The Alternate Road to Vision 20-2020 – The Role of Legislators

The year 2020 will surely come, Ish'Allah. What may not be realised is Nigeria being counted among the top twenty economic giants by that year. The vision 20-2020 is a lofty ambition and it is achievable but only if the road being trodden towards that dreamland is modified. In the next few weeks, the hollowness of what is presently in place will become apparent - the storm of the Niger Delta crisis will calm and the euphoria of the amnesty will soon disappear. Thus do success and tragedy fade, at least in the minds of most Nigerians! There is serious business ahead and unless Nigerians see a concrete plan that will carry everybody along, the dream of the present administration to propel Nigeria to the top will fizzle out. The South Koreans did it in the 80s and I do not see why it is not possible here. However as I write, the fundamentals of the Nigerian economy are weak and unless they are strengthened, the anticipated increase of our GDP to over $900 billion with a per capita of $4000.00 by the year 2020 will not be realised.

The economic structure on ground in Nigeria is greatly flawed in terms of resource allocation, and to me that is the brass tags. Development is greatly dependent on balanced resource distribution and the rest of the story is human capacity and maybe pure luck. Nigeria is endowed with luck, adequate resources and potential human capacity. The road to tread to the imagined destination, therefore, is by redesigning the economic structure of the country. Oil revenue will play a vital role no doubt, but the goal of zero-oil-receipt to fund recurrent expenditures in the public sector will turn out to be a sensible path to tread. This may require legislation by the National Assembly with a deadline say year 2016 if vision 20-2020 is to be realised. This means public staff emoluments; maintenance of public infrastructures; running costs of public services et al will have to be taken off from oil revenue by the year 2016, whilst only capital projects are retained within the oil receipt bracket.

The onus of this goal is on the National Assembly and not the Executive arm at the federal level. Two other legislations namely, Tax Reform and Reform in the Insurance Industry are ancillary but key to this goal. Only by reforming the insurance sector can there be a rein on the runaway Interest Rate, while tax reform will lead to a meaningful exchange rate. It is not surprising that the Americans pumped in huge sums of bailout money to the insurance industry last November – the American Insurance Group (AIG) took a whooping $250 billion of tax payers' money to save it from collapse. The reason is because premiums from insurance, which is made possible by legislation, are the source of cheap borrowing. The government through the central bank can only meddle in the matters of interest rate when the insurance industry becomes the highest depositor in Nigerian banks. As of now in Nigeria, the Central Bank will have to beg the commercial banks to reduce their lending rates.

Tax paid by the citizens can be likened to the tithes demanded in ancient Israel for the promise of abundance blessings. Our much awaited job creation could be hinged on tax reform. Besides, tax will relieve the pressure on government to auction the oil receipt due to the desperation in funding the public treasury with naira, which is the currency the government spends. Tax will fund the public recurrent expenditures hundred per cent (100%), thereby freeing the oil receipt to service the private sector, that in turn will be taxed, which will then swell government revenue. Ironically, the present system of auctioning the oil receipt is a form of tax, but our experience has shown it to be counterproductive. The wealth creating sectors (manufacturing, agriculture, mining and education) have suffered on the basis of this method of resource allocation. All in all, it's about the route the naira takes back to the public treasury after leaving the treasury through government contracts and the salaries of public servants.

So much development is being anticipated. Much is dependent on the era of uninterrupted power supply and the target of 6000 megawatts of electricity by December 2009. This has been promised by the present administration. The target date could be attained, reviewed or shifted and I have no qualms with the target or whatever date; my fear is the continued steady supply of electricity a day after the commissioning. Nigeria has never been short of targets and dates. Continual of projects and services that have at first appeared beautiful has always been the problem. In my article "Will There Ever Be Light?" I identified the air conditioners as the greatest obstacle to our unreliable power supply simply because of the unpredictability of when the compressors come on or go off and the amount of power needed for the start up of the compressors each time. Now then, with the influx of air conditioners into the country unchecked, 6000 megawatts generation may not be enough to start the compressors in our air conditioners

The electricity company, as I write, has no control over our air conditioners. A friend of mine, who lives in Toronto, Canada, told me that during working hours and days, between 11.00 am and 2.00 pm in his residential neighbourhood the air conditioners line is switched off from the power company. This is only possible because of standard wiring that is enforced in that area. During off peak periods when most of the people are outside the residential area, the air conditioners in his area are isolated from the supply of electricity. Compressors in the air conditioners are electric motors, which for those who did physics in school will agree is the greatest upset to a steady flow of electric current during their start-ups. An electric motor requires about six times its rated power to start, but its demand drops back to its rated power after start-up. This is an upset, though could be eased by the use of capacitors that store some energy to assist in the start-ups. Nevertheless, the unpredictability of when they will come on is the greatest problem. Legislation on standard wiring may be needed and the time is now.

Samuel Akinyele Caulcrick

Nigerian College of Aviation Technology