It has taken the weighty voice of business tycoon, Aliko Dangote, to remind the federal government of the need to look at both sides of the coin, particularly on the economy, before jumping to conclusions. In addition to reminding the government to constantly do cost-benefit analyses, he also gently cautions them over their simplistic interpretation of economic indicators. Since January, the government has been exulting over its savings from partial border closure, periodically dishing out statistics of how much had been saved and how smuggling of arms had also been curtailed. The government also proudly proclaimed how much it had raked in through import duties, a feat it celebrated without pondering the drawbacks.
Economic matters and statistics are not as straightforward as the government makes them, warned Alhaji Dangote. Though he did not speak directly to the land border closure, nor to rice importation, he zeroes in directly on the issue of import duties collection, describing the huge figure raked in by the government as heart-rending. “My heart bled when I read that Nigerian Customs collected N1.35trn import duties last year,” grieved the mogul. “It means the economy isn’t working. If the economy is working, the Customs shouldn’t collect that much money, it is the Federal Inland Revenue Service (FIRS) that should.” It is unlikely the federal government has in recent years thought of the correlation between the health of the economy and import duties collection. Consistent with its tunnel vision, the federal government always lauded revenue collection without examining its harmful correlations.
For instance, having shut land borders for months on end, the government has not for once indicated how much the economy has lost by that action, almost as if there have been no losses. The government speaks to increase in duties collection but says nothing on the huge losses to manufacturing companies whose goods are traded on the West coast through land borders. The government is at liberty to conceive whatever economic policies it deems fit, though it has seldom felt the need or urgency to persuade the citizenry, but it has a corresponding duty to honestly let the people know the consequences of the policies. To pretend there are no negative consequences is dishonest and cheap. And to further pretend that no diplomatic consequences follow its economic measures, no matter how salutary, is also to engage in self-deceit.
The overall conclusion of Alhaji Dangote is that the Nigerian economy is not working, citing for instance the huge losses some of his companies sustained in the past one year. Said he: “Government lost so much money last year in the traffic logjams of Apapa. Our three companies lost N30bn in profit. Which also means government will collect less tax from us. So, we need to look at infrastructure, we need to look at power because without power there won’t be growth. That is what will propel MSMEs to grow and be everywhere and spur manufacturing.” More tellingly, the tycoon gave the following advice: “We can diversify the economy through agriculture and manufacturing. Manufacturing creates a lot of jobs, creates middle class and transforms families. These are the areas we need to focus on. But how do you diversify into manufacturing and make it an inclusive growth? You need to do more of backward integration or import substitution. Our economy is great because we have a local market. The economy of Asia is focused on exports. But we have a domestic market with our about 200 million population apart from the ECOWAS market. Our import last year was almost $47bn. It is not sustainable. We cannot have 200 million people, growing at an average 2.7 percent and we are importing most of the things we consume…We need to be more serious so we don’t keep talking about diversification. It has been very elusive. I don’t know why. It is possible but people are not focusing on.”
Alhaji Dangote may be peeved by the country’s economic management, but he is definitely not irrational or emotional. Indeed, what is beyond doubt so far, and flowing from the business tycoon’s observations, is that the Nigerian economy is not being managed with the breathtaking expertise the size of the economy demands. The government’s assumptions are simplistic, and they draw wrong inferences from economic indicators redirecting their attention elsewhere. There is also huge scepticism that anytime soon, the economy would come under the kind of management and coordination that would reassure investors, citizens and even economic planners. Rather than take umbrage at Alhaji Dangote’s slap on the wrist, it is hoped that this largely uncoordinated government will take cognisance of the people’s displeasure, abandon its ad hoc approach to economic management, and proffer remedies that will and can work.
The Nation
