 Concrete step towards recovery
And now, Obasanjo has made another pact with the Nigerian people. It is a pact they have been yearning to have for a long time and are already investing so much hope in. And unlike in the past, Nigerians have come to realize the symbiotic relationship between politics and economy, a fact that was well understood by the immediate former and hopefully Nigeria's last Military ruler, General Abdulsalami Abubakar. "Whatever actions we have taken to get our nation back on track has not been limited to the political sphere alone, " he assures.
Akeem Bello-Osagie, the Chairman, United Bank for Africa, UBA, a Nigerian leading bank also agrees: "There is the political challenge which is movement to democracy, the second challenge is reorientation of the economy. The political is important and makes things possible and creates the condition for the political economy. If we have both, then I think we would have a booming economy and be a success story."
In addition to that however, Nigeria's expectations from the new president also include sincerity and transparency which Obasanjo pledged on many occasions while campaigning for and after winning the election. If his words turn out to be his bound, then the future of Nigerian economy looks bright. Because as unhealthy as the economy seems, it has never been short of efforts at reforms from the past regimes. Lack of transparency and consistency have however been the leaders undoing.
A former Head of State, General Ibrahim Babangida, introduced the Structural Adjustment Program (SAP) in 1986. It was a real testy time for Nigerians. It was however intended to re-kick-start the economy from the doldrums. The reform, though half-hearted, was impressive in a country where investment restrictive decrees (Exchange Control Act of 1962 and Enterprises Promotion Decree of 1972) survived for between three to four decades, regulating the economy against competition and sealing it against the injection of the badly needed foreign exchange accruable from foreign investors.
SAP was meant to be a "Made in Nigeria for Nigerians". It was a mixed package of hardships and relief. The hardships had to go necessarily with the reforms. To Nigerians, despite the belt-tightening conditions that went with the implementation, national pride that came with the rejection of dictation from outside agencies like IMF and the World Bank had enough cushioning effects.
Interestingly, for the first time in Nigeria, a decree was put in place in 1988 which led to the assessment of 145 federal parastatals for full or partial privatization and commercialization. A whole 111 enterprises were confirmed sick and therefore desirous of investible funds from both local and foreign investors. In 1991, they were dragged to the open market, and by March 1992, 68 of the parastatals had undergone one or other form of privatization.
It should be a matter of interest to the new president that non-oil exports have remained adamant to growth induced measures. It is understandable that diversification policy in the past was largely mere political slogan, but not with the regime of the late General Sani Abacha who made quite some progress in this regard, especially between 1995 and 1997.
At the forefront of diversification has been the need for revitalization of the agricultural sector. In the 1995 budget speech of the late dictator, General Abacha, he put it thus, "In the quest for economic recovery, agriculture must provide the lead. Prior to independence, agriculture was the main stay of our country's economy supplemented only by solid minerals export. Nigeria was once the world's leading exporter of palm produce, the second largest exporter of natural rubber. In addition, Nigeria was self-sufficient in food and agro-allied raw materials... A new approach to economic recovery through the revitalization of the non oil sector must now be implemented with dispatch..." he reasons.
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Truly so, the democratic institution and the revitalization processes for the economy are already in place and taking shape. The Nigerian economy is being thrown open with
"red carpet" being laid for would-be investors to be part of the beneficiaries of the irresistible offerings of Africa's biggest market. And expectedly, investment managers are already at work in many parts of the world. Many are already taking a plunge into the Nigerian market. According to Goodie Ibru, President, Nigeria Stock Exchange, NSE, "foreign investors are on the queue for investment opportunities in the country." Foreign investment into the Nigeria's stock exchange which stood at US$4.9m in 1997 when Nigeria was considered a pariah nation and unsafe for investment rose to US$49.4million in 1998. Couple with this is the lifting of the United States restriction order which was placed on Overseas Private Investment (OPIC). OPIC now gives support to private investors who want to do business with Nigeria.
Aside from the United States, several private investors are paying visit to Nigeria to assess the capital market for possible areas of investment. Recently, South African businessmen came on a business mission. Mr. Johnny Thabo Pitswane, counselor and acting High Commissioner of Republic of South Africa in Nigeria says that South African businessmen have indicated interest in the oil, mining and energy sectors, also in telecommunication and transportation and in the financial sector and its derivatives. Mr. Pitswane adds that "Nigeria with a population of about 120million people can never be neglected by any serious businessman. And rightly so, it looks like Nigeria is also set for them.
Check out Nigeria's selling points: The agricultural sector, for example, used to be Nigeria's biggest export earning reaching about 76 percent in the 60s, but over dependence on oil has succeeded in driving it to an all time low 0.78 percent. But now the sector has been opened up for foreign investors, while the local farmers have various incentives to boost their production. The government has started providing duty relief on importation of agricultural inputs including machinery and agro-chemicals. Foreign investors enjoy pioneer status which qualifies them tax exemption for five years, while the agro-processing has the assurance of direct allocation of foreign exchange whenever the need arises.
Early this year, former minister of finance, Alhaji Usman Ismail during the budget breakdown put the expected growth rate in the sector at 6.0 percent. He is not building a castle in the air. Last year alone, a total of 26,511 projects / beneficiaries received nearly US$5million grants, while the Agricultural Development Program (ADP) (a World Bank-Federal Government counterpart funded project) provided in-kind credit facilities to thousands of farmers.
These incentives are yielding bumper harvests for farmers already. Presently, Nigeria is the world’s largest producer of cassava. It also records impressive production of maize, yam and cattle.
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NIGERIA
