By Rasheed Akinkuolie
Nigeria’s economy had for over three decades now been presided over by the brightest economists from all over the world, ranging from the top echelon of the World Bank, ADB/ADF, the Academic Community and other economic pundits.
However, The Human Development Index (HDI) of Nigerians which is an aggregate of the general standard of living of the people, in terms of access to education, health care, housing, security, potable water and life expectancy etc have not faired well, and in most areas have deteriorated significantly.
So, what went wrong ? what can we do on the short and long term, and is there need for policy and orientation shift to reverse this trend ?
The problems are enormous. Nigeria has the highest number of children who are out of school in the world, 12 million of them followed by 5 million in Pakistan.
The Minister of Water Resources in a recent interview declared that only 7% of Nigerians have access to potable drinking water, which is not a wild statement.
Life expectancy in Nigeria at under 50 years is very low even by African standards.
There is poor access to medical service, such that malaria takes over 200,000 lives annually. The rich and influential however go abroad for medical treatment, leaving the poor to their fate.
The housing deficit stands at 18 million units and at least 70% of Nigerians live in shanty towns without sewage system, schools running water and health services.
Nigeria, despite being a major exporter of crude oil, still imports refined petroleum products worth several billions of USD a year, and on top, hire contractors to import the products who are paid huge subsidies.
Nigeria is a heavy importer of food despite the abundance of rare vast arable and fertile lands under the tropical sun and fresh waters, which are ideal for farming organic foods and exotic fruits.
The security situation in the country is very precarious, such that the movement of people is restricted and cautious because of abductors and kidnappers. These are some of the plethora of problems confronting Nigeria today.
These challenges in most cases require simple solutions, but were often complicated by dubious economic policies, which are too theoretical, confusing, illogical, impractical and sometimes unreasonable .
For example, If Nigeria’s economy is the fastest growing in the world, then, how come that tens of thousands of Nigerians are fleeing the country to Europe and other parts of the world ?
If Nigeria is finally out of recession, why can’t the effect be felt now, instead of in decades to come as being suggested by our economic experts?
In essence, there is no workable plan in place and the Nigerian people are unhappy, hungry and at the receiving end of poorly conceived policies.
Market economy and privatization which is a refined form of capitalism was adopted by Nigerian policy makers in its poor and distorted form.
The private sector in developed countries operate freely, without usurping the responsibilities of the government towards the people in the provision of free education, health care, subsidies to farmers, the dole to the poor and other social services.
The enthronement of the private sector in mainly running the economy in Nigeria is simply not working. There is therefore urgent need for policy review. After all, when you are down, you stop digging, and the best way out is to come up.
In the new direction, the government must take control of the immediate welfare of the people by investing directly in education, health care , and other social services, as it was in the early years of Nigeria’s independence.
The free education policy in Western Nigeria can still be replicated today. It is the same with other social welfare services rendered during the first and second republics.
The new policy direction must be practical actionable and address the problems directly. For example, the problem of the children who are out of school can be dealt with by building schools with basic classrooms.
The Lagos State school model during the Second Republic from 1979-83 is a good example to follow. The teeming unemployed youths and Youth Corpers could teach in these schools and by so doing kill two birds with one stone.
The huge deficit in housing is also an opportunity to provide affordable social houses for ordinary citizens and create mass employment.
A housing project of 2 million units has the potential to employ more than 5 million artisans as plumbers, electricians, carpenters, masons, tilers, Labour supervisors, labourers and other accessory jobs.
How else can medical tourism stop other than to build world class hospitals, which Nigeria as a country can easily afford ?
The country would by so doing save thousands of lives,make huge savings in foreign exchange on medical treatments abroad and preserve its honour.
These projects should be financed from
Nigeria’s current 40 billion usd Foreign Exchange Reserves which is currently open to importers, all and sundry to import private Jets, exotic wines, cars, caviar and such luxury items which add little value to the economy.
The same principle should apply to the building of refineries and other government owned enterprises (GOE) like in China. The giant Chinese Construction and Oil Companies operating internationally are owned by the Chinese government and run by trusted party members and competent managers.
Finally and most importantly is the need to stop the continuous decline in the value of the Nigerian currency. The easiest way to strengthen the Naira is for the CBN to stop funding luxury imported goods directly from Nigeria’s scarce foreign exchange reserves.
But, the CBN has been circumventing this control by funding BDCs and unduly concerning itself with the parallel market rates. When sponsored alarms are raised in the media about falling value of the naira in the open market, the CBN reacts by pumping money to the BDC apparently to ‘shore’ up the value, but are actually, willfully or naively enriching the BDC operators and not solving the problem.
In principle, individuals who which to exchange their naira at whatever rate should be free to do so. This should not be the concern of the CBN. If the value of the naira is strong within Nigeria, the demand for forex would reduce. I will give hereunder an example which could be a guide for our policy makers.
When Sékou Toure, the late President of Guinea Conakry opted out of the CFA Francophone monetary zone in 1958, he took a calculated risk and he had to sail or sink with the decision.
He created the Guinean Franc and pegged the official rate at 2,5 Guinean Francs (GF) to 1 USD. The parallel market rate was 200 GF to 1 usd.
What Sékou Toure did was to give local value to the GF which rendered the USD and other foreign currencies irrelevant in the country.
The government provided free education from primary to university level and put his children in the same school system.
There was free medical services and extreme medical cases were referred abroad, (usually to Morocco) at government expense.
Sékou Toure issued ration cards to every family, including diplomats; Nigerians, Americans , Germans to purchase rice, meat, fish, sugar , vegetable oil at reasonable prices. A 50 kilo rice was sold for about 10 usd. The State House was also supplied from the same source. This policy of feeding and providing for the people directly worked magnificently well. Violent crimes was rare, beggars were not in the streets, there was no prostitution and human trafficking in the country. This policy however did not shut down private sector operators who were also thriving.
The policy of food distribution to the public is not alien to Nigeria. There was the Nigerian National Supply Company (NNSC) during the second Republic, a government agency through which rice, sugar, vegetable oil, milk stock fish were supplied to civil servants and the general public at reasonable prices.
This program should be revived to stem the current level of hunger in the land. These simple remedies are more effective than the fabulous economic statements which have not benefited the Nigerian people in any form.
• Ambassador Akinkuolie Rasheed was the Director of Trade, Investment and Policy in Nigeria’s Ministry of Foreign Affairs.