Export Incentives As Strategic Resources
By Casimir Onukogu
Modern economies and nations are built and led on three macro platforms: viz national strategic resources, national interests and national cohesion/solidarity. Any nation that gets these three platforms right is automatically perceived as a world power or a politico-economic-militarist giant. One of the challenges in developing economies like Nigeria is to develop the capacity to integrate these national platforms into a working whole.
Another challenge for developing economies is to develop the capacity to capture the critical components of each platform. Some nations capture one element and pursue it believing they have done it all. No, there is a lot more to be done. For instance, national strategic resources are many and varied. They include tangible, intangible, financial, demographic, people mindset, export power, and export incentives. The more discrete national strategic resources are, the more successful and competitive a nation tends to be.
These pictures can be applied to Nigeria's export incentives. Nigeria has created about 16 export incentives since 1986 but today only one, Export Expansion Grant (EEG), is working well in spite of some policy and operational lapses. Today, Nigeria is the only country in the world that doubts and queries publicly its export incentives as a national strategic resource.
The implication of this is that: (a) present managers of the national economy need to appreciate more the new meaning and name of national exports and export economy (b) today's managers of Nigeria's economy need to consider more seriously export incentives as national strategic resources (c) Our economic managers need to take export incentives as intangible national competitive and commercial striking power resources (d) national economic managers need to appreciate fully the linkage between deregulation, privatisation, administrative reforms and Nigeria's export economy. For example France, through her Minister Monsieur Debre', established in 1976 a linkage between intellectual development and export economy for the French economy.
The implication of this is that export economy and export incentives are seen in many economies as national strategic resources that need to be given strong construction and padding. Instead of throwing such national strategic resources to ridicule and press prey, it should be applauded, branded and redesigned for greater potency and effectiveness. Based on this thinking, it was not necessary to announce to the world the suspension of this national strategic resource. The best approach would have been to assemble the best brains in export incentives management in Nigeria to shoot at the revealed lapses.
It will be recalled that various studies carried out by Nigerians had revealed these lapses and called the attention of export incentives policy designers to them. Such researchers did not announce their findings to the press. It is true that export business is a daily and hourly event. As we are talking streams of export talks are going on. Our macro-economic managers need not shock the system before correcting some identified problems. Let us apply some elegance into public policy design and redesign. This is another name for national organisation, cohesion and solidarity.
National exports need no longer be seen as products and services but as national visibility, national capability, national organisation and national credibility. Nigerian companies must be convinced and coached to export these rather than products and services. Export policy formulators need to encourage Nigerian companies to act as exporters of national visibility, national capability, national organisation and national credibility. The idea is to have your hands on the products and services but with your mind on the former.
This is the new and most current idea about national exports (oil, non-oil products and services). Based on this thinking, we recommend that export incentives should be seen as national strategic resources levels two and three. There should be more sophisticated export incentives. Existing ones should be upgraded by teams made up of professionals in export business, national strategic resource disciplines and facilitating agencies. National export incentives need not be subjected to open-air or news broadcast queries and doubts.
This is capable of damaging Nigeria's export economy, confuse our allies and customers. Nigeria is the only country in modern global economy that suspends or withdraws through news broadcast, its export incentives. We need to sophisticate and make more combative and adaptive existing ones through national strategic network teams of professionals. Managers of the national economy must learn to pause for caution on issues concerning national strategic resources.
One of the greatest lessons of this argument is that the presidency should consider setting up a crack team of professionals whose mandate can be, among others, to define the contents of (a) national strategic resources, (b) national interests (c) national cohesion/solidarity. The product of such a team will be a directory which macro managers can work with and which can be used for coaching future managers and leaders. This is the new brand of patriotism and professionalism all over the world.
There is adequate evidence to illustrate these ideas. Early this year, an indigenous export consultancy firm was commissioned by the NEPC to conduct an impact assessment of Export Expansion Grant on 100 exporters and beneficiaries of the scheme. The study did not go through national news broadcast. Yet, it establishes that a total of 61 per cent of Nigeria's export companies are in Lagos, 20 per cent are located in Northern Nigeria (Kano, Kaduna, Katsina and Zaria) seven per cent in Rivers State, 10 per cent in South West zone. The researchers visited 80 per cent of these exporters in their factories and premises.
Majority of the exporters 90 per cent said: "Do not scrap Export Expansion Grant. Without this Export Expansion Grant, export is not feasible, Export Expansion Grant gives us confidence to export more, EEG has encouraged us to invest in new plant capacity. Export Expansion Grant helps to make us competitive in international markets. We now venture into more markets because of the national solidarity and will behind our international adventures".
Our study revealed abuses likely to undermine this national strategic resource. No company should be allowed to ridicule Nigeria's strategic resources such as EEG. All non-committed exporters should be exposed and prosecuted according to the laws of Nigeria. Nigerians demand this. In doing this we should not behave like we are buying Coke or Pepsi or pure water. We should behave like strategically trained managers and leaders. Announcing the interim corrective measures on national news is unstrategic and untactful. The world is watching. The village square handling of Export Expansion Grant lapses makes all of us to appear elementary before our competitors and allies. We should not give our allies the opportunity to say "these Nigerians cannot be trusted with strategic issues".
Indeed further public declarations and publications of Export Expansion Grant dynamics need to be continued be discontinued. National economic managers should constitute a team of professionals in export business, export incentives and national strategic resource experts to fine-tune the operations of Export Expansion Grant to fit into the strategic thinking of the government, exporters, international clients and WTO. In short, let us miniaturise Export Expansion Grant.
Let us give Export Expansion Grant a continuous user-friendly configuration and improvement so that it can achieve its strategic mission. Nigeria's economy does not need to stand still as we do this. We think therefore that we do not need to do this under television cameras or national newspapers' front pages.
*Dr. Onukogu is with Koinonia Ventures Limited in Lagos.
