Investment remains the foundation of growing economies, regardless of the stage of development. Of course, advanced countries have understood and confirmed for a long time that investment in human capital is the most important. Indeed, the improvement in labor productivity, which also has a positive impact on the productivity of capital, translates into an increase in production and a drop in unemployment. It is not necessary to go far to prove the role of investment in human capital in the general development of all economies. Japan has no natural resources apart from human beings, in which it has long invested to reach and maintain the world’s second largest economy before being recently supplanted by China. As we go through this article, public universities, a greater proportion of our university sub-sector have closed due to funding, among other things. We will come back to this later.
The need to expand the domestic investment discussion is based on last week’s editorial reader appeals and a number of interviews in numerous radio and television programs about the need for help from investors national over the past few days. Questions have been raised about the type of incentives needed; who should provide the incentive and what kind of private sector production needs help or support?
We hear about industrial economies, not agricultural economies when we talk about advanced countries. Of course, in the context of industry, we find various subsectors with broad categorization as consumer goods manufacturing and capital goods manufacturing subsectors. The Nigerian manufacturing sector recovered very rapidly from the late 1970s to the early 1980s when the first and second oil booms were properly implemented under the Third National Development Plan which served as a guide for economic activities unlike to the current unguided situation. The boost from the manufacturing sector then had a positive impact on employment, which is the very nature of the manufacturing sector. Without success in the steel industry, Nigeria cannot be properly placed to venture into the manufacturing of capital goods and that is why the consumer goods industry has flourished relatively well compared to the production of goods equipment like wire and cable companies, machine tool companies, etc.
Anyway, our manufacturing remains in the nascent stage over the years due to the lack of fiscal and monetary support. The ongoing problems of foreign exchange to import the necessary raw materials, the high cost of production due to high interest rates on loans due to the financial crowding out of government loans, the high cost of electricity generation and competition cheaper imported goods. These clearly indicate the area of support and intervention that the manufacturing sector needs to put the economy on the path to industrialization. We have just learned that China has embarked on the export of cocoa and we can be sure that it will not only be raw cocoa but processed cocoa products.
China with cocoa is just the test case for it to venture into the production of coffee, rubber and other cash crops, which we have neglected over time. It seems clear that China is about to push African commodity-producing countries to the wall so that these countries become totally dependent on imports. This is what we can call the economic trap and economic capture. A lesson to be learned immediately for our government to take appropriate action is that Chinese entrepreneurs are not doing these things alone, but with the support of their governments and various institutions.
The Chinese government supports entrepreneurs not only through monetary and fiscal policies and interventions, but also physically by ensuring that all government enterprises purchase products made in China. Government, through monetary policy, provides cheap credit facilities for mass production of goods for export with additional government freight and insurance policies while fiscally, Taxes, including excise duties, are not imposed on exports apart from fiscal interventions to aid production. Educational institutions are well-funded to contribute to technological advancement in the production of goods that they have already planned to bring to market at a specific time, while economics and business schools produce policies and plans economic and trade on where and how the country can go. a specific destination over the next decade and beyond.
Nigeria must begin to encourage and support domestic investment in all fields of activity, but particularly in manufacturing as a pathway to industrialization. Support should be both economic and physical. The government should give tax incentives or breaks to domestic investors rather than foreign investors. It should be possible to provide an institutional framework to import capital goods (machines) for firms that cannot afford them and sell to them at intervention costs. That is, instead of the Central Bank totally blocking the supply of foreign exchange, the purchase of machinery and other capital goods can be done through the Bank of Industry in conjunction with the Manufacturing Association of Nigeria for the benefit of local manufacturing companies.
In the 1970s, when Peugeot and Volkswagen automobiles were being produced, the Nigerian government patronized the manufacturers as a matter of policy, in addition to promoting “Made in Nigeria” products to the public. The current government and legislature must revive such a policy of purchasing vehicles and other goods made in Nigeria. Even the consumption of all lunches and parties organized by the government should be based on Nigerian manufactured consumer goods. This will not only provide support and confidence to producers as well as the public, but will drive business expansion with resultant job creation in manufacturing, agriculture and service sectors. A policy document is needed on this.
The role of educational institutions in supporting the growth of the productive unit of the Nigerian economy has always been underestimated even by the corporate sector. And that brings me to the issue of ASUU and the federal government with the public. Education was China’s starting point in 1949 and the benefits are evident to everyone today. This is where Chief Obafemi Awolowo started with the Western Region in the 1950s and the effects can still be felt where politics has touched. This is where many of our so-called rulers are today directing their children by sending them abroad for studies in ivy league schools and killing the education system at home, perhaps with the hope that these children will return to rule the illiterate! This thought or plan will not work. The persistent strike by the University’s Academic Staff Union aims to ensure that public education does not totally collapse. This is where the children of the masses go. The masses cannot afford private universities or study abroad, which is why every year there is a lot of pressure first on the federal universities, which are the cheapest, and the state universities where some fees are paid, even when many private universities struggle to find students.
I am proudly a product of Nigerian tertiary institutions. I did my polytechnic studies in Lagos State and my university studies between Benin and Ibadan. I don’t feel inferior to anyone in the world in my profession. In my senior undergraduate year ASUU was on strike for three months and as our professors resumed we could see the renewed enthusiasm to teach and graduate in their behavior because they met their demands. All my children are graduates from Nigerian public universities and they have witnessed many ASUU strikes, but they are better off today. Even in the process, they learned a vocation before graduation. The same with many past and present presidents of ASUU. Our children were or are in Nigerian public universities not only because we cannot afford to send them to private universities, but because we believe in public universities.
The last time ASUU negotiated public university staff salaries was in 2009, it has always been about funding, funding, and funding. When the funds come to the university, they don’t go to ASUU because it’s a union. It goes to the board of directors of each university, which is made up of government representatives. Earned allowances which the government projects as large are paid only to academic staff who carry out an excessive workload, as they amount to overtime due to logged-in staff. It is not for all academic staff. My salary in 2010 when I reached the bottom rung of my level is the same going up today but less in value like many of my colleagues given the depreciation of the naira and the rise in inflation, yet we are committed to teaching Nigerians. In fact, the salary must be an issue in this fight, otherwise, no recovery! If Nigerian educational institutions, from primary to tertiary, are well funded, they will be to the glory of our country. Nigeria is designated as a member country for the development of the COVID-19 vaccine and we are all happy about that. It’s because they know we have good scientists. Are we sure that we will be considered as such in ten years if the government continues with the way it behaved and the ASUU gives up the fight? Long live the ASUU.
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