Chineme Okafor in Abuja
The Nigerian Society of Engineers (NSE) has urged the federal government to give priority to the manufacturing sector in its foreign loan procurement, saying the emphasis on infrastructure development will not help the national economy to attain the vibrancy to compete in the global economy.
Giving the advice in Abuja wednesday, the NSE said that instead of borrowing to spend solely on capital projects or infrastructure as stated by the government in its 2016 budget, it should give high priority to spending to rebuild the manufacturing sector.
The society’s president, Otis Anyaeji, said this when he inaugurated the Nigerian Institute of Safety Engineers (NISE), an offshoot of NSE, adding that it was important Nigeria looked for ways to become self-sufficient and able to locally meet its developmental needs than just looking for quick-fix for the recession that the economy had slipped into.
He said borrowing to spend on just infrastructure might not necessarily guarantee the country the needed economic independence to take care of her citizens but making sure that her manufacturing sector was strengthened to provide the materials and equipment needed to build the country’s infrastructure.
Nigeria is facing its worst economic crisis in decades as sinking oil prices and low oil output eat into its foreign reserves while the naira weakens against other currencies.
For months, the country has also been looking for sources to help plug a projected 2016 budget deficit of N2.2 trillion as President Muhammadu Buhari plans to triple capital spending in the 2016 fiscal year.
The Minister of Finance, Mrs. Kemi Adeosun, had last April in Washington said that the country would consider funding options from the World Bank and African Development Bank (AfDB).
“We are speaking to the World Bank and AfDB for budget support loans. We see the Nigerian opportunity as a policy opportunity and we feel the bank is the place to go to support our policy reforms. There is a lot of stigma and a lot of institutional memories in Nigeria around IMF that is not positive and we believe that this type would not be the right message for Nigeria at the moment,” Adeosun had said.
Anyaeji, however, spoke against this background and the government’s plan to turn to foreign financial institutions to plug the budget shortfall.
He said: “Recession as you know it is when an economy is not active. Our economy has not been active and if it begins to get active especially in the productive areas, manufacturing of what we consume, at least, we will move away from the recession.
“We have to take into cognisance the issue of housing because it is said that any economy whose housing sector is progressive can never get into recession because of the linkage to housing. There are other sectors with such linkage effects that we should go into. The automotive sector is one of such.
“The country must immediately make investment in the mother of all sectors, which is the machine tools sector. This is the sector that makes machines that make other machines.”
On foreign loans, Anyaeji said: “We are not against government taking loans, what we are talking about are the conditions. We all agree that with the quantum of funds available to the government, there is need for foreign investment to supplement, but in taking such foreign loans, what we are saying is that the interest of Nigerians ought to be paramount.
“If you are taking loans, mind you, we are still going to pay for it and incidentally it is not us who are around that will pay for the loans but generations unborn that will be saddled with that.
“There must be great efficiency in the way the loan negotiations are going. We must be looking for loans in the things that will improve the manufacturing capacities of Nigeria – that will give Nigerians the ability to make some of the very basic things they need. What we must consume we must make here.
“Let foreigners and others participate in our economy but in the things that will make us self-sufficient – that will make our economy rebound and we become sustainable. Don’t take loans to import cement, sand and steel, we are saying take loans to build up the capacity to make the cement, steel and rubbers here and let people invest in the manufacturing activities.”
Speaking on the decision of the NSE council to ratify the formation of NISE, its pioneer chairman, Biodun Oyedepo, said the incessant disregard for safety codes in the country’s infrastructure sector, as well as breach of existing safety protocols in already existing infrastructure necessitated the formation of the institute.
Oyedepo stated that NISE would not compete with existing agencies that regulate safety in the country but would act more as a watchdog to ensure that the right things are done with regards to safety.
According to him, practitioners in the country’s infrastructure sector have taken for granted all codes and protocols in their design of their engineering projects.