BY OMOH GABRIEL, BUSINESS EDITOR

NIGERIA after Independence was on the right path of economic growth and development. It had visionary leaders who were interested in the welfare of the people.

Industries were springing up in every region of the country. In the North, Ahmedu Bello who held sway was occupied by setting up farm settlements, textile industries.

It was the same story in the East where Michael Opera set up farm settlements and a number of manufacturing companies. In the West, Chief Awolowo, apart from the popular free education, set up a number of industrial estates which attracted several companies from abroad. It is this simple reason that the West is the most industrialized part of the country.

At this time, the Nigeria economy was in top shape and at take off stage in economic development. The Nigerian economy was rated along the same indices with Brazil, Indonesia, Malaysia and the rest of the now talked about BRICKS countries. Then Nigeria had development plans that guided the nation.

Autonomous entities

In the North pyramids of groundnuts and cotton were part of foreign exchange earning commodities. In the West, cocoa was found in abundance.

It brought pride to the nation. The various regions were autonomous entities and there was competition among the regions on internally generated revenue. The military intervention and the discovery of crude oil in commercial quantity seemed to have radically altered the course of Nigeria’s economic development.

While the military discarded the fiscal federalism structure of the country and made the states to become federal allocation collector, the discovery of oil made Nigerian leaders to sleep walk and refuse to plan believing that the money flowing from the ground will solve all the nation’s problems.

As the military leaders were sleep walking and basking in the euphoria of petro dollar earnings, Nigeria’s population was growing faster than the resources

Peter Drucker, the management expert, in his book the practice of management wrote that “Innovation is the specific instrument of entrepreneurship, the act that endows resources with a new capacity to create wealth.

Nigeria military leaders did not yield to the management advice that management must always, in every decision and action, put economic performance first. It can only justify its existence and its authority by the economic results it produces.

There may be great non-economic results: the happiness of the members of the enterprise, the contribution to the welfare or culture of the community, etc.

Yet management has failed if it fails to produce economic results. It has failed if it does not supply goods and services desired by the consumer at a price the consumer is willing to pay. It has failed if it does not improve or at least maintain the wealth-producing capacity of the economic resources entrusted to it. During this period there was no serious investment in power and other critical infrastructure, the ones  available were not maintained and infrastructural decay set in making many to feel that Nigeria is a failed state.

This is far from the truth. Nigeria is a land of ample opportunity and immense possibility. In a fast changing and evolving world, where weaklings of yester years have become economic giants and the strong of yesterday are fading in economic glory and becoming weaklings. Nigeria has a chance to make a difference. Twenty years ago, no development economist would have accepted any theory that postulated the emergence of China, India and Brazil as economic power houses.

Economic power house

Today, China is almost the largest economy in the world beating United Kingdom, Japan, France, Germany and Italy.

According to a United Nations economic data, the global economy’s Gross Domestic Product (GDP) as at 2010 was $62.6 trillion. Of this, the United States of America accounted for $14.447 trillion as the largest economy in the world. It is followed by China with a GDP of $5.739 trillion making it the second largest economy.

Japan the third largest has $5.458 trillion GDP. Germany which is fourth has a GDP of $3.280 trillion while France the fifth has $2.559 trillion GDP. Britain which dominated the world for decade as the economy to beat is now a distant sixth economy in the comity of nations. Nigeria is occupying 47th position with a GDP of $238.920 billion.

This shows that from the peak there is only one easy way to go: downwards. It always requires twice as much effort and skill to stay up as it did to climb up.

In other words, there is real danger today that in retrospect the United States of 1950 may come to look like the Great Britain of 1880—doomed to decline for lack of vision and lack of effort. Going by the current trend and projection by 2020 there will be a major shift in the global balance of economic power compared to 2010.

Emerging economies will rise in importance and China would have overtaken the USA to lead the list of the world’s top 10 largest economies by GDP measured in PPP terms.

Looking at the Nigerian economy in the last few years since the return to democratic governance, from global perspective, foreign investors are now looking to Africa, Nigeria and Kenya in particular.

There seems to be a tide, the type Shakespeare spoke about, in the economic affairs of Nigeria if only policymakers can see beyond their noses and take the tide at its high to give Nigeria an economic take-off to recover from the missed opportunities of the late and early 1980s.

Epileptic  power supply

Investors are seeing what most Nigerians are not seeing. The complaint of lack of infrastructure, epileptic power supply, low industrial base etc., are fast becoming opportunities to foreign investors.

At the Reuters Africa investors’ forum in Johannesburg early this year, foreign investors who have businesses in Nigeria and other African countries were quoted as saying; “If you want to ride Africa’s business boom, choose your country well and be ready for bumps on the road.

But the momentum is upward and you will be rewarded if you stay the course.” African policymakers and chief executives of companies operating in Africa are spreading this upbeat message, as interest in what was once dubbed the “hopeless continent” blossoms along with growth rates.

During the year, Global X Funds listed the first Exchange Traded Fund (ETF) on the New York Stock Exchange to track Nigerian stocks. The head of the Fund said this is a move which will enable U.S. investors to buy high growth Nigerian shares at home.

Nigeria, in the eyes of funds managers and economists today, is growing in popularity as an investment destination, offering the promise of seven per cent economic growth and a consumer market of around 170 million people. The Nigerian stock market index rose 35 percent in 2012 but dropped to 29 per cent this year, making it the second best performer in Africa and one of the best in the world. The index is up 29 per cent so far this year and analysts expect gains to continue as strong corporate earnings trickle in.

There are a massive amount of U.S. investors looking to get exposure to Nigeria.

Nigeria’s stock exchange disclosed that it is reviewing applications from some leading global investment banks to join its trading floor, as reforms aimed at improving liquidity and transparency bear fruit. Mr. Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange, told the Reuters Africa Investment Summit in Lagos that some foreign investment banks have applied to trade on the floor of the exchange. “We cannot announce which ones yet but they are in the top 10 in the world,” Onyema said.

Rencap and Standard Bank already have traders operating on the floor of the exchange. Before the stock market bubble burst in 2008, wiping nearly two thirds off its value in a year. Domestic investors own 85 percent of the shares, with foreigners owning the rest. The investment tide is afoot; will Nigerian public servants, government functionaries and elected officials stop stealing and ride on the tide of development?

Come January 2014, the geographical expression called Nigeria will be 100 years old. The Northern and Southern protectorates were amalgamated by Lord Lugard in 1914. The land mass in which Nigeria is located is a land flowing with milk and honey. Many have looked at the progress made in desperation and have written off the country. But many out there are seeing the Nigeria experiment as a land of great opportunity.

The United States of America recently described Nigeria as the next economic success story. Apart from its natural resources, Nigeria has a young and dynamic population made up of upwardly mobile middle class. It is this middle class that current serve as attraction to the international business community because of the huge market it represents. The experience of the telecom operators in Nigeria bears this out clearly. It is for Nigeria to put its act together and get it right. Nigeria’s economy has been growing at 6-7 per cent in the last few years without regular supply of power, when eventually the country gets the power equation right, the economy will frog leap.

Economic success

President Barack Obama himself declared Nigeria as the world’s next economic success story, stressing that this was one of the major reason his government was committed to helping the country build strong democratic institutions and remove constraints to trade and investment through the African Growth and Opportunity Act (AGOA).

Making this declaration at the US-Nigeria Trade and Investment Forum, an event organised by the Nigerians in Diaspora Organisation (NIDOA) in Washington DC, during the year, Obama who was represented by Ambassador Eunice Reddick, said that his country expanded opportunities for Nigeria to effectively access markets and diversify its economy beyond a narrow reliance on natural resources. “As we support these efforts, the Diaspora can play an important role in contributing to a strong, vibrant and economically prosperous Nigeria” he noted.

It is not only the US government that is seeing the great possibilities in Nigeria. In 2004, Goldman Sach said that Nigeria will emerge one of the 20 largest economies of the world in 2025. This was the basis of Nigeria’s vision 20-2020 by the then President Olusegun Obasanjo administration.

In a presentation on Nigeria’s Debt Capital Markets, Richard Fox, Fitch Rating’s Head of Africa/Middle East sovereigns, had compared Nigeria’s current sovereign debt metrics to those of Emerging Markets (EMs) that have recently made the transition to investment grade (IG) and came to the conclusion that Nigeria is on the path of success.

He said: “Since 2004, seven EMs have moved up the rating scale from Nigeria’s current ‘BB-’ level to the lowest investment grade ‘BBB-’ rating. The most recent was Indonesia in 2011; the others are Azerbaijan (2010), Brazil (2008) and Bulgaria, Kazakhstan, Romania and Russia (2004).

Of the seven, four are oil producers to varying degrees. The three notch upward movement has typically taken between six and eight years, which makes it a plausible ambition for Nigeria in the context of its Vision 2020. “Among the key indicators that Fitch uses to assess sovereign creditworthiness, three stand out as being well outside the range of experience of recent newly IG EMs: per capita GDP, reserve cover and governance (the latter measured by the World Bank’s governance indicators).

These areas represent Nigeria’s biggest challenge to improving its “Nigeria’s stable and robust GDP growth of more than 7 per cent since 2009 and it compares well with the record of newly IG sovereigns and is even more creditable given its reliance on the non-oil sector.

However, structural reforms planned in the electricity, oil and agriculture sectors, will be crucial if growth is to be diversified and sustained closer to double digits, in order to close the large gap in per capita income.

Even with a likely substantial increase in nominal GDP this year due to the rebasing of the national accounts, Nigeria’s per capita GDP will still be outside the range enjoyed by the new IG countries when they became IG. “Nigeria’s inflation rate is now on the low side – in single digits.

If the goals of this administration’s transformation agenda are to have strong, inclusive non-inflationary growth, to generate employment and alleviate poverty and to achieve value reorientation, Nigeria must begin to take advantage of this positive disposition.

Positive disposition

The World Bank’s Doing Business Index of 2012 ranked Nigeria as 133rd out of 183 countries on the basis of the constraints encountered in starting a business, dealing with construction permits and registration of property and enforcement of contracts.

It also identified differences in state regulations and in the enforcement of national regulations that can enhance or constrain local business activity. Nigeria was on the path of greatness at independence.

It evolved development plans which saw major development in the country at the early stages of the nation’s development.

The first, second and third plans were executed but the fourth was abandoned and since then Nigeria has had no development plan. Nigeria needs to return very quickly to development planning if it is to tap into the vision many are seeing for it.

If the fourth development plan that was jettisoned was religiously implemented, Nigeria would be singing songs of freedom today. In that plan, the framers said “Since the fourth national development plan is only one in the series of medium term plans intended to transform the Nigeria economy and society over time, its basic objectives are naturally and broadly similar to those of its immediate predecessors.

What ever changes there are would be no more than a reflection of the lessons of experience derived in the implementation of the preceding plans”.

The over riding aim of any development is an improvement in the living conditions of the people using the resources, human and material, with which the country is endowed. It is around this principal goal that the specific objectives of Nigeria’s development efforts were woven. The nations set objectives in the 3rd National development were what the country is clamouring for today.

It envisaged increase in real income of the average Nigerian; more even distribution of income among individuals and social economic groups in the country; reduction in the level of unemployment; increase in the supply of high level man power; reduction of the dependence of the economy on a narrow range of activities; balanced development – the achievement of better balance in the development of the different sectors of the economy and various geographical areas of the country; increased participation by Nigerians in the ownership and management of the productive enterprises; greater self reliance that is increased dependence on internal resources in seeking to achieve  the various objective of society.

This implies increased efforts to achieve optimum utilization of Nigeria’s human and material resources; development of technology; reduction in rural urban migration; the promotion of a new national orientation conducive to greater discipline, better attitude to work and cleaner environment.

The main trust of Nigeria’s strategy during this period was in the direction of increased self reliance and considerable reduction of its dependence on the external sector in general and the petroleum sector in particular. If these objectives were rigorously pursued Nigeria would not be playing a catch up game in the global economy.

Global economy

Nigeria needs to return to its roots, plan, strategise and push to become relevant in the eyes of other nations. This will require greater sacrifices especially in terms of established consumptions habits if resources are to be freed for pressing development needs. There will be no room for subsidy. It must free resources for development.

This strategy will demand a greater spirit of innovations, hard work, and greater utilization of domestic resources and in particular, the involvement of the masses especially at the local level in the development process. A conscious effort must be made to mobilize the Nigeria masses — the entire Nigeria population for the implementation of the new Nigeria vision.

If China could successfully mobilise its populace to achieve the second largest economy position out of obscurity, yes Nigeria can.

Nigeria and China have certain things in common, a growing population, an emerging middle class that constitute a huge market for industrial products, a huge land mass. Yes, Nigeria can move into the league of top economies of the world. All that Nigeria needs is an effective leadership.