There must be private sector involvement in financing to bridge Nigeria’s over $300 billion infrastructure gap, while emphasis needs be placed on quality human capital development to build a strong population that can drive the Nigerian economy, experts in this year’s BusinessDay CEO Forum have said.
The experts reasoned that for Nigeria to build a virile post-election economy, where less attention is paid to oil, there must be a shift from consumption and rent-seeking to production.
“Some Nigerian cities are cities of consumption,” said Paul Collier, keynote speaker and professor of economics and public policy in the Blavatnik School of Government at the University of Oxford.
“But there has to be a shift from consumption to production. Nigeria must move from politics of rent-seeking to productivity,” Collier said.
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According to him, for this to happen, there must be an interaction among the three investment processes, involving the government, the household and the firm.
“Government must provide infrastructure; households must invest in housing, and firms should invest in factories,” he said.
“What the three investments will do is to bring about the triple miracle of productivity. When households invest in housing, they provide liveable density. When you have a liveable density, you provide a lot of opportunities for small businesses,” Collier added.
He explained that when government provides good infrastructure that will enable firms and people to cluster, people and skills are brought close to jobs, while the government will have the opportunity to levy taxes and raise sufficient revenue.
Collier also said Nigeria’s government must not just provide free education to Nigerians, but stressed that the education must be qualitative. He emphasised that the country’s incoming administration must be ready to use the private sector where possible in this process.
Nigeria’s economy is stymied by headwinds which have weakened the naira and reduced total exports from about $97 billion to $57 billion. External reserves have depleted from $60 billion (2008) to $29.49 billion (April, 2015). The manufacturing sector still makes single-digit contribution of nine percent, while non-oil exports have fallen from $2.97 billion in 2013 to $2.43 billion.
Successive administrations in Nigeria will need to promote growth sectors, drive efficiency and develop people, said Christian Wessels, deputy managing director, TGI Group of Companies.
“We need to encourage agriculture, consumer goods/retail, manufacturing and the environment, by making investments in financial services and technology (especially energy),” Wessels said.
The CEO in the post-election Nigeria would be faced with multiples of challenges and opportunities in the face of global headwinds. He would have to identify tough decisions and solve them in the most efficient way, said Richard Ingleton, global CEO, TNS.
Ingleton added, “ You need to delegate decisions making, develop your superpower, manage heuristics and use your rational decisions.”
Uche Orji, MD/CEO, the Nigeria Sovereign Investment Authority said Nigeria must pay much more emphasis on human resources, stressing that developments in ICT and entertainment had shown what the country could do.
Apollos Ikpobe, deputy managing director (domestic banking), UBA Group, who represented Phillips Oduoza, group managing director/CEO, UBA Group, said Nigerians still have 46 percent of the unbanked, which was an opportunity in the industry, that the bank was prepared to capitalise on.
Ikpobe said UBA had hedged against global headwinds through the e-banking scheme, reducing non-performing loans (NPLs) to 2 percent and buying into the unbanked.
“We also demand consistency in keeping to agreements so that investors will have more confidence in the government. We have also given out loans to drive the real estate sector and we also believe that there should be a special unit that will help in loan recovery,” he said.
Nigeria’s industralisation depended on improving efficiency and building a strong energy infrastructure, according to Adepeju Adebajo, MD, Lafarge Cement Wapco Nigeria, who also said the incoming government would have to find ways of raising revenue and encourage manufacturing to enhance growth and diversification.
ODINAKA ANUDU, EDOZIE IFEBI, JOSEPHINE OKOJIE & DANIEL OJABO
