The President on Monday, May 23rd at a meeting with the organised private sector unveiled his transformation agenda for the economy saying he will be at the driving seat of the implementation as the chairman of the National Economic team. Yes, it is time for Mr. President to think economy, talk economy, dream economy and act on the economy. He said that there would be a comprehensive review of import subsidies and waivers granted to companies, adding that only companies expanding domestic production and creating jobs would be considered for such incentives. Rural and urban integration, infrastructure and family planning are the critical factors to the transformation of the Nigerian economy and its possible emergence as one of the top twenty economies in the world by 2020.
A transformation agenda for the economy will require men and women who understand the nature and operation of the economy as a whole. The Nigerian economy is largely dominated by the informal sector. In other countries, they call it the small and medium scale enterprises which are the engine of growth in any economy.
For economic policies to work and move the nation forward, the President needs to appoint men and women with integrity, vision and clear understanding of the clarion call to transform the economy. It is not about being a graduate from Harvard Business School or the London School of Economics but about men and women who understand the culture and workings of the economy. Many London-groomed economists have come into the country and failed. Because they could not come to terms with the fact that theories are culture-based. For any Finance and Economy minister to succeed, he must be practical, meet the people, understand how they do their business and mobilise them for national economic integration. He must be a person who knows the potential of Amade in Aba, Awka products.@ He must see the beauty in Atie and dye adire@, he must understand the potential of the AFulani handloom dressmaker.@ He must learn the technology to be derived from those militants who refine Apetroleum products illegally@ in the creeks and the so-called illegal miners in the north. He must be a minister who adopts rather than imports technology. He must wear the face of Nigeria like Dr. Okonjo-Iweala who where ever she is, ties her Agele headgear and wears her Nigerian dress and is proud of it. A minister who sits in Abuja and talks at people he is supposed to supervise instead of talking to them, can only harvest policy failures. The desired minister must be energetic, ready to work and go to where the people work.
The problem that needed to be tackled is the duality of the nation=s economy. The duality between the formal and informal sectors is an important factor in the lack of competitiveness of the economy. In each of the major sectors of the economy, there is a sharp divide between a small number of highly productive, internationally competitive producers and a very large number of small producers/service providers with low productivity. The duality of the economy results in a lack of dynamism and competition.
Addressing the duality of the economy is therefore vital for strengthening and sustaining job creation.
The President as he enters into the next phase of his administration must realise that consistent with the high level of informality and low productivity in the economy, job creation is insufficient: only an estimated 510 per cent of the estimated six million new entrants into the labor market find jobs and wages are low. Youth unemployment (1529 years) is estimated at about 60 per cent.
The informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the purview of government regulation. This sector may be invisible, irregular, parallel, nonstructured, backyard, underground, subterranean, unobserved or residual. Informal economic activities in Nigeria encompass a wide range of smallscale, largely selfemployment activities. Most of them are traditional occupations and methods of production. Others include such financial and economic endeavours of subsistence nature as: retail trade, transport, restaurant, repair services, financial intermediation and household or other personal services. Activities in the informal sector in Nigeria are difficult to measure; they are highly dynamic and contribute substantially to the general growth of the economy and personal or household income.
The informal sector in Nigeria may be categorised into the following subsectors: Productive; Service; and Financial
The productive informal subsector encompasses all economic activities involving the production of tangible goods. They include agricultural production, mining and quarrying (excluding petroleum), smallscale manufacturing, building and construction. Specifically, they manifest in food production, woodwork, furniture-making, garment-making, welding and iron works, among others.
Also the informal service subsector includes repairs and maintenance, informal education services, health services, counselling services as well as labour for menial work. Repairs and maintenance services include tailoring, vehicle repairs and maintenance, tinkering, carpentry and servicing of various household and commercial tools. Informal health services, especially in the rural areas, include traditional birth attendants, herbalists and other traditional medical practitioners. There are also traditional spiritualists who offer counselling services. These services are rendered for fees paid to those who render them.
The activities of the informal financial sector of the economy are mostly underground, unofficial, irregular, informal, shadowy, and parallel. This is where the money outside the banking system is. The most predominant type of informal finance in Nigeria is the Esusu. Among the Yoruba, it is called either Esusu or Ajo. Among the lgbo, it is called lsusu or Utu while the Edo call it Osusu. The Hausa call it Adashi’, the Nupe – Dashi, the Ibibio – Etibe, while the Kalabari call it Oku. Some Esusu groups operate with written laws while others operate with unwritten laws but on oath of allegiance and mutual trust. The general practice is that esusu associations contribute a fixed amount periodically and give all or part of the accumulated funds to one or more member(s) in rotation until all members have benefited from the pool. In each of these sectors, they generate employment.
The minister that will help to transform the economy must be one that understands the basic principle of the dual economy and integrate the two into a large performing economy. We no longer need ministers who are treasury looters in active connivance with companies that exist on paper. Nigeria needs ministers who will not be compromised to giving individuals concession and waivers for their financial benefit instead of sectoral benefit; ministers who will not deal with businessmen on account of their persons, or self-centred solutions, but on basis of being a member of a group that represents group interest.
It is time the President appoints ministers who will see the country as a whole as his/her jurisdiction, ministers who will begin a mass mobilisation of Nigerians for productive ventures. Ministers who will assist to integrate the informal sector into the formal sector. Emphasis should be on small and medium scale enterprises which in every economy, generates jobs more than the large companies. The Federal Government in the next four years should focus on creating and sustaining small and medium scale businesses in both the agricultural and industrial sectors along the value chain.
Below are some of the several reactions to this column. Please send in your reaction, opinion and suggestions on how to move Nigeria forward. Your reaction must be civil.
Patriots‚Äô hearts bleed for the nation
Thank you so much for your expose in the Financial Vanguard of Monday 23/5/11 on our bloated Nigerian political rulers who borrow to maintain themselves in office. Your revelations are enough to bleed the hearts of genuine patriots. What legal and practical steps (both local and international) can be taken to stop these mindless, greedy and voracious unfortunate gang, from further ravaging our lives and the economy of this country, and the tomorrow of our children?
Felix Ekpo, Sapele.
CBN‚Äôs insensitivity to true Nigeria picture
Your article on CBN cash limits is to me an excellent truth on the CBN insensitivity to the true Nigeria picture. I pray they see it and accept it.
Nigeria leaders borrowing to maintain themselves in office, Demeji Bankole should be blamed for it.
Society where mediocres are pushed up as professionals
We live in a society where mediocres are thrown at us as professionals to manage institutions hence backwardness in our nation. We need to build our infrastructures (energy, electricity and security) first before thinking of introducing what and how things are done in developed climes. Your write-up on CBN cash limits is well appreciated. Keep it up.
As useless ministers drop
As useless ministers drop, will we expose greedy journalists too? Out soon: Complete list of receivers of ministers‚Äô brown envelops from taped calls, text, e-mails, event lists.
Note: This number has since been switched off. It can neither receive calls nor text messages. We encourage the so-called AMedia Police@ that uses this number to send the text message to please publish the list quickly if they are sure of their facts and be bold enough to make themselves known and stop being faceless. We in Vanguard will not be intimidated, we will continue to do what in our opinion is the right thing to do