True Transformation of the Nigerian Nation and Economy: Five Quick Steps, By Oluwafemi Akinfolarin
I recently watched a video of an African American preacher sermonising on the place of the black man in governance. The man has a radical concept. He believes that the black man is not suited to govern. He sees South Africa as a prime example of a country showing irreparable damage under a black administration contrary to the developmental strides achieved under an insane racist white one. He went further to ask for an example of a black president successfully running a predominantly black populated nation, and sadly I couldn’t think of one without some massive flaw. What does this have to do with transforming Nigeria, you ask? Well, it’s simple. A new government is taking over and it’s imperative that it proves Mr. Preacherman wrong. I would like to offer five areas that we could use to drive rapid and real transformation in Nigeria.
First: Institutions, never people. We need to build institutions stronger than the people running them. There must be significant independent checks on the power of the incoming president who should also have a clear score card which an ordinary citizen can measure him by. In the United States, the Supreme Court and Congress ensure the President does not become a tyrant while the people and mass media ensure scorecard failings are punished. In addition, the concept of independent special prosecutors who are lawyers appointed by branches of the government to investigate allegations of corruption against other branches should be considered. For example, instead of the unending probe panels in the senate or House of Representatives, a special prosecutor should be appointed by an act of the National Assembly to investigate allegations and if credible evidence of wrong doing is gathered, the culprit should be immediately charged to court through an expedited process. This would be a significant curb on the excesses of the branches of government.
Second: Oil and Gas sector transformation. PETRONAS of Malaysia (ranked the 75th largest company in the world in 2013) and ARAMCO of Saudi Arabia (the largest Oil Company in the world by reserves) are poster cases of how national energy companies should be run. PETROBAS of Brazil and NNPC of Nigeria are examples of exactly how not to. ARAMCO is the second largest employer of labour in Saudi Arabia behind only the government of the Kingdom, while PETRONAS plays a similar role in Malaysia. To achieve this level of transformation in the Nigerian oil and gas industry, we need to completely dismantle the current operational model of the NNPC, set up distinct companies focused on production, distribution and sales, and separate industry regulators from the industry operators. And most radically, we should create private sector companies out of the successor companies, with shares floated on the Nigerian and foreign stock exchanges. The floatation will serve to provide funding for the startup operations of the private company while the government maintains its equity stake. Floatation also means the company is accountable to the people other than the government.
Third: increase inflow of Investments into the country. To dramatically increase corporate investment inflows into Nigeria, we should address the issues thrown up in the ‘Ease of Doing Business Survey’ conducted by the World Bank which ranks us a lowly 170 out of 189 countries. I would suggest we handle this initially by creating an investment haven like the Dubai International Financial City in Dubai where a separate legal regime would govern all the foreign company’s activities in the country, whether conducted within or outside the haven. Special courts would be set up to handle disputes in an expeditious manner. These serves the purpose of reassuring the investor that even a dispute on purchasing property in a separate state would be quickly resolved in the haven. To ensure that the investments in the country are profitable to the country, we should insert two clauses in the regulatory framework; the first that immediately a company sets up in the haven and increases its revenue to a set threshold, it must list on the Nigerian Stock Exchange, and secondly, each company must recruit and train a minimum amount of Nigerians and create a succession plan detailing how to reduce the number of expatriate staff to zero within five to ten years.
Fourth: Agricultural and Startup space transformation: The most important driver of improvement in the employment space will be agriculture but rather than large farms, we need to make small holder farming profitable enough to improve the standard of living of the farmer. To do this we need to create farming zones that are area specific, build silos in each area, and get the farmers to form cooperatives which deliver their produce to the silos, while government guarantees sales and payment to the farmers after a set period.
The Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), a bureau of the Ministry of Trade needs to be transformed because it’s a major hindrance to increased employment in the country. The comparable Small Business Administration in the US’s role includes ensuring that about 23% of prime Federal Government contracts are awarded to SME’s; it also guarantees a percentage of all loans given to SMEs across the US by partnering with financial institutions. This agency of government helps SMEs start business, develop business plans and prepare for getting loans from banks. SMEDAN does none of that.
Finally, we need to aggressively plug revenue leakages. Recently a newspaper carried details of how the largest rice importers were granted waivers to import the product leading to revenue losses of N36 billion to the government of Nigeria. Governance is Nigeria is opaque; MDA’s operated two different sets of accounting books to hide internally generated revenue. This should stop and all accounts should be published in the media. Also, any agreements signed by the agencies and which cost the country income should be penalised.
This incoming administration faces a monumental task to rapidly transform a nightmarish nation. It has to pick its battles, identify high priority areas to tackle for maximum effect, and within a 6– 12 months window show dramatically results or it will face a ground swell of anger worse than the one against Jonathan. Addressing the issues highlighted above might form a basis for starting that transformation.
Oluwafemi Akinfolarin, a Lawyer, writes in from Lagos.