West African countries have been advised to invest in human capital and improve on their infrastructure in order to ensure economic development since the new wave of oil discoveries cannot guarantee their future economic growth, especially now that the world is investing heavily in renewable and clean energy
By Anayo Ezugwu
IT was another celebration time for Realnews Magazine. On Tuesday November 19, the online magazine clocked seven. Like in every other year, Realnews in its traditional way gathered together an array of intellectuals, diplomats, professionals to discuss political economy of West Africa. Bearing in mind that Nigeria closed its borders against goods from other West African countries since August this year, the lecture could not be otherwise, but timely.
With the theme: “Beyond Politics: An Economic Narrative for West Africa,” Maureen Chigbo, editor and publisher of Realnews, set the tone for the lecture with her welcome address. She said more countries in West Africa are discovering oil, which is a finite resource. She raised alarm on the danger of over-dependence on oil revenue and called for economic diversification in the sub-region.
“Our choice of the 2019 topic and sub-theme was informed by the need to escalate and broaden the conversation on the economic challenges facing our region with Nigeria as the regional economic powerhouse. This is against the background of the recently endorsed Africa Continental Free Trade Agreement, ACFTA. More countries in the West Coast are discovering oil, which is a finite resource. How about the danger of over-dependence on oil revenue and the unending call for economic diversification?
“We have carefully selected the panel of discussants with the relevant expertise, knowledge and experience to address the chosen topics. I would like to appeal to my journalist colleagues to ensure that the message from here today is heard in Africa and beyond. Of course, at Realnews we will ensure that we do our part by giving the widest publicity to this important lecture,” she said.
According to Chigbo, the anniversary lecture “is one of the ways Realnews is contributing to the development of our nation by providing a forum for frank discussion by professionals, scholars, technocrats and influential personalities on the way forward for our great nation as the hope for Africa.”
She recalled: “In 2014, we focused on elections; in 2015 the theme was on the economy, in 2016 the discussion was on security; 2017 was on the challenges of Leadership in Africa, while the lecture in 2018, dwelt on Africa’s political transitions and the economy.”
Indeed, John Mahama, former president of Ghana, in his lecture announced that West Africa needs to aggressively position its economies for growth in other to provide more employment avenues for the growing populations. He called on the leaders of the region to change the existing economic models and paradigms. He said Africa with its urbanising population must look more to developing its service and digital economies faster.
According to him, this sector of the economy, if nurtured, is prone to fast growth and can provide employment for millions of young Africans coming out of school. He acknowledged that great potential for growth also exists in tourism, the creative industry, ICT, and financial services. “In my country Ghana, as in Nigeria and other African countries, the services sector has overtaken agriculture as the largest and fastest growing sector of the economy.
“African countries must create the right environment for these to grow through tax incentives, reduced regulation and red tape. We must change our model of being producers of raw commodities. Africa’s gold must reach the rest of the world as valuable jewelry, her oil must arrive as petroleum products, her timber as furniture, her cocoa as chocolates, bauxite as aluminum and copper as semi-conductor parts. Value addition and processing will provide more wealth for African economies and millions of jobs for our young people,” he said.
To achieve this, Mahama said Africa must invest in making power more available for domestic, industrial and agricultural use. He said while Africa cannot follow the model of the past industrial revolutions that have polluted and threaten the very existence of the planet, cleaner forms of energy, including gas-fired thermal, hydro, solar and wind energy are areas the region must aggressively invest in.
“Nigeria must as a priority aggressively pursue a gas-to-power policy and stop the flaring of almost 300 billion standard cubic feet of gas per annum, representing a loss of almost $700 million a year. Africa must support the Inga dam and other potential hydro power projects, which could bring about an additional 40,000 MW of power to South, East, West and Central African economies.
“Investment in social and economic infrastructure is imperative. We must make the big push, especially in the transport sector. Road, rail, maritime, aviation must all receive priority attention in order to ensure efficient movement of passengers and goods both within and between our countries. This will enhance trade and services across the West African sub-region.”
The former president also raised alarm over the impact of unilateral closure of the borders by Nigeria on free trade in the ECOWAS sub-region. He acknowledged the harmful effects of unbridled smuggling of goods on the growth of local production in Nigeria, but said it is problematic that sub-regional economic activity and trade should suffer because of domestic institutional weaknesses in the country. “Nigeria must invest in strengthening its institutions and systems that are responsible for preventing the importation of illegal or prohibited goods.
“The total closure of, especially, the Benin border, is having a significant toll on many small and medium businesses, especially in Togo, Ghana and Cote D’Ivoire that rely on this inter-country trade. I am sure that businesses in Nigeria that rely on supplies from these countries are also suffering. With the signing of the joint border task force agreement between Nigeria and her neighbours, I would like to take this opportunity to appeal to Nigeria to open up her border so that economic activities can resume.
“As the largest economy in West Africa, I believe it is not by accident that Nigeria is home to the headquarters of the Economic Community of West Africa States. The import of the following quote from the objective principles for establishment of ECOWAS cannot be lost on us. ECOWAS was set up to foster the ideal of collective self-sufficiency for its member states. As a trading union, it is also meant to create a single, large trading bloc through economic cooperation. Integrated economic activities as envisaged in the area revolve around but are not limited to industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial issues, social as well as cultural matters.,” he said.
However, Mahama expressed concern over the rising cases of terrorism in the region. He said the rise of terrorist insurgency is as much the result of inequality and poverty, as it is, of religious ideological brainwashing. “This is exacerbated by the exclusion of large segments of our populations from the modest economic growth that our countries are enjoying.
Increasingly, insurgency is also being fuelled by competition for dwindling natural resources to sustain life and economic activity, such as land and fresh water. This general insecurity affects investment and hurts economic activity. The whole of the Sahel/Savannah Region stretching as far as into Central and East Africa, and all the way to Northern Mozambique face some degree of threat from terrorist insurgency.”
Indeed, Mansur Muhtar, vice president, Islamic Development Bank, IDB and former minister of finance in Nigeria, warned of the dangers of over-dependence on oil. He said the greatest potential Nigeria and other West African countries need to explore is the people and not oil.
Muhtar, who was chairman of the occasion, noted that with about 196 million people and a projection of 401 million by 2050, Nigeria is the most populous country on the African continent and largest after India and China.
“Nigeria has large numbers of young people, presenting opportunity for deepening human capital base for a sizable domestic and home market – growing size and strength of consumer class. Beyond figures, trends from the Economic Intelligence Unit database of November 2019 show that Nigerian oil production was below potential and could be optimised by increasing investment,” he said.
Muhtar said the government must also address security issue which had created supply disruption. “Meanwhile, Nigeria is still a big player in the international market, largest oil producer in Africa, ranked 12th in the world, second largest amount of proved crude oil reserve in Africa, largest natural reserves on the continent.”
The former minister, however, made a case for economic diversification through broadening of sources of growth with greater domestic linkages. He said this would shield the economy from price and output volatility, reduce vulnerabilities and allow sustainability of growth against natural resources depletion. He said this would also enhance employment prospect by providing expanded and wider job opportunities, thereby facilitating a more geographically-balanced equitable growth.
Supporting the call for economic diversification in West Africa, Nurain Hassan Ibrahim, technical adviser to Alex Okoh, director general, Bureau of Public Enterprises, BPE, who represented Okoh at the event, said Africa must focus on what comes after oil. He said the sub-region need to diversify into other aspects of the economy.
According to him, the idea of the end of oil or beyond oil is something that is currently playing out not only in Nigeria but in other parts of the world. “I think it is important when you look at the issues and understand why we must diversify. We have to look at the key areas that we can focus on, mainly when you look at the services that have been mentioned, statistics has showed that 56 percent of the GDP comes from the services sector, which indicates that there are a lot of potentials for the non-oil sector.
On her part, Margaret Olele, chief executive officer, American Business Council, said West Africa needed to build infrastructure to support growth and development. She said it was one thing to have democracy and the next thing was to make it work for the people. “I would like to look at the politics in West Africa and to mention that both Mr. Chairman and His Excellency have mentioned political maturity, which is really very heartwarming because it really shows that African democracy is maturing.
“The American Business Council represents American businesses in Nigeria. Surely the issue about democracy in Africa is maturing and we want to see it improve the economy of West Africa. I would like to say that the US government has a long standing trade partnership with West Africa. There are also funds coming in from the US to support trade in West Africa.
“Issues around infrastructure need to improve and I know that US companies are very keen towards this in West Africa. They also need to improve issues of governance in terms of business and how we can grow. On the issues of improving government institutions, we have capacity building programmes. These are areas I know we have experts. I’m talking about Nigeria specifically,” she said.
In his goodwill message, Peter Obi, vice presidential candidate of the Peoples Democratic Party, PDP, in the 2019 general elections and former Governor of Anambra State, said oil would not save Nigeria or any country in the world. He said the world was moving out of oil and Nigeria must follow suit and diversify and also invest in education. “Oil has not saved Venezuela which has three times the oil reserve of Nigeria and it will not save Nigeria or any other country either,” he said.
That notwithstanding, experts have warned that the only way to bring economic development in West Africa is through diversification and strengthening of economic ties. So, the ball is now in ECOWAS’s court to ensure development of the region.
– Nov. 22, 2019 @ 20:15 GMT |