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Investors can’t afford to ignore our economy, says
Baiye
If
there is one thing economists are unanimous about, it is Nigeria’s poor
information-gathering machinery. Sourcing for relevant economic data is no easy
task, no thanks to government’s comatose statistics institutions. The
same scenario obtains in other sectors of the economy. But this grim situation
is set to change as some Nigerians painstakingly dig for relevant data for
development. Clem Baiye is one of such. A renowned journalist and public
affairs analyst, Baiye is the brain behind “Nigeria: Economy, Business
and Politics,” a compact, authoritative and insightive publication that
encapsulates the goings-on in the country. He spoke with Development Reporter, Ntai Bagshaw, on
the challenes of achieving rapid and sustainable growth in Nigeria. Exceprts:
Your publication debuted
in 2001. What informed it production?
All
countries that are serious about their image and future have a way of
presenting themselves in various types of publications. Not only this one. If
you see countries that have developed massively over the past 20 years like
Malaysia, Singapore, and South Africa, when you arrive at their airports, you
have so many publications about their country. It is not a public relations
gimmick. Nevertheless, it is aimed at saying, “this is our country. These
are our faults and these are our strengths. This is a good place to come and do
business.” There are difficulties in doing business in Nigeria. We are
not saying that there are no difficulties. We are not a propaganda tool. We
will accept that there are difficulties but we are saying that the reward for
doing business in Nigeria is so overwhelming that it is not in your interest to
ignore the Nigerian market. Then we go on to talk about the strengths and so on
and so forth. We will accept the flaws in our system - the flawed political
system, imperfect elections and so on. All those things we tend to bring out. I
am writing this as a Nigerian and I am saying that I accept that there are
certain things that are not right in my country. Nevertheless, I am telling you
that there are many other things that are right and positive. I believe that if
our country is to develop, we need a lot more to be invested in this economy
than we are investing now. We invest by way of either saving or by bringing in
capital from abroad.
Are you saying there is
a gap in information dissemination about the true picture of the goings-on in
Nigeria?
Yes.
Many people do not tend to know much about Nigeria and people complain that
they do not often get a document that can give them enough snapshots about
Nigeria in one full swoop. There may be in several publications and, with all
due respect, they are at times a bit negative. That was part of the problem. I
have seen how other countries do their own promotions: many organisations are
involved.
Our
information-gathering machinery is comatose. How were you able to gather all
the facts in the publication?
It is
still a challenge. What we have tried to do is that the people I work with are
people who share my vision about the need to have accurate and up-to-date
information as possible about Nigeria. If we have to pay money to get the
information, we pay. Let me put it this way: we do not spare anything that we
can afford. Anything that is on our hands, which we believe will help us in
gathering any information, we are prepared to get it. And, basically, I think
that from my journalistic background as a reporter, I know that the best people
to get accurate information from are still the reporters. Some reporters may
not necessarily be good in writing the sort of things that we want, but the
role of the editor is to sit down, get the raw material that the contributor
has and translate it into the style that you want in your own publication. That
is what we do.
How has the publication
been received?
It
has been received very well. It is respected. However, I do get criticisms from
people who say we need to translate it into a more commercially oriented
publication. We are creeping slowly towards that. Information generally should
be power. If you want to have access to power, you have to be prepared to pay a
price for it. We like to believe that it will be a decent and reasonable price.
We are generally doing better. We are producing more yearly than we used to do
before. And it is gaining more respectability. What we need to do is to
translate it into something that becomes a viable and ready tool. We need to
improve on the internet-enabling tool. It was on the internet about 18 months
ago but due to some things that I need to correct from my own side, it did not
achieve all its objectives. But it served to sensitise people. We are working
on that now. It will get to a stage where people can go on the internet for
updates every months and very quarter. But each year, we write afresh. Some
people think erroneously that each year, we simply just call up the previous
year’s figures. No.
In
fact, sometimes, we change the writers not because we do not have respect for
our contributors, but because we do not want people to think that we are
straitjacketed. That we cannot go out of our thinking mole, particularly in the
political side of the report. There are people who have different political
perceptions. In as much as some of our contributors in that aspect are very
good and respected writers, occasionally, we change them to get a balanced view
of things. Generally, we have a crop of very experienced analysts and editors
like Mohamed Haruna. Also, there are much younger people like reporters who
understand their beat. But we take responsibility for the opinions that are
expressed in the report, so we do our best to try to be as fair and balanced as
possible.
How wide is its reach?
The
reach keeps increases outside the shores of this country mainly because it is
attractive. We spend a lot of money producing it to be as attractive as it is.
I think it is very well edited, but we were never satisfied.
Can the report be found
abroad?
In
embassies, tourist centres and so on. What we want to now do is take them out
of official line places and bring them to airports where the average person who
needs to know more about Nigeria can simply pick a copy. That is the next
phase.
The publication is on
the economy and politics to the economy. Where would you say our biggest
challenges lie as a nation?
We
need to do so much work in a number of areas. I will look at three or four
areas not necessarily in order of priority. Political reform is one. One of the
things that have been happening since 1999 is that there have been no reforms
the political system. Maybe because the government does not agree that there is
something wrong with the political system. Now with that I am not necessarily
referring to the calls for a sovereign national conference. That is not
necessarily what am I am saying. The feeling of alienation is strong. Why?
Because it has not been possible thus far that if a political group is not
performing very well, you can throw them out at the elections. In my view, what
basically has been happening is that the capability of ordinary Nigerians like
you and I to vote people out has been severely curtailed by the flawed
electoral process. The electoral process that we have today often does not
allow you to be able to say, “You are not doing very well, so don’t
come back again.” When the President was announcing the declaration of
emergency in Plateau state, he alluded to the fact that (Governor Joshua)
Dariye has not been doing very well. How come that if he was not doing very
well, the ruling party through means that I cannot affirm, renominated him? And
there are so many others like him. So something is wrong with that system. In
addition, there ought to be a system whereby people who are doing well are
rewarded. I want to talk about the governor of Katsina State. I have never met
him but I understand that he is very prudent. He has managed the state very
well. But he might have been thrown out in 2003 because as a nation - this is
not just the fault of the political leaders - even as followers we do not have
a way of making sure that we retain those that are doing well. This is because
we do not put our passion and drive behind standing by those that we perceive
are doing well and need to be kept. Therefore, the fact that somebody is
elected does not necessarily mean that he is doing well. And the fact that
somebody is not re-elected does not necessarily mean that he did very badly. If
a system does not have justifiably measurable rewards and sanctions, that
system is flawed to that extent because it will not allow the best hands to
come up. I was just reading The Economist and it says, “the political
process (in Nigeria) is so thoroughly compromised that the very decent people
often run away from going into politics.”
Is this situation
compounded by the immunity that serving elected officials enjoy?
That
clause should not be there. First of all, it is supposed to be borrowed from
the American constitution. But the American system only says that you are
immuned if you are a President. It did not say you are immuned if you are a
governor. It is a military mentality to think that if you are an executive at
the federal level, what should apply to the goose at the federal level should
apply to the gender at the state level. It is not necessarily so. In some
American states, some of the state legislators operate on part time bases. Like
in Texas, they meet sparingly, but in some other states, they meet full time.
So, this uniformity, which the military imposed, is part of the thing that has
led to the present situation. There is no reason why the governors enjoy have
the immunity clause because they simply have taken it upon themselves to do
what they like. We like to focus on the President and to say many things about
him but what about the governors? A few are doing very well. A few are decent
and respectable.
What
other pressing challenges do we need to tackle as a nation?
The
other one is this: The present fight against corruption. First, I think we
should be fair to the President. There are a few places in which he has done
well. He has realised that, at the end of the day, it is not so much banging
heads but changing the system and making it as full proof as possible. That is
why he started with due process, service reform and so on. Those ones in the
medium to long term will lead to results. But then, you ask yourself the
question that the politics that we play today is largely dependent on cash. If
to that extent, it is dependent on how much funds you have mobilised, people
who have huge sources of cash, generally cannot stand the test of scrutiny. And
these are the people that control and have influence over the political
process. So to that extent, the political system itself is corrupted. Those
things need to be looked at - the financial implications of it and the
implications for the economy. If you look at the Japanese system, the Japanese
people have agreed that their political system is corrupted. Why? Because
whoever is ruling in Japan always has massive public works contracts - bridges
that connect nowhere and roads cost billions. Now it is from those places that
the construction companies recycle funds back into the political process.
Because being elected in Japan is very expensive just like it is in Nigeria.
What they did was to attack the root of the problem, which was by stopping
those meaningless public works contracts - building things that nobody
will use. So, until we begin to starve the system of all those ill-gotten funds
that are processed through the system, we are not going to be able to attack
the question of corruption. That is why the anti-money laundering drive will
come into play in future. For now, our corruption rating worldwide is still
nothing to be proud of. Everywhere you go and in anything you are doing, people
expect you to pay a price.
Are Nigerians becoming
aware of the ills of corruption?
I
think we are more aware of it. But the challenge is still daunting. We all have
to accept that it is not a leadership problem, it is also a followership
problem. We all have to accept that things cannot be done the way they used to
be done. The degree of acceptance keeps improving by the day. But are we there
yet? I am writing about my country because I want people to come and invest
here. Nevertheless, I am also aware that countries like China, where people are
taking their investible funds to, are facing the problem like we are facing in
Nigeria. Maybe even on a greater scale.
What does the Nigerian
economy have going for it that foreign investors should be envious of? What can
the economy offer them that are rare elsewhere?
One
of the things that we offer, first of all, is our market. We have a huge market
because of the human resource potential that we have here. The second thing is
that there are some flaws in our judicial system, and I do not claim that our
judicial system is whistle-clean. But by and large, our judicial system is
necessarily predictable. How do I mean? If you are an investor in Germany or
China and you have a problem with your local partner, you should take it that
your local partner would win that case.
Isn’t it the same
here?
Not
necessarily. That’s why I said it is not as predictable here as it is
elsewhere. I think for a businessperson in his country as it stands today - and
I do not deny that it has its flaws - it is a lot better than in some of these
countries where investors are flocking to
What does the Nigerian
economy have going for it?
The
third thing is that, depending on where you are coming from, if you are a
European investor, we are much closer to Europe than Asia. If you are an
America investor, depending on what part of America you are coming from, we are
also much closer to America than Asia. But if an Asian investor, there are
certain linkages that we share. Look, we are at different levels of
development. If you are producing for the masses, people with low levels of
income, you have a ready market in Nigeria because our income levels are not
very high. If you took good advantage of it, we have as of today, a very low
wage structure, which is a plus go the investor. If you compare us with India,
we obviously don’t have a low wage structure but if you compare us with
how close you are to your market, our wage structure is decent. It is very low.
And if you look at the quality of the people that we produce from our
universities, we are not doing badly. We criticise our university system and I
agree with that but also you have remember something: we still have a lot of
people that are unemployed but I believe that not all of them are unemployable.
If
you look at all the multinationals that first went to China, they took a
long-tem view that they are likely to loose money within the first few years
and some of them had their fingers burnt. They went into deals with state-owned
enterprises and they were always holding the short end of the stick. At times
we require that level of patience from those that come into this country.
Sometimes, we are part of the problem. We make people to say that Nigeria is a
short-term economy so when investors come in here, they just grab as much as
you can and quickly leave because we also have that attitude. So we, as
Nigerians, have contributed to that problem.
What should be done to
change this short-term view of the economy?
There
need to be some consistency of policy. For instance, if you are in some form of
industry, the tariff structure has to be such that it will favour you.
Otherwise if you bring in funds and you take borrowed money and go and start an
industry and somebody sits down in Abuja and just changes the tariff structure
in such a way that it doesn’t favour you, it is not going to be the best
for you. Of course, there are issues that we need to address like
infrastructure. Infrastructure is really terrible but with that entire problem,
no multinational has operated thus far in Nigeria and remained if he
didn’t think there was something in it for him. Because China is such a
huge market, people were prepared to say “I can sit down here for fifteen
years”. Our market is large but it is still not as large as the Chinese
market. When you look at sub-Saharan Africa, you think that the economy of
South Africa is bigger than ours, but our market is biggest of all. This mean
that ultimately the destiny of Nigeria is to be the economic powerhouse of
Africa just like China is tending to be the economic powerhouse of the world
now. Thirteen per cent of world output at purchasing power parity is China, 60
per cent of photocopies, microwave ovens, DVD players, shoes is manufactured in
China. Half of digital camera, China; 40 per cent of PCs China. This means that
as far as we are concerned today, Nigeria stands at the threshold of being the
economic powerhouse in Africa to do better than South Africa, if we get the
parameters right. Remember that all these things did not happen in China until
the last 15 years when the reforms from the seventies translated into changes
in policies, allowing people to come in and the emergence of less-statist
intervention. You cannot disown the force of 1.4 billion people. So also here,
you cannot discount the force of 130 million people in Nigeria. Therefore,
untimely, with the natural progression, Nigeria should become the economic
powerhouse of Africa.
How long will this take?
I
don’t know but we can shorten the time by making sure that we get our
policies right.
Are we progressing
towards that?
We
are creeping towards it, but I think it will get better in successive years.
How quickly, to be frank, I cannot say.
What
will absorb the massive unemployment we have is not the oil sector. It is
industry and manufacturing. Today, the bulk of the new manufacturing that we
have is from China, at the small and medium scale level. If you look at the
German and Japanese economies, those SMEs pool a lot of people out of the
jobless market and into the job market. So what we need to do is to make sure
that the entry-level barriers and the impediments that are there are not as
stringent as they are. But I have a problem. We belong to the WTO and
I’ve asked people how come that when I want to buy toilet soap and other
household goods, the one that is made in Indonesia is cheaper than the one that
Unilever or PZ Nigeria makes? Some people tell me it is because of dumping. It
may be dumping, but is that the only problem? Don’t you think it has to
do with the anti-business policies of government? Local governments go around
chasing companies for mobile advert tax and what have you. These are some
anti-business policies that our states and local governments are engaged in. So
there is a disconnect. The federal government goes around saying that we are
looking for investors, while some state governments believe that if you are an
investor you must be eliminated by various levies and demands imposed on you.
Whereas if we allow the businesses to flourish, it would be better for all of
us. Those are some things that need to be addressed. It is not good pointing to
the President and saying that he is not doing anything. The problem is at the
local level.
The World Bank says our
excessive red tape is a major bane of our business environment. Are there improvements
in this area, perhaps with procedures at the ports?
Let’s
not even go to the ports. Let’s start from where the president is saying
he wants implement his service delivery reforms. Processes will change and
things will be faster. I keep saying it that if I know that if I tender for a
job, I will get a response within ‘x’ number of days and will sign
my contract with ‘x’ number of days, I can take a risk and borrow
money and tell myself that I don’t need to make too much profit. I just
need a decent profit so I can stay competitive and be in business. But if you
go into entering for a government contract and you don’t know when it
will finally take place - you have to fly so many times in and out of
Abuja - that is going to put at the back of your mind that when
you’re running the tender for the job, you should expect to make
something unreasonable. Because unreasonable demands are going to be made on
you, not necessarily that somebody is going to ask you to pay a bribe but on
the day you return to sign the deal, somebody will say that someone went for
his child’s naming ceremony so he cannot turn up. Why couldn’t an
alternative be found? Those are little things that affect the big jobs. There
was a study recently by the World Bank about do in business and it paced
Nigeria among the bottom of the table. And I said to myself that I do not like
what we are doing to ourselves. In fact, I even doubt that we are as far as
that because some of these other countries do have quite a lot of problems.
The World Bank report,
“Doing business in 2005” showed that developing and emerging
economies have progressed because they have streamlined their regulations and
made it less difficult for people to do business.
Yes,
we need to begin to think in that light. And it is our responsibility - those
of us that believe that there is a future for our children in this country
- to continue to think and argue for this. Because if a people do not
believe in themselves, this is part of the problem. The President goes round asking
for debt relief. You as an individual, if I borrowed from you N50,000 nine
months ago to pay my rent and I’ve not paid you the money up till now,
yet you see me and my children living big, while you squeezed yourself and lent
me the money, will you forgiving the debt? No. That is what I am saying. The
President means well but he should focus on his internal reforms than this
search for the elusive debt write-off. He is not going to get it for Nigeria.
Are you talking about
the time lag?
He
will not get it. It will not be in his time.
What if the reforms are
successful?
If
the reforms are successful and things begin to work and people are convinced
that yes, we’re doing a good job, okay. Secondly, these people claim that
they have so much information about how much has been stashed abroad by
Nigerians. This is part of the whole picture. That is why I believe that
Nigerians who invest in this country should be encouraged and made to ensure
that all the other bureaucratic impediments to doing business are as minimal as
possible. If it to generate some revenue to improve on service delivery, yes,
but if it is to generate a cash fill where politicians will come and gather, it
is very discouraging.
In your publication, you
did not refer to the services sector. The services sector is increasingly
taking a greater share of the global economy.
Yes.
What I understand is that most countries, expect those with a small population
base, go through a manufacturing period before entering the services economy.
We wanted to go through the industrial economy but we had a wrong policy - that
was import substitution, which in farness, and let us not blame those people
then, with the benefit of hindsight were wrong. Perhaps if I were making the
policy in the sixties and seventies when import substitution was in place,
perhaps I would have done the same thing.
But
we now realised that that policy was not really import substitution because
most of the raw materials that we used were still being brought from abroad.
There was never any attempt to integrate backwards into the local economy. This
continued until recently when people like Cadbury and so on started doing it.
Therefore, our thinking is that the service industry as it is today is merely
banking and insurance. These constitute the bulk of the service industry apart
from things like tourism and the rest of them. We need to develop all those
sectors, there’s no doubt about it. Nevertheless, the service industry
has a lot more to do with even your attitude than your grit and sweat. How do
you perceive a person that is coming in? I still haven’t forgotten that
in 1986 I went to visit my friend, Sully Abu, in Zimbabwe and the Customs
officer called me and asked, “My friend, are you from Nigeria?” I
said yes. He said, “Did you come here with a lot of money.” I said
yes and asked him why. He said, “Because if you spend the money here, we
will be paid our salaries. You are coming to help our economy. Sao please next
time you’re coming, come with more money.” I wish we could say the
same for us here. There has been some improvement but there still is a lot more
to be done. Those are things that matter. You were talking about the ports. I
mean, you send your things to Nigeria and you still are not sure you will get
them out in good time. With all the security agencies the ports, the so-called
port rats are not rats anymore, I think they are more than rats. They may not
be seen but they are invisible elephants.
One
of the activities that we could go into is backroom processing, otherwise
called outsourcing, which is a big industry in India today. It is a big
industry in India so much so that Indian companies are re-sourcing back into America.
To develop that industry in Nigeria will change our attitude to time. We will
have some benefits but infrastructure is still a problem. If you’re going
to outsource, you must be certain that when you need to talk to someone in the
US, you keep in proper track. We need to condition ourselves to be able to
receive that kind of investment and also think whether our environment is ready
for it. I still believe that our mindset needs to be slightly altered to be
able to receive that kind of investment. The attitude of our fresh graduates
needs to be reorganised. We are moving and we will continue to move. But we
need to increase our speed so we can reduce he gap.
Is the Federal
government’s decision to spend N600 on image laundering a worthwhile
venture?
That’s
a difficult one. I don’t have any problem with image laundering but what
I keep asking myself is that why do we call it image laundering. That means
that we want to redeem our image. We are giving the impression that even the
whole process that we are going through is a self-sinister. What we need to do
is to accept that there are things that are not right with our society and to
say that we know that they are not right, and we are working on it. Take the
419 issue, if somebody is not greedy how will someone say that your father left
$20 million and you would accept that. So, it has to take an interest of the
other party for it to become fruitful. To that extent, we need to look at
ourselves and there are certain things that are not right with what we are
doing. We want to change not because the World Bank is saying that we should
change. Not because the IMF says we should change. But because it is not in our
interest not to change. It is in our interest to change and to change for the
better. That is what we should be saying to ourselves. From that perspective,
we can begin to look at what things we should change.
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