Business And Economy

Vision 2020: A Vision Or A Mirage?

The articulation and validation of NV20:2020 under which Nigeria aspires to emerge one of the 20 largest economies in the world by year 2020 represents the nation’s biggest and boldest dream since its independence from Britain in 1960! I believe the economic policy disagreements that have arisen between the Federal Government, the Nigerian Governors’ Forum and Organised Labour since the introduction of NV20:2020 are all necessary strategic battles that must be fought and won to ensure the viability of the vision!
Thus, though my comment entitled ‘The biggest threat to NV20: 2020’ was published as far back as December 15, 2010, when the debate on both the removal or retention of the domestic fuel subsidy and the establishment of the Nigerian sovereign wealth fund were not yet the national hot potatoes, I have been really amazed by how the factors that I described then as constituting the greatest threat to NV20:2020 are playing out in the current economic policy debate. This has resulted in the refusal of state governments to collect their monthly revenue allocations for the second month in a row! I realized that the re-production of my comment of December 15, 2010, will greatly help the proper situation of the current domestic fuel subsidy and sovereign wealth debates within the purview of NV20:2020!
I cherish King Solomon when he declared with absolute finality that, “Where there is no vision, the people perish….” I treasure this saying as the fundamental law of life and enterprise, especially because I have repeatedly found the visioning process to be the most powerful means of personal, corporate and national self-expression through which aspirations are articulated into goals that instill a sense of destiny and inspire passionate pursuit. I also treasure this scripture so much because I believe that it states one of the most important God-given rights which no person, enterprise or nation should fail to recognize or fully appropriate on a continual basis-and that is, the right to dream to the extent of your personal, corporate or national aspirations! However, since it’s always the size of the underlying ambitions and aspirations that determine the size of a dream, there are both small dreamers and big dreamers. Since a dream typically serves as a powerful source of inspiration, big dreams tend to provide greater inspiration and so it is far better to dream Big, Hairy, and Audacious Goals!
In their article entitled, ‘Building Your Company Vision,’ Collins and Porras wrote that, “We found in our research that visionary companies use bold missions-or what we prefer to call BHAGs (Big, Hairy, Audacious Goals)-as a powerful way to stimulate progress. All companies have goals. But there is a difference between merely having a goal and becoming committed to a huge, daunting challenge-such as climbing Mount Everest. A true BHAG is clear and compelling, serves as a unifying focal point of effort, and acts as a catalyst for team spirit. It has a clear finish line…it is tangible, energising, highly focused. People get it right away; it takes little or no explanation.”
When properly thought out, understood and pursued, big dreams rarely fail to bring about landmark achievements such as the USA’s space leadership which was heralded by its being the first nation to land a man on the moon in fulfillment of President John F. Kennedy’s dream of doing so within a decade and Barack Obama’s emergence as the first black president of the USA. The incredible inspiration, energy and momentum that big dreams provide is best demonstrated by the fact that despite President Kennedy’s assassination a few years after outlining his man-on-the-moon dream which seemed most impossible at the time, his audacious dream so galvanised the nation that the mission still got accomplished within the time-frame that he set!
Given the parlous socio-political and economic state in which Nigeria finds itself in its 50th year of independence, its dream of becoming one of the 20 largest economies in the world within the next 10 years seems most likely more audacious than the dreams of Presidents Kennedy and Obama combined! I bet that the courage to aspire to accomplish within 10 years that which you failed to accomplish within 50 years and that which took the Asian tigers three decades to accomplish deserves the Nobel Prize for National Audacity! President Jonathan and the 500 eminent Nigerians who worked tirelessly to complete the articulation and validation of the NV20:2020 document should be commended for demonstrating extraordinary faith in Project Nigeria! However, the reality is that many big dreams like NV20:2020 still fail to be accomplished despite being excellently articulated, mainly because they are not supported with the transformational will needed to make the big decisions, commitments and sacrifices that are the critical requirements for their accomplishment.
Big dreams take big decisions, commitments and sacrifices to accomplish, and my fear is that the biggest threat to the success of NV20:2020 is the lack of the transformational will needed to make the big decisions, commitments and sacrifices that will give it the critical national alignment without which its implementation will be absolutely impossible. Collins and Porras underscored the importance of alignment by also positing that “Building a visionary company requires 1 percent vision and 99 percent alignment.” The point that these authors were making is simply that visioning is a far easier strategic task to accomplish than the creation of the strategic alignment that ensures the optimal implementation of your vision!
We need to understand that the emergence of the Asian tigers was made possible by the strategic wisdom they demonstrated by articulating the right national transformation visions and giving their visions the critical national alignment that facilitated their optimal implementation. Like the visions that propelled the emergence of the Asian tigers, NV20:2020 is a prima facie economy-led national transformation vision which can only succeed to the extent that the Nigerian leadership class can make the big decisions, commitments and sacrifices needed to shift from our age-old political nationalism that has kept each ethnic group/geographic region perpetually preoccupied with the divisive goal of pursuing the political conquest of all other ethnic groups/regions to the much-needed corporate nationalism that will refocus all Nigerians on the urgent priority of Nigeria’s development of the world-class national institutions and capabilities that will make it a high-income and globally-competitive nation. Corporate nationalism is such a fundamental requirement for the success of NV20:2020 because it is the only paradigm that can produce public servants and politicians who will approach governance with the mind-set, passion, discipline and personal sacrifice of business leaders and entrepreneurs whose mission-critical objective is to create and run thriving enterprises that have all it takes to achieve superior performance and competitive advantage as well as endure over the long-term.
Unlike in the Judeo-Christian religion, when visions are conceived in economies, there is a need for effective econometric modeling and planning to determine the variables and necessary actions which will make the visions come true. The case of Vision 2020 is that of a lofty vision which was not domiciled on the right sacrifice to make it come true.
Our econometric simulations on the Nigerian economy reveal that if the current rate of growth of GDP and population is sustained in the next eight years, Nigeria’s GDP per capita will be a mere $2,384 by 2020. Sadly, this was the average GDP per capita of the top 20 economies (which Nigeria seeks desperately to be like) as at 1997.
Our forecasts which are based on data provided by the World Bank also indicate that by 2020, if the top economies are to maintain the average growth rate which they have exhibited in the last 10 years (that is if the developed economies can shake off the current economic doldrums), they will have average per capita income of about $60,525 by that time.
If the status quo does not change in Nigeria, the country will remain far behind. The problem of Nigeria’s slow GDP growth and high population growth is an old one. Not that population growth is the major problem, but if we continue to grow population without corresponding GDP growth and reduction in corruption, our future is threatened.
Historic data from the World Bank indicates that on average, nations in the first 20 economic group attained GDP per capita in excess of $1,223 (which was our per capita income a few years ago) around 1960. France, Norway, and the UK had per capita income of $1,320, $1,441; $1,382 by 1960, and have consistently grown since then. One fully understands that Vision 20:2020 is a wild goose chase when one reckons with the reality that the goal is to attain an economic standard which we could not attain in 50 years, in just eight years.
As of 1960, Nigeria’s GDP per capita was a mere $91 and has just managed to grow by 25 per cent in the last 50 years. In the same period, Norway grew per capita income by 59 per cent; while France gained 34 percent. On average, the High Income Countries (HIC) recorded 30 per cent increase in GDP per capita in the last 50 years; while Nigeria saw a rise of a little less than 25 per cent.
Our simulations reveal that Nigeria needs to grow at an uninterrupted rate of between 9.5-12 per cent per annum in the next eight years or miss vision 20:2020 altogether. And since this is unlikely to happen, we can as well come up with a better and more realistic vision.
Given the current circumstances, there are two choices for Nigeria. If the country cannot automatically implement policies that will grow the economy at a faster pace, then it has the option of shifting the goal post. Clearly, the idea of merely believing that developing infrastructure will grow the economy is not good enough.
Infrastructure is a necessary but not sufficient condition for development. We need to start asking ourselves the questions: From which sector of the economy will our economic miracle emerge?  What policies are we putting in place to make the identified sectors realistically viable?
Policy makers and governments within Nigeria need to answer these questions. Nigeria’s political elite should in a sense start thinking like the Chinese. What the Chinese did was to set targets for different sectors of the economy and work towards those targets.
Nigeria has the capacity to attain high growth if the country fires on all cylinders. But all economic indicators point to the fact that Vision 20:2020 cannot be attained. If we must attain some level of improvement in the next 8 years, our growth should be all-inclusive, well-coordinated and not restricted to one sector. The country needs to explore all its growth frontiers.
Nigeria’s policymakers have to implement fundamental policies which foster inflow of FDI in a coordinated manner. This inflow of FDI should be coordinated to attain predetermined economic targets. When the right policies are well implemented, the result will be growth and consequently development.
The truth is that Nigeria has not done too badly in terms of growth in the past six years. The problem however is that this growth has not trickled down to the masses. There are prospects for Nigeria’s economic ‘resurgence’, but things will not work by mere uncoordinated visions. We have to do more.
It is absolutely certain that without the urgent shift from political nationalism to corporate nationalism, no president or political party or government-no matter how credibly-elected can drive the accomplishment of NV20:2020. Time will tell.

African Economies And The Global Debt Crisis

So far, the current global debt crisis has cost the leaders of Greece and Italy their jobs. Who will be next? Only time will tell. The current debt crisis is one of the most devastating since third world debt crisis of the 1980s, so far it impacts has concentrated on the developed countries of Western Europe and North America.
African countries, like most other developing countries, have had their own share of debt crisis in the past and many are yet to recover from that almighty blow to their nascent economic growth. But this time around, the blow that they will be receiving is indirect, since the debt in effect is European sovereign debt. There are various channels through which the current global turmoil can affect African economies, one of which is through trade. The bulk of African export to European countries has already been affected by way of reduction in the overall export, especially that of primary products. Countries such as Kenya, Mali, Uganda, and Senegal have already seen their primary export to Europe being affected by the crisis.
As austerity measures put in place in countries such as Spain, Ireland, and Portugal bit harder, so should the volume of trade between these places and their African partners. Debt crises of this magnitude should be expected to have an effect on corresponding debt held by African countries; already the cost of borrowing has increased, making it more difficult for poor African countries to finance their deficits. Many countries across Africa are rethinking their earlier decision to issue bonds or borrow from multinational financial corporations.
But one positive way the crisis is affecting Africa is by way of directing the attention of global financial players toward the continent. In order to satisfy the demand of portfolio diversification theory, many global investors are directing their money toward the African debt market which is young, dynamic and diverse.
China, with foreign reserve running into trillions of dollars, has been christened by analysts as the lender of last resort in this crisis. Already, the Chinese government and business community has bought billions of dollars of western European debts, at a time when Europeans themselves are running away from these junk debts. No African country can play the role China is currently playing in this crisis, the combined foreign reserve of China is more than African economies put together. As a matter of fact, no one expects Africa to play any such role, if not the way the crisis has affected the total number of aid money coming to the poor continent. Thus, here in Africa, analysts are more concerned with the way the crisis is affecting the total amount of aid and development money that is coming to the continent and not the other way round.
But one important sector that the European debt crisis hit the most is the emigration sector. Africans now find it difficult to migrate to Europe, even when they possess the most needed education and talent. The big sign on the wall as far as Europe is concern is: ‘Investors’ capital and high net worth individual welcome, less endowed individuals and migrant without capital not welcome.’ This is not to talk of illegal migrants who will be maltreated whenever they show their faces.
As for the millions of Euro remittance money that is coming from African migrants working in Europe, Africa should expect less of it as the crisis bite harder. This is not to talk of the thousands of Europe-based Africans who have lost their jobs since the start of the crisis and are therefore finding their way back to Africa.

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