Frank Ukonga Lecture 52: The imperatives of rolling up
sleeves and work to rebuilding & Re-branding the Nigerian State: A
functional Approach: by His Excellency Prince Frank Ukonga, the President of
National Peoples News group;@ 2015
The 2015 general elections has come and gone with remarkable
results of a historical paradigm shift of power for the first time to an
opposition party in the Nigeria federation and it is praise worthy to applaud
the winners and the losers for the maturity and democratic culture of peaceful transition
of power.
The people’s votes counted in one of the most competitive
polls of sub Saharan Africa who voted clearly for ” change” based on issue oriented manifesto
and promises from the winners; where the hopes of the peoples were seduced very
high in expectations of the delivery of the dividends of democracy and above
all of the promises of greatness made by the winners; which should translate to
the delivery of quality services, novae opportunities and advancement of the
peoples of the Nigerian state. At this juncture it would be pertinent to
espouse on a number of crucial premises where the proletariat of the Nigeria
state are eagerly expecting rapid changes in order of priority addressed to
lift the Nigerian state to sustainable economic, industrial and agricultural
prosperity in a short distance of history yonder…
Diversification of
the mono cultured economy of crude Oil exports: The global down turn of the
prices of crude oil in recent times need be given critical analysis to
ascertain the causes and the future prospects of oil export base economy with a
view to urgently kick start a realistic program of diversification of the Nigerian
economy if Nigeria is to remain relevant as the economic giant of Africa whose
GDP is estimated to a little over one trillion dollars by 2020; largely due to
the re-basing of the Nigerian economy on the economic indicators of service
industry including music, Nollywood film production etal which in real terms
are a deviation from the international standard practice of certification based
on post modern economic indicators of
the Real Sector of the economy, the overall power generation capacity of Nation
and its consumption per head, GNP/ Head, pulp and paper consumption per head,
the stock exchange, the amount of liquid steel per head; the level of
redundancies, capacity utilization of install industries, contribution of the
real sector and agric sectors to the economy etal…if the re-basing of the
Nigerian economy were based on any of the aforementioned economic indicators the result would certainly be different.
Whence there is the urgent need to diversify the economy to areas of comparative
economic advantage.
Nigeria as Rental
state vs Tax State; Focus on IGR: Imperatives of constitutional enabling Acts:
The Imperatives of constitution provision & Review: Nigeria is classified as a Nation in the category
of Rental state that makes the bulk of its earning from export receipts of
crude oil and gas into the international market. These earnings is used to fund
the capital, recurrent and social spending expenditures through statutory budgetary
allocations monthly and annually… though attempts are made by the government to
collect taxes through the various tax / Inland Revenue generation departments
and by various states and local governments of Nigeria there is an urgent need
of a constitutional discuss of national scale on these vexing issues to once
and for all transform Nigeria from a Rental state to a Taxed state or perhaps
invent a functional synergy of both .. In most states peoples pay levies, taxes
to lga, state govt and to federal government without really knowing who should collect
what, and what amount should be collected from peoples, companies and enterprises..it
is a jungle out there in the context of
tax regimes in the states level…double taxation, Arbitrariness and lack luster
approach to this aspect of crucial internal revenue generation to the three tier
of govt in the country is part of the problems of the inability of states/ LGA
to meeting up its financial obligations to the electorate in the context of
financing their budgets .Whence there is the urgent need of a white paper from
the various Houses of Assemblies in collaboration with the National Assembly on this crucial aspect
of revenue generation and its synergy into the entropy of state/ LGA
management.
Mobilization of Developmental Finance: The two major
stratagems of mobilizing developmental
finance the world over is either one use her own money through mobilization of excess
liquidity in the economy or the second option of using other peoples’ money via
borrowing; but remember the classical maxim that those who go a borrowing, goes
a sorrowing:
Mobilization of
excess liquidity in the economy: The financial sector of the economy could
play a vital pivotal role in the mobilization of excess liquidity in the
economy with a focus on supplying the urgently needed developmental finance in
Nigeria and most emerging democracies of the world.
Mobilization of
developmental finance through Banking consolidation: The Nigeria Experience; A
critique of Soludonomics: Banking consolidation of economy is done the
world over not only to restore confidence in Banks and to manage distress, illiquidity,
insolvency and collapse of banks and financial institutions but also as a
fulcrum to develop & mobilizing the resources in urban and rural areas into
bankable products through Research and development, research and innovations;
Which pulls all the national resources together continuously in the pursuit of
provision of highly needed developmental finacees for lga, state, federal
government, institutions, industries and the private sector. But unfortunately
the Nigerian Banking consolidation of Professor Sochukuma Soludo , a former
governor of the Central Bank of Nigeria was dysfunctional as it lacked the
necessity and sufficiency premises of adequately mobilizing developmental
finances for various segments of the polity…and no sooner after the banking
consolidation of the previous decade of mundane recklessness in Nigeria the
consolidated funds vanished through director related borrowings…and the
problems is still with that industry till today…HRH Sanusi Lamido also a former
governor of the CBN, came to the rescue as in
the emergence of Eco Bank takeover of Oceanic Bank, emergence of Street
Bank, Keystone Bank etc… the Universal
Banking concept immediately pushed aside the secondary and primary banking
institutions of mortgage banks./ community Banking concept that became
atrophied as they could not compete with the universal Banks which necessitated
the creation of Micro Finance Banks that also was dead on arrival because of
several reasons which made it unworkable as a supportive auxiliary to the
universal banking ethics…. The African finance corp. and the African Monetary
Fund concepts of Soludonomics that led
to seeding Lagos as a Banking and financial Hob for the sub region and the
African continent became only a hob of
speculation and peddling hob of other peoples financial products due to defaults
in the fundamental reason de entree of the entire scheme. Even the rebasing of
the Nigeria’s GNP/ Head from 250 dollar to an astronomical level of 1200
dollars/Head by Soludonomics , though acceptable for National pride sake but
puzzling to esoteric minds… For the banking institution In Nigerian to
adequately mobilize developmental finance for the nation there is the urgent
need to overhaul and re invent it in the Schumpeterian sensibilities.
Capital Market:
The stock Exchange needs to be overhauled and new marketable products to be invented
and marketed aggressively to grow the Nigerian capital market into a world
class market. Investors could be protected through a national insurance scheme
if possible. This would generate new source of capital.
Accessing
Developmental Finance from external, formal and private capital syndication: This
simply translate in most cases to going a borrowing and going a sorrowing… The experience
of the debt burden of the previous 20th century where the third
world were owing over 500 billion dollars to its western creditors was a great
lesson that cannot be swept under the carpet. It became so bad that countries
had to borrow to reschedule dept further compounding the situation. Virtually
all countries caught up with the debt trap of that era of living dangerously
became net exporter of capital…and till today Africa is caged in that bondage of being a net exporter
of capital annually to the tune of over 600 billion dollars… The favorable receipts
of oil exports in the OBJ era came to the rescue of Nigeria where we paid close
to 20 billion dollars for questionable debts of mundane era of sqandemania and
the investment were not there to show for the money borrowed. A bad case. For
now the external debt portfolio of Nigeria is within acceptable manageable
scope but if we must go a borrowing again, we must be twice shy…as it is said
once bitten twice shy…
FDI, Infrastructural
developmental finance vs Industrial developmental finance: focus on external
sourcing: I often warned several countries of emerging democracies
including the Nigeria state on the dangers of going a borrowing for
infrastructural developmental which usually leads to dept trap and debt burden
through illiquidity and insolvency.. it would be dialectical if external loans
are accessed for industrial and agricultural investments, It would be ideal if
external capital is accessed to develop the generation and distribution of
electricity and the iron and steel sector, it would be seen as dialectically
rectitude if external fund is used to develop the real sector economy but to
borrow for infrastructural development of roads , schools, bridges etal , to
borrow to fund recurrent expenditures and social spending of the budget which
cannot bring back the money is to commit economic suicide …it is a stratagem of
self destruct…otherwise the options of encouraging FDI- Foreign Direct
Investment, equity financing, joint venture projects, PPP, etal.. Could be seen
as appropriate and harnessed as credible alternatives.
The Real sector
economy: Power, steel, Petro chemical and small and Medium Scale Industries:
The aforementioned aspects of the economy need radical transformation if we
must develop to substantial standard that can anchor the nascent democratic dispensation
in Nigeria and in most emerging democracies of the world. Electricity is the
backbone of all modern civilization of the contemporary world and the more you
can generate and distribute the required level for industrialization the more
other problems like voluntary and involuntary redundancies are solved. In the
case of the take off of the petro chemical boom of the Nigerian federation it
is imperative that all forms of subsidies in that sector be removed otherwise
it would not give room to proper harnessing
by the private sector to grow Nigeria out of the woods. In this case the
low prices of crude oil and gas would become a blessing for the Nigerian state
if we remove all subsidies from that sector. And this would encourage Nigeria
to stop exporting its crude oil and gas but export refined petroleum products
all over the world. Most advance economies of the world thrives on the
plentiful of Small and Medium scale industries…in particular the United States
and the German Economies that are doing very well. Nigeria could borrow a leaf
from this and encourage the establishment of small and medium scale industries
in the plentiful as well; this would create a stable middle class cadre on which
the nascent democratic experience can be crested for sustainability.
Redundancies:
Voluntary and Involuntary & the vulnerable: Most governments of
emerging democracies employ less than 4 % of their citizen directly in the
civil service and other parestatals, remaining a huge labor force of above 95%.
The private sector cannot absorb all of them so above 60 % work force is
unemployed and redundant. This is a huge waste to emerging democracies who has
a favorable demography of large army of youth that if gainfully engaged could
become the back bone of greatness for these nations. So it is advised that
Nigeria look inward seriously to gainfully engage the large army of youth that
are currently redundant in the country through various schemes already
mentioned above.
Terrorism,
kidnapping, robberies, corruption, indiscipline & delinquencies: No
nation can develop in the midst of terrorists, corruption, kidnapping,
delinquencies and indiscipline. So Nigeria need to intensify it resolve to
confront these security challenges addressed to create a peaceful, disciplined,
law abiding and congenial atmosphere for business to thrive.
