Superpreneurs Are The Master Key To Development

By Dr. Nicholas Okoye (DBA)   |   27 November 2015   |   11:25 pm  
nicholas-okoye

Nicholas Okoye

NIGERIA THE NEW DIRECTION

In all ramifications Nigeria is in need of a new direction. It is obvious that the path we are currently following is clearly not working, and it is obviously not sustainable. Whereas many scholars, politicians and academics may disagree on the new style or new direction we should take as a Nation, nobody is in disagreement that one of the most important things we need is to create new jobs for our teeming youth population.

Unemployment: The number one problem in Nigeria and every geopolitical part of Nigeria is the millions of young people that are out of work. We have over forty million people that are out of work. This is a keg of gun powder waiting to explode if something monumental is not done quickly. We are educating millions of people and then we churn them out into the World without hope or direction. The result is that they become recruiting grounds for violent crime gangs. Kidnapping, armed robbery and even terrorism are getting new recruits as a result of our unemployment crisis. No meaningful National Development can take place when the youths are restive and that seems to be happening now with the clamour by Eastern Nigerian youths for an idealistic State of Biafra. Which they wrongfully believe will solve all their problems. The unemployment crisis will not go away if Biafra is created in fact it will become much more pronounced and it will fuel a more deadly internal conflict in the South East which may have no end. When people are hungry they can believe anything you tell them that will solve their problems. So the illusion being created by this modern day so-called revolutionaries have no basis in reality or facts. If our current political leaders or the wannabe leaders riding to fame on the back bone of an illusionary Biafra cannot address the unemployment crisis then they will fail the people, and a much more angry youth awaits them after that fact.

Balance of Payments: Nigeria has been running a negative balance of payments for as long as I can remember, however it is only coming full circle now because we now need more and more foreign currency for exchange in order to fuel our appetite for foreign goods and services. We import toothpicks even though the best tooth picks in the World are now made from polyethylene which we have in abundance. We import shoes, even though highest quality leather in the World is coming out of Northern Nigeria. We import fuel and we are the sixth largest producer of crude oil. We depend on foreign Nations for our software, our high level education and even our food. What the Nigerian elite does not know, or should I say chooses not to know is that this almost total dependence on foreign suppliers for goods and services is putting so much pressure on our local currency, the Naira, that we will have to devalue the naira every two to three years if we keep the import bill growing at this pace. The more foreign goods we demand the more US dollars are needed to exchange our weak Naira. The more we send our children to school aboard in India, Ghana, the UK, USA, France, Germany etc., the more US dollars are needed which means you will need more naira in exchange for fewer dollars. The more we go to India for medical treatment the more we will need more US dollars to exchange for more naira. The circle is endless and the sooner we start to produce for ourselves the better our economic outlook will be.

Industrial Capacity: we have a very poor industrial capacity. And I ask myself all the time why? The answer is obvious first of all the power issue is a big challenge and you cannot industrialize without a stable and consistent power source. However more importantly our population has a mind-set challenge. Most of our Entrepreneurs are mentally lazy and that is a fact. Many of our Entrepreneurs would rather set up a hotel, a petrol filling station, a substandard school , a restaurant or any of the other service oriented ventures that do not task your brain or thinking too much and get you returns in no time. So the brave long term entrepreneurs and players that set up industries are few and far between. In addition there has been no serious partnership between the National or the State Governments to really promote and push an industrialize agenda. Products as simple as nuts and bolts command as much as two billion dollars in the oil and gas industry, being used for pipe lines, flow stations, production platforms, drilling rigs, and so on. In the entertainment industry Nigeria seems to be the headquarters of piracy, so every music material or Nollywood video gets copied and sent to local replication plants for reproduction, However even though this illegal market is churning out millions of Video CDs, DVDs and music Discs, there are no Nigerian plants that produce the raw disc plates. They are all imported. There is so much to gain from investing in a comprehensive industrial strategy for Nigeria and for the region.

Exclusion: According to the Central Bank of Nigeria we have about 60% to 70% of our population that are excluded from the mainstream financial economy. That simply means that whereas Nigeria has a $526 billion GDP economy, this is only 30% to 40% of the potential real situation. Or rather to put it another way, we have a potential GDP of over $1 trillion which will put us at par with and even surpass Norway, Korea, Brazil, Mexico, and even Canada. If these figures do not excite you then you are not a true Nigerian. It means that we have a major advantage and major benefits if we were to launch and implement a National Inclusion strategy that will convert our rural people into productive manufacturers that are part of an industrialized value chain feeding into the mainstream system getting the rewards and linking the reward mechanism to reinvestment in communities and social services. The economic activity at the grass roots should not stay at the grass roots. It needs to feed into the system so that the financial transactions at that level can fuel investment. Deposits from community merchants can fuel credit in the economy which will in turn stimulate more growth. We have excluded our people for too long and it is time to include them. The benefits to Nigeria from launching and running an inclusion strategy are monumental.

Incompetence: Ordinarily I will say I do not care if the Federal or State Government hires an incompetent official as it has nothing to do with my business and I am going to make my money anyway. However thinking like that is why Nations fail. The Public Official controls almost everything that determines the nature and the structure and even the profitability of private enterprise. So when you hire or vote incompetent people you are condemning your people and your Nation to live a miserable and sad existence. We have far too much incompetence in our Governments at the Federal, State and Local levels and it is hurting our Nation badly. We have officials who are responsible for approving building designs that do not even understand what a design should look like. We have officers responsible for approving drug and pharmaceutical research that do not know how to conduct an experiment.

The space of collapsing buildings in Lagos and in other parts of Nigeria shows how incompetence in Government can endanger lives. As officials responsible for building certifications seems not to know or even care about the standards of the buildings so they compromise and people die. At higher levels the incompetence is more alarming; Federal Ministers, State Commissioners and even some State Governors cannot understand intelligent arguments about National Development, its drivers and its fundamentals. As a Nation to really take their growth and development seriously we must be able to take on this evil of having incompetent leaders at the helm of our affairs. The benefits we will gain by promoting competence will be huge, and have major implications for National Development.

Capital: We have been complaining for as long as I can remember that the costs of capital in Nigeria are far too high. Banks charge double digit interest rates and this makes it very difficult to do business and depend on Nigerian Banks for credit. In some cases the Nigerian Banks will charge Entrepreneurs as much as 25% or even 28% per annum. At the micro level it is scandalous as the Micro Finance Banks and most non-Bank financial institutions charge 5% to 10% per month which works out to an alarming 60% to 120% per annum. I am a financial consultant and expert myself but I have never been able to understand why the Nigerian Banks have to charge so high for interest on loans to the real sector. The Bank of industry charges 9% to 11% and they are doing business very well. Their funding is based on bonds issued at fixed rates to the Central Bank or the Treasury and then they issue the proceeds to Entrepreneurs with a reasonable mark-up. The mark-up covers their expenses, their costs and their profit. So why are the commercial banks charging rates that are out of this World and they have been doing this for over thirty years. Why hasn’t the Federal Government done a study as to what the real costs of the banks and taken these costs down or out of their mandates so that interest rates can come down? We need a solution in this regard as we cannot industrialize without capital and that capital must be patient capital that sees the long term and not this present system of short sighted capital with short horizons. I know the Central Bank did a great Job some years ago by introducing the cashless policy in an effort to reduce the cost of movement of cash around the economy. However we did not see this policy translate into lower interest rates as the Banks no longer had to invest heavy costs in movement of money.

The Nigerian System: if it doesn’t work then this is Nigeria. If it can’t work then this is Nigeria. And if you want to pull a fast one, and get away with it then this is Nigeria. That’s the Nigerian system. We need to get rid of it if we are a serious people. The Nigerian system has become synonymous for tribalism, nepotism, quota system, zoning system, federal character all in an effort to subdue the great achievers and push forward the laggards and incompetence. This Nigerian system is killing us as a people and we pretend that we do not know it. When you hire your brother or your in-law as opposed to the competent candidate you are condemning your institution to failure. As that brother or uncle or in-law will not have the drive to perform as he or she knows they did not merit the job and so the work will suffer. It saddens me when a young person says they want to work in Government. At first I used to get excited that our young people are choosing Government because they are driven by patriotism and service to nationhood. However when they tell me the real reason that they want to work in Government is because they can get to work late, they say some Government offices start as late as 11am. And then they can leave work at 2pm. And in some offices officials do not even have a desk with which to report to, so nobody knows whether you are coming or going and these young people just love that. Well the bad news is that our Nation or any region within our Nation cannot continue like this, if we do it will destroy us.



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