VISION 2020 AND YARADUA'S WRONG STEPS
President Yaradua has made it a singsong the vision of making Nigeria one of the top 20 economies by the year 2020. He has made it an issue to "assure you" (the reader) that Nigeria would become one of the 20 largest economies by the year 2020. Since my last article entitled "Labor strike and Nigeria's development agenda", I took time off to study the President's actions and inactions. I don't just write; I wait to write what matters to me and touches my heart.
President Yaradua is a graduate of the largest University in Sub-Saharan Africa, which arguably is one of the best in Nigeria. He studied Analytic Chemistry at the Ahmadu Bello University Zaria, which obviously should equip him to analyze, not only chemical matters, but political and economic counsels he may get from his advisers.
To become one of the 20 most industrialized countries in the world by the year 2020, Nigeria must systematically and practically encourage local production of goods and services. I was sad and disappointed when I read that President Yaradua gave approval for the re-opening of one Ibeco cement factory in Port Harcourt which only imports and re-bags cement. The import is to crash the price of cement in Nigeria and break the monopoly of local cement manufacturers like Dangote.
The Manager of Ibeco cement factory boasted that within 40 days (30 days freight time from China to Nigeria and 10 days for re-bagging) his company would flood the Nigerian market with cheap cement. While shallow thinking jubilated, deep and visionary consideration mourns for Nigeria. According to newspaper reports, some Permanent secretaries of relevant Ministries and the Customs leadership advised President Yaradua to approve the re-opening.
It is indeed in the interest of consumers that the price of cement (and of any other commodity) should drop. However, importation of cement as now being encouraged by President Yaradua is definitely not a rational decision. Elementary economics teaches that importation of commodities rather than local production creates jobs only for the exporting countries and eats away at the foreign exchange of the importing countries.
President Obasanjo encouraged local production of cement whose local demand now stands at about 13 million metric tons a year. Huge investments have been made by local manufacturers who now produce about 10 million metric tons per annum, hoping to meet local demand very soon. The Obajana cement factory was commissioned in May this year and is currently set to produce 5 million metric tons per annum. Other cement factories are either being built or are about to be built. Jobs are being created for thousands of people. What common sense does President Yaradua's decision make when juxtaposed with what I have said thus far?
In order to fight poverty, jobs must be created. Yaradua has spoken about job creation being a focal item on his development agenda. How can importation-driven economy, as he seems to be promoting, result in job creation for Nigerians? With billions of dollars being invested in building state-of-the-art cement factories and renovating old ones (I was deeply impressed when I drove by the Benue Cement Company this week and saw how the renovation of the company has eliminated the bellowing of dust that used to pollute the area) by people who could easily have made stale money importing the product, Yaradua is sending the message that local production does not pay.
I am tempted to believe that all the government officials that advised President Yaradua to approve the re-opening of this cement-importing company must have got their palms greased. However, President Yaradua must take the full blame for the bad consequences of his ill-advised approval. The buck stops at his desk.
I call on the new Minister of Industries to urgently impress upon President Yaradua that he has taken a wrong step that will not take us any near the vision of making Nigeria one of the 20 most industrialized economies in 2020. Furthermore, I appeal to President Yaradua to tactically reverse his approval by making it clear to managers of Ibeco cement factory that the presidential approval is for local production of quality cement and not for importation of cement whose quality we are not even sure of. Yaradua must not scare away Nigerian entrepreneurs who might start getting the message that government cannot protect local initiative.
Japan became what it is today by encouraging local production, quality education, and instilling in her citizens the belief that their products would be sent to every part of the world (this was even made into a song). It must be stated also that for over 250 years Japan closed her borders to external trade, while she developed local skills and technology. Even after the Second World War when her economy had been destroyed, she re-built through the steps I have stated earlier.
The Koreans encouraged local production and sourcing of tools through the inspiration of General Park who was then hated for his policies. Education was placed on the front burner. South Korea is now a developed country. I hope President Yaradua is not being deluded. 2020 is only 13 years away, and there is no time to waste encouraging importation of anything. If we must break monopoly with regard to any goods and services, it should not be through importation.
We can encourage the emergence of more Dangotes, who have transformed themselves from petty retailers to substantial manufacturers. A leader who must lead his people from one phase to another superior phase of development must have to his credit the emergence of a generation of manufacturers, investors, and inventors. May it not be said that in the time of President Yaradua factories were shut down because he encouraged retailing rather than creative manufacturing. I am a sad man indeed.
The sale of the refineries at Kaduna and Port Harcourt to Blue Star group (A group of Nigerian Entrpreneurs) raised some dust. The group decided to pull out and asked for a refund. President Yaradua, from my reading did nothing to encourage the group; not even against glaring facts that the NNPC would like to continue milking the nation through those refineries into which a lot of money has been pumped without sustained productivity at levels that are commensurate with the expenditures on them. Government cannot afford to allow waste of public funds without returns. PHCN (formerly NEPA), NITEL, NNPC, Nigeria Airways, Ajaokuta steel company, NRC represent efforts of the Nigerian government in power, communications, energy, aviation, steel, and mass transit respectively, which are very critical to any nation's development. Informed people know what became of government investment in those sectors. Giving the NNPC a deadline to efficiently manage refineries they have failed to successfully manage since their building is like asking a robber to protect a bank he has been robbing for a living.
President Yaradua is not making any sense to me. I read in the papers that a new electricity tariff shall soon be announced (which tariff, I understand would only be upward in spite of poor service delivery). This does not sit well with the promise by President Yaradua to declare a state of emergency in the energy sector and his presidential approval for import of cement to drive down prices.
Common sense should dictate that if Yaradua is so much concerned about consumer price drops then he should also without delay approve the importation of electricity from the Lagdo Dam of Cameroon to serve the North-Eastern part of Nigeria. I visited this dam last year and learnt that out of the 4 turbines, only one is being used (The remaining 3 can be put to Nigeria's use through some business negotiations with the Cameroonian government). Power supply in the province is un-interrupted; and this Northern Province of Cameroon shares a lot of affinity with North-Eastern part of Nigeria culturally and economically. It is more expensive to build power lines from Kainji dam to Yola, for instance than doing same to link Yola with Lagdo Dam, which is less than 300 km from Yola.
Importation of electricity from this dam will encourage more production and job creation in Nigeria, which will eventually drive down prices of some goods and services whose prices are now up because of the torrid business environment, primarily caused by decrepit infrastructure, chief among which is the sorry state of electricity supply. This is the kind of importation that Yaradua should encourage in the short term while new power plants are being built.
Any country that has made significant progress has done so by placing quality education on top of her priorities. President Yaradua declared that his first, second, and third priorities was the economy. I hope he knows that there is no economy without well educated people to manage and grow it through modern skills and knowledge acquired through functional education.
Recently, the Central Bank of Nigeria announced that as part of the Financial Systems Strategy (FSS) the University of Ibadan, University of Nigeria Nsukka, and the Ahmadu Bello University Zaria were selected as centers to train people in information technology and Business management (Accounting and Economics). To retain the best brains in Nigerian Universities, the government of Yaradua cannot afford to pay University Professors a small fraction of what Senators, and other elected officials are being paid in accordance with the new pay regime announced by the RMFAC. Quality education cannot be isolated from quality remuneration and funding. In negotiating with ASUU, the new remuneration for Senators should be kept in view with regard to a Professor's salary.
The unwieldy cabinet of President Yaradua and strange contrivance of portfolios has failed logic test. The distribution of senior portfolios does not reflect federal character either. I hope Yaradua's team of Advisers will provide sufficient value for their pay.