Nigeria must overcome its crisis and continue to grow. First we have to reform the economic system to increase its efficiency and responsiveness. Second we must bring about an internal adjustment, reforming the power sector and improving movement of resources all over and particularly to the rural areas to ensure the economic empowerment of the rural populace including women, increase domestic market competition and improve the organization and the quality of investment program in vital economical sectors in all part of the country. Third there has to be substantial external adjustment.

Internal Adjustment

Strategic Sectoral  Investment Priorities

1.    Politically

A democratic Nigeria with free and functioning democratic institutions must be allowed to flow. Democracy is more than the creed of our country, it is the inborn hope of our humanity, an ideal we must carry, a trust we must bear, a touch we must pass along. Democracy should be allowed to take root in the political culture of Nigeria no matter how inexperience would be politicians may be thought to be. A democratic Nigeria with a private sector oriented market economy where equal opportunity, social justice and the rule of law exists.

2.    Economically

a)    The provision of basic economic need is an essential tool for any long term economic progress for Nigeria. The reform of the energy sector, the availability of water and improved security and enabling environment for economic investment and opportunities must be top-most priority in this regard. Another major shortcoming of the Nigerian economic system is the lack of policies implementation and the unwillingness of the Nigerian people to react to changes for a better Nigeria. The failure to impose financial discipline on enterprises and to utilize bankruptcy possibilities has a similar effect. The result is innovatively inefficient and reduces the interest of the enterprise in maximizing profit. If it is judged that special exceptions need to be made during the process of adjustment and special subsidies given to a particular activity, it is important both that the process be as transparent as possible and that the temporary nature of the special treatment be made clear. Subsidies generally increase the fiscal burden; they should be greatly reduced and strictly targeted to those groups who need them most.

b)    An economic environment that inspires confidence in investors. Controlled inflation, few but meaningful regulations on the setting up and running of businesses i.e. setting up of a computer network system where registration of a business does not take one to Abuja and spend days and months in the process. But registration at state levels and on district levels where a State has many applicants in places like Lagos. Kano etc. Just like the issuance of passports and driving licenses today. Elimination of multiple taxation through decentralization. This procedure should include all other forms of tax collection. A simplified, decentralized and corruption free procedures in the issuance of licenses, permits etc. Tax incentives to attract foreign investment and a national system of tax control and check of businesses.

c)    We should continue to implement a guarded economic deregulation, a tight monetary stance and a policy of no extra-budgetary expenditures without extra-budgetary revenue. Any further project needs more careful analysis of its effect on operating costs and its economic value and once given careful consideration must not be abandoned. Laws that inhibited foreign investments into the country must continue to be abrogated and replaced with the ones that assist and facilitate foreign investments into the country. Distresses in the banking system must constantly be checked, identified and eliminated, also oil dedicated accounts must be entirely eliminated so that oil proceeds would be properly accounted for. Nigeria must restructure its capital spending.

d)    We must diversify the economy, less dependent on export of crude oil, and the continuation of setting up of companies that produce intermediate chemical raw materials for industries using crude oil and the abundant natural gas as raw material base. In time this will reduce our dependence on some imported raw materials. Provide the environment for the setting up and running of small scale industries in the textile, agro-processing, and engineering sectors through training and low interest loans for individuals or group of individuals with proven abilities.

e)    Privatization and restructuring of the remaining sectors of the economy like the motor vehicle production and assembly industries, electric power supply, mineral mining sectors, and others by encouraging the participation of strategic foreign investors. Strategic foreign investors should be such that have the best technology (at least such technology that matches the international standard), should be part of the criteria in selecting such a strategic investor. Self-managed companies should be encouraged to compete and remain financially viable and expose to international standard (prices, quality). This should have a major long-run impact on economic efficiency.

f)      As in market economies, direct foreign trade operations should be encouraged to be preferred by most producers, and are presumably in the long run the more efficient pattern, provided that producers have sufficient profit incentive to seek foreign markets aggressively. Closer direct market contact should influence the quality of product made and offered for sale. World Bank research on the causes and consequences of Korea’s success in increasing its share of exports of manufactured goods strongly indicates that direct contact between the producer and purchaser can also have beneficial effects on technological transfer. The more that can be done to increase the interest of companies in exporting, the better. An active wholesale trading market system along the former Eastern Europe model can also be effective in promoting trade.

g)    Still more autonomous to the States and flexibility. Consideration should be given to splitting some multi-plant enterprises when there are no technical advantages from concentration.  There should be in place an anti-monopoly legislation so that entry of new firms into the economy would be encouraged. Presently the birth of new firms is still largely an administrative act rather than an expression of entrepreneurship. Credit-granting to enterprises and even individuals must be based on the fulfillment of planned tasks, with discretionary contractual relations based on a bank’s assessment of enterprises’ creditworthiness. Government bonds could be issued to finance future budget deficits, and be sold to the public directly, instead of the central bank’s making interest-free loans to the government and collecting savings through interest-yielding bonds and deposits; in this way the cost of public debt would be properly reckoned and included in the state budget. These bonds and those of public utilities would be fully guaranteed by the state but there seems no reason why other bonds should be similarly guaranteed.

h)    Investment decision-making does not appear to give enough attention to increasing returns at the margin. This requires effective project evaluation of Federal investment, using international techniques of project analysis that have been accepted in principle in Nigeria for many years, but are too infrequently applied. For decentralized activities, it should be a capital market which will give profit-making enterprises alternatives to reinvestment in their own activities and be self-managed, a healthy fear of bankruptcy to alleviate the tendency of investment whatever the cost, and a system that rewards individuals for making successful but risky investment decisions. Self-reliance instead of budgetary support (unless where really justified), commercialization of credit, and penalization of loss-making activities with the possibility of ultimate bankruptcy. Combining reform and stabilization requires macroeconomic policies which are consistent with the reform principles, and markets must clear i.e. equilibrium prize level (be better organized and eliminate ‘black market’ where business is not legally registered and therefore pay no tax). A period of uninterrupted economic equilibrium is necessary to reverse expectations and to reduce speculative purchases of commodities; after that the maintenance of equilibrium is easier to reduce inflationary ‘overhang’ and ‘gaps’.

Priorities

Energy

The Nigerian economy is currently severely handicapped by the dire shortage of electrical energy. This shortage was predicted as far back as 25 years ago. What steps were taken by the government to forestall this shortage? Today, people and companies rely on electricity. Keeping the business activities going requires having two kings of power. Constant electricity production and supply, and personnel to control the consistent quality and knowledgeable management of the power. In comparison, Ontario Canada: (Population 8.5 million)-- The most populous of Canada's ten provinces and three territories and the nation's industrial heartbeat: Total Electrical Power Generating Capacity: 30,481 Megawatts

Nigeria: (Population 140 million est.) --sub-Saharan Africa's most populous and with (the exception of  South Africa), the continents most industrialized nation: Total electrical Power generating Capacity:  5902 Megawatts - operating most of the time at less than 50% efficiency - until recently managed exclusively since 1972  by the defunct NEPA with a workforce of: 33,000

Some more comparative statistics to ponder (even after discounting for the disparity in the state of economic development and activity between Nigeria and Canada):

 Where Nigeria's electrical Energy comes from:

Three hydro power stations with combined installed capacity of --1,930 megawatts

and six thermal power stations with combined capacity of-- 3,972 megawatts.

--mainly coal fired units 

Where Ontario's Electricity Comes From

Ontario has one of the largest electrical power generation systems in the world. More than 90 plants produce over 30,000 megawatts of electricity. However, not all this capacity is available at any one time because of scheduled maintenance and other factors.

The Ontario grid also has the capacity to import and export up to 4,000 megawatts of electricity.

Currently, Ontario's electricity is generated as follows.

We proposed  creating 2 Coal powered plants to generate 7 000 Megawatts each, building the Mambila hydroelectric to generate 2000 megawatts, and 6 gas stations to generate each  2000 each as well as rehabilitating our current sources to operate at full capacity. And invest extensively on future solar power generation. Then NEPA of PHCN should be divided into three sub-sectors. The production sector, the distribution sector and the marketing sector. The strategic power management control must ensure the availability of uninterrupted Power Supply. The present program runs the risks of shortfalls in supply and is vulnerable to slippages and cost over-runs.

Health

Nigeria should provide basic healthcare to every citizen irrespective of ethnicity, religious conviction, tribe or political affiliation. Our hospitals should be made to match the international standard, with adequate facility and services. Also, government should embark on campaign to promote cleanliness, good sanitation and proper sewage and waste management to improve peoples’ health. Continual and systematic improvement of primary health care system i.e. provision of clean drinking water, proper collection and effective disposal of refuge. Every district should have council house management to organize proper collection and effective disposal of refuge and of course charge every household for the services. In the long run, the move should be towards refuse separation, source of recyclable materials like plastic, metals etc., and rich source of natural fertilizer. Clean water supply to each and every corner of the country must be structured through the states and local levels with a control management that will guarantee that. Provision of secondary and tertiary health institutions at accessible sites and at affordable prizes. Provision of accurate data on drugs production and availability and the encouragement of the production and importation of drugs on the essential drug list all year round. Revitalization of the immunization of infants, children of school age and girls before they get to child bearing age. Systematic introduction of health insurance at all levels. The health insurance can be made a part of the income tax system and each insurance holder should carry an insurance card as an individual or as a family. We highly commend the Identity Card for each and every Nigerian, its advantage is profound. Planned increases in the rations of hospital beds will impose substantial capital costs and incremental recurrent cost burdens. But plans to continue increasing the number of physicians beyond the present level is justified. However, despite the pressing need for new hospital beds, it would probably be more efficient to postpone a few of the planned new hospital starts, and reallocate the resources for rehabilitation of existing hospital facilities where feasible. Massive public campaign to improve health-related behaviour (importance of balanced diet, vegetables, fruits etc., physical education) and on the part of industry to pollution reduction. Government investment in clinical facilities will be ineffective in reversing present rising mortality trends.

Agriculture

The basic requirement for sustainable economy is the ability to provide food for the Nation. Investment in agriculture should concentrate on mechanization and equipment, farm buildings like massive silo storage facilities, water irrigation systems for farming, water amelioration and drainage, water supply and rural electrification. It should also favour food processing which is essential to export prospects for agricultural products. There should also be emphasis on cash crops, meats, fishes, oils, dairy products, grains, fruits, vegetables etc., and cold and silos storage facilities. These agro-processing projects should be intended to earn foreign exchange through exports, so there is need to examine the market potential for the products concerned. Comprehensive, effective regulations to introduce basic modern technology and equipment, supply goods and services for export, and improve the supply of goods and services of high quality to the domestic market. There should be irrigation program and even allocation of fertilizers and to keep it in check constantly.

We should support farmers and encourage mechanized farming by providing agricultural equipment and financial support in the form of loans backed up by landed collateral security. The question is how to make these resources available to the actual farmers. There should be a community based programs called credit union groups in villages among interested farmers. The product will be bought over by independent private group with the farmers having 40% of the share of profit. The profit will be used to pay the loan gradually. They can get further loan for expansion if they are successful. This will lead to full mechanized farming. Any group that fails will be bought over by the government, private agency, bank or any member of the group. The success of the program will be monitored by the financial institutions involved, government regulatory body, and the private agency that will eventually make profit. In effect, there will be checks and balances between the farmers, the private agency, the bank and the government body regulating the program. The success of this program will create many large scale farmers. These will generate large increase in our agricultural products. There should be a substantial policy on agriculture. The main policy here is sufficiency in food production and surplus for use as industrial raw materials for export. The priority areas include: 

i) all aspects of direct agricultural production, but in particular, rehabilitation of groundnut, cotton, cocoa and oil palm production, fish production and forestry;

ii) investment in processing of agricultural produce and storage facilities;

iii) investment in processing of agricultural input supply and distribution;

iv) agricultural mechanization e.g. adoption and use of farm equipment (such as bulldozers, tractors, etc) including the provision of land clearing and land preparation services;

(v) agricultural support activities including research and funding of research activities;

vi) water resources development, especially for irrigation and flood control infrastructures along river basins;

vii) development of earth dams and construction of wash bores and tube wells;

viii) development and fabrication of appropriate small-scale and mechanised technologies for both on-farm processing (e.g. threshing) and secondary processing of agricultural produce for consumption or storage.

Agricultural products include groundnuts, palm oil, cocoa, coconut, citrus fruits, maize, millet, cassava, yams and sugar cane. Nigeria also has a booming leather and textile industry, with industries located in Kano, Abeokuta, Kaduna, Onitsha, and Lagos.

Industry

The industrial sector has been beset with problems in recent years. Though, the rate of industrial capacity utilization rose to 32.5% as against 29.3% in the nineties, it has been badly effected by lack of diversification and modernization. Indirect mechanisms such as credit and fiscal incentives must be encouraged to financial resource allocation to priority sub-sectors. Special emphasis should be given to investment projects for:

a) Modernizing industry and increasing productivity, especially through more efficient use of energy and other materials,

b) Expanding exports; and

c) Expanding industrial linkages and using locally-produced inputs and domestic raw materials more intensively.

To improve project implementation, substantial fines should be imposed for delays of constructions. We must restructure our industries especially those sectors that are expected to lead future industrial growth because of their export potential and substantial spillover effects. Local production of construction materials, electrochemical products, electronics parts and other spare parts should be highly encouraged and there should be mass media promotion of such products. Resource allocation should be towards industry modernization, generation of industrial linkages, completion of existing investment projects, saving materials and energy, increasing the supply of particularly scarce intermediate products, and expansion of exports. The output of the construction industry in most countries is about one-half of gross capital and 3-8% of the gross domestic product (GDP). Productivity improvement in the construction industry e.g. Ajaokuta rolling mill may therefore have a significant impact on the economic well-being of a nation. Considering the scarcity of skilled managers and the unsophisticated equipment and technology, it can be said that there is much room for improving productivity in the Nigerian construction industry, especially in today’s complex and competitive market. We must analyze the Nigerian construction industry at the sectoral level, administer surveys to top Nigerian constructors and design professionals in order to identify potential areas of productivity improvement in the Nigerian construction industry, and to determine the type of actions Nigerian constructors and design professionals are willing to take in the interest of improving productivity. Computer utilization in construction management, especially in planning and scheduling should be a high priority to the industry. It is a fundamental law of economics that one should employ the resources that are scarce and maximize the use of resources that are plentiful. For Nigeria, that is labor-intensive, capital-saving ventures and methods, because cheap labor is available in abundance, the resources are there so we just have to go ahead and use it.

Transport

The reduction of oil subsidies, privileges and protectionism is highly commended but more needs to be done, especially in the area of transportation in Nigeria. Major roads linking Abuja to all state capitals should be dual carriage. Transport investment, like the transport system as a whole, should plainly be dominated by railways. We should construct the national railway network to cover all state capitals as well as industrial areas. Signaling systems on main lines should be upgraded, particularly by introducing more automatic line block signals on main lines. The rail lines should be dual (or provision for future construction). There should be modern track and wagon maintenance equipment and a program to build, modernize and rationalize existing marshalling yards with a proper management structure. Railway electrification would reduce diesel oil consumption only marginally, and should only be undertaking if reduced operating costs are large enough to justify the substantial installation costs for now. For exports purposes and even transport of goods within the country should be encouraged to use rail container so reducing the burden on our roads. Number of rail terminal should continue to be increased likewise the use of containers and handling facilities. This is a long term plan but it can be done, then penalty should be imposed on truck drivers carrying over load on the road. Other within-town or city alternative patterns of public transport must be thoroughly explored. While between cities, the Government should take a special interest on River Transportation. To this end I suggest the setting up of a National Dredging Construction and Maintenance Authority (NDCMA). This should be an autonomous body charged with the surveying and dredging of the river Niger and Benue, construction of river paths along the route and maintenance like in Poland and Holland. This should be a national policy with the headquarters in Abuja and branches in all the states watered by River Niger and Benue. The Polish branch of the body (Przedsiębiorstwo Budowy Wodnej PBW) are willing to train and the IHC of Holland which built more than 50% of world dredges have also signaled their willingness to survey and build corresponding dredges if asked to do so.

Education

Educational authorities are to wake up to the revolution going on in information technology and so should fashion our educational system accordingly so that Nigeria is not left behind. Adequate and high quality text books and other materials are relatively more important. Less emphasis can be placed on the quantity of teachers, and more on the quality of training, with continued reliance on the existing impressive system of teacher upgrading and in-service training. Facilities for proper technological, economical and medical knowledge dissemination at all levels should be available in our schools if Nigeria wants a better future. If this knowledge is about ‘what works’ or even ‘what works better’ in pursuit of better performance, then it should be thought as: an explicitly developed educational system. Every Nigerian deserves to have that kind of education. The educational system in Nigeria is urban conscious. It does not prepare the young Nigerians for a return to the land. Rather it alienates him or her from the land. We recommend an appropriate educational system with realistic technology that will take into cognizance and put into maximum use the indigenous genius of the people and their local resources. Those are the only relevant technology that should be employed in all aspect of development and knowledge dissemination taking into account our cultural impacts which made lots of difference in Japan for instance. Government should continue to consult with parents, teachers and students on the best ways to continue encouraging excellence and continue to help each student prepare for challenges and opportunities and give them the tools they need to make their voices heard. Government should promote e-learning, so that students anywhere in Nigeria can still receive the benefit of a quality education, supporting such e-learning, internet-based tools of empowerment like www.Kaduna-ITtrainingonline.com and www.Arewa-online.com online resources. Government should make those commitments and keep those commitments. Now the task is to focus these technologies to improve productions, business processes etc in a world where knowledge and in particular, efficient, timely access to knowledge is a critical economic factor in the commercial success of a Nation.

Telecommunications

We commended the digitalization process going on in Nigerian telecommunications and hope it to continue. There is the need to look at the area of interconnectivity of our communication systems, and to allow more carriers into the market. The postal service should be reform and provide other services like collecting bill payments, sending/receiving faxes, e-mail services, correspondence etc., and have computer monitoring networks in the whole nation. I believe that the outlook for Africa is much better thanit has ever been since the early years of independence. The pace of reforms is accelerating and the NEPAD policy framework is consolidating democracy and sound economic management. In addition, inter connectivity between countries through infrastructure is being accelerated. African countries have taken centre stage in determining their own destiny. The African Union, with the support of major African countries, is leading the resolution of conflicts and is refusing to recognise unconstitutional changes of Government. Above all, there is evidence of progress as confirmed by growth rates of above 5 percent achieved in many countries. The launch of the agricultural revolution with seed capital provided by the World Bank is another strong signal that Africa is on the move.

Housing

Nigeria has severe housing problem not only in terms of households per dwelling unit but in terms designs of houses. Expenditures by households for existing housing are extremely low by international standards. Local production of standard building materials should be encouraged and subsidies to cooperative and state housing need be increased. Continued selling off some state housing to tenants would create saleable stock of housing, particularly in urban areas, and would begin to open up the market for housing, reduce future subsidies and create a source of funds that could be used to provide financing for additional housing. Innovation in building materials and designs to permit unit construction costs to fall should be encouraged, and adequate infrastructure provided to privately owned land. We would recommend ‘ZAURE’ system which is a new suitably itemized building system solution in the scope of efficiency, and an elaboration of basic affordable technologies. Standardized housing design with gyps and a system of planning and prophylactic of maintenance services of that type of building appropriate to Nigerian cultural socio-economic needs. The new concept illustrate solutions for repairs, and planning processes modeled and applied to Nigerian condition, and the discussion of its advantages in the scope of efficiency and economics. And a solar water pumping systems both for rural and urban areas, floating pumps for pumping from lakes, rivers, etc. for irrigation applications and boreholes submersible pumps for houses. And other small scale high efficiency technology variant optional systems which are cost-effective, easy to apply and to improve.

Security

Lawlessness, bribery and corruption have proved to be some of the greatest problems hindering our development as a nation. International ranking of competitiveness of nations done under the auspices of the world economic forum of Davos, Switzerland recently report mentioned the warning of businessmen surveyed as to the growing costs of these evils of lawlessness and bribery. Our own opinion is that Nigeria should fight these cancer and fox that have eaten deep into the fabrics of our society with all the means we can get. The Anti-Corruption Commission should continue to work with the police and coordinate the fight against corruption and lawlessness.

External Adjustment

There should be a plan trade projections to dramatically raise export and earnings of goods and non-factor services must by far exceed debt service owed and to remain adequate to meet the interest on Nigeria‘s debt if at all. Bilateral trade agreement and diplomatic relationship with Countries should be pursued and dynamic trade be encouraged. This scenario should lay emphasis on giving the economy a more solid basis for sustainable long-term growth in order to achieve a ‘real’ surplus on hard currency balance of payments. Export, import should grow, and grounds for foreign investments must be prepared, tax exemptions etc... Nigerian Government must succeed in reversing the trend of rising external debt stock, refinancing or rescheduling should continue to be necessary until the size of the current account surplus becomes largely enough to cover repayments obligations, trade credit should become more accessible. For this achievement to be possible, it will require balance both domestically, discussed above, and externally, which is in the preparation of detail plan trade projections.

Conclusion

So if the objectives of external and internal adjustment are to be achieved within a time-frame say 2015, exports will have to be kept competitive, and careful demand management will have to be pursued to ensure that domestic absorption remains within target levels and that imports attain but do not exceed their projected levels. There are several other vitally important and mutually reinforced elements of economic policy: reform measures to improve price incentives to export and increase producer responsiveness to price changes, and improve the efficiency with which scarce resources are used; a carefully balanced reduction in the investment program to improve its overall efficiency and allow new and more productive investment; and the restructuring of the economy and improvement of factor markets to allow resources to be used where they contribute most to national income. Any delay in adjustment will greatly increase the cost to the economy in the long term, and delay the time when a greater share of resources can be devoted to a continual improving living standards. Finally, of all the above recommendations, proper and consistent (continuity) implementation of the recommendations must be the topmost priority if the Government wants to reach this goal.

This is my humble opinion in a concise form as to our vision of Nigeria in the years to come (2015). May God bless our country Nigeria.