CONTINUED FROM YESTERDAY
Regarding electrical power, we must move beyond limiting states to generate, transmit and distribute electricity to areas not covered by the national grid.
Our problem is a lack of power yet we preclude states from helping to resolve this chronic problem that stabs at the very heart of economic development.
It is not right to say states can generate power but cannot sell it where they want.
Without yielding any countervailing benefit, this policy suppresses the generation of needed power instead of enhancing.
2. RATIONALIZE MONETARY POLICY
Government correctly seeks fiscal stimulus to energize the limping economy.
One can argue that efforts in this direction are perhaps too modest given the situation that confronts us. Our monetary authorities have done better recently but they need to take additional steps to increase the fiscal space available to government and the private sector.
I endorse analysis of Governor Ambode and others that current interest rate levels bridle growth by making borrowing for long-term investment too costly.
Monetary authorities appear to be more concerned with battling inflation than in sparking growth.
However, the nature of our inflation – mainly cost driven – is beyond the purview of interest rate policy to contain. Instead of surrendering growth to curb inflation, current policy sacrifices both.
Also, the varying exchange rates distort economic and monetary signals.
The vast rate differentials is fertile ground for currency arbitrage and speculation.
This means that too much money will chase rentier opportunities in the financial sector instead being plowed into vital investment in the jobs and equipment needed for the production of actual goods.
More fundamentally, we need to break from the self-imposed dollarization of our fiscal space.
The intake of dollars determines our budgets. We operate under an implicit dollar standard.
However, the global dollar standard was formally abandoned over 40 years ago.
Instead of this outdated mechanism, we should base our budgetary calculations on the quantity of naira needed to foster the highest growth possible without pushing inflation too high. Such a change in perspective will remove the ideological blinders that thus far have impeded our ability to define our political economy and its path to growth.
It also will open the fiscal space so that government can undertake even greater steps to stimulate the real economy in ways that provides jobs and builds the infrastructure needed for sustained economic development.
3. COORDINATED INFRASTRUCTURAL AND INDUSTRIAL POLICIES
No modern nation with a significant urban population has attained prosperity without an industrial base capable of employing larger numbers of people and of manufacturing goods for domestic consumption and export.
To one degree or another, English, American and Chinese governments employed industrial planning to lift their economies during their earlier stages of development.
These nations represent the past, present and immediate future of economic achievement. Their success justifies their policies.
Yet we depart from what has proven the most effective avenue to prosperity for a large developing nation.
We must press forward with a national industrial policy fostering strategic industries that create jobs and spur growth. Tax credits, subsidies and the insulation from the negative impact of imports for critical sectors should be integral to this plan.
4. PROVIDE INFRASTRUCTURE AND POWER
We must remember a national economy cannot grow beyond the capacity of the infrastructural that serves it.
Thus, we need a national infrastructure plan closely linked to the industrial plan. New infrastructure is needed where the new industrial work will take place. We must conquer the political and bureaucratic bottlenecks preventing affordable, reliable electrical power.
This impediment places us literally and figuratively in the dark regarding our economic condition.
The problems are not technical in nature as reliable electricity is a staple of economic life in nations less endowed than Nigeria. We must persuade and convince those factors that currently impede our national quest for reliable power to move aside so that we can achieve this crucial precursor to economic vitality.
5. HELP THE FARMER: AGRICULTURAL REFORM
Our farmers need a reprieve.
We need to increase farm productivity by taking a few critical steps. For example, commodity exchange boards and futures markets to ensure minimum farm incomes and encourage production must become part of our rural economies.
My friends, we stand at a moment where history will be made for better or worse. Other nations have faced tough times.
Those which overcame their challenges did so by using creative insight to accurately assess their shortcomings and to identify solutions that would serve them into the future. Nigeria must act in similar fashion.
Nothing that any other nation has done is beyond our grasp if we commit ourselves to the task.
We have much work to do to create the Nigeria we seek so that the Daily Times may continue to report on the progress of this nation for another 91 years or more. In doing so, let it chronicle the rebirth of Nigeria as a nation much more prosperous and great than when it was first conceived.