The days after the lockdown

By Dr. Adesina A. Agboluaje

Every adversity, every failure, every heartache, carries with it the seed of a greater or equal benefit (Napoleon Hill).
March – April, 2020.

• Pandemic is a recurring infection an example is Spanish flu which happened more than 100 years ago but the important lesson learnt from it is what happens after the storm.

• This is a great opportunity for Nigeria to review its fiscal and economic policy spearheaded by the Federal Ministry of Industry, Trade and Investment (FMITI) and gives prospect for the Ministry to place itself among the most import entity in this current situation in order to diversify the economy with different safety net order than crude oil which has been affected during this Covid-19 pandemic.

• The London Business projected that the pandemic will affect:

o Consumer Products
o Consumer electronics, semiconductors
o Tourism and Hospitality
o Automotive
o Oil and Gas
o Aviation and Airlines

• Additionally, McKinsey and Company projected that in Africa, the pandemic will affect:

o Fragile Health System
o Demography: young and poor
o Small and Micro-businesses
o Limited Fiscal Capacity

• Augusto Consulting pin pointed the impact on real sector industries by grouping it into Little, Moderate and Big.

The company stated that the sectors that will be significantly affected are:

o Hotels
o Leisure and Entertainments
o Airlines
o Breweries
o Construction
o Road Transport
o Real Estate
o Oil and Gas midstream & downstream
o Trading – imported luxuries
o Cement and other building materials.

• We believe necessary palliative measures should be taken to turn the impacts into opportunities after the next day of the lockdown.

We suggest the response to ease the effect on the economy, businesses and the citizens at large.

The list is not exhaustive as further deliberation and research is been conducted to further raise more suggestions.

SUBJECT MATTER & DETAILS

1 FG creating a “standing Investment Coordination Think Tank”

• The Think Tank will be saddled with formulating, monitoring and implementing of key investment policies.

• The structure of the Think Tank will be flexible and designed to make on the spot decisions/approvals regarding new investments, bearing in mind that there would be an increase in demand for FDI after the “storm”. They would also carry out a needs assessment on existing industrial companies with a view of reviving the viable ones.

• The composition of the Think Tank will include: Ministers of Industry Trade and Investment, Finance and National Planning and Budget, Works and Housing, Transportation, Interior, Power,Ministry of Solid Mineral,Ministry of Communication and Agriculture. ECA, Governor of CBN, DGs of key investment and trade related agencies (NIPC, Customs, NEPZA, NOTN) will also be included in the Think Tank.

TIMELINE: IMMEDIATE

The membership of the above can be expanded depending on the nature and sector focus of the potential investment.

2 Sectorial Focus

Agriculture ( Farming, Plantations, Husbandry, Fishery,

• FG supporting industries and individuals (after needs assessment carried out by the Think Tank) through grants, equity (such interest will be sold off by FG at a later date), subsidy and any other appropriate intervention.

TIMELINE: IMMEDIATE

Cash Crops, farm settlement)

• Address food wastage by investing in key industries within the food processing value chain by upgrading their industrial processes

• Importation of food materials that will be in shortage after lockdown

• Establish Agro-allied industry across each LGAs in Nigeria- Using suitable PPP vehicle to deliver such industries ( Govt ownership via equity in such PPP can be sold off at a later date)

TIMELINE: LONGTERM

Agric. Production

• Establish Agricultural settlement in every LGA in the Country

–minimum land size for establishment of settlement should be 100HA.

• Review current Fiscal policy for Agriculture to attract and support private sector participation.

• Introduction of subsidies, fertilizers at minimal prices, duty free for importation of Trucks/pick-ups or 6months.

• Creating platforms that would enhance logistics-processing- market access ( Govt buying off produce)-finance( single digit interest) and tax waivers for Industrial Companies that retain workers during the lockdown.

TIMELINE: IMMEDIATE- MEDIUM TERM

Housing

• Building of 1000 Housing units by States with a set target for completion in 12 months

• PPP structure for development and management

• HM for Works and Housing to develop a support and subsidy template by end of June 2020

TIMELINE: IMMEDIATE

Transport (Rail and Road Dev.)

• Fast track completion of on-going rail-line and expand existing lines to ensure connectivity to key markets and ports.

• National waterways to be supported to commence the usage of inland waters ways as mode of transport within the hinterland

• Develop new template to support State Govt in repairing FG roads-payment to be made by FG within 2 budget cycle upon meeting standards set by FG in the template.

• Passage of legislation to support the above template.

TIMELINE: IMMEDIATE- MEDIUM TERM

Aviation

• Encourage the merging of various private sector participant in the sector to ensure coordination

• Establish the National Carrier as existing Airline will face financial and operational issues due to the pandemic

TIMELINE: IMMEDIATE- MEDIUM TERM

Human Capital Dev( Welfare)

• Re-engineer the current NHIS structure to be more open and transparent

• Commence the process of proper insurance for Govt workers and abolish payment of such in arrears- introduce insurance ID card for workers.

• Payment of new minimum wage by State Govt and payment of all outstanding allowances between now –September
2020

• Devise for better reach of vocational training and education

TIMELINE: IMMEDIATE- MEDIUM TERM

Tourism

• FG should continue with the visa-on arrival and also encourage airlines to assist clients in securing the visa

TIMELINE: IMMEDIATE- MEDIUM TERM

Security

• Design a robust security architecture

• Introducing house coding in conjunction with NIPOST within 6 months and databank for such codes be housed under
NSA

TIMELINE: IMMEDIATE- MEDIUM TERM

Ministry of Solid Mineral

• Make policy regarding Mining more transparent and Faster track the Geodata gathering launched in partnership with world bank as no investment without data

• Setup buying center of key exportable minerals (gold, silver, lead, zinc, tin, columbite, tantalite and copper) and collect mineral from registered artisan miners

• Coordinate with ministry of trade to promote investment in key industrial minerals like feldspar, silica sand, marble, gypsum, brine, kaolin, to cut down import bill

• Fast track the resuscitation of Ajaokuta , Itakpe ,Alscon plants to cut down import bill

• Liaise with ministry of power on utilizing coal mines for power generation

TIMELINE: IMMEDIATE

Ministry of communications

• Fast track the implementation of digital economy

• Liaise with ministry of finance, CBN, solid mineral, Ministry of trade and investment to further expand digital finance inclusion reach to rural areas targeting farmers, artisans by increasing connectivity in those areas

• Liaise with ministry of education to devise cheaper means of education using virtual technology etc

Ministry of Health

• Develop a workable PPP model in partnership with ministry of trade and investment for manufacturing of essential equipments, consumables and drugs needed by health facilities and health sector as a whole

Power

• The Ministry of power should be supported coordinate its efforts to plan for, prepare, and respond to all hazards that could potentially impact the energy grid during a pandemic with federal, state, and local governments/agencies at the highest levels through joint efforts by setting up an Electricity Subsector Coordinating Council (ESCC).

• Prioritize the provision of power to industrial hubs ,clusters during manufacturing hours of industries to cut down the manufacturing cost

• .remove the power subsidy and work with humanitarian ministry to direct towards the most vulnerable as who consumes power most are the rich

3 Economic Policy

Special Economic Zones ( SEZs)

• Review and reposition SEZs as a tool to drive industrialization and help attract needed FX from exports and create jobs

• Enshrine SEZ laws and regulations in the National economic policy

• Promote ease of doing business and reduce complexity in business establishment decision process by merging the two Free Zone Authorities.

• Ensure available of stable power and proximity to Rail to ensure low manufacturing and logistic cost of Goods

TIMELINE: IMMEDIATE- MEDIUM TERM

Monetary Policy

• Ensure CBN stops issuing policies on a trial and error basis and discourage policy inconsistency surrounding FX ownership and usage

• Support for HAJJ and Pilgrimage and oil subsidy should be halted

• CBN should set up a crises intervention fund that would be released to Ministry of social development and Humanitarian during crisis. Disbursement of fund directly by CBN should be abolished as it is opened to fraud and opaqueness.

4 Health development

• Develop international standard hospitals in the six geopolitical zones through PPP with internationally acclaimed hospital management company. This can be established around the University Teaching Hospitals model in this zones to promote knowledge transfer.