Nigerian economy had been in crisis before the global economic meltdown hit our local market.The problems and challlenges the private sector have are related to bad governance, and not the global economic slowdown. In more specific terms, one can talk of crisis induced by lack of infrastructure, bad policies and ineffective leadership. Under these circumstances, we shouldn't really attribute our woes or the unimpressive market indicators in Nigeria to the global economic meltdown. This means the business environment has been under stress for some time. Yes, with the onset of the global crisis we have had further deterioation in our situation across the various industries.
In the matured economies, it looked like jobs were sacrificed to maintain corporate profit and survival during the recession. How much of job losses have Nigeria experienced in the past twelve months, and what is the scenario we will be dealing with over the next year in the country?
Here again too high unemployment rate has been with us in the country for sometime. In the latest statistics by the World Bank, unemployment rate in Nigeria was put at about 20 per cent. As high as this is, The Bank's estimate is very conservative.With the impact of the global recession and the crisis in our local financial services sector, unemployment situation in the country has worsened significantly.
Government policies have failed to support growth in agriculture and the real sector, including manufacturing. These sectors hold very high job opportunities. In the last five years when Nigeria's GDP growth averaged 6 per cent, it hardly correlated to job increases.
In 2006, the administration of Olusegun Obasnjo made a pronouncement that it would release N70 billion for the revival of the texile sector. The former President went ahead and made symbolic presentation of cheques to about 10 textile industries. Alas, it was N70 billion on paper, but those industries have not been able to access the intervention funds. If government had lived up to it's words, it would have led to significant revival in the texile industry.
Similarly, the present government recently came out with a package to stimulate agriculture with N200 billion. One immediately wonders what this will amount to, considering that agriculture in Nigeria is dominated by subsistent farmers. Where is the capacity to absorb the fund? So we have lurking another policy declaration that will not be met with execution.
A few weeks ago, the government announced a 'stimulus' package that would see injection of $2 billion into the economy. What is in it for employers in the organised private sector (OPS) which constitute your membership?
We could have easily adopted some of the policy options that have helped the G8 countries to weather the economic storm. They realized that employment is key to the revival of their economies. They instituted policies that will promote and support consumption. Interest rates were radically cut; in the UK, it got as low as 0.5 per cent. This was to fight back the credit crunch, and spur economic activities. These were the measures one was expecting from our government, instead of the jumbo $2 billion. Where is that going to in the economy? Would it promote economic activities?
A sectoral intervention would have been appropriate. But government says the fund will be distributed amongst the three tiers of government. That is not the kind of intervention we are hoping to get. We are talking of targeted sectoral intervention that will be followed up by implementation, like reviving the manufacturing sector which has been completely comatose.
We need to be able to engage the populace and unleash the energies of Nigerians in employment and business. For us to realize this, we have to attack the issue of infrastructure. The truth is that businesses are folding up in spite of the huge stimulus package. Effectiveness of every policy of government should be measured in terms of how many jobs have been created; how many businesses have been established. I can't see any connection right away between the stimulus package the government has just announced and its capability to revive businesses. So we face an imminent huge chunk of money flushed down the drain.
One essential attribute of how the recession has been dealt with in the matured markets is coordination of the policy measures by all stakeholders including governments, regulators and various market participants. How much of consultation, for instance, has NECA been involved in attempt to address the financial market crisis in Nigeria?
Overtime, government has played down or overlooked the social dialogue model promoted by the International Labour Organisation (ILO). NECA has been in existence for over 50 years. In the past, there was significant interaction between the Organised Private Sector (OPS) and government in formulation of policies that have bearing on business. Even in the worst days of military autocracy, the regimes recognised the need for social dialogue and stakeholders consultation. Traditional business representatives like NECA, MAN, NACCIMA and NASME were consulted. Expectation for this is higher under a democratic system.
In the first term of President Obasanjo, he made attempt at consultation with the OPS under the Presidential Committee on Revitalization of the Nigerian Economy, chaired by then Vice President Atiku Abubakar. By the second tenure of the President, he had abandoned consultation. Government then decided to speak only to a certain few individuals in the private sector. With this preference, group consultation was undermined. Under the present administration, things haven?t changed very much. Most of the grassroots organisations are still being ignored in the process of government policy formulation. This was not the case in the best of times Nigeria had experienced. A huge communication gap now exists between the government and OPS. I say this without prejudice to the sovereign role of government in managing the economy and in ruling the country. But Nigeria accented to the ILO framework for social dialogue, and we are expected to observe both the principle and the practice.
Given your views above, what is your perspective on the policy preferences of the administration of President Yar'Adua?
At the inception of the administration on May 29, 2007 President Yar'Adua announced his 7-point agenda. More recently, the Vision 2020 which aims to make Nigeria one of the top 20 economies in the world by the Year 2020 has been launched. Are the objectives in the pronouncements achievable? Perhaps this government is on the familiar path of rhetoric. First we had a visioning process that led to Vision 2010, which had clear objectives. We must ask ourselves, is there a problem with the 2010 document? Why could we not achieve the laudable objectives stated in the Vision 2010?
I firmly believe that political reforms should precede economic reform in Nigeria. We have prioritised economic reforms, whereas political reform is what provides the right platform for economic reform. In this connection, I believe we need to promote true federalism. The current political structure we have in Nigeria is simply promoting indolence; it is not challenging the various federating states to embark on the path of economic activities that will ensure job creation and improvement in the welfare of people in their domains. We need to look at reforms that will place the emphasis on the federating states contributing to the federal purse. This is what we had in the first republic. It is completely different from the arrangement we have today in which we distribute or appropriate revenue from the federal purse. Why should I have to wait for three months to get my driver?s licence simply because of concentration of issuance in few federal facilities? Why should I have to deliver power generated by me to the national grid when I could easily deliver it to my immediate environment where the market exists?
As a membership based organisation (MBO), what are the criteria for joining NECA and what are the benefits?
You simply need to be an employer of labour with staff strength of 5 employees minimum to be a member of NECA. This requirement applies across all the sectors and industries.
NECA is a business membership organisation that was established in 1957. The main objective for establishing NECA was to provide a platform for private sector businesses to influence government policies in the areas of social and labour issues. Overtime, NECA has expanded its scope to cover any issue of interest to private sector employers. Our mandates now include support of member organisations in building capacities to compete and survive in the economy. In that regard, we offer our member businesses training and human capital development programmes. Our business advisory services to members cover HR, taxation and others knowledge intensive areas.
Our transformation has involved our partnership with some governmental bodies in addressing dearth of vocational and technical skills in the country. We deploy facilities in our member organisation for this purpose. We are also promoting entrepreneurship, especially small & micro businesses. A gender support to encourage women entrepreneurs is in place at NECA, while our involvement with youth employment is a CSR deliverable for us.
This interview was conducted in October, and was first published in the November 2009 edition of Financial Nigeria magazine - a monthly development & finance journal. Interviewer: Jide Akintunde. To subscribe to the journal, call +234 802 343 9098 or email: firstname.lastname@example.org