By Omoh Gabriel
The recently held two-day National Economic Council (NEC) Retreat ended with a number of resolutions. The expectation of most Nigerians is that the meeting will come up with an economic agenda that reflects the change in approach to governance and economic management. The retreat started with a fanfare that looked like some serious economic policy outline was going to come out of it. At the end of the meeting, Nigerians were disappointed with the outcome.
The fact that the retreat was a meeting point for Governors, serving ministers and the Vice-President, to any serious-minded Nigerian who is conversant with the way governance is run in Nigeria, would not expect any serious out-of-the-box thinking to have come from the meeting.
In the first instance, a number of those at the meeting do not understand the workings of the various sectors of the Nigerian economy and their linkages to proffer an all-embracing policy direction for the national economy. They are well aware that the various arms of government are financially handicapped and that they cannot on their own, provide the needed funding to revive the ailing economy. Many of the attendees are political office holders who know next to nothing about the principle of a functioning economy.
Given their limitations on sound economic matters, the expectation was that these public sector officials would have invited key stakeholders, economic experts from within and outside to dialogue on how to chart the way forward. Politicians that were made ministers would always play politics with the welfare of the people. If the aim of the retreat was to generate medium and long-term policies that will address challenges within discussed areas of the economy at both the federal and state levels, then it was a miscalculation to have excluded the organised private sector from the discussions. It was equally self- seeking on the part of the organisers of the retreat to have left out expert advice on this issue.
There is basically no difference between what the group discussed from what has happened in the past. As a government of change, the expectation is that the approach to governance and economic management will be totally different from that of the past. Nigerians need a break from the past where government functionaries spend public funds organising talk shops that lead the country nowhere.
Developing the Nigerian economy should be a knit partnership between the private sector and the public sector which duty is mainly to set the rules and provide a level-playing field for private sector operators. Nigeria’s public sector managers have to change their mentality toward economic management. In fact, public sector hold on the economy has been the bane of the nation’s progress. Their attitude to the private sector is that of suspicion. They have never seen the private sector as partners and would not like to lose the power they hold on the economy. They are patriotic while others are saboteurs.
Funny enough, the retreat sets up two implementation committees made up of mostly chief executives of states and spending ministries. The implementation committee is headed by the Vice-President and Chairman of NEC, Prof. Yemi Osinbajo.
The question is how are they going to implement the decisions when they are not in a position to invest either their money or government funds into the sector for productive activities? At best, they are to be seen as facilitating agents. At the close of the retreat, the members resolved that there was need for concerted and consistent efforts to diversify the nation’s revenue sources and expand compliance on VAT, adopting a gradual plan for rate increase. Who is going to pay the increase in VAT? Is it government or the private sector and the Nigerian public? If the members of the National Economic Council are not in touch with the public, they should know that there is poverty in the land and most companies are barely surviving the hard time. Increase in VAT without carrying the payees along will meet with resistance and failure.
Besides, the Council has set the target of national self-sufficiency in Tomato paste for 2016, Rice for 2018 and Wheat 2019. How realistic are these targets? What is the current national demand for these products and what is the local production at the moment? It is good to set targets but what are the value chains process to follow the self-sufficiency? It is not just farm produce, but storage, processing, packaging and access to markets. Are all these processes in place for Nigeria to achieve the set goals? What is the standard set by the authority for companies to meet before each of the products can be accepted in the local and international market? Has the government planned market access for local producers who may want to export their products?
The demand for tomato for instance is currently estimated at 2.3 million metric tons per annum, while the local output is 1.8 million metric tons but due to lack of good storage facilities and poor developed marketing channels, up to 50 per cent of the tomato produced in Nigeria is lost. Recently, Dr. Richard Munang, the African Regional Coordinator of The United Nations Environmental Programme, UNEP, lamented that Nigeria spends $1bn to import tomato paste.
Central Bank Governor, Mr. Godwin Emefiele said at a stakeholders’ meeting with officials of Paddy Rice Producing states and Rice Value chain investors in Abuja that the Federal Government spent $2.41 billion on rice importation between January 2012 and May 2015. He argued that the bank’s decision to ban foreign exchange for importation of rice; fish and other items would not be reversed.
This scarce foreign exchange would have been saved if Nigeria had achieved self-sufficiency in the chosen products. This is not the first time that the Nigerian government is setting such targets. How much attention is this government paying to the details in the production process of what is being produced in the country? What is the quality assurance for the consumer? Nigerians are obsessed with quality and beauty. The packaging is as important as the content. These are details that NEC should come out with if they are to be taken seriously.