At the recently concluded World Economic Forum held in Cape Town, South Africa to which President Goodluck Jonathan led a high-powered delegation, one of the key takeaways was the substantial economic growth that is expected to occur on the African continent over the next fi ve years.
It was predicted that Africa will have six or seven of the fastest-growing economies in the world, as well as the largest overall growth of any continent within the next fi ve years. Naturally, Nigeria is one of such countries given the current six to seven per cent GDP growth rate.
However, inasmuch as the macroeconomic indices look good, the failure to translate this into job creation remains the big minus for our economy.
Indeed, rather than create jobs for the predominantly young population in a period when oil prices are strong and the economy is expanding at a rate Western economies are praying for, the nation is heading towards a sociological crisis with the number of unemployed growing from 9.1 million in 2008 to 16 million in 2011 according to UNIDO fi gures, just as the labour force grew from 61.1 million to 67.2 million within the same period. This translates into an unemployment rate rising from 14.9 per cent to 23.0 per cent within those short years.
Yet, we all know that the great nations of the world – the United States, Germany, France, United Kingdom and lately China and South Korea – have relied on industrialisation to harness resources both internally and beyond their immediate borders to generate the required wealth and jobs to transform the lives of citizens.
The key to unlocking such immense potential for our economy lies in the hands of the micro, small and medium enterprises sector that account for 90 per cent of jobs created in the developing world, but this is are very sort of people that the banks don't want to talk to. They have the entrepreneurial drive but in cases lack the requisite management skills to run their organisations in a structured way to allow for growth and expansion into mega entities that will outlive their founders.
Compounding the situation is the huge infrastructure defi cit with huge cost implications that make Nigerian goods uncompetitive, multiple tax regimes, expensive documentations processes, diffi culties in securing titles to land and seemingly uncontrollable smuggling of cheap goods from China and the rest that has made manufacturing industries a ready case for failure.
This is why the case for a highly comprehensive and structured approach to deliberately industrialise Nigeria's economy become even more imperative so that the fi gures our leaders enjoy bandying about in recent times can have real meaning for majority of the populace.
I will readily admit that the current effort at privatising the power sector is one of the key steps in resolving the unholy paradox of a resource rich nation that is unable to feed, clothe and fuel itself.
One also welcomes the recent policy initiatives of the government, especially through the Ministry of Agriculture and Rural Development and the Ministry of Industry, Trade and Investment in adopting the value chain approach to create the linkage between agriculture and the industrial sector and local and international markets.
Critical to the success of this is access to cheap funds, which in being provided by specialised institutions such the Bank of Industry for companies that would have otherwise collapsed under the weight of high interest loans and small fi rms in need of expansion. This is with the added benefi t of expert guidance to help entrepreneurs navigate the minefi eld created by the peculiarities of Nigeria business environment.
Part of the strategy is to help MSMEs reduce costs by encouraging the establishment of industrial clusters complete with small power plants, develop entrepreneurs that would convert specifi c comparative advantages in the utilisation of local resources into competitive advantages and create linkages between MSMEs and large fi rms with the big picture being employment generation and poverty alleviation through economic empowerment.
What has surprised me personally is the refusal of most state governments to take advantage of some of the emerging opportunities including the matching loans being provided by BoI for small business including cottage industries and service providers, especially those run by women, to stimulate business activity and generate taxes, while they keep complaining of inadequate funds from Abuja.
Vast opportunities exist in agriculture and agro allied industries, textiles, petrochemicals, fi sheries, mining, exports, retailing and services but it seems that it is the foreigners in those states that are able to see beyond their noses.
Yet, this is the time to get productive and build and industrial base at various levels in order to signifi cantly cut the risks associated with dependence on oil and gas and importation of virtually everything we need.
Apart from targeting sustainable development of the MSMEs, Nigeria needs to break the jinx that has held down our large strategic industries such as steel and petrochemicals. The time to act is now.
