudable programmes. All funded through cocoa. No other administration after him took the vision beyond Awolowo.
As part of a healthy competition, Chief Michael Okpara, the then Premier of the Eastern Region, tapped into its main stay, oil palm, to develop the region. And history told us how Malaysia, the largest palm oil exporting nation came to Nigeria, to pick the seeds in order to develop their own oil palm industry. Today, Nigeria is one of the biggest importers of the product from even Malaysia.
The Groundnut pyramids of the North brings a nostalgic feeling of when years back, the pyramid once adorned the flip side of one of Nigeria’s banknote. The Premier, Ahmadu Bello, the Sardauna of Sokoto, used resources mainly from groundnut to drive the development of the northern region.
Nigeria was also an investment destination for world known industrialists and business men, and local entrepreneurs were doing great. The country was the base for Leventis Motors and its super malls, Kingsway stores, VONO Products, Bata Shoes with its brand, COTINA shoes, LENNARDS shoes, (all producing shoes from tanned leather here in Nigeria) and Michelin Tyres in Port Harcourt, etc.
In that era, we were riding in locally assembled cars, truck, and buses. With Peugeot in Kaduna, Volkswagen in Lagos, ANAMCO in Enugu, NISSAN and TOYOTA Motors in Lagos and LEYLAND in Ibadan. We had STEYR in Bauchi producing agricultural tractors and its components. VONO products then in Lagos were producing the seats. We can remember the Odutolas of this world who engaged in tyre production and other products.
There was also EXIDE Batteries in Olodo, Ibadan, producing car batteries not only for Nigeria, but the sub-region, West Africa. IsoGlass and TSG in Ibadan, and Oluwa Glass in Ondo State, were producing the automobile windshields component. FERODO in Ibadan, produced tyre brakes shoes.
Noteworthy of the era was that, Dunlop and Mitchellin were producing tyres from rubber plantation in River State, and today, the rubber has disappeared. Neither has any administration, past or present, made efforts to revive it.
We had SANYO in Ibadan and KENWOOD in Lagos and by their establishment, we were able to listen and watch television simply because the assembly plants were sited here. We had THERMOCOOL producing fridges, freezers and air-conditioner for our comfort.
The textile industry which used to employ millions of Nigerians, like the United Nigerian Textiles Limited (UNTL), based in Kaduna and Chellrams Stores in Lagos, were producing fabrics from cotton grown here in Nigeria, not imported.
There was Nigeria Wire and Cable on Ibadan-Abeokuta road, producing quality cables through which we enjoyed safe and free electricity flow into our homes and offices. There were many other indigenous companies that contributed immensely to the nation’s gross domestic product (GDP) and economic greatness. They were private sector investments.
How about some government-initiated enterprises like the Nigeria Airways, Nigeria Railways Corporation and Nigeria National Shipping Lines? These enterprises were pride of the nation, Nigeria, and Africa,

Nigeria because of its enormous economic power and resources, naturally became the economic giant of Africa.
However, the petrol-dollar economy fuelled with the discovery of oil moved the continent, and particularly Nigeria, from prosperity to poverty. This oil is today an albatross to our economic growth and sustenance as we are at the mercies of the giant players and world powers who manipulate prices as it suits them.
Nigeria began its descent to this sorry state, particularly with the incursion of the military into power in our polity. In that era was a head of state who boasted that Nigeria’s problem was not money but how to spend it.
Corruption reared its head, and it is still an unhealed cancer plaguing the country. Monies for development were stolen and embezzled, and no tangible effort was made to punish offenders. The cancer grew in bounds, and we lost focus.
Resources were further plundered and the nation drifted as expected into poverty. A clueless former military president, once lamented after dribbling himself and Nigerians to a cul-de-sac, that Nigeria’s economy had defied all economic theories. Visionless leadership.
The rape on the nation’s resources continued with the return of the country to democratic rule, though short-lived, 1979 – 83, the military made its return and the rest as they say is history.
Due to the absence of consistent development of its natural resources, lack of commensurate infrastructure to sustain the industry and failure to leverage the value chain in order to better the welfare of its people, agriculture took the backstage for the dollar spinning oil.
Her citizens began to seek greener pastures abroad because foreign nations opened its doors and provided the opportunities to thrive. Their exploits in all walks of life are immensely evident in medicine, academia, technology and many more. The subsequent brain drain that followed further depleted her resources.
That we found ourselves in this morass shouldn’t have surprised us. The journey started decades back. But we were not discerning enough or pretended not to know that the path we had charted, neglecting the first bride, agriculture, was a journey to economic leprosy, and if care is not taken, death. The nation’s situation is made worse by its internal security challenges, especially the incessant herders/farmers crisis that has affected the food producing zones in the country, thus spiking food inflation as farmers are no longer able to go to their farms.
In 2016, Nigeria slipped into economic recession, and it was hoped that lessons learnt from the crisis would have sufficed to make us rethink how the government and we, Nigerians, conduct our affairs.
Unfortunately, nothing on the table seems to suggest our seriousness in reviving the old good era of economic prosperity, except for the Governor of the Central Bank of Nigeria, Godwin Emefiele, who had demonstrated the zeal on economic diversification. Other government institutions are seemingly on holiday and clueless on ways to fire the economic diversification as poverty ravages the people.
We were practically importing everything including toothpicks until the CBN Governor in 2016, in the midst of economic crisis, announced the suspension of 41 items from the forex official window. He later added two other products. Godwin Emefiele had identified those items as the ‘big elephant’ draining the nation’s reserves. The import bills were so huge that it created exchange rate crisis for the Naira. At a time, the local currency exchanged for N525/$1, before measures were taken by the Bank to arrest the drift.
However, COVID-19 with its destructive escapade, has a lesson for us all to learn from, backward integration. I wonder if the government had not shut its borders in August 2019 to stimulate local production of products we were importing, especially rice, and rein in enterprises of smugglers and economic saboteurs, before the pandemic began, where would Nigeria have found itself when all nations in the world shut their borders, and were busy fashioning how to mitigate the impact of the virus?
COVID-19 is not only a reawakening call to get serious with the economic diversification, but also to look inwards, join hands together with those charged with the responsibilities of running the government and the economy. This is the Next Big Thing.
The next big thing if we are serious as a nation, is for all of us to do all we can to avoid another recession. The federal government and the CBN especially must work together and maintain a sustained collaboration to facilitate inclusive growth and development across priority sectors, particularly, those that are employment elastic and have high economic impact. This is highly imperative if Nigeria must avert another economic crisis.
The issue of power, electricity supply is critical as Nigerians have not been impressed with the government despite huge finances that had been committed to the sector. We are all aware that it was the reason that led many companies to relocate their businesses to neighbouring countries leading to job losses and turning what used to be business factories/warehouses to worship places.
The federal government should also step up its effort with speed and aggression to arrest restiveness and banditry in the country, while programmes and initiatives to tackle the high rising unemployment rate should be put in place. Unemployment largely has been attributed to be the cause of the pervasive insecurity challenge in the country. It is a timed-bomb waiting to explode.
The Central Bank of Nigeria has demonstrated its willingness and readiness with its various interventions, particularly at the outbreak of the pandemic, by providing cheap loans to households and businesses affected by the virus. It has also demonstrated its readiness to improve access to credit for not only smallholder farmers and MSMEs, but to also enhance consumer credit and mortgage facilities.
I urge the CBN to intensify its effort towards diversification, particularly in agriculture and non-oil products. It is also pertinent to expand its economic commodities under the Bank’s commodity development initiatives to quicken the pace of food and raw materials self-sufficiency, while strengthening linkages between farmers and agro-processors to help unlock private capital flows from financial institutions to smallholder farmers.
However, the fiscal authority, the federal government, and its agencies must brace up with matching initiatives such as providing sustainable infrastructure that can generate growth and development. This is the yearning of Nigerians.

Ademola Bakare, a media consultant writes from Abuja.

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