OUTSIDE THE BOX -By Alex Otti
“In preparing for battle, I have always found that plans are useless but planning is indispensable”Dwight Eisenhower
In my last column, I attempted to draw attention to the importance of diversifying our understanding of the diversification of the economy beyond commodities to less tangible but more important assets of our nation. These could be summarised under education, talent, entrepreneurship, intellectual property and skills. I concluded by arguing that most modern economies leveraged knowledge to leapfrog to development, even when they have commodities like us.
As our point of departure today, it will be safe to state that harnessing knowledge requires rigorous planning. Some people will be quick to interject that we have had plans in the past that did not yield the desired results. We had the first to the fourth national development plans and a few rolling plans thereafter. While I acknowledge the existence of these plans, I hasten to add just like Eisenhower that such beautifully crafted documents do not have any relationship with what we are discussing. We are interested in the process of thinking through and agreeing what we want to be, how we intend to get there, what we require to get there, who would be useful in our journey, when we have to get there, how to know when we get there and what to do if things change in the process of our journey. Effective planning does not make room for not getting there nor what to do if we don’t. This is because failure does not have a place in effective planning and by the time you find out that you failed, it would probably have become too late. There is a favourite saying that if you do not know where you are going, any road takes you there. Planning helps us to know where we are going and the route to get there.
The first question of where we want to be requires a lot of original thinking, given that no two countries are the same. This is the major job of leadership. Any entity that does not have leaders who can articulate the vision of that entity is doomed. This is where we should actually start the restructuring of our country from. If you look at the developed countries, you will notice that it is all about the vision of the leadership. The good thing about good vision is that it outlasts the visioner.
For our country, a good place to start will be to ensure that we maximise the capabilities and ingenuities of our people. A lot of people make the mistake of placing capital above people and when capital takes flight as it is wont to do, confusion sets in. Marxian economics, even though seems to have fallen on bad times with the collapse of USSR and other socialist countries, have some theories that are still very relevant up till today. One of them is the place of labour in the extraction of surplus value. Surplus value is also known as profit. Marxians insist that surplus value comes from labour and they have been able to demonstrate it mathematically. Simply put, they point out that if the three factors of production are land, capital and labour, the only way a combination of the three factors can produce more goods than the original inputs is that one or more of the factors yield much more than what was employed in the production process. Since land is a natural occurrence and there is no way land can be increased and capital is also fixed naturally, it is only labour that can transform itself and account for profit, depending on energy and time employed. One angle to look at it from is that the essence of government is the good of the people. So, government must be interested in anything that creates jobs for its people.
The other angle is that there is no invention anywhere in the world that was not created by people. Viable businesses insist that their most valuable resource is their people. If we agree with this theory, it then follows that as a country we must invest in our people to encourage them to use their talents for the benefit of the country. The most important encouragement you can give a people is neither food nor money, even though those are necessary. I believe it is education. Education liberates the mind, exposes people and sparks off their ability to think and create value. A few weeks ago, we hosted Mark Zuckerberg in this country. Beyond everything, one thing that I believe helped his talent is education. He benefited from very good education at Harvard University.
We must rethink the quality and quantity of education available to our people in Nigeria. One doesn’t take for granted, the fact that with the entrance of the private sector in education, there is a little bit of improvement, but that improvement pales into insignificance if one appreciates our current position assessment. If we look at the position of our universities, alongside other universities in the world, it will amaze not a few people that no Nigerian university made it amongst the first 600 in the league. If not for the University of Ibadan that rescued us, by placing number 11, no other Nigerian university made it to the list of the top 20 universities in Africa. When you look at enrollment, we are also in the very low category. With this kind of scorecard, how do we expect great performance from our graduates? However, we have very happy stories of some of our citizens excelling in spite of our inability to make our universities citadels of excellence.
We must sit back and draw up a clear roadmap of where we want our education to be. We must give ourselves targets. An example is to seriously decide that in four yearswhich will coincide with the life of an administration, not less than five of our universities must be rated amongst the best 10 universities in Africa and 100 in the world. We will then proceed with a clear planning of human resource, research and development, enrollment, faculty, curricular and most importantly funding to ensure flawless execution. We will then identify very capable and experienced hands to handle this project. In doing this, it would not matter where the hands come from even if we have to hire foreigners. We may also drill down further to identifying areas of research and development that we want each of the five universities to focus on. Just like India chose to specialise in modern Medicine and Information Technology, we may decide to add music and movie technology, taking those two, which our people have done well in, without help from government. We may also add modern textile manufacturing technology, modern designing of clothes, shoes and leather works and automobile manufacturing as part of the preferred areas of specialisation.
To complement the universities, we may, as part of our planning, designate certain locations as Medical, Information technology, Music, Movie, Textile, Leather, and Automobile Villages or hubs. To give effect to the designation, the government will acquire very large expanse of land, build state of the art facilities, and install machines and all necessary infrastructure to attract interested participants to those locations. Huge industrial parks would be built in those locations to enable shared services and encourage start-ups. Generous incentives like for example tax holidays and protective tariffs would be introduced to encourage and attract businesses to the locations. Management of the locations could be outsourced to the private sector and done in such a way as to encourage them to keep reasonable margins to ensure proper maintenance of the facilities, while maintaining the town and gown relationship with the universities. The government should have at the back of its mind, the original intention of the project which is not necessarily to make money but to encourage talents and entrepreneurship and reduce unemployment while diversifying the economy in a more enduring manner.
In four years, the planning government would have achieved a more respectable and well-funded educational system, created and encouraged talent, created jobs and jump-started local production. This can be replicated every four years by successive governments. I must tell doubters that this is not rocket science. It is this same country where arms and ammunition were produced during the civil war. A lot of arms are still being produced illegally in different parts of the country today. Crude oil is being illegally refined locally by people who may not have seen the four walls of a tertiary institution. A young man in Aba in 2014, built a generator from a disused Mercedes 911 engine. A man built a car, with very rough edges and rudimentary technology elsewhere recently. Imagine what will happen if government gets interested in some of these innovations and decides to put its balance sheet behind these local geniuses instead of the futile search for foreign investors.
The Facebook King spoke about the energy in Lagos. He was impressed with our boys and girls that are into software development and programming. Can’t we organise them and make laws that protect them and their intellectual property? Can’t we do better with copyright laws to protect our musicians and artistes in Nollywood? Can’t we build huge modern facilities in Lagos for instance and make it difficult for people to shoot films in other parts of West Africa and make money? Can’t we invest massively in roads, rail, power, and airports to ensure that we reduce the cost of doing business in Nigeria to encourage our people with ideas and skills to deploy those into products where they can make money and subsequently pay taxes to government? Don’t we think that would be a natural attraction to foreign investors rather than the frequent trips by our leaders to look for them? Have we wondered how a 1 per cent improvement in security would reduce capital flight and improve productivity? What about the very beautiful scenery littered across the length and breadth of the country? How have our planning looked at our tourist sites in Obudu, Idanre, Mambila, Yankari, Lokoja and the likes, not just to upgrade them to points of attraction, but make them accessible and secure so that we can begin to make money off them?
Do we realise that it is the responsibility of government to ensure that jobs are created for its populace? What is government’s target unemployment rate? How is planning being handled to bring down unemployment rate from close to the present 40 per cent to a manageable number? Recently, we watched the second largest domestic airline close shop and send thousands of people home. Should government let this happen given that beyond the job loses, the suffering of the flying public would multiply? Does government through planning know how many aircraft we need to safely move people around the country? How come no one spoke about bailout funds for Aero Contractors, which by the way is now owned by AMCON? When the US government bailed out auto manufacturers in 2009, it was not because US President Barack Obama liked the faces of those companies. It was to save jobs and save the economy. Less than six years after, all of them have turned the corner and refunded all the bailout funds given to them with interest. Obama could have ignored them like we ignored Aero and the undertakers could have come in and thousands of jobs could have disappeared.
Suffice it to say that development does not happen by accident. It has to be properly planned and flawlessly executed. Flowing from some of the areas we have identified, which by the way is not exhaustive, it is clear that our planning would be led by the president and the chief visioner of the country assisted by a team of well trained and experienced experts. The main beneficiaries should be the private sector who would join when the objective conditions have been created. It is fallacious to expect the private sector to lead planning. It has never happened and will never happen. The private sector will support the government who is expected not only to show the light, but to fund it and regulate it. Government must then support the private sector to create jobs. That is the logic of stimulus spending. Government pumps money into the system to get the private sector to create jobs.
Once people have jobs, demand will be stimulated because workers, paid workers I mean, will spend money to buy goods which in turn will get more businesses to produce to meet the increasing demand and by so doing create more jobs. Taxes will flow both from businesses and the employed population and the tempo of economic activity will increase and recession will give way to economic growth.
In our diversification journey, we must spend time to articulate what we want to achieve and ensure that we do what we agreed. Planning without action is futile just like action without planning is fatal.