The Chief Executive Officer of the Nigeria Economic Summit Group, NESG, Dr. Tayo Aduloju has said that Nigeria must be strong political, economic and social institutions to achieve its economic growth objectives.  

According to Aduloju, building a strong nation requires three key pillars: strong political institutions, strong economic institutions, and strong social institutions, all led by effective leadership.

 

He stated this during a panel discussion at Vanguard’s Economic Discourse themed “Nigeria’s Economic Outlook 2025: Hardship and Pathways to Sustainable Recovery.”

He said: “When you said Nigeria’s problems are caused by NESG. So the first thing is, how you define a problem, to a great extent, it determines whether you can solve it. Nigeria’s problems are economics, but they are not first economics; the economics of our problem is a subset of how we have defined the problem.

So the problem is, Nigeria has failed to pursue its national development as a responsible sovereign. What that means, is that  the political elite, the business elite, and any other elites that may exist, including the military elite, have y jointly by action or inaction in a conspiracy of slowing down, or in some cases mitigating Nigeria’s economic development.

“And this is an important truth to first accept that we are here by choice, not the choice of others, but by our collective choice that nothing happening in Nigeria because just somebody outside the world wished it on us. Because, from  Yemi’ Kale’ s example of the case studies, if it was wished upon those countries, they won’t be where they are”.

How to build a nation

“Then the question then is, how do you build a strong nation state? You build it on three pillars, strong political institutions, strong economic institutions, strong social institutions, and these institutions must be led by certain type of leadership. You are discussing prayer a few minutes ago. One of the scriptures from one of the holy books says that where there is no vision, the  people perish. In fact, there’s another translation that says, where there is no vision, no redemptive vision, and the nation perishes. So it matters what people collectively see. So as I see the problem, the foundations of the problem is, whilst we were clear in 1960 as to the nation we wanted to build and the trajectory needed to take. It seems as if we’ve lost our way. The political institutions create a political agenda and a political culture that does not support the economic agenda that we build. 

So, Dr Kale was pointing to a series of development plans that the political class does not own and has never been committed to execute beyond their term in office. So once there’s a political transition, the plan is thrown away and a new government comes in afresh. The nations we are discussing, back to your benchmark, succeeded in prosecuting development agenda over the longer term. So political institutions must own, national development agenda where all of us have reached a consensus with the vision and all of us are committed, in spite of political transitions, to go on that journey together.

“Now, once you don’t have that, just imagine, PDP governed Nigeria from 1999 to 2015 as a ruling party. Under that ruling party, we had the vision 2020 , under the ruling party the government after that , pursued a seven point agenda that started moving away from vision 2020 . Under that government, a vice president of a cabinet, where the president dies, moves from seven point agenda to transformation agenda. And so the inability to prosecute our consensus around what is development in Nigeria. How do you deliver it? Where does it go? This is the problem”.

Double digit growth

“So you then come to targets like double digit growth. We’ve set double digit growth in 1999 actually, since 1995 when vision 2010 was created. Oh! Reduce poverty. Oh, we’ve said that since 1995 when vision 2010 was there; you say industrialization, one of the five principles of economic reform agenda agreed between NESG and government in 1993 was industrialization, infrastructure, education and privatization. So the point is, we reached this consensus. We agree it’s a great idea, and then we leave the room for political elite that does not agree that it’s a great idea to execute it. And so you unplug, you derail  every four years or eight years, as the case may be now;  it means that  for Nigeria, we must have a consensus, not just on the agenda, but on how, because the possible  thing for Nigeria at any moment in time is always a fantastic upside. That’s why it’s easy to put any outlook”.

Potential is not problem of Nigeria

“Look, take any outlook on Nigeria, 10 to 20 years; we are always  top 20 economies in the world. I think there’s a 2050, projection now, we are top 12. We’ve had the potential to be top economies in the world. Potential is not our problem. On potential, Nigeria will go to heaven. The problem is, when you want to convert our potential to outcomes, measurable, tangible outcomes that matter to you and I. You must deliver leaders that can run institutions; institutions execute policy. In fact, if you hand over  that agenda to an institution that has no capacity, nothing will happen. Institutions execute policy. Now, institutions also develop policy. If you have an institution that cannot convert a political agenda, no matter how nicely it has policies that match the internal and external environment and can execute, it will fail. So the last thing to note is that once we are spending more on the cost of governance, the capacity to govern has not gone up, it’s gone down. And so there’s a disconnect between our investment in governance and governing institutions and their capacity, and that capacity affects political outcomes like peace and security and stability.

“It affects your capacity to define what your enlightened trade policies are and how you should deal with Trump or deal with Russia or deal with China. It affects your capacity to say right, like Dr Yemi pointed out, we need to do these four things, the capacity to now translate those four things into outcomes for Nigerians, whether it’s unification of  FX, whether it’s removing subsidy, whether it’s social,  we saw social protection up here. We’ve tried to implement social protection for 12 years. The whole of President Buhari administration for social protection left ; the challenge is how we transmitted. Social protection in Nigeria did not automatically translate into benefit for citizens. So we failed, not at the idea,  we failed, not at the agenda, we failed because the quality of leadership and the quality of institutions that need the capacity to execute has a huge deficit and if we don’t solve that deficit, many promises of Nigeria will not become realistic”.

Engagement

“ A nation of engagement that would fit that model. However, in every case that Dr Kale presented this morning,  in Brazil, Indonesia, Malaysia, how these countries grew was that there was a consensus in the private sector and a consensus in government that we will co-deliver. We will co- deliver economic transformation. That’s not a meeting, that’s not a regional or annual summit, you know, that’s not a quarterly briefing. No, that’s  if we say, today, we want to transform the energy sector, the energy plan will have two sides, what government must do, what business must do, and accountability and responsibility mechanisms to check everybody is doing what they are doing right. And then we all will come and report to the country, and you say, this is where we are; they are engaging. That’s so when you say engagement, that’s what we mean. Now, if you take five areas that can be transformative  today, in fact, what I call the arc of the possible . Nigeria has an infrastructure stock of $3 trillion infrastructure alone, the bankable component of that infrastructure stock is at least 75% in other words, if you depoliticized it, if you de risked it, today, that infrastructure will be attractive to global and local investments. What the private sector asks is an engagement;  if we will bring our capital, if this infrastructure meets this incentives and conditions.  What the government then needs to deliver is reforms that create incentives; that delivers those conditions for the capital to come,  either at ports, rail, roads or energy. It’s not enough to say we have an infrastructure stock of $3 trillion when I can’t invest in a seaport tomorrow morning without bottlenecks that will almost chase me out of the country. It’s not enough to say, come and invest in oil and gas when divesting onshore for an entity that took almost seven and a half years, and those of them prospecting offshore, have waited for a decade.

So in practical terms, engagement must translate into consensus for action, contracts and compacts for delivery, and there should be accountability mechanism to check how we are progressing. Let me give you another example in this country, the government said we are incentivizing Dangote to build a refinery. When the refinery is ready, the price of Premium Motor Spirit, PMS will come down. We didn’t say it. Government officials said it locally and internationally. Now, today, the refinery is ready with the capacity to produce three weeks or four weeks consumption,  at lower prices, right, with high quality, and then stories started. Now it’s that disconnect, not at the level of talking, please, but the level of the consistency of regulations, the consistency of policy, the transparent execution of these policies, with accountability and reporting. 

If Dangote did not build the refinery, then we should have also held Dangote accountable, right, that we gave you all these incentives as a country to build something. Where is it? Because, by the way, in our last 25 years, there are some times in Nigeria where the government gave unfair advantage to the private sector entities to go and do certain things. They became rich, but Nigeria did not benefit, right? That’s also part of the problem. So when we say consultation that drives development, we are discussing a partnership that transcends the big meetings, right? So, in energy, agriculture, any country that has grown agriculture grows it with a partnership of smallholder farmers, they are triggered to become highly productive, coupled with large scale industrial production driven by technology and science, you need both”

Security challenges 

“ In Nigeria, massive workforce of smallholder farmers and high tech agro firms that, if given the right incentives, can go in and partner with the smallholder farmers for growth. But nobody will do it when 1/3 of the land for cultivation has security challenges. Nobody will do it when there’s pervasive unclear subsidies in agriculture input which makes investing in seed, and other inputs very hard to do. Okay, and no one will do it when there is no consistency of policy; you know, agric promotion policy is no longer than 10 to 20 years. So that’s another example, where  there is no consistency that is what we mean. Nigeria wants to hit, let’s say, on maize, a target of 20 million tons of maize in 2025 then we will ask ourselves, How much land have you cultivated? Government will declare what they cultivated. We, the private sector will declare what we cultivated. What did you plant on the land? Who declared the seed varieties we were using, and the yield factor?  Government will declare the same, then businesses that need input for local production can take position, supported by government that gives them development finance, leveraging single digits of credit to store what we have for the next season. Then all of a sudden it changes the policy, can it get it right? It requires mobilizing the private sector at scale; it requires the networks that deliver and networks that understand that it’s business that drives this thing. And what government is doing is government is creating policy, and policies that create environments for the investment to come. 

It is investment that creates opportunities; it is opportunities that create jobs. It is those jobs that the young people sitting down here listen to, listening to us, will be absorbed into. Now, once there are no opportunities, no jobs;  no jobs because no investments, no investment because the environment is not conducive”.

Public private interface necessary

“Consultation is key. We need public and  private sector interface, where the partnerships deliver national competitive advantage. That’s more hard work than conferences. Even the annual summit can’t deliver it. That’s my own annual summit.  It takes all of us working together, and Dr Kale makes an important point this year, and the global vulnerabilities means that we now don’t have time. In the next 24 months, even this country will be in electoral cycle and the politicians will be distracted. So you have 20 months maximum of serious thinking and execution on energy. We can do it to PMS, and  on electricity.

Look, you can deliver a subsidy gas pipeline in 12 months that delivers 12,000 megawatts of power. You know, food, you can double the production of staples in Nigeria in 12 months. This is within the ark of the possible. Now let’s pursue the ark of the possible, and that makes a difference. You can today give manufacturers single digit interest rates and  allow them to refinance inventory,  balance sheet for the last 24 months and get them back. 60 % to  70% of economic activities are operating below 5% GDP. What you need is to fire  up economy so that it translates into 6% GDP growth, and that is also within the trajectory and the ark of the possible.  So, we’re not asking for things we need to pray for God to do for us. No, what we’re asking for, God has given us already. If we take ourselves serious,  12 months of work starting today, we will have a radically different set of outcomes from the one we are seeing”.