By Omodele Adigun
TO wean Nigeria from oil dependence for export earnings, the Federal Government has been urged to make sustainable investment for long-term funds.
According to the Managing Director of Cowry Asset Management Limited, Mr Johnson Chukwu, it is holistic approach to economic management that will change the structure of the nation’s economy from its present status of mono-product economy to multiple-exports nation.
Chukwu, who gave the advice Thursday in Lagos while speaking on the theme: Policy Options for Nigerian Economy’s Recovery at a forum organised by the Finance Correspondents Association of Nigeria(FICAN), said there is no single sector of the economy that is fully developed, hence “we need a cocktail of policies which will include creating windows of investment for long-term funds through the concession of commercially viable infrastructure, exchange rate adjustment, full deregulation of the downstream petroleum industry and stimulating investments in sectors where Nigeria has comparative advantage as well as investing heavily in social infrastructure such as health, education and security”.
Reflecting on the current crisis on foreign exchange (forex), which he lamented that it was worsening by the day, he observed that “our policy response will determine if and when we will come out of the crises and if we will be enmeshed in future crude oil price crises. ‘Like humans, organizations and corporate entities, including nations are products of the decisions they took at critical junctures in their life’ .”
He then urged the Federal Government to formulate policies that would encourage value addition instead of production of raw materials.
His words: “We, however, believe that trade policies are better tools to use in discouraging the importation of goods whose import hurt local manufacturers. We have proven cases of successful use of appropriate trade policies to develop specific industries in the country. A classical example is the Cement industry where local manufacture has grown from 2,000 metric tonnes per annum to more that 40,000 metric tonnes per annum in 15 years. Nigeria has moved from a net importer of cement to a net exporter as a result of targeted use of trade policy in the subsector.
“The Federal Government should renew the previous government’s drive towards the implementation of the cassava policy, sugar policy and automobile policy. Similar policies should also be enacted for petroleum refining, palm oil/produce and vegetable oil refining, sesame seeds, cocoa, cotton, granite, furniture, leatherwears, etc. Should we grow these sectors to the point of producing globally competitive final products from the abundantly available raw materials, we would have succeeded in achieving the much desired import substitution, conserve our foreign reserve and possibly earn some foreign exchange.”
On infrastructure, the Cowry Asset boss noted that government alone could not fund the huge infrastructure deficit in the country. “We, therefore, believe that the way to go is to concession some of the critical infrastructure that are commercially viable such as transport infrastructure – rail lines, highways, seaports, airports, etc. and invite private sector capital to build these infrastructure under Build Operate and Transfer (BOT).
By Omodele Adigun