Resource curse is a term that is used to describe a situation where countries which possess abundant natural resources, particularly mineral deposits and fuels, tend to have less economic growth and lower standard of living than countries with fewer natural resources. In the case of Nigeria, overdependence on oil, which accounts for a greater proportion of the nation’s earning, is largely responsible for the paradox of plenty being experienced in the country.
Determined to break this jinx, the federal government took a major step to improve the country’s poor global competitiveness ranking by establishing the National Competitiveness Council of Nigeria (NCCN), in February 2013. The Council’s key mandate is to ensure that Nigeria increases in competitiveness ranking by at least 75 places in four years. The initiative is private sector-driven.
At the inauguration of the Council in Abuja, the Minister of Trade and Investment, Olusegun Aganga said: “I would like to see Nigeria improve its ranking by 75 places in the next four years. We have everything we need in terms of resources. We just have to improve the environment and the capital will flow.”
Nigeria has ranked low on the World Economic Forum’s (WEF) Global Competitive Index and the Ease of Doing Business Index over the years due to myriad factors such as poor infrastructure, weak industrial base and policy inconsistencies. The NCCN believes that by addressing these issues, Nigeria will become more competitive.
Another step the government has taken to improve Nigeria’s competitiveness is the launch of the Nigeria Industrial Revolution Plan (NIRP) and the National Enterprise Development Programme (NEDEP) in February 2014.
The goal of the NIRP is to increase the contribution of the manufacturing sector to the GDP from the current 4%, to more than 10% over a five-year period. NEDEP on the other hand, is a strategic platform that would deliver growth within Nigeria’s micro, small, and medium enterprises sector. Both programmes are expected to positively transform the Nigerian economy in the next few years.
President Goodluck Jonathan, who flagged off the programmes, said, “The NIRP, which is the most ambitious industrialisation programme ever pursued by our nation, will accelerate growth in those industries where Nigeria has comparative and competitive advantages such as the processing of food and agricultural products, metals and solid minerals processing, oil- and gas-related industries, and construction, light manufacturing and services.”
Nigeria is also making steady progress in the power sector, which has performed at sub-optimal capacity over the years. In September 2013, the government presented certificates and legal papers to new owners of 15 state-owned power generation and distribution companies under the privatisation scheme. This has opened a new vista of opportunities for investors. The government realised a total of $2.53bn from the sales. It is expected that the new owners of the 11 power generating companies (Gencos) would generate additional 5,000 megawatts within five years.
The Minister of Power, Professor Chinedu Nebo said the power sector is highly capital intensive and would require $3.5bn investments annually for the next 10 years in generation and transmission alone. This creates ample opportunities for foreign investors.
He said: “Government alone cannot afford these huge costs. This is at the core of government decision to privatise the industry and in so doing, get the critical mass of private investment and expertise to resuscitate the comatose power sector.”
Apart from the industrial and power sectors of the economy, there are indications that the government may soon privatise the transport sector, including roads, airports, seaports and harbours, in the country.
The government is preparing to send four bills to the National Assembly in this regard. If this becomes law, it will allow the private sector to invest in these areas which have been the prerogative of the government. This will further open up the economy for growth.
Key private sector players and top government officials, including a former head of state, organised a forum in London in March this year to explain to potential British and European investors on the progress Nigeria has made so far on the economic front and to woo them to invest in the country. The event was part of activities to mark Nigeria’s centenary.