PROSPECTS AND CHALLENGES FOR NIGERIAN INDUSTRIAL AND
SOCIO- ECONOMIC EMANCIPATION: ANOTHER LOOK AT NEEDS
By J. A. Bamiduro
and
S. T. Babatunde
Introduction
There has been radical and conscious effort by the government to implement series of
economic reforms that will touch all the facets of the economy in order to be in tune with
the policy of globalization.
After 20 years of military rule, Nigeria was a pariah nation. The economy was in
decay. Macroeconomic indicators flashed deep red. Inflation, interest rates and the naira
exchange rates were unsustainable and the unemployment rate astounding. Industrial
capacity utilization was less than 30%. Education has not faired any better with
dilapidated schools and estimated 60% of Nigerian children out of school and roaming
the streets. The state power agency was all but decrepit and producing less than 2000
megawatts of electricity for over 120 million people. Coupled with this, the public sector
was riddled with ineptitude and corruption. Nigeria tottered under an external debt of
over $30 billion and not surprisingly, wallowed at the bottom of the UNDP Human
Development Index.
In Nigeria, the government has come with various economic reforms to turn the
economy around and has called it many names which include Structural Adjustment
Programme (SAP), removal of subsidies in agriculture, deregulation of financial sector,
privatization programme, deregulation of upstream and downstream oil sector and of
recent the National Economic Empowerment And Development Programme - which is
the focus of this paper.
The wide ranging economic and social reforms initiatives from an ambitious
privatization scheme, to growth and anti- corruption programmes notwithstanding, these
nuggets of achievements tend to pale against the black boulders of challenges facing the
country, in particular, the endemic poverty.
Economic deregulation, according to Ibiyemi (2003), is the deliberate and
systematic removal of regulatory controls and operational guidelines in the administration
and pricing system in the economy. Again, Nickels, et al (1999: 130), defines
deregulation as the government withdrawal of certain laws and regulations that seem to
hinder competition but alleviate poverty.
In acknowledgement of this reality to contain the caustic impact of poverty on
Nigerians, the present government recently launched a comprehensive, home grown and
poverty alleviation programme – NEEDS.
Before we go on with the motivations for NEEDS however, we shall discuss the
concept of development. Development has been variously defined. For instance, the
Oxford Advanced Learners Dictionary (1989:562) sees development in terms of the
unfolding and “bringing out of the latent capabilities” of anything. It is seen as “a state in
which anything is in vigorous life or action”. Babatunde (2003:199) observes that
1
“development involves the progressive unfolding of the potentials contained in
something” so that it could reach a “well – grown condition, a state in which that thing is
in vigorous life or action”. Adesina (1984) has earlier on thus correctly observed that
Development has come to mean the gradual
expansion of available facilities and resources both
quantitatively and qualitatively so as to bring to a
fuller, better and greater state (p.2)
Two broad perspectives of the concept of national development are recognized.
The first one equates national development with socio – economic development. This
perspective examines it in terms of economic growth, attainment of economic targets and
increase in Gross National Product (GNP) or Gross Domestic Product (GDP). This
perception is considered to be narrow. The second attitude to national development is to
see it in a broader light in which national development is seen as a nationwide
“continuous promotion of the well being and security of persons in such a way that they
are constantly able to optimize the realization of their individual potentials” (Oyelaran:
1990:20). In this wise, national development involves the action of the human resources
on the natural resources “to produce goods necessary to satisfy the economic needs of the
community” (Chumbow 1990: 67). This kind of development is called “total human
development” (Bamgbose, 1991:44). Bamgbose adds that
In this model of development, the emphasis is on a full
realization of the human potential and a maximum
utilization of the nation’s resources for the benefit of all. (p. 44)
Schumacher (1973) (in Bamgbose, 1991:43) emphasizes the primacy of man as
the source of all economic development. Man is said to provide the primary resource, and
“the key factor in all economic development comes out of the mind of man”. He argues
further that although poverty may be traced to material factors, e.g. lack of wealth, capital
or infrastructure, those factors are secondary. “The primary causes of poverty are really
deficiencies in education, organization and discipline”. (Bamgbose, 1991:44). In this
regard, he submitted, “Development cannot be created, bought, ordered or transferred.
The crucial factors have to become a property of not just a few but of the whole society.”
Schumacher concludes that,
Economic development is something much wider and deeper
than economics, let alone econometrics. Its roots lie outside
the economic sphere, in education, organization, discipline,
and, beyond that, in political independence and a national
consciousness of self reliance… It can succeed only if it is
carried forward as a broad, popular “movement of reconstruction”
with emphasis on the full utilization of the drive, enthusiasm,
intelligence, and labour power of everyone (190-1).
This suggestion is the path capable of leading to national growth and development.
Ansré (1976) (in Bamgbose, 1991:43), posits four elements relevant to an overall
national development:
2
Economic development, politico-judicial development, socio-economic development,,
and intellectual and educational development. The mid-wifery role of language in this is
obvious because the discussion centers on wealth-getting and wealth- sharing. Wealthgetting and wealth- sharing involve interaction at various levels, with diverse tongues in a
multilingual context and factors. Language is thus the natural bridge among these factors
so as to enhance information dissemination, intellectual development and socio-cultural
interaction. It is only an informed populace that can be easily mobilized to operate the
socio-political and economic machinery for development.
This paper is therefore pre-occupied with the examination of NEEDS` objectives
and the modus operandi in terms of the potential it has for realistically developing
Nigerians. The paper is thus divided into five parts. Part I examines past national
economic reforms and the implementation of deregulation policy in Nigeria from
conceptual and theoretical angle, Part II reviews the NEEDS strategies. Part III briefly
discusses the challenges of NEEDS while part IV brings out the benefits in terms of
social economic upliftments. The final part contains the conclusion and policy options
and recommendations, which should assist in alleviating the suffering of the people.
PAST NATIONAL ECONOMIC REFORMS
Nigerians received the news of NEEDS with mixed feelings: a sigh of relief and
deep skepticism. This is because over time Nigerians have had to make sacrifices in the
name of economic reform programmes. They have been forced to swallow bitter pills as a
result of various economic and social prescriptions but the people’s ill health has become
acute and Nigeria’s economic condition progressively worsened. By the mid 1980s
Nigeria’s economic problem which began in late 1970s reached a crisis proportion. The
problem included growing unsustainable fiscal deficit, declining agricultural product, low
and falling capacity, and under-utilization in the manufacturing sector and rapid inflation
in rate. Egbon (1997) found out that “there exists serious capacity under-utilization in the
manufacturing sector, especially the SMEs as a whole. It is more chronic in some
industrial branches especially in the capital goods sub-sector.Bamiduro (2002)
corroborated Aigbokhan (1989) pre-sap unweighted capital utilization levels (at the
industry wide level) to be 69.5%, 60.3%, 57.0%amd 54.8% for 1983, 1984, 1985 and
1986 respectively. But in 1988 and 1989 (post-sap) years, the capacity utilization ratios
were 35.3%and 36.6% respectively. In 2002 the ratio stood at 33%.
The above problem resulted into fallen national output, high unemployment and a
depressed standard of living for the citizenry. Therefore some stringent policies and
measures were adopted between 1982 and 1985 to address these problems but were
unsuccessful. Take poverty for instance, according to Federal Office of Statistics (FOS)
the proportion of the total population of Nigerians living in poverty shot up by 66 percent
(67 million people) in 1996 from 28 percent in 1980 while the proportion of the extreme
poor (people living in less than N6000 a year) literally exploded to 29 percent in 1996,
from 6 percent in1990.
The structural adjustment programme (SAP) implemented between 1986 and
1992 did not impact positively on the poor neither did it deliver succour to the needy in
the country; instead, poverty doubled. In the same vein, the National development plans
3
or the rolling plans and other poverty alleviation programmes helped to ease the paths of
poverty and disease.
The objective of SAP was to restructure and diversify the productive base of the
economy in order to lessen its dependence on the oil sector and on imports, to achieve
fiscal and balance of payments viability over time, lay the basis for sustainable non oil
sector with minimum inflationary growth among others. Has the policy or programme
achieved the said objective? Therefore if Nigerians perceive the present programme, that
is NEEDS as another bungling and corruption infested poverty alleviation and economic
programme, it will be a justifiable manifestation of the poor performance of the past
development programme. Let us examine two sectors that were deregulated as a result of
the structural adjustment programme:
Manufacturing sector
The sector has been very vibrant and performed creditably well at the outset, but
after the introduction of sap in 1986, government started to remove various supports
given to the sector; thereby creating series of problems. These problems ravaged such
sectors as the automobile, textile, beverages, household items to mention just a few.
Prior to the introduction of the economic reform called SAP, the textile industry had 45
companies but now it has reduced to 8 companies. In the automobile industry almost all
the automobile plants established (such as Peugeot Automobile of Nigeria (PAN),
Volkswagen of Nigeria (VON), Leyland Nigeria Limited have been grounded which
resulted into a huge loss of job, reduction in the Gross Domestic Product (GDP) and
importation of second hand vehicles, parts and spare parts christened “Tokunbo” at the
detriment of the local plant. The government through the unpopular economic reform of
SAP destroyed the manufacturing sector by importing all sorts of goods like textile,
leather, etc.
Agricultural Sector
The agricultural sector was also among the sector that was deregulated. The
government wanted to encourage mechanized farming but ended up killing the smaller
and local farmers through their policy of withdrawal of subsidies in fertilizer and farming
equipment and chemicals – like tractors, pesticides, insecticides, etc. In many cases, the
equipment and the fertilizer were not available and where they were available, they were
not made available on time and did not meet the farming period. The government now
appears to have realized her mistake of neglecting the sector all in the name of
deregulation. It is hoped that the realization will not be a mere lip service such that
declarations will be translated to real positive results on the various categories of farms.
OBJECTIVES OF NEEDS
NEEDS is different from the other economic programmes that had come before it
in many positive respects. National Economic Empowerment Development Strategies
seeks to achieve poverty alleviation and economic revivalism by stimulating the well
acknowledged creative energies of the vast majority of the population.
Obviously, there are four clear goals of NEEDS. They are:
i.
The creation of wealth
4
ii.
iii.
iv.
Generation of employment
Reduction of poverty
Re – orientation of values
The objectives have informed the policy thrusts of the government and are part of
a grand reform agenda which is encapsulated in its far reaching economic programme.
NEEDS sets clear but ambitious macro – economic targets fro Nigeria. Real
Gross Domestic Product grew 8.6% in 2003; it is expected to grow five percent in
2004, six percent in 2005 and 2006 and seven percent in 2007. See Table 1.
A steady five percent annual reduction in the incidence of poverty is projected
over the five year period 2003 – 2007.
In the generation of employment, NEEDS commits all stakeholders, particularly
the Federal government, to creating a minimum of one million new jobs from 2003 to
2004 and two million yearly from 2005 to 2007.
In the re – orientation of values, Nigeria expects tourist visitors every year in
number by 10 percent year on year up to 2007.
Table 1 - Selected Targets under NEEDS
2003
MACROECONOMIC TARGETS
Real GDP (Growth Rates %)
8.6
Oil Sector (% growth)
15
Non – oil sector (% growth)
5.83
Percentage Reduction in Poverty (%)
5
Minimum No. of New Jobs created (millions)
Growth in Real Per capita consumption (%)
Inflation Rate (%)
11
SECTORIAL TARGETS
Growth in Agriculture (%)
7
Manufacturing sector Growth (%)
Manufacturing capacity utilization (%)
53
Tourists visitors to Nigeria (Annual growth rate %)
SOCIAL SERVICES
Education
Adult Literacy Rate (%)
57
Health
HIV/AIDS Prevalence rate (%)
6.05
Immunization coverage (%)
39
Access to safe water (%)
64.1
INFRASTRUCTURE
Power Generation (MW)
Roads (Rehabilitation & New roads)
3,000
Source: NEEDS; Nigeria Grand Reform Agenda
5
2004
2005
2006
2007
5
0
7.27
5
1
2
10
6
0
8.54
5
2
2
9.5
6
0
8.34
5
2
2
9.5
7
0
9.52
5
2
2
9
6
7
10
6
7
10
6
7
10
6
7
70
10
-
-
-
65
5
60
70
4,000 5,000 7,000 10,000
3,500 3,500 4,000 4,000
THE NEEDS STRATEGIES
Four key strategies are detected which will drive the NEEDS programme as
follows:
1.
Public sector reform is the most publicized aspect of NEEDS, largely because of
the large size of the civil service and the over arching importance of government and its
institutions in Nigerian life as the main source of economic patronage.
NEEDS seeks to enthrone a more professional public service that is able to
deliver more value. The strategy here is to restructure, trim and retrain the civil service as
the main engine of service delivery by government. It also aims to eliminate waste and
inefficiency and free up resources for investment in infrastructure and social services by
government.
2.
NEEDS sees rapid growth of a resilient and competitive private sector as a key
component of a sustainable reform programme. The strategy is to diversify the economic
base and reduce the relative dominance of the oil sector; put the informal sector in the
mainstream while their linkages to the rest of the real sector is strengthened and generally
create a vibrant private sector that can respond to the rigours of market forces as its
engine of growth.
The NEEDS document articulates the strong commitment of the federal
government to a programme of collaboration with and strengthening of the private sector.
Therefore, the NEEDS aims to alter the strategy for industrial development and make it
less import- dependent, more local resource – based and more related to local research
and development, particularly in the area of small medium enterprises (SMEs).
3.
Economic empowerment of indigenous SME businesses through patronage of
their products by improved tendering and procurement processes that stipulates minimum
levels of local content.
4.
Streamlining processes at the Corporate Affairs Commission through reduction of
forms, review of stamp duty procedures and the tie – in of name regulation with other
intellectual Property Rights protection.
THE CHALLENGES FACING NEEDS
The National Economic Empowerment and Development Strategy is relatively
well positioned in terms of framework and the definition of the Nigerian essence as basis
for plan articulation and implementation. However, a key requirement to success is
integrity. Integrity helps an organization to win trust and credibility. Integrity is the key
to getting Nigerians to be involved in and support the NEEDS programme. This is crucial
because Nigerians have watched how several other programmes have been highly
orchestrated in the past only to bubble like foam and disappear as quickly as it rose
without making any discernible impact on the Nigerian socio – economic and political
terrain. As such, the agency must be seen to perform in the relevant areas if Nigerians are
to have any confidence in it.
In addition, the document notes that Nigerian faces the threat of not meeting the
Millennium Development Goals (MDG) if further major steps are not taken. For instance,
6
unemployment is still high (at 10.8% or 6.4 million people were unemployed in 2003, it
has clearly been rising since then). The GDP average growth rate of about 3.6 percent is
still lower than the minimum of 5 percent required to prevent poverty from worsening
and the 7 percent needed to meet the MDG target of halving the incidence of poverty by
2015. All these, point to the low level of human development and low utilization of the
enormous human potentials in Nigeria for development.
In view of the challenges above, we make the following recommendations to ensure
the effective achievement of NEEDS objectives.
RECOMMENDATIONS
In this respect therefore, NEEDS has to face the task of ensuring total human
development. This is largely because development has its roots outside the economic
sphere (Schumacher, 1973, in Bamgbose, 1991 ). As cited earlier on, Schumacher (1973:
190 – 1) adds that its roots is “in education, organization discipline, and . . . in political
independence and national consciousness”. The implication is either that NEEDS should
broaden its fundamental consideration or admit that the task of economic development
and empowerment should involve other agencies. The involvement is such that there will
be a goal – directed networking and collaboration with other parastatals, agencies and
ministries concerned with education, communication, enlightenment and national re –
orientation. In this way, a realistic holistic development can be achieved. It should be
noted that true development subordinates the interest of capital or technology to the
people’s interests. When the people at the grass roots are adequately involved in decision
– making, they are made to have a stake, not only in the decision made, but in the nation
as a whole.
Grassroots` mobilization has its roots in proper communication and education. It
is only an informed public that can participate in development efforts. Sympathetic
reporting and adequate information can create a climate of hope and confidence and can
generate effective support for government and her programme. Information aimed at
development towards a predetermined direction is targeted at influencing attitudes. In this
case communication is being used as an instrument of social change: bringing about a
climate for development rather than bringing about changes directly. The latter is not
usually successful because the people only wake up to see changes imposed on them and,
the people are thus almost inadvertently working to return to the pre-change status quo. It
is almost as strange to them as suddenly dressing up a dog with beautiful attire! The dog
will continue to behave strangely until the attire is removed.
In the former, however, there is a conscious effort to involve the people through a
horizontal give- and- take (not top- down) communication process. Where this is properly
worked out, questions arise from the grassroots and through effective interaction, the
people are mobilized and sensitized towards providing answers to these questions. The
atmosphere advocated here does not need any long speech for the people to see
government presence in their locality in the relevant educational institutions and
infrastructural facilities (e.g. good roads, portable water scheme, electricity,
communication networking facilities, etc). The attitude of government nowadays is like
that of the proverbial sage; he is the only depository of wisdom, the people must always
listen to him, they have nothing but thanks to give in return.
7
Aside of the communication process, the public sector has to be transformed into
an efficient and responsive instrument for delivering services to the people. Presently, the
public sector has largely become a ghost of what it should be. Several “ad hoc” agencies
and parastatals have been empowered by the political gladiators to take over the statutory
duties of the public sector. This duplication, largely to satisfy political cronies, rabble –
rousers and power mongers must stop if the public sector is to perform its statutory duties
of standard control and custodians of landmarks in the democratic dispensation.
It is when the public sector performs its duties that the private sector can be
empowered to become competitive and thus lead the growth process. Anything outside of
this only puts the national economic and socio – political development process in a
swivel chair, or even a rocking chair – there is movement alright, but it is movement on
one spot!
Discipline is one of the crucial roots of economic development and
empowerment. Corruption and fraud arise out of indiscipline and selfishness. As such,
corruption and fraud must be ruthlessly dealt with and infrastructure decay reversed. The
war against corruption must be total and comprehensive, not in the present selective way.
The weak and vulnerable groups must be strengthened and value orientation of the people
reshaped to de – emphasize rent – seeking, over dependence on government, promote
hard – work, entrepreneurship, discipline, honesty and respect for traditional values.
CONCLUSION
One crucial need of the hour in Nigeria is economic empowerment and
development. If this programme will not run like many other such laudable programmes
in Nigeria, concerted efforts must be made to put the challenges raised in the foregoing
and the subsequent recommendations in perspective. It is high time Nigeria stopped a
cyclic movement in our developmental efforts.
8
REFERENCES
Adesina, S. (1984) Growth Without Development. Inaugural Lectures, Faculty
Of Education: University of Ilorin.
Allardt, E (1973) “Individual Needs, Social Structures and Indicators of
Development,” in S. N. Eisenstadt and S. Rokkan (eds.)
Building States and Nations. Vol. 1, Beverly Hills: Sage
Publications.
.
Aigbolohan, B. E. (1989) “Capacity Utilization in Manufacturing in Bendel State,
Nigeria” (Mimeo)
Babatunde, S. T. and Olujide, T. M. (2003) “National Development in a
Multilingual Context: The Example of Nigeria” in
Olu Obafemi and Sola Babatunde (Eds.) Studies
and Discourse in English Language. Ilorin: Haytee
Press and Publishing Company.
Bamiduro, J. A. (2002) “Analysis of the Peformance of SMEs in Kwara State in
Post SAP Era.” An Unpublished Ph.D Thesis, Deparment of Business
Administration, University of Ilorin.
Bamgbose, Ayo (1991) Language and the Nation: The Language Question in
Sub-Sahara Africa. Edinburgh: Edinburgh University Press.
Chumbow, B. S., (1990) “The Place of Mother Tongue in the National Policy
Of Education”, in E. N. Emenanjo (ed.) Multilingualism
Minority Language and Language Policy in Nigeria.
Agbor: Central Books and Linguistics Association of
Nigeria. P.61-72
Egbon, P. C.,(1997) “Structural Adjustment Programmes and Capital Utilization
in Nigeria Manifacturing: The Case of Edo and Delta States”
N.N.B. Business
and Economic Review. Vol. 2.
Emenanjo, E. N. (ed.) Multilingualism, Minority Language and Language Policy
In Nigeria. Agbor: Central Books and Linguistics Association of
Nigeria.
Ibiyemi, S. (2003) “An Evil Day Postponed” Financial Standard FS Extra 4. 52.
October, 20
Nickels, G.W., McHugh J. M. and McHugh S.M. (1999) Understanding Business.
USA Irivin Mc Graw-Hill Company.
Oxford Advanced Learners Dictionary (1989) Oxford: U.K.
Oyelaran, O. O. (1990) “Language Marginalization and National Development in
Nigeria”. In E. N.Emananjo (ed.) p. 20-30.
9
PROSPECTS
AND
CHALLENGES
FOR
NIGERIAN
INDUSTRIAL AND SOCIO- ECONOMIC
EMANCIPATION : ANOTHER LOOK AT ‘NEEDS’
By
J. A. Bamiduro (PhD)
Department of Business Administration
University of Ilorin,
Ilorin.
And
S. T. Babatunde (Ph.D.)
Department of English,
University of Ilorin,
Ilorin.
10