PREMIUM TIMES
Export or perish! Nigeria has mouth-watering basket of goods to export and must seize the opportunity provided by the African Continental Free Trade Area (AfCFTA) agreement. We lost out on the American the African Growth and Opportunity Act (AGOA), hence we must not lose out on AfCFTA. The country must also use the digital economy for massive “invisible” export earnings. To take that leap from consumption into production, it is now or never for Nigeria.
This headline is not meant to frighten the reader. It is a reality check stressing the need to wake up and face a daunting reality with “the fierce urgency of now.” To paraphrase the opening statement of The Communist Manifesto: “a spectre haunts (Nigeria)…” Taking poetic license on the basis of the current grim reality, a reference needs to be made to our dwindling national revenue, an excruciatingly narrow tax base, and the absurd inability to meet our daily OPEC oil production quota. Nigeria is the only OPEC country that has not benefitted from the distortion brought about by the Russian war on Ukraine. This fact sums up a picture of national underachievement. A currency turmoil, and the continuing erosion of the purchasing power parity, due of the cost-of-living crisis induced by a 42% devaluation of the naira, sums up our season of disequilibrium.
In navigating a way out, we must answer the most essential of questions, which is: “What is to be done?” Hard-pressed nations boxed into a tight corner have had to answer the same question. While in a similar balance of payments disequilibrium in the 1960s, the Prime Minister of India, Jawaharlal Pandit Nehru, famously admonished the nation to either export or perish. In like manner, British Prime Minister James Harold Wilson used the same phrase in justifying the unavoidable devaluation of the British currency, the pound sterling, in 1967.
President Bola Tinubu must now flog the same position, as we try to find a way out of the present crisis. That there is a crisis cannot be denied; the position of the United States bank, JP Morgan, that Nigeria has only N3.4 billion in its foreign exchange reserves contradicts the position of the Central Bank of Nigeria (CBN), and it is very important for the CBN to issue a detailed clarification on this. The crisis has come at a time when Nigeria is making a case to join an expanded BRICS, a global economic group consisting of Brazil, Russia, India, China, and South Africa. The current turmoil does not help Nigeria’s case in this regard.
There is a silver lining on the horizon though. Given his earlier record of sterling achievements, the new Federal Executive will have a very competent economic team coordinated by the highly respected Wale Edun. The team presents an opportunity to make a break from our underachieving past. Any new gain must be institutionalised to make the break irreversible. It should be “now or never”. The country must go for broke on export. The creation of a Ministry of the Blue Economy is a belated masterstroke. The Ministry must be the engine room, just like a hopefully rejuvenated Ministry of Solid Minerals. Both ministries have the potential to take us on the trajectory towards diversifying and intensifying the depth of our foreign exchange earning base.
It is worth recalling that in the 1960s, the Nigerian Ports Authority contributed a huge chunk of the federal budget. In 1961, the port of Lagos was rated the seventh most efficient port in the world! Today, the demons holding us back must be slayed. Nigeria must have internationally competitive ports to export goods from. If we get it right with a leap and a bound, we are free. Institutions such as Standards Organisation of Nigeria, NAFDAC, etc., must be rebuilt into competitiveness. Institutions matter. Nigeria needs strong institutions to be competitive. A reformed law enforcement arm and an agile judiciary are crucial to creating a competitive business environment. Seventy two per cent of commercial cases in London have nothing to do with the United Kingdom. In the UK, the judiciary is responsible for 2% of the foreign exchange earning. Singapore is another good example of a country where a strong judiciary attracts investments. Qatar, UAE, and others have followed.
Export or perish! Nigeria has mouth-watering basket of goods to export and must seize the opportunity provided by the African Continental Free Trade Area (AfCFTA) agreement. We lost out on the American the African Growth and Opportunity Act (AGOA), hence we must not lose out on AfCFTA. The country must also use the digital economy for massive “invisible” export earnings. To take that leap from consumption into production, it is now or never for Nigeria. It is now or never for our dear country to become highly skilled, competitive and relevant again.