by Mark Amaza
For the second year running, Vice President Yemi Osinbajo led the Nigerian government delegation to Davos, Switzerland for the 2017 World Economic Forum (WEF), the yearly talk shop and networking event for global business and political leaders. Like all other attendees, he was expected to sell Nigeria as the preferred destination for international investors.
However, as part of the panel of discussants for the “Building Africa” panel with Rwandan President, Paul Kagame and Ethiopian Prime Minister, Hailemariam Dessalegn, Vice President Osinbajo’s answers to the questions asked were not only less than satisfactory; they also give cause for worry.
— T. Rankïn' ∆ (@AfroVII) January 22, 2017
While the first question put to him by the moderator of the panel hosted by business television channel, CNBC on what political will existed to unlock economic opportunities in Africa was answered fairly well, the second question on what the government is doing to get investors excited about Nigeria again considering the economic difficulties it went through last year, Vice President Osinbajo ended up faffing around.
Rather than clearly lay out the plans of the government for stemming the economic bleeding in the country, Vice President Osinbajo launched into an unneeded background talk on what went wrong in 2016 by blaming loss of government revenue and a fall in power supply to the activities of militants. A repetition of the question by the moderator got a slightly better response of engaging with militants and the launch of a National Economic Growth and Recovery Plan.
However, these answers do not go far enough in restoring investor confidence in Nigeria, chiefly because engagement with militants only reinforces Nigeria’s dependence on crude oil exports, and the details of the Economic Growth and Recovery Plan are yet to be known.
In the meantime, Nigeria remains mired in a recession, with headline inflation at 18.3%, a fast-depreciating naira which is exchanging at almost N500 to a dollar, pushing up the prices of imports; scarce availability of foreign exchange due to the refusal of the Central Bank of Nigeria to float the currency, and the economy is still hemorrhaging jobs.
But in the middle of all of this, it does appear that the problem is not that the Federal Government is lacking the right solutions; rather, it is that it is insistent on what it feels are the solutions despite the fact that there is no evidence that it is working.
For instance, despite all efforts to convince it to allow a full float of the nation’s currency by local and international stakeholders, it has through the CBN pushed ahead with various strategies for keeping the naira artificially high from demand management to trying to control the price in the parallel market. Also, despite all assurances that it intends to diversify the economy and cut waste in government, it is apparent that it is hoping and working where it can for a rise in the price of crude while still proposing budgets that are heavy on recurrent expenditure.
Vice President Osinbajo’s unimpressive answers at the WEF panel might not have yet elicited responses from investors and the business community, but they should not need reminding that this year is the last full year of governance for this administration. It is common knowledge that politicking will take over at most from the middle of next year.
Thus, they have to put in everything they have got in pulling Nigeria ahead and out of this economic quagmire that we are in.
This is not the time for them to stubbornly hold on to ideas that have so far not worked. They should be bold and shed whatever economic philosophies and ideologies that have so bound them to these ideas, and try new ones.
It is time to have a bold, realistic economic recovery plan and to run full-speed in implementing it. Anything short of this will not bring investors running back to Nigeria.