Life is like riding a bicycle; you don’t fall off unless you stop pedalling” is a proverb from Sierra Leone. This proverb and the story of the invention of the bicycle aptly serve as a metaphor for Nigeria’s economic aspirations.
Heavy-laden bicycles are stable, so far as they keep on moving. As a bicycle, Nigeria’s economy keeps pedalling on thanks to robust growth in non-oil sectors like telecommunications and infrastructure. Yet it risks crashing if it loses momentum. An even more worrying danger is if the economy fails to generate millions of jobs for its youthful population.
Nigeria has to steer the economy towards sectors that will generate more dynamism for every pedal push. And we really don’t have to re-invent the wheel to produce more oomph.
The bicycle was invented neither out of strictly technical nor economic factors. As a novelty it occurred neither to replace a similar technology nor to make an existing one more efficient. People who took to riding bicycles in 1890 used to walk or take public transport. The bicycle’s attributes: speed, comfort, safety, elegance and price were the result of long experimentations and learning-by-doing on the part of both the consumer and producer.
For instance, John Dunlop, the Scottish veterinary surgeon, was dissatisfied with his ten-year old son’s tricycle. This led him to invent the pneumatic tyre in 1888. A few years after, alongside further improvements e.g. the chain-drive, the bicycle became a means of mass transportation “with incalculable effects on urban residential patterns” according to Joel Mokyr, a professor of economics history.
To add more pedal power to the economy, Nigeria will be peddling its credentials as an attractive investment destination as its hosts the 24th World Economic Forum (WEF) Africa in Abuja from May 7 to 9; after several years of requesting to serve as host. And thanks to the growing and active involvement of the firms like Dangote Group, Oando and First bank, and institutions like The Nigerian Stock Exchange.
This year’s conference is rightly titled “Forging Inclusive Growth, Creating Jobs”. The federal government of Nigeria reckons the theme perfectly aligns with its medium- to long-term aspirations. WEF Africa is one of the preeminent business conferences on Africa.
In 2013, the Africa Competitiveness Report, a joint publication by the African Development Bank, the World Bank and the World Economic Forum, identified Africa’s infrastructure deficit as a major barrier to intra-regional trade.
In order to sustain growth and improve living standards the report called for “investing in growth poles” i.e. export-facing industries and their supporting infrastructure”. Connecting markets deepens regional trade, improves output and competitiveness and contributes to and reduces “spatial-inclusion and spatial inequalities” according to Mthuli Ncube, AfDB chief economist.
For diehard doubters, hosting the event is a waste of time, an opportunity for Nigeria-style profligacy. To incurable cynics, fence-sitters and optimists alike, the Sierra-Leonean proverb should serve as food for thought.
Realists will admit that even a conference as big as the WEF, although necessary, is insufficient to attract all the foreign investment Nigeria needs. However, countries combine road shows and investor conferences to promote their economic opportunities. Nigeria’s hosting of the WEF can’t be an exception.
Ngozi Okonjo-Iweala, coordinating minister for the economy and minister of finance says the forum “provides an unprecedented opportunity for economic diplomacy for Nigeria.”
Tanzania and Ethiopia respective hosts of WEF Africa in 2010 and 2012 used the event to show case business opportunities in agriculture and manufacturing. Ethiopia and Tanzania are proof that Africa’s growth story goes beyond natural resources. Both these East Africa economies stuck to smart policies (from 1995 to 2010) and major structural reforms. Along with Burkina Faso, Mozambique, Rwanda and Uganda they have been identified as “high performers”.
South Africa, Africa’s largest economy has profitably used the WEF to market its economy. South Africa has hosted the Africa event 17 times since 1990, when the regional WEF gatherings started.
Last year, over 865 participants from more than 70 countries were in South Africa. The conference theme: “Delivering on Africa’s Promise” integrated three pillars: “Accelerating Economic Diversification; Boosting Strategic Infrastructure; and Unlocking Africa’s Talent.”
In the main, Foreign Direct Investment (FDI) in the oil and gas and telecommunications is one of the wheels Nigeria’s economy has been cycling on. The other is robust domestic demand thanks to rising remittances, falling inflation and stable food prices.
However, the economy is pedalling on poor roads. Lack of adequate infrastructure delays delivery of goods and services and the little there is can hardly catch-up with the number of cars in rapidly urbanising cities like Lagos. To move faster and better, to prevent wastage and rot, the economy needs to pedal on a network of roads that connect, say, tomato farms in Kano to Lagos.
The CEO of a Lagos-based Africa-focused investment bank asserts that investors need to pay a visit to better appreciate Nigeria’s economic reforms, to see the potentials and identify opportunities. It’s the only way to understand, for instance, how Lagosians use generators to supplement the 1,000MW of electricity they receive from the grid (if at all) to bridge the 9,000MW deficit.
In other words, a successful WEF will attract new investment to boost output in sectors that promise growth and jobs. Special focus will be given to agriculture, light manufacturing (cars, shoes, plastics, etc), infrastructure, housing and construction and technology. In short, industries that put labour productivity on an automatic upward trajectory.
Government alone cannot turn bumpy roads into tarred 10-lane expressways. Hence, the WEF is a chance to promote bankable infrastructure projects. Okonjo-Iweala, in her 102-page response to the House of Representatives’ Committee on Finance, says government will “show case the 30-year infrastructure Master plan we have developed and allow investors identify the opportunities that suits their portfolio.”
Concretely, hosting the WEF Africa in Abuja will contribute to building Nigeria’s image as the Africa’s premier investment destination. President Goodluck Jonathan, currently at Davos, a winter resort in Switzerland, where the flagship WEF holds annually, will host a special event with the intention of attracting several of the 2,500 people (CEOs of the world’s largest corporations, Heads of States and Ministers to Chief Executives of international organizations such as the World Bank, the European Union and the United Nations) to Abuja next May.
