Ezeakukwu Emmanuel Nsoedo (PhD)
The world’s economic future looks very bleak at best in the near future. The leading economies are tethering on the brink of disaster as a result of imminent massive unemployment, coupled with the collapse of oil prices. Two days ago, the United States Brent crude sold at negative $0, the first time there had been such dramatic collapse in the oil market since the commodity was discovered. The danger exacerbated by the fact that the oil producers in the United States have run out of storage facilities despite the industry’s sophistication in maintaining huge storage capacity.
The oil market collapse impacts Nigeria even more because of its dependency on the product for most of the country’s revenue. Nigeria, over the years, had abandoned the cash crops that used to generate revenue for the central and regional governments. Palm oil, cocoa, rubber, and groundnut used to be the primary income earner for the various regional governments were essentially abandoned by Nigeria when the civil war broke out, and the military scrubbed the decentralized government for the unitary system. The military sliced up these regions into 36 states and the Federal Capital Territory, all of which are dependent on monthly dole out from the federal government to survive.
The coronavirus pandemic is going to hover around based on the experts’ analysis and the economy of the world’s leading countries are not expected to return in a hurry to full steam to necessitate spike in oil demand around the globe. The consequence of this reality will drive many countries to find ways to protect the jobs of their citizens. In countries with responsive governance, there is likelihood to resort to ultra-nationalism and protectionism. Recall how health materials for covid-19 paid for Germany, which were en route to the country was diverted to the United States when the disease exploded in that country. President Trump has already indicated that he would sign the Executive Order to ban immigration to the United States to protect the citizens from being infected with the coronavirus and to protect the country’s jobs. Make no mistake; all those developed advanced countries would do whatever necessary to preserve the jobs for their citizens because lack of a job is a most likely one-way ticket out of office.
Nigeria’s government has been on a borrowing binge for the past five years without a serious cerebral tasking to find solutions to some of the problems the country has internally. Most of the money borrowed by Nigeria to invest in the infrastructure was not made with a sense to yield resources back to the economy. The roads in Nigeria that take heavy vehicular use are still there without the railways, including the cargo rails to relieve the roads of the burden; hence, the continuous investments in that sector which lack efficiency. The same goes for the power sector where billions and billions of dollars were invested without commensurate yield; consequently, the citizens suffer from the misapplications of the money and inefficiencies imbued. As it is, the Debt Management Office reported that as of December 2019, the debt burden of Nigeria stood at a staggering sum of ₦27.4 trillion. The sour aspect of the debt is that while other geo-political zones benefit immensely, the southeast had been left out of the party; yet, all the states collectively bear the liabilities and repayments.
Despite the huge debt profile, Nigeria keeps misusing repatriated funds recovered from past corrupt officials and former head of state, Gen Sani Abacha.It is ironic that as the money gets repatriated and being spent in some phantom projects, an equivalent sum is being solicited from foreign lenders. The revenue profile from the Federation Account Allocation Committee has shown that there is a steady decline in the disbursement amount in the preceding months. The decrease in FAAC allocation is not likely to appreciate in the near future, therefore, it is best to say that Nigeria is in deep financial woes. Considering the present situation, states must begin to fashion a strategy to be creative, and also,address ways their internal generated revenue could be made more efficient. This has to be done in light of the fact that the oil price slump issue is not likely to witness a rebound in such ways to change the fortune of Nigeria. The covid-19 impact would still be felt across the globe for several months after people had gone back to work and cure for the disease found.
The first thing the Southeast Caucus at the National Assembly ought to do to collectively is to persuade the other members from other regions about the futility of taking new foreign loans, especially, it was never going to be used in an equitable manner. They and the Southeast governors must exchange ideas on how best to coordinate the economy of the zone so that there could be better cooperation among the states. Rather than seeing themselves as adversaries, it would be better to view each other as partners in progress for people of the zone. The five states could set up joint funds to support research and development in myriad fields that they could collectively exploit their findings respectively.
Another reason why the urgency to begin to act is now, stems from the fact that the absence of the steady hand of the late Abba Kyari as the de facto power broker would have left a huge coordination and enforcement vacuum. Even when there is a proposed policy to address the oil price collapse as it affects Nigeria, who would be the enforcer that would reward with the cane and carrot? Needless to say that the governors from the Southeast geo-political zone must move forward with an actionable plan to ensure stability and growth in their various states, thus, helping to ensure that the zone transforms evenly.
Using Anambra state as a reference case, the state has a well-developed road network that spans the entire length and breadth of the state. The state needs to determine how far it would go with the award of new roads and other capital projects, except where it is absolutely necessary. The Anambra state government must conserve their resources and redeploy them where they ought to yield back by way of consistent growth in the state at this perilous time. Some of the ceremonials do not have to backed by the usual elaborate pump and display regardless how important. Personnel travelling out of the state should be curtailed, except where it is very necessary.
The Anambra state government has already begun an agricultural program, but they need to ramp it up. The partnership between the state government and Cosharis Maduka in the promotion of agriculture has yielded tremendous progress, and therefore, more investors would need to be invited through a targeted sales effort to showcase the enormous potential the state has for businesses. Beyond that, the state government should embark on sensitizing the citizens to engage in some of agricultural activities regardless of what else they do as employment. Food security is very important both for the state government and its citizens. This is important because there is no telling what the atmosphere would be like in a few months in Nigeria, and particularly the state with its young citizens being restive well.
The state government should offer such incentives as tax holidays, or facilitate with the procurement of plot of land to build processing and packaging plants to ensure that the agriculture outputs are handled expeditiously. The state must have inspectors made of people with tested integrity to ensure that those processing plants adhere to international standards to avoid rejection of the products that would be exported to other countries. The ultimate goal of the state ought to be to start generating foreign exchange from agriculture.
A relationship the government of Anambra must pursue with seriousness dedication would be to partner with the Anambra people in the diaspora not only to come in as investors, but to leverage on their expertise to help move the state ahead. Other states in the zone could the same as well. They are in a better position to facilitate viable partnership for the state through their professional exposures. With a well articulated development plan, the Anambra Diasporas have the potential to lead in sophisticated health care sector development that would serve as destination point for people with ailments that ordinarily would have taken out of the country to obtain a cure.
For Anammbra state to unleash its full potential she has to leverage on the enormous affluence of the indigenes, the affluent Igbo people in diaspora along with the willing Southeast states to work to develop their an independent energy that is environmentally clean. Clean energy such as solar would thrive abundantly in the Southeast geopolitical zone. Besides, it is cost efficient when compared to the traditional energy sources currently used in Nigeria. Energy independence has the potential to propel all sectors of the economy to flourish, just like the state of Israel. The employment potential would be immeasurable considering many university graduates roaming the streets without opportunities to harness their talents. It is about time to think big, now that the economy of the world appears to be in hibernation as a result of coronavirus pandemic.
The state government should work closely with the organized business community, the traders, and the Chamber of Commerce and Industries to bring them up to date about the difficulties the country is experiencing, and the need for the state to chart their own course. As much as the state government feels the pain of scarce resources, the industrialists and traders probably feel the situation worse, hence, the state government must be seen as empathic partners by members of this sector. The government could affirm that there would not be an increment in taxes or levies as a way to support various enterprises in the state. It is important, however, the government tightens up its IGR regime to close the leakages that may lead to waste. The state should work to elevate the quality of education to international standards. One of the first things that suffer during the paucity of the fund is education. The state must consciously invest wisely towards quality education, particularly in information technology and artificial intelligence. With adequate preparation, the state’s school graduates should compete with any group outside the shores of Nigeria. Meanwhile, the new generation could take the state as high as they may wish if the state makes the right developmental call now.