Former Lagos Governor, Asiwaju Bola Tinubu was Principal Guest of Honour/Keynote Speaker at the 2017 Annual Dinner of the King’s College Old Boys’ Association (KCOBA) on Saturday, September 23rd, 2017 at King’s College, Lagos.
In the speech read on his behalf by one time Lagos Commissioner for Finance in Lagos, Mr Olawale Edun, Tinubu among others offered ideas that may aid the urgent need for fixing the nation’s economy.
The seven suggestions by Tinubu are as follows:
Our current national economic model is but an old, crumbling house. Repairing this edifice is the greatest challenge confronting us.
NATIONAL INDUSTRIAL POLICY
We must press forward with a national industrial policy fostering development of strategic industries that create jobs as well as spur further economic growth. Whether we decide to focus attention on steel, textiles, cars, machinery components, or other items, we must focus on manufacturing things that Nigerians and the rest of the world value and want to buy.
We must partially reshape the market place to accomplish this. The federal government should institute a policy of tax credits, subsidies and insulate critical sectors from the negative impact of imports.
NATIONAL INFRASTRUCTURE PLAN
2. We need a national infrastructure plan. Roads, ports, bridges and railways need enhancing and new ones need to be built, the goal must be a coherently-planned and integrated infrastructural grid. A national economy cannot grow beyond the capacity of the infrastructure that serves it. Good infrastructure yields a prospering economy. Weak infrastructure relegates the economy to the poorhouse. Government must take the lead.
The focus on infrastructure has important corollary benefit. Federal expenditure for needed infrastructural spending h empirically proven in every place and in every era to boost recessionary economies and provide employment when sorely needed. Deficit spending in our own currency to advance this mission is neither a luxury nor a mistake. It is a fulcrum of and balanced and shared prosperity.
3. We must overcome the economic, political and bureaucratic bottlenecks preventing us from achieving reliable electrical power.
This is perhaps the single greatest impediment to economic advancement. The lack of power inflates costs, undercuts productivity, causing havoc to overall economic activity and job creation. Our economic situation is literally and figuratively in the dark.
The hurdles we face are not technical in nature.
We must convince those political and economic factors currently impeding our quest for reliable power to step aside that we may obtain this critical ingredient to economic vitality.
4. Modern economies are based on credit. However, credit for business investment is too costly in Nigeria.
The long-term economic strength of the nation is dependent on how we deploy now idle men, material and machines into productive endeavor. And this is highly dependent on the interest rate.
The CBN must cure its affection for high interest rates. Lower rates are required so our industrialists may borrow without fear that excessive costs of borrowing will consign them to irredeemable debt. The normal profit rates in most business sectors cannot support the burden imposed by current interest rates.
If our industrialists do not invest in more plant, equipment and jobs, the economy will stagnate. The banking system would have achieved its goal of low interest rates at the greater costs of economic growth. This is as misguided as trying to save a branch by chopping down the tree.
Consumer credit must be more accessible to the average person. The prevailing norm is for a person to purchase high -priced items such as a car in one lump sum. This is oppressive. It defeats the average person and constrains transactions in real estate, vehicles and appliances that could vitalize the economy.
5. The government-backed home mortgage system must be re-engineered. Mortgage loan agencies must be better funded, and liberalize their eligibility requirements so that more people qualify. They need to provide longer-term mortgages with manageable interest rates. Government should provide the supporting guarantees to make such financing a reality.
By sparking the effective demand for housing, the overall economy is enhanced. The construction sector and the industries allied to it will surge.
Moreover, to the extent that a man has a house he calls his own, that man is content; his contentment and innate common sense will act as brakes against instability and reckless political conduct.
6. Also, a workable credit system lessens corruption. The current lump-sum payment requirement tempts people toward misconduct. They see no other way to secure such large sums. Their wages will not suffice. Thus, they either must steal the money, beg for it or forego the purchase. Having an accessible credit system that provides for periodic installment payments places a purchase within the reach of a person’s wages. They no longer have to equate being honest with doing without.
7. Agriculture remains the backbone of the nation. We must help the common farmer by improving rural output and incomes. This is best done via ensuring minimum prices for crops strategic to food security. Here, we must revive an old practice and policy that served us well. Though effective, this policy was shunned because it conflicted with the free market totems that we were asked to erect against our own interests.
We must return to commodity exchange boards which will allow farmers to secure good prices and hedge against loss. An agricultural mortgage loan corporation should be inaugurated to further promote these goals.