Nigeria’s Economy and the Bad Manager Syndrome, By Olufemi Boyede

We take one step forward and a hundred steps backward. Policies are invented from the moon and almost circumvented at the point of implementation, while players and policy handlers carry on as if the nation is a pawn on a chessboard. Obviously no nation can make appreciable progress if bedeviled with incessant policy summersaults…

I have been downcast of late. I have not felt this way for a long time. Although, as I write, I oscillate between Nigeria and Canada, while also getting involved in some other international assignments, and I feel so bad and terrible that my country of origin has just refused to wake up. At my first international event in London, U.K. in September 2001, one of my key resource persons, the world acclaimed Kevin D’Souza actually categorised Nigeria as a “significant underachiever”. I recall that in concluding his presentation that day, he charged the Nigerian big-wigs present to do all within their powers to “reawaken this sleeping giant on the continent of Africa”. It is depressing that almost twenty years later, we are yet to heed that call. I personally feel horrible that while I have spent a good part of my adult life trying to help in enhancing the nation’s economy in my own little way, from my own little corner, it seems that we remain happy always playing the circus game, year in, year out.

We take one step forward and a hundred steps backward. Policies are invented from the moon and almost circumvented at the point of implementation, while players and policy handlers carry on as if the nation is a pawn on a chessboard. Obviously no nation can make appreciable progress if bedeviled with incessant policy summersaults or when supposed knowledgeable people are displaying crass ignorance.

The 2019 budget readily comes to mind. I have taken time to go through the breakdown of the document and am really aghast at the negative, discouraging and disappointing relegation of the non-oil exports sector by government this time around. If this is an indication of government’s plans, then we can conclude that rather than promote exports, they are actually asking exporters to fold up. Already a myriad of exporters have closed shop. Some of the thriving industries committed to non-oil export like the have folded up, while former leading exporters like Michelin, Dunlop, and African Textile Manufacturers (Kano) have either relocated out of Nigeria or disappeared completely. Although efforts are being made to revive the once thriving Muti-Trex Limited, which played a great role in the export of cocoa and its derivatives, there are no signs that it is getting off the ground again soon. This is just one of the many cases that the country is nursing.

Apart from the lip service being paid to the non-oil export sector, several other sectors in the country are dying by the day due to inconsistent policies and apathy on the part of policy handlers. Talking about non-oil export, how can government, for instance, provide N305 billion for subsidies on fuel imports, while proposing N5.12 billion for Export Expansion Grant (EEG)? As of today, even at the drastically reduced ceiling of a 15 per cent grant rate, there are up to 10 exporting companies whose EEG claims per year exceed N10 billion each. My opinion is that reducing the budgetary provision for EEG to a paltry N5 billion, implies pegging the volumes and values of exports to a ceiling where claims cannot amount to more than the N5.12 billion.

In the 2019 budget, there is absolutely no mention of the Export Development Fund, the new basket proposed by the Nigeria Export Promotion Council (NEPC) to stimulate small and medium-scale enterprise (SME) exports. And all these under an administration that has been propagating economic diversification and a zero oil, export-driven economy. One wonders if the NEPC was consulted at all before such a cold shoulder was given to the non-oil exports sector?

The irony of the Nigerian situation is that we want to compete with nations where power supply is uninterrupted and where the economic indices are always green, without getting to work on those things that will bring us to par with them. We have deliberately, due to ignorance, the lack of will power and outright loss of focus, left those things we are supposed to do, while clinging to straws, only to lament at the end of the day.

…the potential in the non-oil export sector is so huge. Every state in Nigeria…can boast of at least two products that can thrive well in the global market and earn huge income in foreign exchange for the country. Niger State is the world’s largest producer of shea nut butter… Why is Niger State not the world’s largest exporter of shea butter?

Many, for instance, do not know why other nations of the world aggressively push their products to the third world. While players in these other economies are driven with love for their nations, their governments have continued to give them all the support and incentives required to encourage them produce and bombard the world market.

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Check the world’s largest players in export trade. The U.S.A, Australia, China, Malaysia, India and Ghana next door, all have very fantastic and functional support instruments, programmes and incentives to push their products into the world markets. The last time I checked, South Africa had thirty-four separate export promotion agencies, each dedicated to a sector in which the country deems herself to have high potential. Nigeria has only one. Australia encourages exports to the level of refunding the cost of a telephone call made by an exporter, or the cost of the visit of a potential importer, once these lead to actual export sales. Australia and the U.S.A have a yearly Presidential Exports Awards instituted over fifty years ago.

Pray, what have we done in Nigeria? The few initiatives being proposed are killed at the embryo stage, while many of the initiatives that helped exports a few years ago have been frustrated.

I really do not understand why we just refuse to grow. What even irks is the celebrated huge income from importation. Ordinarily, anybody who reads that Nigeria is generating a lot of revenue from importation would readily want to congratulate the Customs and Excise department. The question that should be asked is: Is the bulk of the funds made from importation from machinery or consumables? The sad reality is that the bulk comes from consumables. This is an indication that Nigeria’s status as a dumping ground for the goods of others is being enhanced. Or how else can you explain a situation where a country so hugely blessed with all kinds of natural resources still has to depend largely on the outside world for finished products.

And this does not mean that players in the export industry in Nigeria do not have initiative or are themselves brain dead. It is just an indication that the policy drivers are either inept or downright ignorant of what obtains in the export industry. Or that the leadership of the country refuses to heed to their suggestions.

The point I am making is that the potential in the non-oil export sector is so huge. Every state in Nigeria, for instance, can boast of at least two products that can thrive well in the global market and earn huge income in foreign exchange for the country. Niger State is the world’s largest producer of shea nut butter. Paradoxically, 95 per cent of this product grows in the wild. Why is Niger State not the world’s largest exporter of shea butter?

We can only become a giant in the world trade space when we exploit our political influence at the level of the Economic Community of West African States (ECOWAS) while also impacting our local SMEs beyond the Nigerian market. It is never too late to improve on our non-oil exports. The world is waiting for the giant in us.

Ondo State produces 65 per cent of Nigeria’s Cocoa and Nigeria is rated as the world’s sixth largest exporter of Cocoa. What is the ranking of Ondo State in the world cocoa deliveries? Delta, Edo, Akwa Ibom and Cross Rivers states have the capacity to catch up with Malaysia on palm oil production. But where are they? Why will my country continue to play the underdog and allow resources and potentials waste? Why are we like this?

When I consider the recent “empowerment” programmes of the federal government, I weep. The most popular of recent has been Tradermoni. Please tell me how many jobs we can create by dishing out N10,000 to every Tom-dick-and-harry who is lucky enough to be at the right market at the right time (when the angel vice president is visiting).

The SME potential for employment is never in doubt. But, what is the knowledge and skill capacity of Nigerian SMEs? Has anybody conducted a study on the mortality of these SMEs, the reasons thereof and how to address these?

For a start, I think we need to begin to borrow a leaf from other countries of the world and develop a home grown plan to relaunch our export programme. The Obama Export Initiative (now legislated and implemented as the National Export Initiative, NEI) for instance, is actually a comprehensive strategy document that is so beautiful to read and easy to implement, as every activity is clearly defined, with executing agent, needed resources and timelines. Reporting was directly to the president, and every MDA with any role at all in the export value-chain was drafted into the Cabinet Committee on exports.

The grants and aids that America packages for Africa are a deliberate policy to sustain the country’s industrial capacity and exports. These are packaged with the intention to sustain America’s industry and exports as the beneficiary country must procure machinery, equipment and other major components from America. The lesson from this is that we have to take advantage of West Africa, our immediate catchment area of influence.

We can only become a giant in the world trade space when we exploit our political influence at the level of the Economic Community of West African States (ECOWAS) while also impacting our local SMEs beyond the Nigerian market. It is never too late to improve on our non-oil exports. The world is waiting for the giant in us. Enough of this one step forward, 100 steps backward. Nigeria must live again.

Olufemi Boyede, an international trade and strategy professional with decades ofexperience in international trade and strategy, wrote from Canada.

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