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Policy reversals could derail economic goal, experts warn

Posted by By WAHEED ODUSILE on 2008/03/14 | Views: 398 |

Policy reversals could derail economic goal, experts warn

The recent reversals of some of the privatization and other major economic programmes of the immediate past administration by President Umar Musa Yar’Adua, could derail the attainment of Federal Government’s plan to make Nigeria’s economy one of the top 20 economies in the world by year 2020.

The recent reversals of some of the privatization and other major economic programmes of the immediate past administration by President Umar Musa Yar’Adua, could derail the attainment of Federal Government’s plan to make Nigeria’s economy one of the top 20 economies in the world by year 2020.

If the trend, which had seen government reversing the sale of the Port Harcourt refinery, NICON Insurance, NITEL and its subsidiary, Mtel, among others, could, according to experts, also affect the actualization of the United Nations Millennium Development Goals (MDGs) for Nigeria and the NEEDS programme of the Federal Government, both of which are aimed at eradicating poverty, disease and uplifting the social economic lifestyle of Nigeria’s poor over the next decade.

A report by ECOINVEST, an Accra-based think-tank dedicated to tracking investment and trade in the ECOWAS sub-region, quoted financial experts as warning that these reversals could affect the in-flow of Foreign Direct Investments (FDIs) into Nigeria which could in turn disrupt the implementation and indeed hamper the realization of these programmes.

They contended that the trend do not augur well for the growth and expansion of the Nigerian economy currently estimated at eight per cent annually, making it one of the fastest and biggest, both in Africa and the rest of the world.

Already, the report said some foreign investors are beginning to look at some more friendlier nations investment wise, like Ghana, United Arab Emirates, Namibia, South Africa and Benin Republic, to redirect their funds due to the Federal Government’s policy somersaults.

The experts are particularly worried that the policy turnarounds and reversals are painting Nigeria as an “economic pariah” in the eyes of the investing world, which in itself would devalue and degrade Nigeria’s ratings and position as an investment haven and an economically stable entity, according to the World Bank, the International Monetary Fund (IMF) and Standard and Poor’s, the globally acclaimed ratings agency.

They are also worried that such institutions as the World Bank, the IMF and ADB, to name a few, may begin to review their economic and financial assistance programme to Nigeria in view of these major policy shifts.

These institutions, they pointed out, have poured well over N10 billion in aid money to support programmes in key areas as health, education, transportation, water supply, energy and power supply, which have assisted the country to boost availability and access to those facilities and infrastructure right across the nation.

They stress that if these institutions withdraw or withhold their funds and stop these programmes, the situation would be catastrophic for the nation as the ripple effect of such a step would take the nation back to the pre-1999 days when no global institution wanted to have any business, social or economic, with the country.

The assessment of Nigeria by those Breton Woods institutions, if pronounced negative, would lead to a ‘drying up’ of donor funds and aid money to Nigeria and the suspension of all major welfare programmes, they surmised.

A corollary to this situation they contended, would be that world class Nigerian technocrats who have been employed and given opportunities to operate at the top echelon of these institutions on account of the country’s current rating and positive assessment, may lose out to other countries and deny other talented Nigerian individuals from aspiring to be like Dr. (Mrs.) Ngozi Okonji-Iweala and Mrs. Oby Ezekwesili, presently Managing Director and Vice-President of the World Bank respectively.

As the international community begins to reappraise the Nigerian economic environment in the light of these recent developments, the situation on the ground is becoming cloudier, judging from feelers emanating from the presidency.

There are indications that the government is getting ready to reverse the sale of the Ajaokuta Steel Complex, the nation’s foremost iron and steel conglomerate which was sold by the Bureau of Public Enterprises (BPE) during the last regime, and also reversal of the sale of African Petroleum Plc (AP), sold to a local entrepreneur, as was done in the case of the National Insurance Corporation of Nigeria (NICON) when the sale of the company to a major local investor was nullified by government fiat.

“There is the need for the Federal Government to publicly come out and renounce these reversals, as they serve as a major disincentive to potential and aspiring investors both local and foreign,” one of the experts said, adding that the major fallout of these upturns and policy shifts is a return to the old ways which bred waste, corruption, inefficiency and tribalism under military rule, and led to the ruin of the country’s state-owned firms and corporations.

“There must be a major policy pronouncement from President Musa Yar’Adua himself to assuage the feelings of international investors and reassure them that all is well with the policies and there would be no reversals in the future. This would surely calm frayed nerves”, they concluded.

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Comments (3)

Okfold(Sobe, Edo, Nigeria)says...

I want the meaning of female owan name Ekeke (Edo state)

Toluwalase Samuel Olufemi(Ijebu, Ogun, Nigeria)says...

Authority belongs to God, once He decrees it is final and binding

Ikponmwosa Osamede(Edo, Nigeria)says...

Your meaning of Osamede is wrong. Osamede means God has given me a crown