Some wonder why Nigeria is taking loans from the World Bank, International Monetary Fund and China, if indeed the country is saving a lot from the removal of subsidies. Also, they wonder why high inflation still lingers if Nigeria no longer prints money, as the government of former President Muhammadu Buhari did, to the detriment of the economy.
But there is a new thinking. Instead of remitting money saved from the removal of subsidies from petrol, electricity and the foreign exchange to state governors, who appear to be besotted with white elephant projects, the money should be expended on projects that can positively impact the economy.
The pet projects of the governors include airports and airlines that are used only by a few elite or are not even used in some cases. It may be better to direct the free funds to build infrastructure and establish industries for the greatest good of the greatest number of Nigerians.
This approach to economic development should employ the youths who are pounding the streets of urban Nigeria looking for jobs that do not exist. The major job of government is to be a catalyst for economic development through intelligent policy frameworks.
The expected coordinated economic development model that will link the efforts of the central government to sub-national governments does not in any way contradict the argument for regional economic development nor hamper the transfer of items, like electricity and railway lines, from the federal exclusive legislative list to the concurrent list.
It will only mean that the National Economic Council, consisting of state governors and the Central Bank of Nigeria’s governor, and headed by the Vice President, should agree with the Federal Government on a unified masterplan that will roll out a nationwide infrastructure and industrialisation blitzkrieg.
If all governments are serving the interests of the people, they should agree to work as a team to provide common services for the use of the people. After all, NEC met recently to endorse the 2026-2030 Development Plan to consolidate Nigeria’s current economic reforms and achieve President Bola Tinubu’s target of a $1tn economy.
You may recall that after state governors realised the folly of asking former President Goodluck Jonathan to release money accrued into the Excess Crude Account to them, they turned around, under former President Buhari, to allow part of the money accrued to be used to fund the purchase of military hardware for the war against Boko Haram insurgents.
It should not be too hard to get the cooperation of the state governors if they are interested in developing a coordinated infrastructure masterplan for Nigeria and are willing to pitch in the funds and supervise the execution of projects within their states or regions.
While the Federal Government will supervise the laying of interstate or inter-regional petroleum gas pipelines and railway lines, state governments should supervise the arterial networks within their states or regions.
It’s the same way America’s Federal Government constructs I-95 and 495 interstate highways across the American landscape, while the state governments construct road networks that begin and end within their boundaries.
And while the counties, the equivalent of Nigeria’s local governments, provide the commuter trains and buses within the cities, the transportation systems are in a way that passengers from one node are transported to the other nodes or vice versa.
If the central, state and local governments agree to an integrated infrastructural and industrial system, the resulting economy of large scale will significantly increase their effectiveness and reduce the operational costs.
The most important infrastructure that all governments must agree to provide is electricity, which is number one; water for industrial and domestic use; railway lines and roads to link farm-gates and industrial estates to the market.
A news report on social media says that a Chinese consortium wants to finance and execute a bullet railway line from Lagos to Abuja, the Federal Capital Territory, and detour down south to Port Harcourt in Rivers State.
That is not good enough: State governments along the path of the railway line should be encouraged to link their capitals, farm gates and industrial hubs to this line. After all, the federal railway line is supposed to serve the people of the states along its path. Why not integrate the road and railway systems of those states into it?
That is when the bullet railway line will be useful to the people. Otherwise, it will end up as another white elephant project. Of course, the petroleum refineries that will power vehicles on the roads, aircraft in the air and the industries must be strategically located in the six geopolitical zones of Nigeria.
More petroleum refineries should be licensed to guarantee a regular supply of petroleum products at competitive prices. If you have noticed the way Dangote Petroleum Refinery is gradually reducing the prices of petrol, you will understand why it is imperative to establish more refineries.
It is necessary to add that after removing subsidies and giving more money to all strata of government, and liberalising the foreign exchange regime, the next thing to be done is to put life back into the industries that went comatose almost after the annulment of the June 12, 1993, presidential election that is presumed to have been won by Bashorun MKO Abiola.
It may not be too surprising that the Bretton Woods institutions that gave free advice for the removal of subsidies and the liberalisation of the foreign exchange regime are not minded to advise the government on how to rejuvenate the collapsed industries of Nigeria.
This has begun to create the impression that these institutions, working only in the interest of international monopoly capital, are interested in further sinking Nigeria into the debt abyss instead of bringing its battered economy back on its feet.
While governments are putting in place the appropriate infrastructure necessary for the revival of the economy, they should also pay utmost attention to using the private sector to build heavy industries, like petroleum refineries, steel mills, and producers of industrial raw materials, machinery and spare parts.
Nigeria needs to invest in companies that can turn primary agricultural produce into industrial raw materials. It also needs heavy industries that can turn sheet metals from Ajaokuta Steel Complex and iron rods from Oshogbo Steel Rolling Mills into automobile parts.
Now, those who are going to think that putting government money into business sounds like a variant of socialism obviously have not heard that America, the world’s most rabid capitalist economy, puts money in private businesses so that they will not fail.
They also do not know, obviously, that Communist China has now become China Inc., which regularly puts money in businesses that are run like privately owned corporations, though they are owned by, and work in the interest of, the Chinese state.
While America’s idea of putting money in private businesses is done with the understanding that those businesses are too big to fail, the Chinese have not yet put a label on the idea of putting state funds in commercial enterprises.
It would appear to make good business sense if savings from the removal of subsidies are put into infrastructure, heavy industries, and corporations that manufacture consumer goods to replace imported goods and conserve Nigeria’s foreign exchange.