Nigeria has what it takes to achieve first-world development, argues Olisakwe Okafor
With the recent protests by youths demanding an end to police brutality and also demanding for better standards of living, it is relevant to explore ways of achieving rapid development and first-world development status for Nigeria within the 2020s decade. The nation’s various governments have published many development plans with the intention of transforming the nation into a first-world country. However, when it comes to implementation, things fall apart.
Some of these development plans include the Structural Adjustment Programme/MAMSER of the Babangida government, Vision 2010 of the Abacha government, Vision 2020 of the Yar’Adua government, Transformation Agenda of the Jonathan government and the ongoing Next Level Agenda of the Buhari government. None of them has come close to achieving first-world development in Nigeria because the plans usually lack focus. It’s like a wild goose chase: you end up with nothing. It is more effective to concentrate on one or two policy areas. While everybody has their own idea of what these ones should be, my own one-point agenda is job creation.
As the poverty capital of the world, Nigeria has about 100 million people living under the poverty line of $1 per day. The best strategy to eradicate poverty is job creation. We need to create about five million jobs per year for about five years consecutively in order to reduce the poverty rate to about 5%. Most of the poor are children and dependants of a single breadwinner, so about five people can be lifted out of poverty just by creating one job.
How do we create five million jobs a year using the concept of international trade? We can start with a major drive to attract foreign investment. Thousands of jobs can be created by just one substantial foreign investor. The investors pay taxes and other fees to the government thereby generating revenue for the government to spend on schools, hospitals and infrastructure. An annual target of $50 billion foreign investment inflow should be set.
The next step is to increase exports and to globalize Nigerian companies. Exports here refer to industrial and value-added products, not natural resources. This industrial exports’ strategy was adopted by the Park Chung Hee-led government of South Korea in the 1970s, when they globalized their local companies like Samsung, Hyundai and LG. These three companies are now world leaders in mobile phones, automobile manufacturing and electronics respectively. Japan is a trillion-dollar economy because of its large number of multinational giants such as Toyota, Honda and Sony. These are global corporations that create jobs, pay taxes and invest billions of dollars in Japan. Most of the cars in Nigeria today are from Japan while British, German and American brands are household names globally.
An example of a potential Nigerian multinational giant is the Nigerian National Petroleum Corporation. NNPC is already a multinational corporation because it supplies crude oil and natural gas to America, Europe and Asia. However, it is one thing to be a multinational corporation and it is another thing to be a multinational giant. A good example of an African multinational corporation that is working hard to become a multinational giant is the MTN Group of South Africa which is currently expanding its telecoms network outside Africa. To become a multinational giant, NNPC needs to have a global network of petrol stations, refineries, petrochemical industries, logistics networks and oil fields; and compete with the likes of Exxon, Total and Shell in the global energy market. Most importantly, NNPC can become Africa’s leading company in renewable energy, helping to move the continent away from unsustainable energy sources that cause environmental degradation. NNPC can be Africa’s voice in the debate over the future of global energy.
The same applies to other multinational corporations like Zenith Bank, Dangote Cement and Globacom. MTN South Africa is the top telecoms company in Nigeria, so I believe that our Nigerian companies can do better in other countries. Nigerian banks are already present in some African countries and it is possible that our global agenda may start from the banking sector. The next step for Nigerian corporations is to dominate Africa. Expansion continues until they become global companies. The best strategy for this plan is mergers and acquisitions. Rather than setting up fresh companies in new countries, they can merge with, or acquire companies in those countries. These acquired companies would then be expanded and integrated into the global network of the group.
First-world countries do not rely on taking percentage cuts from sales of natural resources. Rather, they rely on taxes paid by their multinational conglomerates who convert natural resources into value-added and industrial products. Giants such as Toyota, ExxonMobil and Apple are each able to pay billions of dollars annually in taxes to their home governments. Nigeria can therefore multiply government revenues by encouraging our large conglomerates to export and compete in global markets. Their revenues from Europe, America and Asia would all be taxable by the Nigerian government. This will also boost economic growth in Nigeria and with a double-digit growth rate, Nigeria can move from $500 billion Gross Domestic Product to over $1 trillion GDP within two or three years. Let us also not forget what exports do to a country’s currency: one naira to one dollar becomes possible. Nigeria can become a first-world country if she has a sufficient number of multinational giants. The competition between countries of the future will not be about how many army divisions you have, but about how many multinational giants you have.
Virtually all first-world countries made their wealth from manufacturing and exports. One area of global potential for Nigeria is automobile manufacturing where we have our Innoson Group. Japan and Germany made most of their wealth from automobile manufacturing. Let us support Innoson to challenge the likes of Toyota and Mercedes-Benz. My advice to Innoson is that they should upgrade their cars so that high-class people in Europe and America can feel proud to drive an Innoson car. Innoson may have to employ the best car designers from around the world in order to achieve better designs, luxury and technology. Major events like international auto exhibitions and car races should have Innoson participation. The company will eventually contribute billions of dollars in taxes, jobs (direct and indirect) and investments to the Nigerian economy.
Another sector that is as promising as the automobile sector is Information Technology. Nigerian youths are highly tech-smart but due to lack of opportunities and enabling environment, their talents are often under-developed. Their talent is an energy that can be harnessed by the government and the private sector. Indians used their tech-talent to create an IT sector that services the outsourcing needs of large American and European corporations. Israel’s government is also developing the nation into a global IT giant. Grants, loans and incentives are made available to the IT sector and Israeli companies have been involved in many global mergers and acquisitions. This is the same approach that we can adopt for Nigeria’s IT sector. Merging existing computer firms into large giants that can compete in the global market will add a lot of value to the nation’s economy and create the next Microsoft and Facebook.
Nigeria’s agricultural sector can also contribute to our target of five million jobs per year. Apart from creating jobs, boosting agriculture will also ensure that food is available to all Nigerians. A good strategy for the agriculture sector is to organize our farmers into corporate entities whereby each entity would have thousands of farmers. These entities are then connected to large-scale buyers around the world. Each entity could export millions of dollars worth of agriculture annually. This strategy has been successfully used in Ghana (cocoa) and if implemented in a competent manner, it could make our farmers very prosperous and also create millions of agricultural and agro-allied jobs.
While practicing free-market liberalism, first-world countries also believe in social intervention to protect vulnerable members of the society. For instance, Nigeria’s minimum wage should be increased from N30,000 toN100,000 per month. We should also develop a social safety net whereby unemployed and vulnerable members of the society are given a periodic allowance by the government in order to maintain a decent standard of living. These are called unemployment benefits/social welfare and they are a characteristic of all first-world countries. As a candidate for first-world status, Nigeria must develop these areas of minimum wage and social safety nets in order to achieve high standards of living for all Nigerians. Other characteristics of first-world societies that Nigeria must improve upon include genuine democracy, gender equality, a nationwide railway network, 24-hour electricity, an excellent education system, healthcare, tourism, human rights/liberty, peace/security, science/technology, and arts/culture/sports.
In conclusion, this is the same process that other first-world countries had to pass through. Nigeria should have a comfortable middle class comprising 70% of the population and enjoying high standards of living. Poverty and unemployment rates can be reduced to less than 5% of the population. A wealthy upper class of about 25% of the population would reflect Nigeria’s status as a global financial hub. Examples of countries around the world that have achieved first-world development within one decade of concerted effort include the Lee Kuan Yew government of Singapore, Park Chung Hee government of South Korea and Sheikh Al Makhtoum government of Dubai. It is therefore difficult but not impossible. With hard work, good governance and the grace of God, Nigeria can achieve first-world development within the 2020s decade.
––Okafor is an Abuja based Legal
Nigerian banks are already present in some African countries and it is possible that our global agenda may start from the banking sector. The next step for Nigerian corporations is to dominate Africa. Expansion continues until they become global companies. The best strategy for this plan is mergers and acquisitions