The vision of transforming Nigeria’s economy by 2020 must be strategically framed, rooted in sound macroeconomics fundamentals and elucidated legal framework to accomplish the targeted goal. Nigeria has come of age, and is now determined to expand her economic frontiers and to invest in the populace. The targeted year 2020 is the year Nigeria proclaims that she will make the list of one of the greatest/best twenty economies in the world.
During the inauguration of the President Yar'Adua, he echoed that Nigeria was ready to emerge from shambles of corruption and hyper-mismanagement to take her rightful place in the comity of nations. Nigeria must move forward to build a prosperous and giant economy. There must be shift in economic paradigm. Nigeria has so far achieved quantitative macroeconomic fundamentals, but a lot needs to be done .
Emeka Chiakwelu, Afripol organization’s Director/Chief policy strategist has offered strategic steps to be taken by Nigeria to realize her vision of making club of the world’s 20 biggest economies by the year 2020. (An abridged version of the paper he delivered on United Nations Day in United States of America).
1. Stabilization and convertibility of Naira: Nigeria must have a stable currency, or her pursuit of a powerhouse in the global economy will be a mirage. Although Naira currency is relatively stable, it is weak and soft when you compare it to other major currencies like dollar and euro. Presently Nigeria is having one of the lowest debts to GDP ratio in the world. This is attributed to her recent payment of foreign debts and the reasonably macro-economic stability she achieved through economic reform measures. Nigeria does not need a volatile economy with unstable exchange rates for that will precipitate low investment. Though high unemployment and low per capita income presently bedevil the economy, her economic indicators look bright.
The postponed Naira re-denomination must be revisited and carefully implemented, for this will make the convertibility of Naira readily. The convertibility of any currency remains basic to foreign exchange transaction.
2. Tax Reforms: Taxes are very important to be left in the hands of politicians. Seasoned bureaucrats and financial experts must be used to setup sensible tax codes that are business friendly which encourages economic development, especially in the attraction of foreign investors. Government must look into lowering tariffs to encourage inter-African business partners.
Tax codes must be made to encourage job creations and businesses. Favourable tax breaks must be given to companies and businesses to stimulate economic development. A modest progressive taxation must be reintroduced and effectively implemented, the idea is to encourage taxpayers to be stakeholders in the affairs of government. By paying taxes, citizens’ empowerment is established. Citizens will then carry out oversight function by monitoring how their taxes are spent.
3. Prudent management of foreign reserve: Nigeria’s foreign reserve is hovering between (50-54) billion dollars and such fund must not be allowed to lay dormant in the foreign holding. A reasonable portion of the reserve can be invested in a foreign market, to yield an appreciating return. Nigeria can learn from Dubai and other Persian Gulf oil countries that have invested in the western economies especially in the American Real estate and fiduciary bonds. Government should assemble a committee of experts to manage the reserve and invest some of the money in stable market overseas.
4. Diversification of the economy: Nigeria has become responsive to the diversification of her economy, not minding she has a long way to go. The country knows what to do, but procrastination has always retarded her progress. Oil cannot continue to be her only high yielding sector, agriculture must be expanded and retooled. Investment must be made in research and development.
5. Nigeria’s Image Management: Nigerian policy and decision makers have not certainly explored the power of image making. The image of a nation both abstract and aesthetic speaks a volume of the nation. Nigeria must be able to tell the world that she is ripe for investment and tourism without obstruction. No foreign institutions or countries can tell the world about Nigeria more than Nigerians could do. Even if Nigeria rent CNN, BBC, and New York Times, the primary and fundamental responsibility of dissemination of news about Nigeria resides in the hands of Nigeria. The country must have her own international mouthpiece to tell her stories to the world, especially to the intended investors and the tourists. Nigeria cannot afford to leave her destiny and future in the hands of foreign media networks that see her as their fellow competitors. Nigeria cannot afford to be NAIVE and NONCHALANT in the era of ruthless, back-stabbing and cut-throat business world.
6. Solid social amenities: Social amenities must be present so that she can make headway in industrialization and information technology. Energy conservation and availability are central to modern development. Basic infrastructures are the key to sustainable development. Constant supply of electricity is the key to development.
7. Reform and Secured Property Rights: Citizens must be able to utilize their properties to create further wealth and this can be possible when rights of ownership are enshrined and guaranteed in the law. Therefore, securing property rights will serve as catalyst for economic prosperity.
8. Commitment to Democratic capitalism: Nobody is saying that democracy and capitalism have no imperfections, but time and experience have shown that they work and boost stability in any given country. The major defects of capitalism - unemployment and inflation can be controlled through sound fiscal and monetary policies. As for democracy, it is the best for Nigeria because of her rich diversity. Independence of Judiciary must be encouraged to the highest order, because it protects and strengthens democracy. Again genuine electoral reforms must be pursued and encouraged to make the electoral body independent, stamp out lawlessness, intimidation and rigging. So that free and fair elections will be guaranteed. A representative government enables every group to participate effectively in the political landscape.
Government must encourage and promote free enterprise. Government must also be alive in performing their responsibilities. These include the protection of lives and properties. They should avoid tinkering with the economy, and should allow the forces of capitalism (demand and supply) to be the dominant economic determinant. While Nigerians must be pragmatic in areas of foreign trade especially the protection of local jobs and infant industries, but they should careful not block free trade which encourages trade specialization and comparative advantage.
9. Securing Peace and security: The most important function of any government is the protection of life and property. A nation devoid of law and order will not be able to perform such a necessary function and therefore her economic growth will be hampered seriously. For Nigeria, the police force must be reformed, and properly trained, equipped and handsomely paid. Courts must be allowed to perform their duties without interference from any quarters.