Nigeria: The Unplanned Economy (Part 16)

By Ikenga Chronicles January 12, 2018

Nigeria: The Unplanned Economy (Part 16)

 — Baron Roy

The Production of Zero (4)

The single most impediment to manufacturing is the centralized authority. Why we do not see these things is what beats me. Are we so insensitive to our problems that we don’t care about solutions any longer? Why on earth should we allow our very existence to be dictated by some mortals in a small office in Abuja?

In Nigeria, to do any business, one must depend on the Corporate Affairs Commission (CAC) for registration. Of course, there are state offices. It takes an average of 90 days to complete the process. The process is stringent. In Holland, you could register your firm and complete the process in less than 12 hours, without leaving your office or home! In fact, you could register using a handheld device! See? Productivity!

On registration with the CAC, the upcoming manufacturing company now requires a license to operate. Not bad. The bad news is that the license is acquired from Abuja! Now his battle begins!

To build a refinery, they demand for his arm, to build a power plant, they demand for a leg, to build a cement factory, he submits his first born, to commence the manufacturing of electronics, they demand for his mother’s head, then to build anything that could have a profound effect on the economy, they ask for the heads of all the clan members! Tell me, how could a country operate this way?

In most OECD countries, licensing is done at the regional level. All they demand is your business plan, the technical details, the employment plans, projections, EIA, and a few others. They check whether it meets their standards and does not negate the federal requirements. The state or region issues the license and the company is on their database. The federal depends on the states to do those. With that, states LOBBY companies to register with them and even provide incentives. The states and regions ACTIVELY help those companies to secure the licenses in record time. Manufacturers sprout everywhere. The states/regions get the employment and all the taxes. The federal get their taxes. Funds everywhere. GDP rises as a result. The states/regions PROTECT the company from ALL attacks; they protect the firms like their babies. They protect the firms from suits made in bad taste, from the greed of the federal government, from the hostile takeover of other companies or foreigners, and so much more. With such participatory protection, the companies thrive and the economy booms. This is what China does, this is what the USA does, this is what’s done in Germany and other OECD countries! Where in the world did we copy this obnoxious and despicable model from? Where?

In our own climes, the company that has borne so much in so many unnecessary costs; cost of registration, licensing, construction, providing its own power, its own water, its own security, making it hardly competitive but determined to forge ahead, that same company has its license yanked off on the whims and caprices of some demented soul in Abuja. And what does the state government or regional do? Absolutely nothing! Dead silence!

In some instances, the state even helps to bring down the firm; sometimes the envy of the governor (like he should be the largest dude in town!) prompts this! Crass nonsense!

And the Senator, Rep member, state lawmaker where the company was located? Clueless! They become politically correct and hide their heads like opossums! The company is left as an orphan to face the might of an unfriendly federal government. No protection whatsoever!

I have been to 32 states of this disappointing country, and I have seen hundreds of moribund companies that were DELIBERATELY murdered! Some federally owned, others privately owned. I was on a tour recently to Enugu, to inspect the premises of the Coal Company of Nigeria, the Coal mines, the power plant on Oji River, I saw a deliberate murder by the central government. The Nkalagu Cement Factory, Ibeto? Odutola Tyres? Iron Ore at Itakpe? Slok Airlines? Guinea Glass? And hundreds more! DELIBERATE policies to kill and over centralization! Pray, which sane company would want to invest in such a toxic atmosphere? Those that operate are the real heroes of our time!

With the obnoxious presence of the central government, we kill initiative! We keep our people down, reduce the economy, increase poverty, increase unemployment! Then we start looking for foreign investors. To invest in this insanity? Seriously?

So when they come on air and start spewing stuff like “we shall create employment, diversify the economy, ensure economic prosperity, blah blah”, I look at their policies and disposition, and burst into laughter. Then I become sober and weep sadly. I weep at what we are doing to ourselves. I weep because we deliberately take the wrong decisions and somehow hope for some great outcomes. I weep because our poverty is self-inflicted. I weep at those we call political leaders; they get into power just to supervise our poverty, and certify our misery.

It is not rocket science; you want employment and economic prosperity? Go for it and ask the federal government to bug-off! Deliberately protect and partner the companies to establish in your state and protect them with your soul! Learn from others. We need these manufacturers! In the 1970s, Deng Xiaoping encouraged individuals to start iron smelting companies in their backyards. Everyone from the towns to the villages became an iron smelter; small holders with small quantities supplying to the large firms. The Breton Woods institutions declared it a failed programme, but it was the beginning of the industrial revolution of the Peoples Republic of China! That single policy, gave a spin-off effect that brought other industries into play. NO LICENSES were required. In fact, China BEGGED companies to establish first and gave them all sorts of incentives to thrive. Once they ensure the firm is thriving, they come back for the licensing, several years later.

In Nigeria, we license them to death! Those who refuse to die, we yank their licenses off, like some hired killers. And if after yanking off the license, they still refuse to die, we send some crazy judicial demons after them! Then they come back to tell us how to improve the economy while actively killing it!

Let the manufacturers thrive. Protect them, nurture them, help them, seduce them, it is the fastest way to prosperity. Prosperity for all–increased employment, increased wages, increased standards of living, increased life expectancy. And we shall leave you in peace to drink the oil to your hearts content.

(To be continued)