Friday, July 03, 2009

Ghana and Nigerian firms

THE government of Ghana has been on a mission to lure Nigerian firms to relocate to Ghana. This is in a bid to attract investors from abroad and by so doing shore up its flagging economy in the wake of macro-economic problems resulting from a devastating global economic meltdown. The report from Ghana ordinarily will be embarrassing in Nigeria if an otherwise correct policy in Ghana is directed specifically at Nigeria and against Nigeria's interest. It will have a connotation of a sister African country unleashing a virulent assault to wantonly sabotage the other's economy. But what concerns us is how Nigeria can offer Ghana and any other country enough competition to safe-guard Nigeria's industrial sector and advance the growth of the economy. The truth, however, is that the Nigerian environment has not been conducive to industrial growth.

For a long time, stakeholders have sought government's pro-active intervention to improve the situation but not much is being done. The reality is that the country faces a crisis of massive de-industrialisation. Even without the open invitation from the Ghanaian President, John Atta-Mills, many companies are on their own closing shop in Nigeria and relocating to neighbouring countries including Ghana. Ironically, Nigeria is advancing towards a so-called Vision 20: 2020, a way of accelerating development to catch up with the rest of the world and be among the 20 most industrialised countries. With every company that leaves Nigeria, the country loses face, jobs and other opportunities. The invitation from Ghana should be a direct charge to the Federal Ministry of Commerce and Industry, states and local councils as well. Low capacity utilisation is a serious problem that must be addressed.

The Ghanaian President, Professor John Atta-Mills is spearheading the agenda of asking Nigerian manufacturing firms to relocate to Ghana. In the course of a recent visit to President Yar'Adua he told Nigerian investors that his government will provide a level playing field for investors and offer incentives. Some of these incentives include a 15-year tax holiday, free land and other policy initiatives. There seems to be a growing consensus among the Nigerian business community that Ghana provides better opportunities for investment. This has not always been the case, though. How Nigeria is now so easily upstaged by its neighbours, is a challenge that the authorities must take up.

The Nigerian environment can be made to be more attractive to industrialisation. At the moment the policy and political environment is discouraging. There is a problem with infrastructure. Not a few companies that have had to shut down their operations in Nigeria have cited in particular, the country's energy crisis. A growing manpower crisis indicated by the failure of standards in the education sector further creates awful doubt about the future of national skills development without which capacity building will be a Herculean task.

It is not enough for Nigerian stakeholders to moan that Nigeria is losing investment opportunities to its neighbours. Infrastructural development should be top priority with the provision of utilities. Research, invention, innovation and its diffusion are nothing to write home about for now and yet the country needs all these to sustain top rank competitiveness. Nigeria is lagging behind mainly because the government has too little appreciation of and respect for education, the fulcrum of any development initiative. The government has to improve its image in all these areas if foreign investors are to take Nigeria's industrial policy seriously.

The government should not allow this country to finally become a nation of traders and that is why it should anchor its Vision 20:2020 on rapid industrialisation and also focus on education and capacity building; development of finance and capital market, infrastructure and the social sector. The state and local governments may specialise around some sectors such as agriculture and food security, health, secondary and primary education, small and medium enterprises, etc while the federal government can concentrate on infrastructure, tertiary education, industries, etc.

Progressive specialisation is the rule of the game in economic growth. Nigeria needs to have an appropriate development policy. Corruption will always be a major set back and it has to be tackled too. Leadership has also always been critical in addressing any development agenda. This is the context in which the Ghanaian challenge must be fought off with an unequalled competitive spirit. Every African country owes it a duty to its people to industrialise, and protect its people's interests.