The Federal Government, Monday, disclosed that the country would not attain the much needed economic growth and development without a strong foundation and emphasis on made in Nigeria goods and services.
Speaking at the ongoing 22nd Nigerian Economic Summit in Abuja, President Muhammadu Buhari also stated that the diversification of the Nigerian economy remained a cardinal point of his administration, adding that his greatest desire is that Nigeria moves from import dependence to self-sufficiency in local production, becoming an export-led economy in goods and service.
According to him, this had been the commitment and mandate of this administration, while he noted that he has remained focus on it each day since the assumption of this administration. He said, “I am also delighted that you have chosen as your theme: ‘Made in Nigeria’ which lies at the heart of so many of the efforts we are making to lead us through this troubled times and to lay a firm foundation for the future.
“As I have said in the past, we need to diversify the economy so that we never again have to rely on one commodity to survive as a country, so that we can produce the food we eat, make our own textile, produce most of the things we use and create the right environment for our young people to be able to benefit and create jobs through technology. “There is clearly no better way to achieve this without building our economic foundation on made in Nigeria goods and services.
Fortunately, we have champions of made in Nigeria that had defied the odds over the years to produce locally and contribute to our economy.
FG taking steps to getting Nigeria out of recession
Also speaking, Minister of Budget and National Planning, Mr. Udo Udoma disclosed that the Federal Government is encouraging a ‘Made in Nigeria’ philosophy and preference in all its practices as part of ways to diversifying the country and take the country out of recession.
According to him, the Federal Government is already implementing policies aimed at getting the economy out of the current recession, key among which is taking action to reduce the disruptions in the Niger Delta.
Others, he noted, include fast tracking measures to raise funding from foreign loans, and other sources, to fund the 2016 Capital Budget; targeting capital releases to projects with impact on employment; speeding up the implementation of the social investment programmes among others.
He said, “As a Government, we are taking steps to encourage our officials to buy made in Nigeria products. We have also been working with the private sector and other related stakeholders to encourage more production and consumption of Made in Nigeria goods and services. “We believe that with more patronage, Nigerian producers will be encouraged to improve on quality and create jobs for our teeming youth.
There is no doubt that one of the fastest routes to grow our economy and create jobs is by encouraging our people to produce more, and export more. “This strategy will also generate foreign exchange that can help in stabilizing and strengthening the Naira.”
Economic position worst than stagflation
However, in his keynote presentation, Chairman, Nigerian Economic Summit Group, NESG, Committee on Research and Publication, Dr. Adedoyin Salami, lamented over the state of the Nigerian economy, stating that the country’s economic position at the moment is worse than stagflation.
He further bemoaned the absence of the necessary framework which was supposed to articulate national development preferences, while he disclosed that Nigeria’s Strategic Implementation Plan, SIP, falls short of a development plan. According to him, presently, the way it looks is this, we have uncertain policy attitude towards private capital and markets.
He said, “From my understanding of the numbers I have seen, current economy and business conditions are far from ideal and because of this, they offer us as a nation, an opportunity to revitalise and to re-engineer this economy. “What any economist fears the most is what is called stagflation. Where you have stagnant growth coupled with rising cost. Regrettably, our position is worse than that. What we have, is an economy that is shrinking in size.
So far this year, it has probably shrunk by about one and the half percent, when you combine both quarter one and quarter two.” “Yes, it is shrinking this year, but the problem did not start this year.
It started in 2013, since then the rate of growth of this economy has slowed, now it is contracting.” Continuing, he said, “There is the absence of the policy framework which articulates national development preferences and attainment powers.
I do commend the Minister of Budget and National Planning for the Strategic Implementation Plan that they have put together, but I must say, that falls short of a development plan. “Yes it is good for the year in which it is concerned, but it does not help investors; it does not guide the economy as to what our national preferences are and what our development paths are going to be.
In order words, where do we want to go and most importantly, how do we want to get there. Failure to do it, we cannot expect investors to invest.” Salami explained that four things should be borne in mind, when issues about the international environment and how it affects Nigeria are concerned, which according to him are: what is happening to global economic policy; what is happening to global trade; what is happening to global capital flows and what is happening to diaspora transfers to Nigeria.
According to him, of these four, only one remain favourable, while the current condition and the outlook for the other three have worsen and is likely to remain unfavourable for Nigeria, perhaps in the lifetime of this administration.
Despite high yield, Nigeria’s instruments remain unattractive
He further argued that despite their high yield, Nigeria’s debt instruments remain unattractive to foreign investors, a stark contrast to what obtained about three years back.
Added to all of these, Salami explained that the country is faced with low productivity, uncompetitive business environment, while the ease of doing business not making significant progress. He said, “Annually, Nigeria takes somewhere between $20 billion and $23 billion of diaspora transfers.
Capital flows, that is a bad story. It does not matter whether you look at it from a foreign direct investment stand or a foreign portfolio investment stand. “Believe it or not, this is at a time, when other emerging market countries are beginning to see a sustained and strong recovery in capital flows. “Worst still, and I draw attention to this very deliberately. As at today, approximately $13 trillion of investor money is invested in assets that at the point of investment, you know would produce a negative yield.
Yet, Nigerian instruments, 20 per cent yield and we cannot attract investments. Now it tells you just how things have changed for us. Two, three years ago, we seems to be the toast of the international market.” FG cautioned on pursuing stronger naira He further cautioned the Federal Government against seeking a stronger naira, saying that emphasis should instead be placed on how to ensure that the naira boosts productivity and put the country in an advantageous position.
He said, “One area that Nigeria must get away from urgently is that determination for a strong currency.
Do not get me wrong, I am not saying leave our currency unmanaged. However, what is the management of our currency aimed at? We have to work for a currency that puts us at our most optimal in the global economy. “We must work for a currency that enables us to be productive; that gives advantage to Nigerian producers in the face of international competition.
Other countries, especially in Asia, have used the auspices of a weak currency, combined with other policies that deal with social challenges to grow.
I see no reason why we will not. “A strong currency sucks in import, subsidises the middle class at the expenses of pretty much everybody.” He also declared that the government is doing itself a great disservice due to its inability to communicate its progammes and policies efficiently.
“I am aware of many things that are going on. There are road maps in various parts of the government, but all of them need to be brought together, articulated, joined together into a development plan that the private sector can understand and take its lead from.
Whether we like it or not, that is an imperative that must be achieved before the end of this year,” he added. Salami also bewailed the fact that more than half of individuals within the age range of 18 and 25 are either unemployed or under-employed.
“To think that Nigera is a young population, where pretty much half of our population is in the age group between one day and 25 years old. If so many are either unemployed or underemployed, we destroy hope; we create a fundamental systemic challenge for social coherence and economic progress.
“We create a fundamental challenge for economic inclusive.
If this is to be a Nigeria for everyone, then the economy has to be ionclusive, made is Nigeria is not a thing that we have a choice about,” he explained. Furthermore, Salami maintained that for made in Nigeria is going to be successful, the country must recognise global trends, identify those that are disadvantageous and manage them, whilst looking at those that offer opportunities and exploiting those opportunities. Continuing, he said,
“The policy environment must improve very sharply, it must be consistent, stable, but at the heart of it, it must be internally coherent. We cannot have a situation where fiscal, monetary and regulatory policies are looking at different directions. They must complement each other.
“But at the heart of all of them, they must convey surefootedness on the part of our economic managers.
We cannot continue to have a situation where, whether we like it not, policies managers do not recognise the risk of investment.
“Investment is about risk taking and if that is the case, our policy environment must be such that would show investors, whether local or international, that they are welcome and that their investments are going to be protected because we want them to succeed.
From time to time, our position has not always demonstrated that.
“Whether we like it or not, our policies must create advantages for those operating in Nigeria. Our policies have to change.” However, he warned that, “Let me make this point, to those who are our leaders.
We do not live in the past. It is not going to be about what has been done, it will always be about what remains to be done. “Whether we like it or not, whilst you will doubtlessly yet be praised for the things that you have done, it is those things that remain undone, that remain to be done that impinge and pinch on us as a nation and it is against those gaps that you would be measured.”