The Chairman of Nigerian Economic Summit Group, NESG, Mr. Kyari A. Bukar, who is also the Managing Director of Central Securities Clearing System, CSCS Plc in an interview with Vanguard spoke on a lot of issues affecting the economy, the upcoming 22nd NES as well as the activities of the Group and its contributions towards building a virile Nigerian economy. Excerpts:
By Peter Egwuatu
WHAT is the rationale behind the theme ‘Made in Nigeria’, chosen for this year’s Summit?
We felt that the theme “Made in Nigeria” addresses the current economic situation in the country and aside from the realities of where we find ourselves, economically speaking as a nation today, it is also something that we need to deliberate in terms of having a long term strategy for the economic development of Nigeria. There is no better theme or subject matter for discussion than to have an inward look to our economy.
I do know and do understand that we are part of the global economy and we have to respect that but at the same time we also have to protect ours and by that I mean our citizens and then job creation, our companies, in their interest and so on and so forth.
All these things was what the theme hopes to address and was considered by the board to be those things that we need to move the country forward and of course some of our various themes in the past have touched on competitiveness, we have had themes such as agriculture, education and the likes but I think today, Made in Nigeria is quite appropriate for the stage.
Of course the situation we find ourselves now is that of a consumption habit that was disastrous, it wasn’t sustainable unless we change our consumption habit. However, I do believe that if one looks at a country where we look inward in terms of developing, building products, and services for the economy and if we do it so efficiently, and with world class standard, it might be good for us.
How can Made in Nigeria initiatives help Nigeria survive the present economic situation?
On the Foreign Exchange, FX situation, the structural factors of the economy also need to be considered for us to find ourselves where the FX is now. I think the solution to the economic situation we now find ourselves in are multi-faceted and we need to be firing on all engines, meaning that we have to basically face all the fronts whether it is production that is local, agric, solid minerals, and whatever it is that we may decide to embark upon .
We need to be careful that we don’t do the same thing to agric commodity what we have done with oil. Unless we add value to agriculture and if we add value then it becomes an enhanced technology product.
So if we continue to just sell crude oil, it is not going to be different if we go into agric and solid minerals and still produce crude of those products, whether it is rice, maize, cocoa or palm oil we need value creation or addition. Whatever we produce, if it remains at that crude level, it will be under priced .But let say if it is coconut that we are producing, we should have the value chain developed.
There would be an enhanced value, simply by refining our crude oil. Our crude oil that we produce should be refined and then exported as Premium Motor Spirit, PMS, Diesel. Now we need to begin to look at petro chemical complexities, lots and lots of jobs are created, lots of values created and then enhanced products that go out and that can also attract the foreign exchange.
So the foreign exchange situation in the short term may be very difficult, but if we deliberately have policies that is Made in Nigeria and we put and provide the necessary incentives and encouragement and support from government, I believe that two things will happen. One is that we will begin to be self sufficient in some facets of our lives; two, we would be creating sustainable jobs, and the foreign exchange situation would begin to improve.
The pressures on foreign exchange demand would subside as well. The fact is that we would end up earning more revenue. So, in the long run, it is going to be a win -win situation. It has to be a deliberate policy that we must adopt as a country.
What kind of incentives would be required to move the economy forward? It could be tax incentive, credit incentives etc. It could be support coming from the government in terms of infrastructure assisting them in some of their research and development aspect.
Those basic things that we need to make our economic system to become competitive and if it is competitive, even a foreign outfit may decide to come and produce in Nigeria and add to those values because if they don’t do so, they would be cut out. It is not about going out there and be begging people to come and invest in Nigeria.
No, if the facilities and the right policy are put in place it basically will attract investors and it would become clear to people to come here and produce and in so doing we would be making money. So, it is going to be a win-win situation both for us and the entities that are coming in. I would also like to see a situation where the government could as a matter of priority select three or four different industries to tackle with.
In that case, we would put all our effort to it as we make up our mind that we want to be the best in the world when it comes this and this area. And when you do that and put your mind around those things and focus on it. We would see great development. I mean there is no reason why we should not thrive in those areas we select. So, there are a number of ways to fill in the gap, it is purposefulness, deliberate policies that would help us come out of the situation.
In terms of objective, what will this year’s NESG help to achieve?
The summit has always been the meeting ground for private and public sector. It means that all the governments, ministries department and agencies would come along and meet with the organised private sector. We would also be practically looking out encouraging small and medium enterprises to be part of this Summit as well as the youth. We would have a forum for the youth and we would continue to do that to encourage them to be part of the change we need.
We would want to see younger faces coming in, younger and newer industries for example , the Information Communication Technology, ICT sector, the new media, There is also a forum dealing on innovation and we have a few of those people that are involved in this industry. We believe on the part of industrial revolution that will help us as a country.
How do you see the recession period we are now and the foreign exchange problem?
There is hardship; the recession is real, no matter which definition you use. If you count the number of jobs that have been lost between January till date, it would indicate to you that a lot of people are suffering. If you use the index of quarter by quarter growth it is still the same. We were clearly in recession as of 30th of June 2016. Now economies go through upside and downside.
This is not going to be an exception for Nigeria. Part of a major reason why we find ourselves in this situation is because of the things that had happened in the past. So, we have to get out of it we have to conduct ourselves in right manner. We have had consumption and we have had abuses and wastages. Those should be lessons, historical lessons; unfortunately human beings tend to have short memories.
Assuming if things start to let go, then they quickly forget, so in that regard whatever policies or things we want to do let it be done in such a manner that those policies become part of us, part of the institutional nature of the economy or structure of our nation.
What role will private, foreign investors and entrepreneurs play in the Summit?
We would be discussing both Foreign Direct Investments, FDI as well as portfolio investments. You know when you are in a situation where you need investments you do not discriminate. The economic policies we adopt may attract more foreign direct investments verses portfolio investments or vice versa.
So it is left to the government to take a position. The other thing is that the government is doing a number of things right now but it is not properly or poorly communicated and sometimes when you do something and it has not been shared people will have the tendencies that you are not doing enough or you are not doing anything and so one of the things that I would like the government to do is to be constantly be communicating all the initiatives even if it is a one thing or the other because the act of communicating would now bring out a dialogue and that dialogue should be seen to be a means of feedback.
So, whatever the government is doing wrong through such feedback such thing could be improved upon where necessary, because there is no one person or organisation or entity that has absolute wisdom .Wisdom can come through that constant dialogue, constant conversation.
It is not good when information sharing is not well coordinated. It may appear that people might be criticising you but you should take it and work on it and then go back to the drawing board. It is terrible when one agency of government says one thing and another seem to be saying something different to that thing and that means that it was not a very coordinated communication strategy that was adopted.
What is the role of NESG in the area of youth empowerment and development?
There is a strategy, I think we started about two years ago and it has been streamlined and be perfected and that is getting together a forum of 200 young people who we basically get them into the Summit house and we meet from time to time and basically discuss what is extremely necessary important to the youth and how what they see and what they want to contribute to the economic development of the economy.
So there is a forum for the youth and there is some other strong structures that is being put in place such as the older generation as expertise would transfer the same time to the youth who are the future of not only the Nigerian Economic Summit Group, but indeed the future of the country so we would continually reach them and have our conversation around the various industries, the emerging industries and also the economy. We want to sustainably grow NESG.
We want Nigeria to sustainably grow as a nation. I think that is why it is absolutely critical and important that our youths are engaged. We do not want to see the situation, where they give up and become indifferent to what is happening in the country.
What role has the NESG played over time in the shaping and development of the Nigeria’s economy?
Yes, I would even start with the very recent past and that is the 21st NES or I can go as far as to the first summit. The first summit was where we articulated the need for Nigeria to relax government ownership of businesses and to embrace privatisation as a means for sustainable economic development and growth and I believe that the government we have dealt with in the past implemented them whether it is privatisation in the power sector or telecom sector. It has been fantastic to the average person; of course with the power we still have some hiccups. But generally speaking anytime government takes it hands off businesses and hands it over to the private sector the value becomes immense.
The reason is very simple, the motivation for running business changes for a person that is private or an entity that is private. The motivation is the profit matter and for government technically speaking, when it was conceived it may have been profitable but it also have social welfare component to it.
The difference is motivation; the way of running businesses differs. NNLG for example is not a government owned entity it is not purely under the government. I believe the government own about 49 percent and private sector owns about 51 percent and it is managed with excellence management structure and it has been giving dividends to the federal government every year and it is paying its taxes. In Public Private Participation, PPP, the successes there also amount to huge when you look at that partnership and the way you grow the economy, jobs get created.
Also in the area of ICT, I don’t think we would have had the many jobs created in that sector if we had only NITEL . So, by having four GSM operators and all the distributors more jobs had been created. In fact, even some people have developed some apps for mobile and so on that are actually creating jobs, and adding values to our lives. These are quite commendable. So we would continue to talk about Nigeria economic future and to make our recommendation.
Are you comfortable with the proposed sale of national assets?
In any act that you begin, when you have so many recommendations, you look at the ups and downs. Government has so many assets that it can actually empower. There are a number of ways of raising funds. One is borrowing, the lenders may decide not to lend. So you need to combine the mix of borrowing local and domestic and then if the gap is still not going to be closed then selling of national assets could also be considered.
Now, you can sell your assets in many ways, the best way to look at it is the value creation. Someone has recommended that the government can reduce borrowing by selling its assets. If we are in dire needs of that we could sell part of that and be able to use that proceeds to do something that can generate multiple value. For example, if we sell and put that money into power I believe the multiplier effect is going to be enormous.
The good or the positive side of selling assets will depend on where the proceeds will be invested. If the investment is going to generate higher benefits in terms of the well-being of the average citizen. Then that so be it, we should do that, it does not make sense to hold on to an assets that is constantly dropping money marginally into you, where as you are suffering now.
We can let the suffering level go down drastically, if we can arrest it by selling assets and quickly applying it on such a manner that would generate huge amount of money. I believe Aliko Dangote mentioned it, we could use the proceeds to boost confidence apart from the confidence, and we could also be able to increase our credit worthiness by doing that.
How does NESG hope to measure the outcome of its recommendations and the overall success of the Summit?
We have as a board also realised that what is not measured does not get value attached and what we have told ourselves that we need to monitor the outcomes of some of the deliberations and recommendations we make. For example in October, the last summit, even before the summit we engaged the National Assembly on the ease of doing business and soon after the summit we reached them again.
We believe very strongly about 11 or 12 of them are to be passed by the eight National Assembly and if that happens we would see an improved regulatory framework of doing business in Nigeria. The other thing, we have done is that during the last summit, the key speaker we brought was the former prime minister of Georgia, he told our Minister of Trade and Investment on how the country can improve the ease of doing business.
He made presentation to the various entities of the federal government and they embraced or accepted some of the ideas he presented and it was great. Of course, everything matters when we implement them. So the legal and regulatory framework needs to be sorted out in one end and the presidency can come out to approve it.
What pedigree of delegates will the 2016 NES be parading?
The same set of delegates that we would be expecting, both from international and domestic. So, certainly we are going to have people from the international community and we normally do not just bring a person just because you are an expert in this or that. We bring people who have done it in their various countries. So, I know that we are bringing in somebody from India, who was a major force or factor into the perception of India globally in terms of the changing rules of doing business and some leaders in Africa, they’re going to be attending. I believe a lot of other agencies would be sending delegates to represent them.