By Adisa Adeleye
Many friends have asked me whether a state of full employment is feasible in a country with no strong industrial base or a pool of skilled workers wanting to be employed. Many analysts doubt the claim of politicians who promise economic growth with full employment but without inflation.

The idea of full employment does not imply that every adult would also be at work at the same time. There would be period of adjustment for movement of workers from one job to the other.

In many economically advanced countries, a _three percent unemployment of the work force is the norm and state of unemployment of more than 3 percent would be unwelcomed. In the United States, President Obama is facing the problem of re_election because the average unemployment rate is about 10 percent.

In Nigeria, the politicians who promised full employment, perhaps, they did not fully understand the implication of full employment in an inflationary environment. The Nigerian inflation has been a product of demand and shortage of supply, giving rise to increase in the price of commodity. It is a pity that President Jonathan has not unfolded in details the economic transformation policy that would bring economic stability, growth and full employment. Any policy that would tackle demand side of inflation would necessarily address the supply aspect of it, also. Excessive demand at home would only be cured by widening the sources of supply at home or through imports which is not cheap because of low value of the naira. Domestic production cost is not helped by high cost of power supply and the corresponding high cost of imported inputs.

The struggling manufacturing industry is at the mercy of cheaper and smuggled finished materials from abroad. The remedy is a physical policy of shutting out of inferior and cheaper materials that would affect the expansion of domestic industry. The argument of some officials that the country is losing revenue through banning of certain commodities, and that most of these commodities are traded openly in Nigerian markets does not make economic sense. It is the duty of a serious government to protect its domestic industry against unscrupulous competition. It is also the duty of Nigerians to support a progressive economic policy.

In a dormant economy, it is necessary to inject extra funds in order to stimulate effective demands for domestic products, thereby increasing capacity utilization to increase the supply. An increase in demand for domestic products would enable domestic industry with idle capacity to engage more hands until a point where optimum production is reached. The idea of some lazy economists that pumping more funds into the economy as a source of inflation does not recognize the ability of industrial expansion through increase in the effective demand of domestically produced commodities. It is an economic fallacy to suppose that higher interest rate would curb excessive demand to the extent of forcing prices of commodities down rather; excess funds would stimulate effective demand and the increase capacity utilization through hiring of more hands. The theory of making credit difficult and lending more costly, especially in a dormant economy is a disservice to a nation whose import propensity is very high.

The question of sourcing funds for industrial expansion and infrastructural development comes to mind. The government‘s approach for sourcing funds through the SOVEREIGN WEALTH FUNDS (SWF) is logical and laudable. It is a way of reserving some parts of oil revenue from being totally consumed. The argument of some governors that all revenues accrued to the country should be paid into the Consolidated Account is weak. It is noted that oil revenue which is being shared to the state does not bear any relationship to the contribution of the states to the Joint Venture Expenditure on Oil and Gas production. The share of the revenue going to the state is like wining a lottery without a stick.

Some Nigerians believe that Nigeria has not got an effective oil policy which will make Nigerian National Petroleum Corporation (NNPC) a profitable commercial organization with shares being held by the Federal Governments‘ oil producing states and other states in agreed proportions. Rather, the NNPC is being run as a government department with no clear objective, except that it is a company fully owned by the federal government and being used to fund federal government investments in oil and gas industry. At times, it looks like an octopus organization suitable for political patronages.

On the question of subsidy, it has been written on this Colum several times that the federal government has nothing to do with downstream sector of the oil industry, this is a sector that has worked well in the past under private initiative.

I have suggested that the refineries should be left in the private hands to operate either on lease (for security) or direct sale to the existing oil marketer with international connection. If private investors are to be encouraged, cheaper sources of funds and advantageous prices of crude would have to be seriously considered. No investor would venture into an industry under the spell of civil service mentality. The subsidy question could be solved by allowing the private oil marketers to be wholly involved in the procurement and distribution of oil products. The federal government should limit itself to the provision of necessary infrastructures.

Some advocates of foreign investments would always argue for removal of subsidy (If any) on oil products and some other essential services in order to make the market more attractive to foreign investment. They often forget that, unlike aid, foreign funds have to be serviced and later the capital invested and the profit would one day return to its place of origin. A sensible foreign investor would always look for a politically stable and economically rewarding environment to invest in. Such an atmosphere does not operate where the price of good living is beyond the rich of the common people. Removal of subsidy on essential services which the common people need to survive would encourage ugly reactions from the poor people of this world.

Many people believe, and justifiably so, that the monthly dollar revenue of oil is enough to stimulate the economy to greater height If properly managed. Oil money, as the country is being constantly reminded, is not for conspicuous consumption of luxuries but for stimulating economic growth and prosperity. Each state should be able to live within its means of internally generated revenue and use oil revenue to promote better living today and greater tomorrow.