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Okonjo-Iweala’s challenge on Vision 20:2020

By Akoma Chinweoke

It was another moment of truth in Asaba, Delta State, when the World Bank managing director and former minister of finance, Dr. Ngozi Okonjo-Iweala,  rolled out  statistics to back up her claims that except the country sits up, it is very far behind the comity of G20 nations.

According to a recent World Bank study on competitive business, the absence of adequate infrastructure in Nigeria has a massive 16 percent to business cost per unit to use compared to 2 percent in South Africa, 5 percent in China and 10 percent in India. Sunday Vanguard Business sought the opinion of experts on how the economy can compete with such a drawback

We must be seen to be in a hurry  —Mazi Sam Ohabunwa, chairman, Nigerian Economic Summit Group, NESG
I believe that what the World Bank managing director has said is an obvious statement which has been said in different form . If a country that is at 39th  or 40th position  wants to be among 20 top economies, it means that it has to overtake at least 20 people assuming that everybody is still moving at the same rate and to overtake 20 people at different rate of movement, it has to accelerate its speed to the level that it can conveniently overtake those other people. So, the truth must be told that we haven’t yet shown that anxiety and  level of motivation as a people who want to achieve that vision.

Yes, a lot of planning and work is going on but when shall we start implementing them? I am aware some investment are growing in hour which is critical, whether the level of investment is adequate I do not know until we see the result because we can’t wait for ten years to see the results. So, a nation that is in a hurry must be seen to be in a hurry from the activities of everybody, from the president to the last person on the line, and I don’t think that is very visible . That is why that comment is well made and of course does not show the situation is hopeless . It does not indicate that we may not get there,  rather it just says that our level of activity, motivation, and drive  right now do not indicate that we have the kind of milage to cover in a very limited time. In a global economy, the more competitive you are, the more you are able to acquire  bigger market shares. We are still uncompetitive and our cost structure is still unexciting due to infrastructure deficit , multiple taxation, environmental and operating environment challenges are all adding up to cost .

So, until we deal with such variables, we would continue to suffer competitive disadvantage and the more we suffer it , the less we are able to compete.

The less we are able to compete, the less we are able to produce and the less we are able to produce, the less we are able to grow and poverty and all the associated fallouts  of poor economic performance would keep staring us in the face. We need to reinvent our country, reinvent the way we do things, add some level of urgency and make sure that everybody down the line is committed and bought into the vision

We need to urgently address infra structural deficiencies —Johnson Chukwu, MD,  Cowry Assets Management Limited
It is very obvious that Nigeria cannot achieve its dream of being among the top 20 economies by the year 2020 if we do not urgently address the infrastructural deficiencies in the country. Given that the absence of basic infrastructure adds about 16 percent (according to the World Bank) to the cost of manufacturing goods and services in Nigeria, it becomes impossible for goods or services produced here to compete with products of other countries with lower cost of production.For our country to become competitive, we must start by addressing the problem of unavailability of reliable energy at reasonable cost. The government must follow through with its two critical energy supply policies – the unbundling and privatization of Power Holding Company of Nigeria (PHCN) and the implementation of the Gas Master Plan. While the government has sustained attention on its Electric Energy Reform initiative, it seems to have relegated to the back  the implementation of the Gas Master Plan. Although the first initiative will bring some relief, to achieve energy sufficiency at low cost as well as open up our upcountry states for energy intensive manufacturing activities, we need to also implement the Gas Master Plan. Also, the country urgently needs to address its transport infrastructure; roads, modern railways, air and sea transport. These will ensure cheaper and more efficient movement of goods and personnel from different parts of the country. It will also allow for even development of the country as the absence of efficient transport system leads to the clustering of industries along high population density areas in addition to its negative impact on the cost of products.Also, we need to improve our educational infrastructure and content, to be able to produce the right caliber of labour that will work in the industries, which would spring up when we address the other infrastructural problems; it is a well known fact that apart from good infrastructure, one of China’s major competitive advantage is the quality and cost of its labour. Finally, we also have to address the problems of the health sector so that we can have healthy citizens and labour force.

Nigeria can get things right if .. -Ausbeth Ajagu, a political economist and president, Academy for Entrepreneurial Studies
I would rather say that Dr. Okonjo Iweala’s figures are rather low as we the Manufacturers Association of Nigeria did our own findings and arrived at 35 percent cost disadvantage of our manufacturers compared to those in Asia, Europe and  far East. So, the 16 percent she said is under quoted.

There is no way the manufacturing concern in Nigeria can compete favourably with her counterpart in far East or Europe. We all know the problem associated with the  sector in Nigeria is principally infrastructure. No light, no water, no electricity, no security. Until infrastructural development takes place in Nigeria, no meaningful development would take place in the economy. However, when there is a will, there is a way. As a first step, let the government totally privatize PHCN and it should be done transparently and immediately so that the kind of drive that happened in the telecom industry would be achieved.

There are people who import diesel and generators which tend to sabotage the economy, especially in respect of electricity and these are the people that are very close to powers- that- be in Nigeria . A motion has been moved to ban public buildings from using generators , let us stop generator import   and that intrinsic term  measure should be put in place. Once that is done, there is a black out in Nigeria and the solution would come. Also, the government should take the issue of taxation very seriously. All kinds of taxes are imposed at all government levels.

The joint tax board came out  with unified tax regime, unfortunately, it was not gazetted and, because of that, the three tiers of government still charge whatever they want and close factories , shops and agencies at will. So, the joint tax board resolution should be gazetted so that it would be enforceable in all tiers of government.

Insecurity of lives and property in Nigeria is a major threat to  development . Foreigners are not coming to Nigeria anymore to partner with us . The  security apparatus needs to be reinforced , retrained and be made to face their duties squarely. So, the way forward lies with electricity, security and a good tax system.

Govt should be sincere  in  implementation of Fiscal Responsibility Act- Gabriel Folusho Fasoto, former president, Chartered Institute of Taxation of Nigeria ,  CITN-  What is happening in taxation system in the country today is as a result of the fall out in the infra structural decay because our refineries are not producing at their optimum. That means that the money coming from  oil is dwindling . It also means that the state governments which are used to spending huge amounts of money  are now finding it difficult to maintain the same level of expenditure meaning that they are now falling back on what we call uncoordinated tax system which has resulted into multiplicity of taxes. But if our infrastructure is okay, the state government would be able to coordinate their taxation. On the issue of multiplicity of taxes, because Nigeria has never been used to using tax revenue to run its governance, that is why we are having the current uncoordinated system of taxes.

But if they can saddle the tax system with the professionals, I believe that we would have a well coordinated tax system and the issue of multiplicity of taxes would be eliminated. .

So, we need to see how the cost of doing business in the country would go down by improving on our infrastructure so that we can have a good climate for business to thrive. So, the government should pay attention to improving our tax system so as to widen our revenue base. Let there be fiscal discipline and government should be sincere  in the implementation of the Fiscal Responsibility Act and with those two, Nigeria will get it right


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.