THE NEXT ECONOMY: WHAT MUST CHANGE

Joshua J. Omojuwa canvasses the need to liberalise the markets

Nigerians pay less for phone calls in 2023 than they did about this time in 2003 and before. This is the only good or service that costs less today than it did 20 years ago. When you settle into that thought, you’d realize how incredible it is that you paid for 60 seconds of calls even if you spoke for five seconds back in 2003. And it was not just the cost, it was the social effect. People would be making calls and looking to cut it off just before it crossed into the next minute. It was madness on a national scale, the only reason it did not look like it at the time was because most people participated in it. When something is the norm, it is always difficult to call it a form of madness. Madness is a deviation from the norm. But this was madness, we just did not know it at the time. Now, we only pay for the seconds we speak for.

That was the Mike Adenuga effect. The most telling expression of the power of the market in our country. No one is paying N50 for a five second call today. You’d pay that for two seconds before Mike Adenuga and Globacom upended that market. What made that possible is a principle of the fair market where no single business or individual held monopoly over prices. A principle that ensures the buyers and sellers arrived at a price determined by the quest of the sellers to compete at every level. Despite being a liberalized market space, two big players held sway over the market and held control over prices. A third player came in and crashed prices across the board; access to SIM cards and phone calls. That bullish entry remains the reference point for the power of the market in Nigeria today. With an extraordinary example like this, it remains shocking that Nigeria remains hesitant about liberalizing its industries.

For us to truly become that prosperous country and people, we must liberalize our industries. In contrast to the previous example, about the same time, we pursued an agenda to become a net exporter of cement. Instead of empowering an entire industry, the same government that did the right thing with telecommunications chose to empower one player. In the end, the country became an exporter of cement, but Nigerians ended up paying more for the product than even countries that depended on imports to meet their demand. As a country, you cannot bend the rules of the market to favour a person or a few people and not pay for it. Thankfully, the advent of the likes of BUA Cement helped to moderate the monopoly tendencies in that industry.

Ours is an unwieldly country. Even with the needed resources, it would always be a difficult task to move all the parts of the body that require moving to be moved at the same time. That said, control is a dangerous tendency when it comes to the economic sector. That is not to say the government should hands off entire industries. It means the government should provide the rules and regulations, define reasonable entry and exit points and let investors play on a balanced pitch that favours everyone and favours no one.

This is not to say that Nigeria should not have priority industries. We should. Pragmatism is an essential tool of governance, and this must be deployed according to the needs of the country, not at the whims and fancies of a privileged few. We must prioritize those things and industries that’d make it easier to move the other parts of the economy. See these as the fulcrum of economic development. Education, across its different layers, must become a national priority. TVET – Technical and Vocational Education and Training – must form the foundation of our education reforms. If we needed to build another Third Mainland Bridge, we’d need to import most of the technical skills and even the labour. We do not have enough expertise across entire industries. Tech has proven to be an opportunity – going by Nigeria’s numbers on the African and global tech scene – but we are yet to scale this industry. Instead, government has mostly played like an inhibitor – take the Twitter ban and the subnational right of way laws.

Since 2007, our economic liberalization agenda has mostly stalled. The Obasanjo administration, hate or love the man himself, remains the reference for economic liberalization in this country with the markets and institutions remaining today as a legacy of those times. Even then, those were the standards for that time, we need a higher stand for these times. Take the so-called NEPA and Power privatization and liberalization? A complete mess. The government kicked away a national government monopoly, broke the country into regions, and then handed them over to regional monopolies. Darkness exchanged hands. That said, even as a poor example, NEPA is no longer a burden on the budget. In a sense, even a poorly executed liberalization policy is better than a market skewed to play according to the incompetence of the government of the day.

There will always be the temptation to favour a few over the majority. In the end, those few make their gains whilst the collective count their losses – border closures, FX privileges, subsidy regime, politically motivated tariffs, etc – but any government that intends to make Nigeria a respected market able to be the first port of call for serious foreign investors in Africa, you must build it into a sophisticated market where whilst you may prioritize and incentivize an entire industry, the government cannot be seen to be working for a few at the expense of the whole. That way, we do not count private jets as a symbol of how well the government is doing, we count our people’s uninhibited access to the basic things of life; food, shelter and clothing. When we solve for those, prosperity becomes the norm.

 Omojuwa is chief strategist, Alpha Reach/ author, Digital Wealth Book