As I ride to work this morning I am listening to news economic analysis and I fear for this country, for me and for my children. Oil is now sub $30 against a budget benchmark, international oil suppliers I hear are blacklisting us, shell and chevron to sack 18,000 workers and as the radio presenter remarked we are indeed facing a petro calypse.
Despite all these, my main concern is the attitude of Government in all these or what I perceive is their approach to solving this looming disaster. From what I have seen so far, there are two major approaches. The first being anti corruption drive, get back as much of the looted funds to pad the budget deficit and the second push to control all revenues that come in to ensure there is no further stealing .
There lies the main crux of our problem. These two strategies are as archaic as it can be. The anti corruption battle at best will give us some phyric victory with the bulk of the expected sums tied in legalese for as long as we can see. Yes, we are receiving some of the Abacha loot but that in itself should show you the futility of that move, it takes forever and we have very short term challenges that need to be faced urgently.
Secondly moving all funds into the TSA, still maintaining control of the commanding heights of the economy, the TSA and all such centrist economic policy only further in my mind stifle the economy.
As I climb the third mainland and look far into the misty clad Lagoon, my mind only races towards our situation if things continue like this in another 12months. What if oil falls as low as $10 because there is nothing I am seeing that would not stop that, and we continue to see a beating of the Naira and the Government is still in court chasing Dasuki and the rest without taking some very radical and proactive steps what will be our lot.
My suggestions are very simple. Free up the economy, open it up for sale. Allow foreign direct investment to come in. Ignore the hot money that tend to hover around the equity and debt markets. These kinds of funds never support the real economy and never creates real opportunities in the real sector it only serves as a basis for measurement and comparisons amongst short term traders.
We have a deep market, huge resources waiting to be tapped. All we need do is to loosen red tape so that dollar can come in as direct investments into the economy, create jobs and jumpstart the economy thereby limiting the influence of petro dollar on the economy.
I think it’s time to sit down with MTN and work out a payment plan if we still insist on this fine. I was initially in support of the full payment of the fine by MTN and did not understand why they where reluctant in paying. But after seeing their financials and also the effect of the fine on FDI I am having a change of mind. I think the fine should be cut by half and a payment plan spread over 10years but paid in dollars should be worked out.
This is so that other FDI investments will not panic and close shop or at worst stop new inflows coming in. We have to immediately concession large parts of our lands to big foreign agricultural business. We have to give them the land with long lease holding, tax holidays so they can come in and employ our people produce and export. These are immediate palliative solutions while still working on solid minerals as another support ledge.
Other sectors that can be immediately opened up apart from agriculture is Entertainment, education, aviation and health. For aviation we can continue with the dream of being a commercial hub for the region like Singapore earning income from all the fees and landing charges that will accrue with all that heavy traffic.
The entertainment industry is a gold mine and we have only scratched the surface. Star Wars earned over 1b dollars we have the market and creativity to do same here, Nollywood is worth over a trillion Naira and these movies can be carefully packaged for the international market and revenue streams well streamlined back into the economy. The movies can target the deep African diaspora markets of South Africa, UK and the Americas as major revenue earners.
Even if only Africans in the diaspora watch these movies we will still be good. If carefully packaged we can reverse this trend. We can target diaspora dollar through their love for our movies.
Basically the idea is to reduce government. Okoroacha has started with the sacking of over 3,000 workers although I do not support the arbitrariness of this move but lighter government with solid technology would free up clogs in the wheel of government, free up funds that can now be diverted into revenue supporting initiatives like infrastructure, public private enterprises if at all.
So in conclusion, we are not dead yet as we have a thriving sub market that does not show on most radars but is very virile and usually comes up to support the artificial economy built by oil. The time is now for us to look closely at over the 60% of us who are not in the banking system and all that cash they control and harness that power to rebuild the economy. This can be done with soft loans, soft taxes, soft rebates and benefits to encourage them to access the banking system so that the excess funds will join the fight to save the Naira.
The retail market is the solution, the millions who eat noodles daily, who drink pure water and who use the ‘I better pass my Neighbour’ generating sets. We need to humble ourselves and go back to them to beg them for their savings, the ones they keep with the old bicycle baba as ‘ajo’ to beg them for their market by repackaging our industries and selling things to them that they will buy, rebuild our schools to attract their children and drawing their funds as school fees. This is the death of the elite and the glorification of the poor man.
It is well.
Joseph Edgar is a respected blogger and Portfolio Manager.