By Modupe Gbadeyanka
To solve Nigeria’s liquidity problem, she needs foreign exchange inflow, a leading economist and the Chief Executive Officer of Economic Associates, Dr Ayo Teriba, has suggested.
Dr Teriba, who further advised the country to open its economy, contending privatization stimulates foreign direct in-flow, disclosed that Nigeria’s annual export revenue has been halved.
“Nigeria’s problem is that other problems are symptoms of the (liquidity) problem. Recession is reflecting liquidity shortage,” the economist stressed.
He added that, “Privatisation 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,” pointing out that a macro-economic approach to privatisation was ideal.
Speaking as a Guest Lecturer at a two-day retreat with the theme Rediscovery and Repositioning organised by the Bureau of Public Enterprises (BPE) in Abuja on August 18-19, 2017, Mr Teriba explained that illiquidity remains the country’s main challenge.
He pointed out that privatisation is now the trend the world over; and cited Saudi Arabia and India which plan to privatise some of their critical sectors to raise funds to develop their countries.
Mr 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, airports to education.
The renowned economist noted that Nigeria relies almost exclusively on volatile export revenue and neglecting opportunities to attract massive and much more stable diaspora and foreign direct investment inflows whereas, “non-resident Indians and Chinese invest massively at home to fund economic recovery and growth efforts of their respective countries” and queried why it did not occur to Nigeria to do the same before now.
He recalled that Nigeria used to attract more Foreign Direct Investment (FDI) than India, South Korea, South Africa and UAE but noted that these countries have overtaken Nigeria and called for the opening up of the vents for investment to flow by breaking all government monopolies as has been done in telecoms and power sectors.
“China’s inwards FDI stocks 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 get wrong?” he asked.
The renowned economist revealed that though 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 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”.
He said it was hinged on the two pillars of the new vision of the Bureau—Rediscovery and Repositioning.
For the rediscovery pillar, he said it would lead the Bureau to retrace and redefine its core values and reclaim its culture of professionalism, knowledge, competence, integrity and transparency.
On the other hand, the repositioning pillar aims to set the Bureau on a path that would help it engage with the future effectively and with confidence, to guarantee that the objectives of the Bureau are achieved.
