Diversification of the Nigerian economy has remained a hurdle that respective administrations grappled with without success and this has brought the country to its knees as DAVID AGBA discovered in this interview with the President of the National Association of Nigerian Traders (NANTs), Mr Ken Ukaoha. Excerpts.
Falling oil price where do we stand as a country?
It is quite informative that we are facing such that trend to letdown the efforts of citizens and government of Nigeria. You will recall that last year, Nigeria became the largest economy in Africa, but with what we are seeing now, the oil price sadly and regrettably has remained one revenue source Nigeria depends upon.
The implication is quite simply as we may end – up borrowing more if care is not taken.
The implication is that yesterday we were not able to diversify the economy and today we are going to pay for it.
The implication is that yesterday, we were are not able to manage our economy effectively and today we are in for it and we with surety pay.
The implication is that our budget has been totally dependent on one source, but today we are going to pay for it.
Another implication is that other sources of revenue, for instance, the huge revenue that comes from customs duties have been left to be emptied in private pockets and the customs are left to deduce whatever they would. And many other agencies of government have been on their own – CBN, NNPC – they generate revenue and they end up dropping almost zero into the commonwealth of the country. Today we are going to cry.
Why until now, Nigeria was not able to come up with alternative sources of revenue?
While I quite agree that it is not easy to come up with alternative sources. It is also unfortunate that leadership in Nigeria appears to be majorly of the class that are not looking at tomorrow. It is either that the incumbent want to outshine his predecessor. But in concrete terms, we could have locked up the economy and looked inwards. Look at solid minerals and agriculture. Those two sectors essentially with what the industrial sector would have done these three would have been a tripod, which the nation would have settled down comfortably. But we choose to stand on one leg. Today the leg is not only aching us, but is almost going off and am just wondering what we are going to do. Whether we are going to squart to sit in a stunted manner.
Where do we stand especially as an import dependent country?
Give it to this present administration that they have been able to knock out good policies that will shoot us up in terms of industrialization. Give it, if this particular administration that they have been able to give certain assurance to the private sector. I also know that whatever we are suffering is a cumulative thing. Because those who were holding the baton did not run fast and it appears some of them did not know that the country was going back, even while they were runing. So we found it difficult to stay in the race and maintain the back. We found it difficult to locate where we ought to have being and where those we started running with are even when they were beckoning on us to come. Look at countries like Malaysia, Singapore, Brazil even India, we were all at par, but, at a certain point their history changed. But, we have remained import dependent, while they have crossed the line.
Does power not have a role to play in all these?
Power is a big issue, but it is not really the only problem. It is what I call combined honourism in a negative sense. Power! Yes, but policy approach.
The problem of powers is number one, the problem of policy approach became number two. A lot of policy designed in this country only promoted importation, they never promoted the pedestal need for industrialization, they never saw that we had opportunities to industrialize the nation. 160 – 170 million people and what it means is that what we produce, it is our people that will first buy it. And therefore gradually, because we were not producing, our people were growing the appetite to consume. We got to the point any goods with a foreign name was selling very well. The media also did not help the case of made in Nigeria products.
But when you look at those policies, they has not been really patronized?
The made – in – Nigeria products is just only recently. Am sure you are aware that Volkswagen and Peugeot had their factories in Nigeria. In those days when you graduate from school you had a manufacturing factory where you needed to work and we learnt that there is a loan for you to buy a Volkswagen or a Peugeot car. With time the Volkswagen company owner left this country because it was not patronized, why because they were displaced from the market.
There was no attempt to dissuade importation. How did this come about? People were getting corrupt in government and they were making more money and the Peugeot and Volkswagen in Nigeria were no longer attractive to them. They wanted to show class. Nobody was talking about the policy.
They were allowed to bring in cars to showcase how much they have , how much they have harnessed. So corruption led to this misplacement of policy which dealt a death blow to these factories and they relocated. Me and you know how Peugeot was produced in Nigeria, but the government decided to bring in BMWs for first ladies to use. So such policies displaced this people and what it means is that they will be paying salaries but they will not be making more. Automatically, people are retrenched.
The same thing happened to the textile industry. The same thing happen to Dunlop, Michelin and they relocated to neighbouring countries. Not just because of power alone but unfavourable policies. The policy environment must be number one before you pursue infrastructure. Things that we can produce here naturally are being imported and the companies were no longer breaking even. What do you expect from them, retrenchment! This is what has brought us to where we are today.
Devaluation of the naira, fall oil prices and an almost non-existent manufacturing sector, what does this portend for the Nigeria trader?
The falling oil price does not portend anything good. Psychologically, it reduces your worth even as a trader. Before now if you are a trader that went to Asia to buy goods when they see you they re – attracted the first thing that comes to their mind is that this man is coming from a rich country. Now, as they see you, the first thing that comes to their mind is this people are struggling now. “Anybody you are doing business with that is aware of global happening, the respect you had yesterday is no longer there” the invincibility of Nigeria and Nigerians becomes questionable.
If your partners were giving you credit, they were giving you credit based on your sound economy. But at the back of their heart when you are signing an agreement based on credit they are also thinking “with this economy” hope my money comes back because they realize that few people are going to buy because they realize that the purchasing power has been affected by a reduction in the revenue of the country. Not only does it hurt the traders but the economy of the nation. And it affects even the consumer who is going to buy from him.
ii.Your currency is not the one dictating, it is dollar. You are running a dollar dominated economy
iii.You are pushing your own economy that is under the dollar down. What you are doing is conceding so early without even struggling. And then conceding at all fronts what the dollar has done is to shoot up immediately. Today the dollar is over #200.
Would you say the CBN acted out of panic in devaluing the Naira?
It was out of panic. Fear of the unknown. Fear of what was going to happen further, some have argued that we should print more money but the question is, if you print more money are you going to print dollar? You are going to kill the naira the more. Dollar is what you are owing and you pay in dollar.