August 19, 2022

Making infrastructure acquisition work more for Nigeria (Part 2) – Punch Newspapers

  • November 4, 2021
  • 5 min read
Making infrastructure acquisition work more for Nigeria (Part 2) – Punch Newspapers

Punch Newspapers © 1971-2020 The Punch newspaper
The Nigerian economy has never collapsed from lack of infrastructure, it has always gone into recession because of oil price collapse. Therefore applying Keynesian reflationary policies is simply applying the wrong prescription. I believe the jury has decided on this question but Nigerians are yet to read the verdict. Earlier, I agreed PDP performed poorly on infrastructure acquisition to the point of almost neglect. Yet the economy grew between 6% and 8% year-on-year for the better part of 16 years. On the other hand, infrastructure has been APC’s swan song yet in seven years not once has economic growth overshot population growth.
Getting infrastructure expenditure to work
There are some conditions under which infrastructure can trigger multiplier effects and then work for Nigerians.
1) The right policies have to get the economy back to around 7% annual growth. Guided use of infrastructure can then propel the economy into double-digit growth. The converse of trying to use infrastructure to grow a near-comatose economy growing at less than population growth also holds true, it might simply collapse that economy. Managers of the economy need to inquire of themselves why the weak response of the economy to the various intervention plans of the last six years? When Nigerian economic growth cannot surpass population growth for years we should acknowledge there is something amiss; could it be that our population is dwindling?

(2) Changing mindsets from governments being the sole provider of infrastructure and getting the private sector to be a major provider. At the current rate, the government barely provides 10% of Nigeria’s infrastructural needs. What has happened in the telecom sector should be the template for other sectors.
(3) A corollary to meeting our infrastructural needs is improving the nation’s non-oil dollar cash in-flow. This is important because infrastructure on its own doesn’t bring in dollars though a lot of dollars is spent on its acquisition. To pay back foreign loans incurred the procurer, either government or private, has to go to the forex market. This can contribute to the balance of payment problems in the Nigerian forex market. With the volatility of oil only non-oil can provide better sustainability.
(4) As we achieved sufficiency in cement production and probably our construction aggregate needs, we have to achieve sufficiency in iron steel rods. As a matter of urgency, we need the biggest steel plant in the world. We have the largest single train petroleum refinery, so it can be done for steel. With these, in place, the quantum of various infrastructure Nigeria will acquire increases exponentially. (More details in the book, Nigeria Attaining Trillion Dollar Status). It is the production of steel rods for infrastructure in Nigeria that will contribute to economic growth. It is the increased production of aggregates and cement and other materials used in infrastructure that will contribute to leaps in the economic growth of the nation, not the infrastructure itself. Infrastructure should be seen as the conduit for what is being produced by the economy as it facilitates the movement of produced goods and raw materials for production amongst other things.

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(5) How many Nigerian professionals and semi-professionals are benefiting directly from mega-construction? The President of the Council for the Regulation of Engineering in Nigeria said 80% of artisans on construction sites are foreigners from neighbouring countries. All mega-sites have Indian or Chinese colonies housing personnel from these countries. Whose pockets are really being reflated directly by our infrastructure acquisition? As the president of COREN said, Nigeria’s skill deficit is growing by the year as aged Nigerian professionals and semi-professionals retire and are not replaced by Nigerians. Something drastic needs to be done to address and reverse this trend as a matter of urgency!
This is where Peter Obi’s highlighting of human capital development comes into play. However, it can’t be business as usual with our institutions churning out armchair engineers, occupying air-conditioned offices for the better part of their professional life. It is not only about providing more resources for education; we have to address the content, the essence and the products of that education. Are we churning out ‘knowledge tankers’ – a term used by Prof. Joel Babalola, a Professor of Education, in his inaugural address, to describe Nigerian graduates? Nigerian human resources must become better doers, thinkers, solution providers, innovators, people who can actually build like the French engineer, Gustave Eiffel, after whom the tower is named.
Interestingly, the answer to the chicken or egg question has played out for us in our backyard. Let’s look no further than happenings in Osun State where a past governor, now promoted federal minister, went on an infrastructural blitz and in just a few years the state found itself in dire straits, unable to meet the basic functions of governance. We should have in mind that governments by their actions and policies spur on or stunt economic development. Getting the acquisition of infrastructure wrong can lead to a stymied economy, so let’s think and ask again. Is the manner we are acquiring infrastructure working for us or working for others including our politicians?

  • Dr Olugbenga Jaiyesimi writes from Sagamu. He can be reached on 08123709109

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