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Reflex Eco Group – Nigeria news

by Victor Emejuiwe (Local journalist)

What lessons can we learn from China? In the past few weeks China became jittery over the growth of its economy, the government of that country was not comfortable with the 7.2% GDP growth of its economy, meanwhile the Chinese economy is renowned as the world largest economy . China utilized four main sectors to drive its economic growth, these includes; Industry, Agriculture, Science and Technology and National Defense also known as the four modernizations. Chinese also have strong laws on equity joint ventures. The evidence of Chinese growth is not in the GDP figures but in the land miles it has achieved above industrialized nations over the past ten years. It is a deep sense of responsibility for China to get jittery over the slight reduction of its growth figures but the structures already in place is enough to mitigate total economic collapse. Interestingly Nigeria has recorded an impressive economic growth of 6.5%, which the Coordinating Minister of the economy sighted as being very impressive but the Federal government should know that with the obvious trend in the revenue profile of the nation, the economic growth cannot be sustained. The Nigerian government is jittery over its revenue profile as a result of recent loss of revenue from crude oil theft and the shortfall of revenue generated from the customs and FIRS.

It is ironical that we celebrate an economic growth and yet record losses of revenue. The Federal government had projected a total of 11.9trn as its revenue projection for the year 2013 unfortunately the revenue profile recorded in the first quarter of the year negates this projection. The Federal Accounts Allocations Committee FAAC, declared the gross federally collected revenue of the first three months as N1.81tn, the trends of this allocation from January, N651.26bn, February N571.7bn and March if we are to go by this trend, Nigeria might end up with just N7.3tn at the end of the year. It is a clear indication that the current economy of Nigeria is in near collapse and the only solution to salvage it, is to restructure the economy.

The four modernization of China as earlier highlighted was successful because China leveraged on its population. China deployed over 300 million of its 1 billion populations into defense, it further encouraged a large number of its population to go into industrialization and as such a lot of Chinese citizens are manufacturers of their own products. The Chinese also saw the need to feed its massive population, therefore it invested so much in Agriculture with a record of 300 million Chinese farmers employed in China, it is ranked as first in worldwide farm output . On Science and Technology China was open to foreign based technology coming from Japan and the U.S.A, it encouraged partnership with this countries and today China has succeeded in domesticating those technologies in its home stead.

Nigeria has similar population advantage in Africa, and as such it is regarded as the most popular black nation in the world. It is also blessed with Natural resources such as crude oil with an arable land for agriculture, as a result, agriculture has contributed as our most reliable source of non -oil revenue contributing 33.4% of the GDP.

The Federal government must learn to build a people centered economy by leveraging on the potentials of Nigerians and deploying them into the identified sectors that could increase the revenue profile of the country. The over reliance on crude has encouraged social vices and laziness especially from those who seize the opportunity to steal crude oil in their domain with disregards to dignified labor. There are four key sectors that should form a people driven economy in Nigeria this includes; Entertainment, Agriculture, Industrialization and Science and Technology. The four key sectors are the major sector that embraces the interest of the vast population of Nigeria.

The Federal Government must be commended for identifying with the entertainment industry such as Nollywood, the recent 3bn intervention fund given to the industry is a sign of encouragement to the industry. However the industry needs to form part of government economic growth policy, with a yearly budget allocated to it. The Industry has been confirmed as the third best in the world after Hollywood and Bollywood, making over 255million dollars yearly with thousands of youth gainfully employed. The Federal government needs to liaise with stakeholders of the industry to establish a framework where both parties could benefit from the growth of the industry. Taxation remains the most suitable means for government to gain from the industry.

China obviously deployed strata’s of its population into its four modernizations, with 300 million gaining employment in the national defense and another 300 million into Agriculture. Nigeria is fortunate to have over 50% of its population involved in domestic farming; however domestic farming is not a reliable source of revenue generation for both the government and the farmers. It has mostly provided subsistent meals for the immediate family of the farmers. There are lots of challenges with commercial farming in Nigeria, and these include; Non access to Modern tools such as mechanized and irrigational farming. Also, the huge cost of fertilizer and lack of storage facilities has discouraged a lot of commercial farmers in Nigeria. The Federal government must intervene by deploying the teaming youths into modernized agriculture. Over seventy percent of Nigerian would be interested in Agriculture if incentives are given for mechanized and irrigational farming. The federal government should provide allocations for mechanized farming while also encouraging the CBN to device monetary policy that offers interest free loan to Nigerians, interested in Agriculture. Strong regulatory framework must be set up to achieve this.

China attained its industrial height by encouraging local manufacturers from province to province; it set up a manufacturing council in each province to test and approved the standard of goods produced and thereafter brands such products as made in china products. Nigeria is equally blessed with enterprising youths in the south east of Nigeria, such as Aba. Aba town in Abia state is known as the “Japan of Africa” simply because the town is made up of virile youths with technical ability to produce different commodities, ranging from bags, shoes, cloths, and house hold materials. In Anambra state, Nnewi Town had produced automobile experts such as Innocin and Anamco. These two companies could revolve into several automobile companies if encouraged to produce more vehicles and also train more Nigerians into vehicle production. In the South West, there are industrialist who are engaged in food processing, the likes of Doyin foods, OK foods, Okin Biscuits e.t.c. The North is not left out; they had once contributed to the growth of the economy by involving in the production and exportation of textile materials. They are also gifted in hand crafts for house hold wares. The Federal government should make painstaking efforts to encourage manufacturing of made in Nigeria products in every regions of the country and set up a manufacturing council in those regions to test the usability and standard of the products.

China opened up its door for science and technology, the aim was to boost the local capacity of its teaming industrialist. For a very long time the Americans, Japanese, Koreans invested in China through science and technology; China leveraged on this opportunity and developed its own science based structure that has become the best in the world. Unfortunately Nigeria is bereft with a bad foreign policy, a good Joint Venture Agreement can be cited in the Law of the People’s Republic of China on Foreign Equity Joint Ventures Article 5, it states that;

“The technology and equipment contributed by a foreign joint venturer as its investment must be really advanced technology and equipment that suit China’s needs. In case of losses caused by a foreign joint venturer in its practicing deception through the intentional provision of outdated technology and equipment, it shall compensate for the losses.

A Chinese joint venturer’s investment may include the right to the use of a site provided for the equity joint venture during the period of its operation.

If the right to the use of the site is not taken as a part of the Chinese joint venturer’s investment, the equity joint venture shall pay the Chinese Government for its use. The above-mentioned investments shall be specified in the contract and articles of association of the equity joint venture, and their value (excluding that of the site) shall be assessed by all parties to the venture”

The Chinese JVA policy above had succeeded in protecting the Chinese interest in any foreign venture, Nigeria’s current foreign trade policy is to encourage foreign investment and also to engage in the exchange of commodities between countries where it has bilateral relationship. The outcome of this policy had only end up making Nigeria a dumping ground for all sorts of importations. The National Bureau of Statistics NBS revealed that in the first quarter of 2012 Nigeria’s importation value across its partners were; China N256.26 bn, USA N196.13 bn, U.k, N190.60bn, Brazil N169.86bn, India N114.04bn, Japan N70.34, Germany N60.48bn, Belgium N54.93bn, Netherlands N50.78bn, UAE, N42.98bn. unfortunately Nigeria’s export value to this countries is in zero sum. The Federal government must review its foreign trade policy to encourage transfer of knowledge, the dominance of priority sector by companies such as Total, Elf, Chevron, Shell, and MRS (former Texaco) and merchandise conglomerates such as UTC, John Holt, UAC, and Unilever should be reconsidered for a takeover by indigenous companies. Nigeria can only develop through science and technology, therefore companies desiring to invest in Nigeria must invest its technology amongst scientist in Nigeria. It is recommended that graduating students of the Federal Polytechnics and University of technologies should be trained by the foreign technologist expatriates willing to invest in Nigeria.

A people driven economy, is the best solution for Nigeria to mitigate crime and create a leading economy in Africa and beyond