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Time running out for 6,000 MW by December— Okolo

By Franklin Alli and Moses Nosike

Dr. Simon Chukwuemeka Okolo, an Aba – based industrialist and a medical practitioner is the President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).  In this interview, he x-rays current development in the nation’s industrial landscape, declaring that time’s running out for the attainment of the 6,000 mega watts promised by the Federal Government by December 2009.  Excerpt.

The Manufacturers Association of Nigeria recently reported the closure of 820 companies. What should be done to reverse company failures in the country?

The Nigeria industrial sector can be made to thrive, become a money spinner and a major export sector for the country if government can improve the operational business environment across the country. Truly, there is no way you can improve upon the business environment  if you don’t seriously address the country’s death  of infrastructure – epileptic power supply, high cost of energy, bad road networks   and bring back rail, air and water transport.  So, I believe  government ought to lay emphasis on addressing infrastructure deficits as one of the major ways to reverse the fortunes of our industries.

 Dr. Simon Chukwuemeka Okolo: Time is running out
Dr. Simon Chukwuemeka Okolo: Time is running out

Also government policy inconsistency has done great havoc on the operational capacity of our industries. It has resulted to low capacity utilization for most industries which have given rise to high cost of production. Government should realize that the key elements underpinning  the development of the industrial sector and especially the attraction of foreign direct investment into  the country are a robust economic growth, prudent fiscal / monetary policies, stable exchange rate, higher domestic savings /investments, free capital mobility (outflows of profits, dividends and principals), excellent debt servicing record and genuine commitment to structural reforms programme (privatization  and trade liberalization), as well as good governance (low corruption  and bureaucracy).

Above all, adequate electricity supply is the single most essential commodity the industrial sector needs to thrive.  If power supply is tackled, our industries would come out of the woods and the economy would be revamped.

What is your position on the just proposed N500 billion bail-out fund for industries?

As you are probably aware, the Minister of Commerce & Industry, Chief Achike Udenwa, has said that it’s still a proposal. The fund we were told will be wholly sourced by the Bank of Industry (BOI), although, the bank is heavily under funded. However the Minister who announced the intention of government is a goal getter and we hope on his sound judgment and capabilities to ensure the proposal becomes a reality.  I believe if the fund is approved, sourced, and is eventually made available to industrialists, it is capable of turning around the fortunes of ailing industries for the better.

Two months to December, do you think government can still achieve the 6,000 MW target? Government  has never wavered on that promise, as officials of government are still making frantic efforts to realize the target. We applaud their efforts.

However, it is most unfortunate that the country’s power problem comes from the fact that all   her  power generating stations are powered by gas and so long as there continues to be trouble flash points in the oil rich Niger Delta, the country will continue to have problems of  power fluctuations.

There is not much time left to the December promise but on the long term, government should have a re-think and turn to building of more hydro energy power plants (the Mambila Plateau Power project), use of coal to generate power, solar energy, wind energy, nuclear energy and biological fuels. If the nation can turn to these alternative sources for her power needs, it would they would go a long way.

What do you think will be the likely impact of banks crisis on the real sector?

Let me categorically make it clear that though commendable, the steps taken recently by the CBN to avert crisis in the financial sector, if, not well handled could cripple economic activities in the country. This has thrown open the need to restructure the frame work of regulation in banks, to put in place a stronger regulatory system to police the sector and prevent the recurrence of the current crisis.

We strongly believe that the action of the CBN governor should have quietly been taken long ago to avert the problems of the current action which will significantly curb lending activities amongst the banks and which (coupled with federal government policy prevarication) will greatly slow down economic growth in the country.
It is also disheartening to note that the much publicized prosperity of the banking sector has never reflected in the fortunes of the nation’s economy especially the real sector. So, if the banks want to avert crisis, they must return to real banking activities and imbibe the tenets of sound fiscal discipline.

The new managers we hope will be able to turn around these banks and aid the CBN’s stated plans to exit its forced investments in private businesses, even as government must step up activities to rid this country of corrupt practices that seem to be at the root of the present crisis.

The EFCC while arresting bank debtors should try to operate within the confines of the law.
They must investigate matters conclusively before arrests of culprits. The EFCC’s unusual practice of arrest of suspects before investigations are conducted is highly improper and against the law. It also negates the tenet of the rule of law mantra of the present administration.

How do you view the recent CBN removal of cap on interest rates?

The economy for years has been bedevilled by regimes of high interest rates which have crippled the industrial sector due to their inability to secure needed credit to run their factories.


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