There is little to smile about the Nigerian economy currently. Yes, we know the impressive figures about 7 per cent economic growth which impresses the international analyst community so much. Domestically, most Nigerians know that the so called growth rate is yet to have any impact on their lives.
The reality on the streets remain increasing insecurity, unemployment, high cost of living, epileptic electricity supply, pot holed filled roads and a high number struggling businesses.
The challenges above arise from an economy that has critical structural challenges that must be tackled for the economy to move forward and have a long term positive impact on all Nigerians.
Five ways Jonathan can make the needed impact include;
1. 1. Get the power sector resolved. This has become a cliché in the Nigerian media. The challenge of getting the power sector right is critical to the survival of Nigeria as a nation that it is difficult to understand why the government has pulled all the necessary plugs to make the power sector work. Currently, the reform in the sector is behind schedule. The probe by the Senate that recommended among others the sack of the DG of the BPE is likely to have a further negative impact on the reforms if the recommendation is implemented. It will be so sad if by the close of 2012, Nigeria is still struggling to generate 3000MW of electricity.
2. 2. Get the transportation network on track. The transportation network in the country is a disaster. The roads are filled with pot holes. Taking a Train in Nigeria is still exotic despite the fact that it is a basic mode of transport in many countries Nigeria seeks to compete against. Our airports are an eyesore and airlines are flown with fear, fares are expensive and their schedule is unreliable. There is no hope of running a modern economy without an effective and efficient transportation network. The truth is that a good combination of the right policies and incentives could get the transportation network fixed. Can Jonathan take significant initiatives in that direction this year?
3. 3. PIB and deregulation of the downstream sector-The Petroleum Industry Bill. It is sad that despite the fact crude oil contributes 90 per cent for our export earnings and more than 80 percent of government spending; the most important bill that could bring order to the way the sector is run remains unattended to. While we dilly dally over the bill, billions of investments are being diverted to other oil producing countries while several exploratory projects in the oil sector remain unexecuted. Can Jonathan get the House of Assembly to get this bill passed in 2012? Deregulation of the downstream sector is already a done deal. However, what we are not seeing is the needed incentives and policies that have to be put in place to ensure that deregulation leads to the take-off of a competitive but profitable downstream oil industry. Deregulation will only make meaning if it creates an active business sector in the downstream end of the oil industry.
4. 4.Get the stock market up again. The down turn in the Nigerian stock market needs to be tackled. Several companies are struggling to raise the needed cheap capital because of the state of the Nigerian capital market. The capital market crash and subsequent banking reform has done critical damage to the retail investor base. It is important that this retail investor base is restored. In the last three years, the stick has been used heavily against this base. It is now time to offer some carrots. It is dangerous to have a population that considers investments in the capital market as bad. The government can set up a fund to help stockbrokers restructure their existing margin debts and offer a window for individuals willing to invest in the market to take a loan for that investment on a long term basis. This will help create some demand in the market again. Companies need to be able access cheap funds from the stock market again or else the required private sector investment to grow the economy will be lacking.
5. 5. Education. Nigeria has no future as a nation if more than 80 per cent of Nigerians continue to receive their education in substandard public schools. There is a need to declare a state of emergency in the education sector. The current public schools will not produce the human capital needed to compete in a world that increasingly requires cutting edge skills.