The 2nd Deputy National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Barrister Dele Oye asserts that the country’s mono-economy needs to give way to the productive development of various sectors of the economy. Edwin Nwanojuo brings the excerpts.
Nigeria just signed the African Continental Free Trade Agreement, what do you think are the benefits for the country?
The key objective of AfCFTA is to boost intra-African trade through progressive elimination of tariffs and non-tariff barriers to trade in goods and liberalisation of trade in services. The agreement will also involve cooperation on investment, intellectual property rights and competition policy. Benefits to be derived will depend on competitive advantage. Nigeria will likely have high production cost due to inadequate and poor infrastructure. Internal infrastructure needs to be improved fast to encourage outflow of goods rather than inflow. If there’s a labour component, Nigerians will benefit given the large population of the labour force which will flow to neighbouring countries to procure jobs
Nigeria has always relied on oil for a long time, what will be your advice to the government on its diversification?
In the past four decades, petroleum (crude oil) has contributed substantially to Nigerian revenue since its discovery. However, it is a known fact across the globe that for a country to attain growth and development, its economy has to be diversified. Diversification does not occur in a vacuum. Mono-economy needs to give way to the productive development of various sectors of the economy. Following the supply and demand limitation of major importers from the country, which brought about the fall in the price of oil by more than 40% since June 2014 when it was $115 a barrel, which now is below $70, after five years of stability, it is a well-known fact that Nigeria’s continuous large earnings or revenue from this sector will be impossible, and the future is far from rosy. As a matter of fact, there is an urgent need for the Nigerian government to begin looking into diversification of various sectors of the economy so as to attain solid economic growth.
Meanwhile, I want to use this opportunity to express my appreciation to all members of the NACCIMA family for electing me as NACCIMA’S 2nd Deputy President. Like you are aware, NACCIMA is the Apex body for all Chambers of Commerce in Nigeria, comprising of all City, state, bilateral and Multilateral Chambers of Commerce. Also Most of all the major companies in Nigeria are corporate members of NACCIMA. The National President of NACCIMA, Hajiya Saratu Iya Aliu is the sole spokesperson of the Association; all the views expressed here are my personal views on the matters covered in this interview.
How can Nigeria create a sustainable development from the untapped opportunities in the nation’s agriculture value chain?
In spite of the oil, agriculture remains the base of the Nigerian economy, providing the main source of livelihood for most Nigerians. The sector faces many challenges, notably an outdated land tenure system that constrains access to land (1.8 ha/farming household), a very low level of irrigation development (less than 1 percent of cropped land under irrigation), limited adoption of research findings and technologies, high cost of farm inputs, poor access to credit, inefficient fertilizer procurement and distribution, inadequate storage facilities and poor access to markets have all combined to keep agricultural productivity low (average of 1.2 metric tons of cereals/ha) with high postharvest losses and waste. Even though agriculture still remains the largest sector of the Nigerian economy and employs two-thirds of the entire labour force, the production hurdles have significantly stifled the performance of the sector. Opportunities in agriculture are not in basic production but in processing which requires electricity. Fully developed commodity exchange is required to optimize the market. Standardization is essential for international trade. Efficient transport infrastructure is required for competitive pricing.
How do you think Nigeria can regain its former place as a major supplier of palm oil to the world?
The country need to be focused . It has to expand production by investing in increasing total land area under cultivation. There should also be a deliberate and conscious effort aimed at expanding milling and refining facilities to meet up with expected additional output.
There is also a need for skilled and knowledgeable agricultural personnel across the country that would in turn bridge the gap of Nigeria’s large infrastructural deficit.
The government and the private sector should also be determined to improve the industry’s knowledge gap via focused recruitment, training of extension workers, aggregating Small Hold Farmers’ production as well as privatising Nigerian Institute for Oil palm research (NIFOR) to catalyse industry growth and productivity. Most importantly, Nigeria should encourage agriculture by investing massively and empowering private sector individuals and groups who are considering agricultural projects.
The CBN recently announced its decision to restrain importers of milk from the interbank foreign exchange, how can this impact positively on local production of milk and the economy?
With the restriction of forex for milk; foreign milk will be more expensive in the market and importers have to pay more for forex. This will lead to local milk becoming more competitive. It will protect the local producers who may expand capacity However, the policy needs to be consistent to yield lasting results.
We also need to be sure that there is sufficient local capacity to meet local demand and that the policy will not hurt downstream players (like yoghurt manufacturers) who depend on imported milk for their inputs.
How can Nigeria attract more investment into its property market and generate employment opportunities?
The property market is a very massive and viable one that contributes tremendously to the country’s GDP. Despite the challenges inherent in the sector, the government through its statutory ministries and agencies should endeavor to create an enabling environment for the operators. There should also be a review of the Land Use Act. The Land Use Act remains as the most controversial legislation act in Nigeria. A lot of stakeholders still describe this act as the one that cripples the economy of the entire nation. A lot of experts may suggest that the act should be overviewed! Moreover, this act should be removed from the Constitution. If this act stays within the measures of the constitution and without any reviewing, then Nigerians should expect no growth in terms of the real estate industry. How can you create a strong and stable growth of anything if the land is under the control of the state governors? The constitutional requirements are the main reason why this act failed. It`s necessary to amend the act to change the situation for the better. Therefore, the main problems of Land Use Act in Nigeria remain the same – land becomes super expensive. In the past, you could just purchase a piece of land from a community or individual and register it in the Land Registry. Therefore, you could get the bankable document almost in no time for the adequate price. For today, the process is changed. If you want a piece of land, you will need to apply for the local government official and pay the fee for the land. After that, you will get the plan with unused lands on the map and get your piece. When you get your piece of the land, you acquire the Certificate of Occupancy. That`s how you become a rightful owner of the lands! Also, the mortgage market must be developed which may in turn foster macro-economic stability, foreign exchange stability to allow repatriation of profits. Another important factor is also the need for a simple digit inflation and adoption of advanced building technology to bring down costs of building .
What do you think government should do differently in providing affordable housing to Nigerians?
Nigeria has a low homeownership rate, lower than that of Indonesia (84 percent), Kenya (73 percent), and South Africa (56 percent). The major issues that continue to affect housing in Nigeria include constraints related to the high cost of securing and registering secure land title, inadequate access to finance, slow administrative procedures, and the high cost of land.
Issues may be resolved by implementing number 6 above. In addition to affordable housing, the Government should take up the cost of infrastructure.
To meet its affordable housing expectations, the Government must also ensure a stable macroeconomic environment and check high inflation rates and astronomical nominal interest rates which are inimical to progress in the area.
On housing, what will be your advice to the government and the private sector in the area of funding as the country is said to need an investment of N56trn in 56 years to close its 22million housing deficit?
The fundamental issue is that we have an economic strength problem and not a construction financing problem. The purchasing power of the population is too low given the levels of poverty.
Capital can easily be imported. However, we need to fix the economy first so that there will be sufficient up takers of the houses.