A leading economist and the Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, has called for the opening of the Nigerian economy through privatization which stimulates foreign direct investment(FDI).
“Privatization is the tool which most countries use to check their liquidity issue and beef up the economy and Nigeria can also do the same by privatizing some of her key sectors”, Teriba stated, adding that a macro-economic approach to privatization is ideal.
Speaking as a Guest Lecturer at a two-day retreat with the theme Rediscovery and Repositioning organized by the Bureau of Public Enterprises (BPE) in Abuja, he explained that illiquidity is the country’s main challenge.
Said he: “To solve Nigeria’s liquidity problem, she needs foreign exchange inflow. Nigeria’s annual export revenue has been halved. Nigeria’s problem is that other problems are symptoms of the (liquidity) problem. Recession is reflecting a liquidity shortage.”
He pointed out that privatization is now the trend the world over; citing Saudi Arabia and India which plan to privatize some of their critical sectors to raise funds to develop their economies. Teriba explained that Saudi Arabia avoided recession because of its huge foreign reserves. Saudi Arabia plans to raise about $200 billion through the privatization of 16 sectors ranging from healthcare and airports to education.
The renowned economist noted that Nigeria relies almost exclusively on volatile export revenue and neglected opportunities to attract massive and more stable diaspora and FDI inflows, whereas “non-resident Indians and Chinese invest massively at home to fund economic recovery and growth efforts of their respective countries.” He queried why it did not occur to Nigeria to do the same before now.
Teriba recalled that Nigeria used to attract more FDI than India, South Korea, South Africa and UAE but noted that these countries have now overtaken Nigeria. He called for the opening up of the vents for investment to flow by breaking all government monopolies as has been done in telecommunication and power sectors.
“China’s inward FDI stock rose from $20bn in 1990 to $1.08trillion in 2015 and Nigeria held nearly half of what China held in 1990 but held only nine percent of what China held in 2015. Where did we go wrong?” he asked.
Teriba further revealed that although Nigeria has about N100 trillion in her economy, it was not evenly distributed and suggested that instead of the present agitation for political restructuring, those in its vanguard should agitate for sectoral, resource and revenue restructuring.
Declaring the retreat open, the Director-General of the Bureau of Public Enterprises, Mr. Alex A. Okoh, said the aim is to help the Bureau in applying a different kind of thinking by involving every member of the BPE family in a strategic episode where “we can together build a bridge between the dream of a new BPE and the actions that we must collectively take to make that dream a reality”.
This new vision for the Bureau is hinged on the two pillars of the new vision of the Bureau—Rediscovery and Repositioning. The rediscovery pillar, the DG said would lead the Bureau to retrace and redefine its core values and reclaim its culture of professionalism, knowledge, competence, integrity and transparency. The repositioning pillar, on the other hand, aims to set the Bureau on a path that would help it engage with the future effectively and with confidence, to guarantee that its objectives are achieved.