How Nigeria can unlock $500bn in 5 years

Nigeria can unlock up to $500 billion in five years if it opens its infrastructure space to privatization, joint ventures and foreign and public private partnerships.

The Chief Executive Officer (CEO), Economic Associates, Dr Ayo Teriba, made this submission on Wednesday while presenting the lead paper at a seminar organised by the Ibadan School of Government and Public Policy (ISGPP).

The Special Adviser to President Muhammadu Buhari on Economic Matters, Dr Adeyemi Dipeolu, was at the seminar which also had in attendance prominent economists and scholars.

Teriba, speaking on the topic, “Transiting from Bust to Boom: Fiscal, Financial and Infrastructure Options”, stressed that Nigeria needed to put in place measures that would insulate it from foreign shocks.

He regretted that as a country, “we’ve been relying on windfalls to boost our economy, through the high prices of commodities like oil, but we fritter the windfalls. So, when the shortfall arrives, we suffer economically”.

He said the economy suffered in the last two years as oil prices per barrel went down to as low as $30. “The recent increase in oil price is bringing the boom back to the economy and our doreign rserves are looking up. But what happens if oil price slides or does not go up?”.

From budget allocation to budget actualisation

The economist then went on to state that the realistic road to economic recovery and stability is for government to raise money by tackling its weak revenue generation, create real access to private financing and build infrastructure.

“Budgetary allocations don’t mean anything if the money is not there because government needs money to convert its words to action”, he posited.

He advised that rather than borrowing to fund the budget and service debts and then remaining indebted, the Federal Government should set a five year plan to raise up to $500 billion by opening up its infrastructural space to privatisation and joint ventureships in rails, roads, health, education, sports as well as property development.

He said the move would help government shore up foreign reserves, boost non-oil revenue, build more infrastructure and also create access to finance for small, medium and large scale businesses and even for student loans.

Exploring and exploiting the options

He advised government to break its monopoly as it did in the telecom sector. He said the liberalization should work in aspects of rail and road transport, health, education and sports. He added that “partial privatization, joint ventures worked in LNG and Oil export and production, and should work in refineries, pipelines, power transmission and aspects of rail”.

He also advocated “assets restructuring” of the large number aging and uneconomic prisons, barracks, wasting government land and buildings”

Teriba said Nigeria could take a cue from Saudi Arabia which is privatizing 16 sectors of the economy despite having more foreign reserve than Nigeria. He also cited the example of Britain which has commenced the relocation of its prisons in high brows to outskirts and siburbs in order to use the free spaces for revenue generating property development.

As a matter of policy, Teriba advised government to stop its agencies from capital projects like buildings and buying of cars without appropriation. He said a lot of thise buildings were wasting away. “You can compel them to sell off those buildings and unlock the revenue”, he advised.

Reactions, government’s plans

Majority of the prominent economists and scholars who attended the seminar showed approval to Teriba’s ideas.

President Buhari’s aide, Dr. Dipeolu who spoke to journalists at the sidelines of the event, acknowledged that the lead speaker presented great ideas, some of which the government was already exploring. He however added that while those fiscal, financial and infrastructural options were being worked upon, government was undertaking simultaneous measures in its Economic Recovery and Growth Plan (ERGP).

His words: “There is no single shortcut solution to economic recovery. Other steps being taken according to the ERGP include boosting revenue by ensuring peace in the Niger Delta, rejigging Federal Inland Revenue Service by bringing more people into the tax net, the tax amnesty initiative, boosting reserves from about $23bn to $40bn, boosting Agriculture and easing land systems, encouraging more local manufacturing to create jobs, infrastrutural development as witnessed in the rail transport system, the second Niger Bridge, raising power generation from 4000MW to 7000MW. We are not able to use all due to inadequate distribution infrastruture like transformers and power lines, these need to be fixed. All these processes are all inter-related when it comes to fixing the economy”.

ISGPP, the Think Tank

In his welcome address earlier, the Executive Vice Chairman, ISGPP, Dr Tunji Olaopa, said: “Indeed ISGPP as a Think Tank, is worried that the little measure of success recorded since the exit from economic recession may be traded for cheap political points by the political class. And so we think that now is the best time for economic experts and other stakeholders in the business of governance to begin a level of conversation that will deliver an alternative sustainable and inclusive model of development for Nigeria.

“We understand that any country that trifles with its economy does so at its own peril. Therefore, we believe it is high time that Nigeria takes her economic growth plans more seriously by coming up with sufficiently strong and intelligent economic strategy on the basis of sound policies that will trigger the growth of the national economy.”

Notable economists and representatives of relevant agencies including emeritus professor, Ademola Oyejide, Prof. Akin Mabogunje, Chairman, Governing Board of ISGPP, Prof. Akpan Ekpo, Prof. Olu Ajakaye, Dr Obadiah Mailafia, Prof. M.K Yahaya. Prof. Emmanuel Nnadozie, Ben Akabueze, Dr Doyin Salami and Acting DG of DAWN Commission, Dr. Seye Oyeleye