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BANJO: It Is Time To Imbibe Concept Of Nigeria Without Oil

By TEMILOLUWA ADEOYE,   |   22 November 2015   |   2:13 am  

BanjoMr. Victor Banjo is Director General, Institute of Directors (IoD). In this interview with TEMILOLUWA ADEOYE, he urges the government to go back to the basis and adopt concept of Nigeria without oil.

What other choices, after oil, do we have to sustain the economy?
NIGERIA, over the years, has attempted to improve its economic functions. Recently, the Institute of Directors Nigeria (IOD) held its yearly conference in Abuja. It was themed, How to promote sustainable investment in Nigeria. At the conference, we said we want to learn from other countries that have done it so well, and no country builds an economy that is sustainable, without having what we call diversification. That word has been overused without enough action being done about it. Diversification requires a strategic framework. We have allowed ourselves to be boxed in to a corner, because we became so dependent on importation.

Again, the private sector does not make policies, it is the government that has to come up with policies, which the private sector can then look for how to implement and make it work. Successive governments have talked about diversification. The revenue from oil has blinded us. We did not use the oil revenue to build other sectors of the economy that could have actually provided alternative source of income.

What is the recipe now?
A country without stable and sufficient power generation and distribution cannot have a thriving economy, because effective power drives a lot of activities. For any economy to grow, you need small and medium scale enterprises. Today, most of them are not able to function effectively, because they don’t have the energy to run their businesses. Most of the times, the cost of services they render has already been inflated in order to cover the cost of alternative power they use for their businesses. There is also the issue of security. I believe that our economy is under performing, because the economy shuts down at night as a result of power outage.

Why must Nigeria go to bed at night, when there are a lot of services that could have been rendered at night? For example, why can’t offices be cleaned when you are not there? But because of poor power supply and insecurity, people can’t move around at those hours. People need to realise that security is not all about having a policeman in the neighbourhood, light is a deterrent to anybody that wants to commit crime.

If you don’t have adequate power generation and supply, the real sector cannot manufacture effectively. Over the years, we have read or heard of how companies were relocating, because of the harsh operating environment. One of the reasons the country has gone down in ratings index is, because of absence and adequate infrastructure. We need to deal with it, because it even influences the perception of the country. The cost of providing services is expensive, and we cannot compete favourably.

How can there be improvement in power supply to support industrialisation?
At the conference in Abuja, we had a presentation from Mr. James Olotu, who is the managing director of Niger Delta Power Holding Company, which is the operator of the National Integrated Power Project (NIPP). He outlined structured work that has been done over the years to build an integrated energy generation system. He told us that generation; transmission and distribution companies should be taken as an integrated project. Most of us focus on the distribution companies.

When we don’t have light in our homes, we forget that if the generating companies don’t get the power, the DISCOS cannot distribute. Because we sometimes get impatient, we truncate a project before they are able to deliver value. He said people say we have about four thousand Megawatts (MW) in the system, but what is actually generated is about 10,000MW. If there is actually a shortfall between generation and distribution, then that is where the gap is: we need to integrate them to deliver value to the country. No major country will invest in your country, if they have to look at the stress to get basic things in place. We need to put infrastructure in place before we do other things.

When you look into a neighbourhood, people would have built houses before the roads came in. That shows absence of forward planning and strategic thinking. As a nation, we need to imbibe a culture, whereby we plan society, and then people can move in. The road network should be clearly outlined, the drainage, and other social amenities.

Most of the communities don’t have adequate fire stations or public schools, because of poor planning. We need to look at the nature of the economy around us; we need to look at language skills. To become an attractive destination for investment is not just about power, it is in conjunction with other things. The Nigerian Tourism Development Corporation also has a role to play. How do you attract investors when you don’t have airlines that can compete at a global level?

Which direction should government be looking at for a possible rebound of the economy?
When Lamido Sanusi, now Emir of Kano, was the governor of Central Bank of Nigeria, he set up an agricultural intervention fund. The options are clear; what has worked for us before? Why did we neglect them? There is actually no state that does not have one form of mineral resources or the other. They are available and efforts are being made to tap into them. Agriculture is a major area for us. In the 50s and 60s, a lot of regions had produce boards to work with farmers to determine what can be produced in each community. The Liberty Stadium was not built with oil revenue; the Cocoa House was also not built with oil revenue.

We need to go back to the basics and make ourselves an agrarian economy. Agriculture has to be the bedrock of our economy. What happens if no one wants to buy our oil? Would we drink it? The concept of Nigeria without oil should be the most important project that we must invest in. All we need to do is articulate the policy, not to think like a raw, we should not think like a producer consumer nation, but an export driven economy.

Nigeria has a lot of untapped minerals, which experts say can sustain the economy, why are we not keying to this?
Yes we do. We talk a lot about crude oil, but experts have also told us that our gas reserves is far more than our crude oil reserves, but as a country, we have not done enough to tap our crude oil reserves and make it economically viable for us. We need clearer policy articulation. I believe there was a deadline to gas flaring, but years after, gas is still being flared, because it appears the agency in charge of regulation is not able to do so or has failed to do so. No matter how much of minerals we have, it all depends on policy framework that governs the administration of the extraction, and the refining of those minerals, and the revenue that accrue from them.

Another issue is if they will be transparently accounted for, and if it is adding value to the people. If it doesn’t, it will create a social problem that will lead to economic uncertainty and makes it difficult for investment in our communities.

How can the manufacturing sector help the diversification?
Nigerians are industrious, hardworking and creative. The biggest handicap to the manufacturing sector is power. You cannot run a business, if you spend all your capital on diesel, repairing trucks that are continually being damaged by bad roads. You cannot run a business, if the regulatory environment is unstable. People are complaining about multiple taxation as well. If we can tackle these issues, we won’t have problem.



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