World Stage Limited has released 68 recommendations from the virtual WorldStage Economic Summit 2020 with the theme, ‘New Reality: Consolidating Economic Diversification’ held on November 10, 2020.
The summit attracted top government officials which include the Minister Of Transportation, Rt. Hon Rotimi Ameachi; Minister of Science and Technology, Dr Ogbonnaya Onu; Prof. Umar Garba Danbatta, the Executive Vice Chairman/CEO, Nigerian Communications Commission (NCC) and experts who deliberated on how to fast track the diversification of Nigeria’s economy.
1 To actualize economic diversification will require massive investment in science and technology, transportation infrastructure, information and communications technology among others.
2 The Federal Government must rethink its investments in infrastructure and technological progress to include both physical and human development. It is expedient to invest more in public education and health in the same manner that we are investing heavily in the construction of roads and rail across the country
3 The Federal Government’s Economic Recovery and Growth Plan (ERGP) in its quest for a diversified national economy is commendable as it has done very well to put the country back on a growth trajectory of 7% by the year-ended 2020, though it may not be achievable due to the emerging health crisis. Castigating the ERGP on the basis of the inability to achieve the 7% growth target will be unfair because notable successes have also been recorded but there are still more macro-economic goals to be achieved.
4 There is an urgent need for Nigeria to reduce dependence on external sources of financing. This does not connote abandoning external sources of financing 100%. Rather, it implies that it is high time government begin to look inward, develop home-grown industries, and create noble and decent job opportunities for all.
5 There is an urgent need for Nigeria to secure its policy space. The ERGP is a testimony of what Nigerians are capable of doing. The more Nigeria appreciates its intellectual assets, the better for the country because innovation and technological know-how will be home-grown. This will pave way for less importation of technology and consequently, local innovation ecosystem will be developed across the nation.
6 Energy plays a pivotal role in economic diversification as its scale of use determines the socio-economic development of any nation.
7 Nigeria has no choice than to diversify its economy and fix the power sector because of the privilege of accounting for over 51% of West Africa’s over 400 million population where its products- services, agriculture, and industries can dominate the sub-region and bring in the much-needed foreign exchange.
8 As lack of access to energy contributes to inequality, poor health, education and poverty in all aspects, to achieve the anticipated economic growth, Nigeria needs to unlock its potential by taking specific steps to build capabilities and enable growth across multiple sectors.
9 Power is a strategic infrastructure and represents the most important requirement for moving the economy forward. To explore power as a diversification option, Nigeria’s power sector have been discovered to be a reflection of the economic growth strategy of the country.
10 A diversified Nigeria’s economy will have diverse revenue streams that will provide it with the Security and reliability, such that if one economic revenue stream fails, the nation relies on the several other options for revenue generation.
11 Economic diversification could be explained from the perspective of sustainable development to ensure long-term stability of the economy.
12 A diversified economy has the capacity to fundamentally strengthen the adaptive capacity of an economy and safeguard its long-term prospects, in the face of depletion of the basic natural resources and the vagaries of economic fluctuations under the pressure of competition from globalization.
13 The Supplementary Protection Measures (SMP) by the Federal Government is a wake-up call to the scientific community and organized private sector companies to grow and further diversify the economy.
14 Taken advantage of the Federal government’s Fiscal policy measure to effectively channel R&D activities towards items with high tariff and those that are now outrightly banned is the right way to go.
15 Embargo on the importation of some goods through official foreign exchange sources is a welcome development for the country as it had been able to save N3.327 trillion between 2017 to 2019.
16 Domesticating the current reality of COVID-19 Pandemic would require orderly and well coordinated efforts by all stakeholders including governments at all levels, businesses, development partners and the non-governmental/community based organizations.
17 Current reality of Nigeria’s economy as depicted by the structure of the growth rates and relative sector contribution to GDP provided interesting but mixed challenges to policy design, programme development and projects/activities.
18 The current structure of the economy shows that Nigeria’s economy could be successfully diversified during post COVID-19 with less emphasis on oil
19 The telecoms sector is well prepared as an enabler for the realisation of the Economic Recovery and Growth Plan (ERGP) 2017-2020 of the Federal Government.
20 Clear-headed and focused regulatory interventions in the telecoms sector must be sustained to deepen access to telecommunications services- voice and data – across the country in view of the positive impact on other sectors of the economy such as healthcare, education, agriculture, finance, transportation, commerce, governance, and so on.
21 The development of the National Digital Policy and Strategy (NDEPS) is on the right track as it underscores the importance of infrastructure deployment for a digital economy in Nigeria.
22 The drive to diversify the economy from perennial reliance on oil and gas proceeds would be essentially enhanced by ICT being enabler of economic growth, providing the necessary digital impetus for transformative development in all other sectors of the economy, be it agriculture, education, financial services, healthcare services and so on.
23 The search for alternative/ renewable sources of energy and dwindling oil prices have made it paramount for OPEC to begin to think beyond oil which is no longer sustainable due to unpredictable market demands
24 It is commendable that NCC has reinvigorated its regulatory efforts towards ensuring more ICT infrastructure are deployed, protected and made accessible as well as available to more Nigerians across the nooks and crannies of the country.”
25 The recent #EndSARS protest in Nigeria may go down in history as the loudest wakeup call since the civil war, for the country to be restructured.
26 The youth agitation though subdued should not be construed as a failure, but a success, a wakeup call that things cannot continue as usual with no job, poor infrastructure and insensitivity on the part of the political leaders who are portrayed to be living in opulence with the lion share of the national cake.
27 The #EndSARS protest could have gone far, upstage the status quo and destroy all what we have built over the years, for us to start all over again in pains to the unknown.
28 Government in collaboration with the private sector should set up innovation hubs in all the 774 local government areas for hundreds of young internet fraudsters popularly called Yahoo-Yahoo boys, to make decent living rather than being ‘proudly’ prosecuted daily by the EFCC.
29 The lesson from the #EndSARS is a clear signal that the current structure of economic exclusion is unsustainable and dangerous. The only sustainable way to pacify the youths and other stakeholders is to extend the boundary of opportunities to all.
30 The COVID- 19 pandemic had humbled the world and further exposed the vulnerability of the human species in spite the advancement in science and technology.
31 The new reality of diversification should inspire the non-oil sector to become competitive, create jobs, attract foreign investment, break into the global market and generate commensurate foreign exchange to strengthen the Naira.
32 The signing into law the new Companies and Allied Matter Act (CAMA 2020) on 7th August, 2020 by President Muhammadu Buhari is commendable as the CAMA 2020 introduces new provisions to reflect modern commercial realities as well as reduce compliance costs and regulatory hurdles for businesses in Nigeria. This is the foundation for diversification,
33 Government at all levels should go out to improve on ease of doing business, encourage new businesses to spring up, undertake deliberate exploration/expansion of local and international market for expected huge agricultural and other outputs.
34 Nigeria should learn from the successes of the South-East Asian countries including Singapore, South Korea, Taiwan, and the People’s Republic of China which did not only invest heavily in the construction of physical infrastructure, they also prioritize investments in their intellectual infrastructure.
35 A commitment to resilient and productive investment in infrastructure and technological progress; to depend less on exports of natural assets, and to take ownership of development agenda in the country is a commitment to deepening economic diversification and promoting economic independence of the Nigerian state.
36 Another benefit of promoting domestic mobilization of resources is enhanced fiscal consolidation. This will not only foster strong fiscal capabilities among the state and local government across the country, it will also entrench improved revenue and public spending management in Nigeria. Consequently, accountability, transparency, and equity will form the basis of executing economic activities in the country.
37 Thinking of how to consolidate economic diversification without paying attention to the lingering COVID-19 pandemic may result to efforts-in-futility. Nigerian economy is vulnerable to external shocks. The war against COVID-19 is not over. This implies that the windows of opportunities for foreign aid and assistance will remain very limited.
38 Three important lessons to be learnt from COVID-19 pandemic:
(i) There is an urgent need for us to reduce our dependence on external sources of financing. This does not connote abandoning external sources of financing 100 pct. Rather, it implies that it is high time Nigeria government began to look inward, develop home-grown industries, and create noble and decent job opportunities for all.
(ii) There is an urgent need to secure our policy space. The ERGP is a testimony of what Nigerians are capable of doing. The more we appreciate our won intellectual assets, the better us because innovation and technological know-how will be home-grown. This paves way for less importation of technology and consequently, local innovation ecosystem will be developed across the nation.
(iii) There is an urgent need to control our development agenda. The shock that came with the COVID-19 pandemic was so rude that it exposed the deficiencies that has characterized the nation’s health and educational system. If we own on development agenda, research and development will be driven by local needs and our innovations will be tailored towards solving problems that are peculiar to Nigerians.
39 The adoption of Public Private Partnership approach by the government in construction of deep seaports, River Ports and Inland Container Dry Ports in the Maritime Subsector is commendable in view of the potentials of creating direct and indirect employments stimulating economic activities along the various transport corridors in the country that will impact on millions of lives in Nigeria.
40 Efforts by government to put in place proper regulations in the road subsector to provide an enabling and competitive environment for Road Transport Operators are commendable.
41 The strategic approach to leverage the Nigeria Science, Technology and Innovation ecosystem in restructuring the economy away from Commodity-based to knowledge driven economic development should be encouraged and publicized.
42 The main thrust of government strategy to reduce Nigeria’s’ over-dependence on import, especially of items it is well endowed with ample comparative advantage to supply the world should be sustained in view of the fact that it will save a huge foreign exchange especially in R&D activities which will eventually translate to high quality Made-in-Nigeria raw materials, products and services.
43 Government’s desire and goal to ensure establishment of strategic alliance between the knowledge domain (Universities, Polytechnics/Monotechnics and R&D Institutions) and industries, businesses and the entrepreneurs should be pursued. These alliances are designed to observe the need to establish a strong and resilient National Quality Infrastructure (NQI) with support from the pillars of Standardization, Conformity Assessment and Metrology. As the regulatory establishments conduct mandatory Conformity assessment with requisite tool boxes, they are compelled to maintain delicate balances between Societal and Business Concerns before issuance of credible certification and Accreditation.
44 The current reality of economic down-turn could be turned into new normal that is extremely beneficial with long-lasting impact on Nigeria’s industrial development and to enhance global competitiveness in all its ramifications.
45 It’s commendable that the NCC has been making regulatory efforts to leverage on next-generation technology platforms in order to continuously advance our ICT ecosystem. With the trial of 5G technology, it’s looking at enhanced mobile broadband applications, the ultra-reliable low latency applications and the Machine to Machine (M2M) applications, all of which will require reliable broadband infrastructure, which is a major focus of the Ministry of Communications and Digital Economy as well as the NCC.
46 Without pervasive infrastructure, the dream of rollout of 5G services will remain just a dream.
47 The cooperation between the NCC and the Nigerian Governors’ Forum (NGF) for a N145 per linear metre of fibre cable laid as Right of Way (RoW)charges, as against the hitherto prohibitive charges imposed on the telecoms companies, which have continued to hinder faster infrastructure rollout is commendable. Some of the states have waived payment of RoW by the telcos in order to facilitate rollout of more robust broadband infrastructure that can support their socio-economic activities.
48 This central role of ICT/telecoms sector in bolstering the economic diversification agenda of the Federal Government which informed the President’s declaration of Telecom Infrastructure as a Critical National Infrastructure, which must be protected by all the law enforcement agencies in order to continuously provide the digital support the economy needs is commendable, considering that telecom infrastructure has become basic infrastructure like roads, railways etc., especially at this critical time when the outbreak of COVID-19 pandemic has led to the migration of most services across different sectors online.
49 With Nigeria accounting for over 51% of West Africa’s over 400 million population, its products- services, agriculture, and industries can dominate the sub-region and bring in the much-needed foreign exchange.
50 Energy plays a pivotal role in economic diversification as its scale of use determines the socio-economic development of any nation capable of solving Nigeria’s problem
51 Lack of access to energy contributes to inequality, poor health, education and poverty in all aspects.
52 To achieve the anticipated economic growth, Nigeria needs to unlock its potential by taking specific steps to build capabilities and enable growth across multiple sectors.
53 One of such areas requiring immediate focus and “structured” investment is the power sector.
54 More than 15% of the total population of the entire African Continent. More than 40% of Nigeria’s population is less than 15 years old. In a nutshell, Nigeria has a large and energy hungry population.
55 The annual economic losses caused by Nigeria’s unreliable power supply have been estimated at N10.1tn or about 2% of GDP (World Bank).
56 Nigeria ranks 171st globally, out of the 190 countries, and 33rd among 46 sub-Saharan Africa countries in respect to getting electricity.
57 Research has shown that for Nigeria to be fully sustainable in power supply, the country needs to generate an estimated 30,000 to 35,000 MW of electricity.
58 The challenges in the power sector require urgent attention as GenCos are presently allowed to generate between 3500 – 4,500MW out of over 8000MW, the rest; between 4,500MW – 3,500MW is left to waste as electricity cannot be stored.
59 The poor state of electricity supply system in Nigeria is threatening the welfare and security of life and properties of millions of individuals with adverse economic consequences for the country.
Electricity plays important role from production to distribution of goods.
60 Whatever form of diversification to be embarked by Nigeria on must have affordable, clean and efficient power supply at its core.
61 The following factors must be considered/addressed when diversifying the economy:
a} Socio-political disposition towards promoting sustainable energy sector: The energy transition of developed nations appears seamless, not only because of their financial strength; but because of the enabling policy structure, favorable legislative rulings and legally established competitive yet regulated market environment. Economic diversification requires a socio-political crusading that will ensure a viable and reasonably just structure for both government-owned, privately-owned and community-owned energy systems.
b} Increase investment plan for hydroelectric power technology: Only about 17% of the large hydro resources have been deployed in Nigeria. Hydropower remains one of the most cheapest and reliable energy sources in terms of returns on investment, operation, and maintenance, etc. Hence, more investment in hydro generation facilities can be of immense benefit towards achieving economic diversification.
c} Need for better clarity on the power policy post privatisation to provide:
• a) clarification of the linkage between the power sector and the real economy in the post-privatization market in terms of national infrastructural development, and economic growth
• b) the need to meet the challenges of national energy efficiency implementation and demand management
• c) specifying the direction of the development of the national grid in relation to the prevalent growth of smart technologies and
• d) clarifying the policy on the development of renewable energy for the power sector.
• It is therefore expedient that the NEPP 2001 be reviewed to provide direction for a post- privatisation Road Map in the decades ahead.
• To provide the needed clarity for infrastructural development as well as relevant regulatory/policy frameworks that will attract investments into the power sector.
62 Given the reality of the large disparity between available generation capacity and the transmission and distribution network capacities, a two-tier market needs to be considered. A two-tier market is a synchronization of the vested contract market and the bilateral market. This would release stranded capacity and help in mitigating the challenges currently faced by the GenCos.
63 Distributed generation should be prioritized among power sector stakeholders and government at all levels in order to achieve electricity supply security for the nation’s industrial, commercial and residential sectors.
64 Available data have shown that operating a mono-economy can be likened to an economic obituary. Therefore, the only thing that will save Nigeria from her economic crunch now or in future is the diversification of her economy.
65 Government must have the political will to do the needful and develop a heterogeneous economy. The clarion call for diversification should not only be government’s responsibility. Other stake holders must cooperate and collaborate with the government to make this dream come true.
66 Evidence-led policy development and pragmatic implementation are key prerequisites for achieving a more sustainable energy future. Nigeria is yet to showcase an alignment between research and energy policies, and between available resources and the particular programmes designed to improve energy efficiency. This impedes synergies between energy policies and economic-sustainability plans, and undercuts the benefits of scale that a more holistic approach would bring.
67 For Nigeria to achieve anything near its objective of satisfying unmet energy demand, innovative policies and financing mechanisms are needed.
68 The right policy mix combined with aggressive funding can position the country as a renewable energy leader, both on the African continent and globally. And it will reap the benefits in technology development, foreign investment, decreased emissions, poverty reduction, and energy for the population without access to the national grid – all of which could ripple into millions of clean energy jobs in manufacturing across the country.