The 21st Century Nigeria (A Look At The Nigerian Economic Policies (1985 – 2000). First Published 2002 By Oguchi Martins Egbujor.

BACKGROUND TO NIGERIAN ECONOMY 1985 – 2000

Chapter 1

Review of Nigerian Government’s Policies on Economic Recovery 1985 – 2000

Nigeria, the giant of Africa, as it was called in the 1970s and 1980s, was ranked among the forty one Highly Indebted Poor Countries (HIPC) of the world by 1996, as published by Federal Government, titled Debt Cancellation in 2000 report, with a per capita income of $300 or GDP of $1 per day.

The debt of Nigeria has steadily risen since 1980 from $3.5 billion to $27.77 in 2000.  The continued military rule through coup,  and change of policies,  debilitating infrastructures,  collapse of business activities,  nationalisation of foreign businesses,  and ineptitude of the military and civilian governments have left Nigeria reeling in abject poverty.   Reference to Debt Cancellation report 2000, Nigeria is ranked 146 out of 176 poor nations by UNDP in 1999.  In fact, she is amongst the thirty poorest nations of the world.

As a result of lack of clear policy and focus by the various governments (including three years of civilian rule since 1980), has force the international community and her friends to declare Nigeria as unstable, and not conducive for investment. As a result of this, foreign investors lost confidence in Nigerian economy, which in turn force them to take their investments to other countries with attractive incentives for business development and growth.

Since 1985,  two military governments (Babangida and Abacha)  having realised the impacts of economic slump,  unstable government,  and lack of strategic policies of economic recovery,  introduced two separate  policies to arrest the dwindling economy,  and establish strategies to foster economic growth.  These policies were the structural adjustment programme (SAP) of 1986, aimed at economic recovery, and the vision 2010 of 1996, which is aimed at introducing policies which will stabilise the economy and attract foreign investment to boost business growth and technological advancement.

These policies were supported by the International Monetary Fund (IMF) and the world business community, especially the creditors, but lack of implementation, unstable government, unaccountability and fraud have left the world wondering if Nigeria will ever recover in a foreseeable future, to benefit from the growing globalisation of world business activities. The figures at 1995 as shown below indicate little or no improvement.

The unfavourable investment climate in Nigeria as a result of the 1972 promulgation of Nigerian Enterprises Promotion Decree (NEPD) limited the level of foreign investments. By 1995,  the IFC fact book 1997, as published in the federal government report,  titled Economic Policy of Obasanjo Administration,  2001 compared Nigeria with other developing countries as follows:-

No. of listed Companies    Market Capitalisation

Nigeria                       184                                $13.0 billion

India                        5,999                                153.2

Malaysia                     621                                296.7

South Africa               626                                233.4

Nigerian Gross Domestic Product (GDP) has steadily declined from its position in 1965, as compared with other developing countries by World Development Report (World Bank) 1997.

GDP 1965          GDP 1995               GDP Per Capita 1995

Nigeria                      $5.8 Billion        $26.8 Billion                  $260

Indonesia                        3.8                         –                                 $980

Malaysia                          3.1                     85.0                               $3,890

Venezuela                       9.8                     75.0                                 –

Ghana                              –                           –                                  $390

The new Nigerian government which came to power on the 29th of May, 1999 has promised to inherit the vision 2010 programme which was introduced by the last government, and to implement it.  This is the first elected civilian government in Nigeria since 1983.  Even though the world was bored and the Nigerians were frustrated of continued military governments in Nigeria which subsequently put pressure for a change to democratic government, civilian governments are not better neither.  After all, the present president and some of his cabinet members nationalised foreign assets in the 1970s when they were in power, and the Shagari’s civilian government increased Nigeria’s debt within three years from $3.5 billion to $20 billion dollars.

Now that a democratically elected civilian government is in Nigeria,  can it review all the policies of structural adjustment programme and the vision 2010,  to design realistic strategies to attract investors and upgrade infrastructures to support business activities,  to the acceptance and encouragement of the world business communities.  

1.1     The Rationale

The rationale of this report is to identify the policies and strategies Nigerian government has so far used to liberalise its economy, in order to attract foreign investments to enable her recover from economic slump.  This report will also identify the opportunities open to investors, so that at the end, after careful evaluation of the identified factors, I will recommend realistic strategies to woo investors,   for Nigeria to benefit from the growing trend of globalisation of businesses.

This report will be focusing on the issues that enable business growth in a competitive environment.  As the world businesses are converging to the global stage through technological factors, and as world consumer demand is becoming homogeneous, Nigeria has to –

• develop its infrastructures to at least, the minimum standard acceptable to world business community and the Nigerian general public

• reorganise its financial institution to cope with the internationalisation of financial market

• eliminate barriers which prevent or slow down business investment and growth

• radically or rationally reform their education and training to cope with the prevailing knowledge based productivity

• introduce policies to ensure economic stability and growth

• and most importantly, work to restore business confidence.

The report will go back to basics (borrowing John Major’s words), to identify where Nigeria was by 1985, where they are by 2000, and where they aspire to be by 2010 according to the aims and objectives of Vision 2010.

Before going into details about where they were by 1985 and where they want to be by 2010, I will first of all, identify the objectives of this report.

1.2     The Objectives

Having introduced this report and having identified the rationale behind this report,  I will,  as mentioned below,  outline the objectives of this international management report.

The main objectives of this report is to identify and critically evaluate the strategies which Nigerian government has used from 1985 – 2000,  to revamp the collapsed economy, and to attract foreign investment to inject fund needed to develop and to build her knowledge based industries and technological advancement,  for the purpose of joining the industrialised and economically advanced nations by the year 2010.

This report will –

• Identify Nigeria’s economic and related problems up to 1985 and examine government actions from 1985 – 2000.

• Identify the level of infrastructure which is needed to sustain and add value to the economy and business activities.

• Identify the issues relevant to business development, and those government policies which enable or disable business growth from 1985 to 2000. This will include business ownership structure, repatriation of profit, business incentives available to investors, any other barriers to trade, and the convertibility of the national currency.

• Identify and critically evaluate all the relevant factors. Recommendation will be based on the factors enabling the attraction of foreign investment to achieve the government’s aspiration.

Having introduced the report and having identified the rationale behind the report and its objectives, I will now introduce the research methodology and the relevant literatures used while carrying out the research which act as the basis for strategic analysis.

1.3      Research Methodology

My investigation into the strategies used by the various Nigerian governments from  the year 1985 to 2000 was based on secondary research. My effort was focused on relevant articles and publications on government policies.  I also sought for interviews from senior officials of the Nigerian Embassy in London,  to identify the present government commitment to the development of the economy and the attraction of foreign direct investment.  

While carrying out the investigation into the strategies used by the Nigerian governments in order to recover from economic slump and also attract foreign investment,  my research focused on the following issues and related literatures as mentioned below:-

1.3.1     The Collapse Economy

Identifying the state of the Nigerian economy from 1985 to 2000,  and the actions taken by the government to revamp the economic slump,  for the interest of economic and business developments,  I had interviews and meetings with some of the senior officials of the Nigerian High Commission.

A Visit to the Nigerian High Commission’s office in October 2001 opened the door for good relationship which enabled two senior members of the High Commission (The Head of Information and the Minister Counsellor (Economic Affairs) granting me interviews about the Nigerian government’s policies on business development and the strategies they have adopted to execute their them. They also provided publications as listed below to back up their claims:-

(1)  Investment Opportunities in Nigeria by Nigerian Investment Promotion     Commission,  Edition 002,  published August 2000.

(2)  Investment Incentives in Nigeria by Nigerian Investment Promotion Commission,  published August 2000.

(3)  New Democratic Nigeria,  Volume 3,  on The Commonwealth – Nigerian Investment Conference 28th February, 2000,  published by High Commissioner U.K.

(4)  New Democratic Nigeria,  Volume 4,  Solid Minerals, by High Commission U.K.

(5)  New Democratic Nigeria,  Volume 5,  Agriculture, by High Commission U.K.

(6)  New Democratic Nigeria,  Volume 6,  Telecommunication, By High Commission

On many occasions, I also met with the Chief Librarian of the High Commission who provided vital information and publications published by the Central Bank of Nigeria,  the Economic Policy of the present government,  the report and the provisions of Vision 2010,  the Ministry of Finance report,  the publication of Nigerian economy by Duncan James of the Economist Intelligence Unit, U.K,  the International Finance Corporation (IFC) on result of the world survey on businesses,  and other relevant publications including that of the Librarian’s on telecommunication in Nigeria.

These publications outlined government’s policy and strategies to improve the economy since 1985 and the present government strategies to inherit Vision 2010 recommendations and achieve its objectives.

These publications and interviews on Nigeria helped me to identify where the problems lie and what the various governments have been doing to improve it in order to attract foreign investments.

While searching for information to evaluate the provisions of Vision 2010,  I contacted some embassies to discover strategies they used on their roads to industrialisation. Fortunately only the Japanese embassy responded by providing two related  publications on the Meiji Restoration 1868.  The Meiji Restoration strategies that paved the way for Japanese industrialisation, is akin to the Nigerian Vision 2010. The publications are as listed below:-

(1)  About Japan (Series 2 1997) published by the Foreign Press Centre, and

(2)  Japan’s Economic Development by Hiromatsu Takeshi (Professor of Statistics at the University of Tokyo) and Kobayashi Minoru (Lecturer of Management Information Systems at Wako University)

These publications narrated how Japan began their industrialisation through the Meiji Restoration of 1868. The writers mentioned areas of the economy it concentrated, and the reasons behind Keiretsu and Zaibatsu systems which are the foundations of Japanese development and diversification.

The publication are necessary for my report as they highlights how Japan managed their economy and if the strategy is borrowed by Nigerian government,  her aspiration of joining the industrial world by 2010 may be a reality.  The world over have been evaluating and borrowing the Japanese style of management,  and I believe that this system may be suitable for Nigeria, if she follow the recommendation of how to improve upon her management culture and adopt the practice of Kaizen,  which enabled Japan to copy Western technology and improve upon it to their advantage.

1.3.2     IMF Conditionality Nigerian Contribution

International Monetary Fund (IMF) has been blamed for the hardship experienced by the citizens of Nigeria for the period 1985 and 2000.  I carried out investigation to find out about the reasons behind the formation of IMF, the objectives and their powers.  According to the book published by Ray August (Prentice-Hall 2000),  titled International Business Law, third edition,   IMF has a laid down rule and  only got  involved in Nigeria’s economic revamp because they have responsibilities to intervene in any member states ailing economy.

1.3.3     Creating Knowledge Based Economy

Nigeria’s Vision 2010 policy identified knowledge based production as a key to industrialisation. My investigation into creating a knowledge based productivity took me into the library searching for any publications regarding the above,  I read two books published by two famous authors,  namely Michael Porter (Macmillan Press 1998) titled The Competitive Advantage of Nations,  and Peter F Drucker (1993) titled Post Capital Society.  These two books stressed that land and labour are no long the agents of production as it used to be.  The books argued that capitalism has created new knowledge based productivity through western education,  training and development of skills,  experience and most importantly,  advanced technology.

Taylor-Gooby and Lawson (Open University Press 1993) argued through their book titled Marketers and Manager that knowledge based productivity could be achieved through reorganised educational system.  They identified National Vocational Qualification as a knowledge creating educational system. This educational system could be borrowed by Nigeria to achieve the aims and objectives of Vision 2010.

Other authors who contributed to my investigation were Ian Beardwell and Len Holden (Pitman 1994) titled Human Resource Management.  This book is very relevant to my investigation as it highlights the development of workers in organisations. The authors stressed about education, training and development in order to prepare workers for work, and to identify and develop their skills.  As I mentioned earlier, these authors also identified the vocational qualification training system in United Kingdom as relevant to modern knowledge based industry.  If Nigeria wants to join the industrialised nations as contained in Vision 2010, the government has to start developing its educational and training system.

1.3.4     Socio-cultural and Political Evolution

Some of the provisions of Vision 2010 identified socio-cultural and political evolution as factors enabling Nigerian drive for good practice and industrial development.  The provision is aimed at changing the perceptions and attitudes of the people of Nigeria towards shared values of respect for elders, honesty, accountability, co-operation, industrious, self-confidence and moral courage.

Investigating into the relationship between culture and business development,  I identified Hampden-Turner and Trompenaars (Judy Piatkus 1994) titled The Seven Cultures of Capitalism.  These authors talked about culture-free perspective which enables the transferability of technology and good management practice from the developed nations.  The authors also talked about the culture-specific which is peculiar to a nation.  This means that multi-national corporation entering into Nigerian economy must take account of the factors.

Hofstede (1980a, 1980b) supported the argument by identifying the variables of culture which have effects on business development. These authors expressing unique cultural implications on business development enable me to evaluate Nigeria’s socio-cultural and political order.  This will assist in developing shared values as identified by Vision 2010.

1.3.5     Developing Strategies and the Environmental Analysis

Looking into the development of strategies to attract foreign investment by Nigerian government,  I looked into Exploring Corporate Strategy by Johnson and Scholes (Prentice-Hall 1993) third edition. These authors identified various ways of analysing the environment. in order to formulate strategies. This book identified some strategic frameworks like the five forces,  Lewin’s force field  and value chain analyses.

Other authors such as DeWit and Meyer (International Thomson Press 1999) Strategy Synthesis supported the environmental analysis. They also identified the evolutionary and revolutionary strategic formations. My recommendation will be formed around these environmental analyses.

To support my investigation,  I also searched over the internet,  newspapers and magazines in order to find out what other countries such as China are doing to attract foreign investment.  I also looked into China’s policies of opening her economy for foreign investors.

Looking into China’s current policies and Japan’s Meiji Restoration 1868 will enable Nigeria to emulate good practices of strategic formulation and implementation, in order to enable her achieve the provisions of Vision 2010.

Having reviewed the literature, I will, as mentioned below, identify the structure of this report which acts as a guide for readers.

1.4     Report Structure

This report begins with chapter one which introduced the state of Nigerian economy by 1985.  The chapter also identified the panic which followed the realisation by the government that the economy has collapsed which resulted to the national debate on the urgent measures to be taken so as to revamp it. To compare Nigeria’s economy at two stages (1965 and 1972),  five developing countries were mentioned.

Chapter two identified and revealed the problems and the measures taken by various governments to revamp and develop the economy.  This chapter identified two notable policies,  namely,  the structural adjustment programme (SAP) and vision 2010 introduced between 1985 and 2000.

Chapter three identified the strategies used by the government to attract much needed foreign direct investment.  This revealed the changes made to the business ownership structure and other incentives introduced by the government to woo investors to inject fund into Nigerian economy to enable the development and building of knowledge based industries and technological advancement.

Chapter four critically evaluates all the identified environmental factors which enable or disable business development and economic recovery in Nigeria starting from 1985 to 2000. Carrying out the critical analysis,  I employed some of the strategic frameworks developed by various academics on strategic management formation. These include notable environmental analyses like the Force Field analysis by Lewin,  SWOT analysis by de Wit and Meyer,  TOWS Matrix by Prof. Weihrich,  Diamond Effects by Michael Porter,  and of course,  my newly developed PERSTICLE,  which is a modified version of PEST analysis.

Chapter five is the recommendation as identified by the objectives of this report. Relevant factors were identified which formed the basis of the recommendation. These factors include education and training, cultural change and the rule of law,  provision of infrastructure,  currency and the financial market stabilisation,  business confidence and the good image,  and the three tier government and unaccountability of Nigerian governments.

 Chapter Two

 2 THE PROBLEMS FROM 1985

The investigation takes 1985 as its starting point,  because it was the time the government made it known to ordinary Nigerians that the economy had collapsed,  and for the first time in the history of Nigeria that the government encouraged a national debate on  measures to revamp and manage the economy.

The aim of identifying the state of the economy from 1985 is to see if it is profitable for an investor to operate in a collapsed economy such as Nigeria’s.  It is the state of a nation’s economy that attract investments,  but if the economy collapse and the infrastructures destroyed,  no investor,  no matter how high the level of his risk taking is,  will put his resources where return on investment is negative.

2.1     The State of the Economy

Nigeria is a country with more than 120 million people with an income per capita of $1000 in 1980.  According to the Debt Cancellation (A Case For Nigeria) March 2000, inflation and economic slump since 1985 has reduced income per capita to $300 by 1996 and GDP of $1 per day as published by the government.

Since 1970s,  Nigeria has largely depended on crude oil production which by 2000 stood at 95% of total export.  There has been a steady decline of agricultural productivity which stood over 60% of export earning by independence in 1960.

Nigeria has a geographical land mass of 923,800 square kilometers,  Three tier governments (Federal,  State and Local).  Naturally she has about 33 solid mineral products occurring in about 450 different locations nation-wide,  as published by Ministry of Solid Minerals Development.  Amongst the solid minerals at commercial quantity are fuel (coal, bitumen,  uranium,  etc.),  metallic (iron,  nickel,  zinc,  aluminium, etc.),  structural/building  (limestone,  gypsum,  asbestos,  marble,  etc.),  chemicals (salt,  sodium carbonate,  phosphates,  nitrates,  sulphur,  etc.),  others (diamond,  emerald,  abrasives, etc.).

According to Federal Ministry of Finance report published in 2000,  Nigeria  produce 2 million barrels of crude oil per day,  which is sold at OPEC price of $20 per barrel.  Annual export earning is about $15.4 billion dollars,  out of which $14.6 billion dollars or 95% is from oil. Nigeria serviced its $27.77 billion dollar debt with $3.6 billion dollars per annum,  about 30% of her export revenue earning.

Due to oil boom of the 1970s,  Nigeria earned enormous revenue income far beyond her expectations.  This subsequently caused the value of Naira (the currency) to rise. The government at that time embarked on ambitious development projects (though with lasting benefits) which cost about $20 billion dollars. This was the beginning of Nigeria’s external debt problems,  as she borrowed from external sources to complete the projects.

Lack of foresight and the fall of oil price in the late 1970s and early 1980s forced Nigeria into debt.  By 1980,  external debt was $3.6 billion dollars.  Four years after civilian rule of Alhaji Shehu Shagari,  external debt stood at $20 billion dollars.  The subsequent military governments’ inability to honour their obligations caused the debt to rise at an alarming rate due to penalties and interests.  By 1990,  Nigerian debt stood at $31.5 billion dollars. Key creditors are Japan, USA, Germany, France and  the United Kingdom.

From 1985 to 1997 (13 years) according to the Federal Government’s publication 2000,  Nigeria paid $14 billion dollars to service the debt, at  an alarming and subjective rate of $1.04 billion dollars par annum.  The pressure put on Nigeria by debt service forced the economy to deteriorate even further,  leading to Nigeria  abandoning its capital projects.  Infrastructures which add value to quality of life and business growth also collapse,  forcing businesses to closure,  causing massive loss,  unemployment,  misery and death to the law abiding citizens.

From 1985, the government embarked on stringent economic measures to arrest the situation, as it aims to put Nigeria back to middle income earning nation.  As a result of this, structural adjustment programme (SAP) was introduced in 1986.

Below are the measures taken by different governments to revamp the economy and to create enabling business environment to attract foreign investment.

2.2     The Measures

The Federal government introduced policies in 1986,  after a lengthy national debate, to improve the economy and encourage Nigerian businesses to be more competitive and export oriented.  There were two notable policies (SAP and Vision 2010) to introduce a market led economy and to strengthen private sector to be more productive, competitive and export oriented.

2.2.1     Structural Adjustment Programme (SAP)

By 1985,  the economy of Nigeria has been totally been destroyed and inflation was rising.  In 1960,  when Nigeria won her independence as a sovereign nation from Britain,  the economy was growing at 8% annual rate and the inflation was at 2% according to Federal Government publication on 31st March 2000.

At 1985,  poverty rate stood at 48.6% and the Babangida administration had no option than to declare a national debate on whether Nigeria should take loan to solve her problem from International Monetary Fund (IMF) and their harsh conditions attached to it.  The debate lasted and at the long run,  it was an overwhelming ‘no’ result  for IMF loan and their conditions.

IMF insisted that Nigeria should take the loan or else no further credit should be granted to them.  The Federal government in 1986 refused to take the loan in line with the popular opinion,  but the stringent IMF conditions (in the name of Structural Adjustment Programme) were self-imposed on Nigeria,  to tackle the seriousness of economic decline,  the rising inflation,  closure of businesses and the fast rising unemployment.  Some of the IMF conditions were as mentioned below:-

• To spend less on Health, Education,  and Social Services – citizens have to pay for them or do without it.

• Devaluation of the national currency (Naira), and to subject it to the full force of supply and demand to identify its realistic exchange rate.

• Removal of subsidies on petroleum products, fertiliser and other essentials.

• Cut jobs and wages for workers in government industries and services.

• Encourage privatisation of public industries, place emphasis on local sourcing of factors of production and to diversify national economy.

• Readdress several constraints on economic growth and national development

• Correct balance of payment deficit, recurrent budget deficit, low productivity,  critical low external reserve,  high import component in the production processes,  and the debilitating culture of consumption.

These stringent measures caused unbearable hardship on the citizens as they struggle to cope with the realities of structural adjustment programme, aimed only to appease IMF, World Bank and the creditors (Japan, Germany, USA, France and Britain).

The national currency was allowed to float.  From NGN1 – $1.50 in 1985,  Naira went down to NGN3.54 – $1 in August 1987.  The government was happy that they have at last established the correct value of the Naira against the dollar,  and subsequently pegged it.  According to the Central Bank report, 21st April,  1997,  the value of Naira continued to fall as it is exposed to the full force of market demand and supply.  By 1990 it stood at NGN8.04 to $1,  and this trend has continued to the current value at NGN105 to $1.  IMF and World bank staff are still putting pressure on Nigeria to devalue it further.  This is the greatest concern for business,  as investment value would be reduced over time.

The stringent IMF conditions which Nigeria has to undertake, demanded a complete new change on socio-culture, polity and economic management.

In addition to all the above,  IMF maintain  an extensive programme of technical assistance (Professor Ray August,  (2000),  through staff missions to member states,  to help reform their fiscal system and budgetary controls,  and also to establish or adapt institutional machinery, such as central banking and exchange systems.

2.2.2     IMF Pool of Fund/Quota and Nigeria’s Contribution

Nigeria,  as a member state,  contributes SDR1,282.60 million  as quota subscription.  SDR stands for Special Drawing Right and it is accepted as a private currency basket, equivalent to US Dollar $1.3422 at August 1998.  It is also measured in group of currencies (Pound Sterling, French Franc, Japanese Yen, and German Mark).

IMF raise revenue through quota subscription of member states.  The quota is relatively measured according to the size of member state’s economy.  IMF draws from its pool of fund as contributed,  to lend to any member state that is in a financial difficulties. A member state’s quota determines how much it can borrow from the pool of fund.  Quota also determines how much a member state receives from the periodic allocations of SDR.  Member state’s voting power is measured according to its quota.

From the above powers and functions of IMF,  it exercised its full control and powers over Nigeria within the period in question.  While Nigeria paid $14 billion US dollars within thirteen years to service its debt as mandated by the IMF,  and her quota subscriptions to IMF,  she only received $70 million dollars within same period.

The implementations of IMF conditions brought hardship to Nigerians.  The devaluation of the currency forced domestic price of goods to go very high,  out of the reach of ordinary Nigerians.  This devaluation also lowered the value of export earning and also soaring foreign debts to unbearable limited with interests and penalties added to it.

As Nigeria accepted the IMF conditions,  the government,  knowing the consequences of the structural adjustment programme,  launched mass mobilisation programme to prepare the general public,  and also implement the stringent programme.

2.2.3     Mass Mobilisation Programme (MAMSER)

Mass Mobilisation for Self-Reliance, Economic Recovery (MAMSER) programme was launched on 25th day of July 1987 with decree No. 31 and 51,  to mobilised Nigerians,  in order to achieve the aims and objectives of structural adjustment programme as identified above. It was aimed at educating Nigerians towards economic recovery,  and the development of new social and political order.

Some of the objectives of MAMSER as identified by Sam Oyovbaire and Tunji Olagunju in their book published in 1991, titled  ‘Foundation of a New Nigeria (The IBB era) are as below:-

• To awaken the consciousness of all Nigerians to their rights and obligations as citizens.

• To inculcate in all Nigerians, the value and spirit of civil responsibility,  commitment to social justice and economic self reliance through mobilisation and harnessing of their energies and natural resources into productive use.

• To sensitise, induct and equip all Nigerians to fight against internal and external domination of their resources by few individuals and groups.

• To propagate the need to eschew all vices in public life, including corruption,  dishonesty,  electoral and census malpractice,  ethnic and religious bigotry.

To achieve the aims and objectives,  the government appointed a cabinet ministry to take charge and implement it according to the provisions of Structural Adjustment Programme.

2.2.4     Implementation of MAMSER

According to Foundation of a New Nigeria,  the Federal Government took a lot of measures to mobilise the people,  in order to face the challenges of structural adjustment programme.  Some of the actions are as mentioned below:-

• The Government introduced Directorate for Food and Rural Infrastructure (DFFRI) to take people back to their farms, in order to produce food to feed themselves.  Fertilisers were distributed and relevant assistance was given to farmers.

• National Directorate of Education (NDE) was directed to encourage and assist graduates establish their own businesses. NGN50,000 loan was made available to any graduates with a good business plan.  This was aimed at reducing graduate unemployment.

• Mature Peoples’ Scheme (MPS) was introduced to reduce both none graduate and graduate unemployment. NGN200,000 loan was made available to small businesses or self employed people who employ two graduates at NGN25,000 each.

2.2.5     Liberalisation

The Federal Government of Nigeria,  also in line with IMF conditions,  promulgated decree No. 25 of 1988 to divest itself of its organisations,  and encourage private partnership.  Some of these organisations include floor mills,  cement factories,  insurance,  hotels,  distilleries,  constructions,  etc.  According to Okogu (1992), the Nigerian Government by 1991,  had divested itself of 78 out of 110 organisations,  and had raised NGN1.6 billion Naira through shares.  The Government had N23 billion investments and earned annual returns of NGN500 million Naira,  about 2% of its investments.  (See original publication)

2.2.6     Infrastructure

To reconstruct and improve the dilapidated infrastructure (transport, educational, electric power supply, etc.) as a direct result of the Federal Government’s commitments to implement IMF conditions,  Petroleum (special) Fund was established in 1994 by the Abacha administration with decree No. 1 in 1995,  to set aside some of the excess on oil revenue,  in order to improve quality of life and business investment.

2.2.7     Impacts of SAP

By 1994,  before the introduction of Petroleum Fund Decree No. 1 of 1995,  all infrastructures have been destroyed,  184 companies only were listed on stock exchange,  with market capitalisation of $13 billion dollars,  as compared with 626 companies with $233.4 billion dollars in South Africa.  Average life expectancy fell to 54 years,  infant mortality was 77 per 1000 live births,  only 38% of children were immunised,  hospital bed and doctors’ ratios were 01.7 beds and 0.2 doctors per 1000 people respectively,   50% of Nigerian population had no access to clean water,  towns and villages were cut off by bad roads and erosion.

According to the Federal Government publication 31st March 2000, Education spending by the government at that time was 1% of GDP,  Health was 0.4% of GDP,  Water was 0.15%,  to compare with 8.75% external debt service.  Nigerian professionals leaving the country in trough, were subjected to harsh reality of second class people abroad.

Having introduced the Structural Adjustment Programme, having also highlighted some of the government’s actions to meet the International Monetary Fund (IMF) conditions,  and having identified the impacts of SAP on the people of Nigeria and business development,  I will now introduce the aims,  and objectives of Vision 2010 and the Federal Government’s strategy to achieve its short,  medium and long terms objectives.

 2.3     Vision 2010

To start to rebuild Nigeria after the long years of harsh IMF conditions, the  Nigerian government,  under the leadership of General Sani Abacha,  decided to take the bull by the horn,  in order to arrest the ugly economic situation in the country,  and to put it back on track for recovery.

As lack of basic needs and unemployment have caused many social problems for the country,  crime rate was rising,  and  inflation was rising at 10% annually.  The situation being unbearable to the people,  the Federal Government,  on the 27th day of September 1996,  inaugurated the Vision 2010 Committee,  led by the deposed Babangida government appointed Prime Minister,  Chief (Dr.)  Ernest Shonekan.

The Committee was charged by the Head of State to –

• constructively analyse why after more than 36 years of political independence, Nigerian development as a nation in many spheres has been relatively unimpressive,  especially,  in relation to our potential;
• envision or visualise where we would like to be at the time the nation would be a fifty-year old independent nation in 2010 and;

• develop the blueprint and action plans for translating this shared vision into reality.

2.3.1     Vision 2010 Committee

Within twelve months,  the Committee worked tirelessly to seek the views and opinions of all ethnic groups,  business community,  professionals,  politicians,  multinational corporations,  Nigerians who live abroad,  and foreigners who have interest in the welfare and livelihood of Nigeria.

According to the report published on the 30th day of September 1997,  there were in all,  12 plenary meetings,  57 around-the-country meetings and workshops,  53 sub-committee meetings,  field studies and thousands of memoranda from the public.

2.3.2     Vision Statement

To be a united,  industrious,  caring and God fearing democratic society committed to making the basic needs of life affordable for everyone and creating Africa’s leading economy.

The Committee identified in three stages –

• Short term objectives (1998 – 2005) – to pursue fundamental economic reforms which can create sustainable economic growth rate of 6-10% per annum in real terms

• Medium term objectives (2005 – 2010) – to achieve growth rate in excess of 10% annually and emerge as a leading dynamic economy in the developing world

• Long term objectives (2020 – 2050) – to assume leadership of African economy and aim at joining the developed nations and in particular, the major powers which are responsible for shaping the future of the entire world.

The Committee,  among other things,  came up with a Vision Statement for Nigeria by 2010 as outlined below:-

2.3.3     Committee Recommendation

It was outlined that the starting point for Vision 2010 was on the 1998 budget which was supposed to make provisions for the implementation of the objectives,  some of which are mentioned below:-

• To pursue economic reform that will create sustainable economic growth of 6-10% per annum within the Vision 2010 and beyond.

• To focus on creating enabling environment which stimulates private sector savings and investments, with government providing conducive infrastructure,  building human capital (education,  health care and technological know-how),  and govern effectively for the public interest.

• To orient the economy towards diversified, export-oriented development based on national comparative advantage.

• Private sector to support the government in a truly progressive partnership as the engine of growth. Concentration should be on best global practice and quality standards, and to penetrate into West African and global markets with the utilisation of domestic natural resources,  local skills and the inherent comparative advantage.

• Create macro-economic framework and economic institutions which are similarly outward-oriented, based on free markets and global competition,  with the government maintaining stable and consistent economic policies.
  

2.3.4     Committee’s Target Areas

In concluding,  the Vision 2010 Committee’s report advised the government to focus its attention on education,  health,  industry,  petroleum,  solid minerals,  agriculture,  infrastructures,  poverty alleviation,  rural and urban development,  unemployment,  small and medium-scale enterprises,  women,  youth,  information system,  industry relations,  reward system,  public and private sector partnership,  stable policy environment,  law and order,  anti-corruption,  good governance,  external image and capital mobilisation.

According to the report,  Nigeria is aimed at becoming a world leader by 2050.  This is the first time that Nigerian government identified a long term economic policies of liberalisation and globalisation,  which  on  –

socio-culture,  is aimed at changing the people’s perceptions and attitudes towards shared values of respect for elders,  honesty,  accountability,  co-operation, industrious, self-confidence and moral courage

polity is aimed at good governance,  accountability,  stable economic environment,  respect for the rule of law,  anti-corruption,  international relations with good image,  liberalisation and democracy

and economy is aimed at outward looking,  free market economy,  export-oriented productivity,  technological advancement,  and globalisation.

2.3.5     Committee’s Target Achievement by 2010

The Committee envisaged that Nigeria would have returned to the rank of middle income countries by the end of 2010.  Below are some of  the medium term objectives of Vision 2010.

• The relative contribution of oil to the percentage of GDP would have declined to 20%.

• Manufacturing would be accounting for 24% of the GDP

• GDP growth rate would have averaged 10% per annum and the rate of inflation would have declined to less than 5% by the later years of Vision 2010.

• The exchange rate of Naira would have improved tremendously, while the Naira would be a convertible currency.

• Finally, income per capita would have risen from $300 to $1,600 by the end of 2010.
  

On education,  it is aimed that by 2010 it should be compulsory for children and young people between the ages of 5 and 24,  and the Committee’s target achievement is 100% enrolment on primary school.  26% of the three governments’ (federal, state, and local) budget should be devoted to education.

Population growth to decline from 2.8% to under 2% by 2010.  As at 1996, children under the age of 15 accounted for 45% of the population.  Education for girls under the age of 18 must be encouraged,  and family planning scheme to be effective to achieve reduction on population growth rate.

On health care, adequate fund should be provided to restructure and upgrade health care facilities to be in line with international standard.  The Committee aimed at improving life expectancy to catch up with the developing countries, from 52 (1993) to 62.  Infant and maternal mortality rates to improve in order to meet average standard for developing nations, the target is 70 per 1000 and 384 per 100,000 respectively.

Urbanisation is on a growth rate of 5-7%. By 2010 more than 50% of Nigeria would be urbanised,  and this is creating problems for the government to provide infrastructure and adequate planning techniques to meet the requirements of urban population.  In line with decree 88 of 1990,  the Committee suggested that the government should provide Urban and Regional Planning Commission, to improve urban economy and alleviate poverty.

Unemployment is high on the recommendations of the Committee.  It was identified that high proportion of the productive segment of the working age population is unemployed.  This include professionals (bankers, engineers, doctors, etc), and primary, secondary leavers and university graduates.  The Committee aimed that by 2010, there should be full employment for all able-bodied persons.

Small and Medium-Scale Enterprises (SMEs), should be encouraged and supported to overcome their financial, managerial and technological problems.  It is noted that less than 50% of incentives and support from government and other agencies utilised.  Vision 2010 Committee recommend capacity utilisation rate of not less than 90% by SMEs within the Vision period.  It is identified that SMEs employed 80% of labour force,  and therefore,  should be supported.

Private and Public sector co-operation is lacking.  The Committee identified that private sector is handicapped by the conflicting interests amongst its organised members,  while unorganised private sector is often too weak to take advantage of useful policy initiatives of the government.  The Committee recommended that by 2010,  public sector domination on the economy should be reduced,  the government should develop a viable,  dynamic,  highly motivated,  socially and environmentally responsible private sector.  Private and public sector partnership should be encouraged.

These should be achieved through –

• liberalising the economy

• strengthen the existing incentives to the private sector

• continue the privatisation initiatives

• encourage regular dialogue between the public and private sectors

• strengthen the informal sector to respond more positively to policy initiatives

• and public sector needs to be restructure and adequately motivated to make it fully alive to its responsibility of providing the necessary enabling environment, especially in the area of support services.

The Committee recognised that Infrastructure such as power, telecommunication, transportation and water supply are basically inadequate in terms of geographical spread, quality and efficiency.  This is blamed on lack of maintenance culture which has caused most of the facilities to dilapidated, obsolete, unreliable and ineffective.  It is mentioned that industrialists pass on the high costs of goods and services incurred as a result of poor infrastructure to consumers.  The obvious aim of the Committee is to make basic needs of life available and affordable to all Nigerians.  To achieve this,  the government should restructure her expenditure pattern and move away from direct involvement in the production of goods ,  to the provision of adequate infrastructure.  Private sector partnership with the government is also to be encouraged,  in order to achieve the required standards.

Capital Mobilisation is to be the engine of growth for the economy.  It is noted that Nigeria has a growing capital market,  capitalised at approximately $3.5 billion  as at December 1996. The market is said to be illiquid and has not been a major source of capital for the indigenous private sector and municipalities.  Nigeria has to modernise the capital market to be liquid,  active and transparent to serve as capital formation not only for multinationals but also for the country’s indigenous businesses,  municipalities and for the funding of infrastructure.

A lot of institutional,  operational and legal difficulties have been identified  in the banking and finance sector.  This is as a result of asset liability mismatch,  capital inadequacy,  fraud and poor management.  These problems must have to be resolved to enable the sector to perform its role during the Vision period.

Pension system also has to be reformed in order to provide improved retirement benefits for retirees,  and to mobilise long term funds to finance the envisaged increase in capital formation.

Science,  Engineering and Technology  are prerequisites of modern Nigerian  agricultural and industrial development.  Nigeria needs sound education based on these three disciplines,  in order to –

• improve skills and production of small scale and subsistent farmers

• develop basic technologies for small and medium scale agricultural and industrial process industries

• enhance acquisition of low and medium level technologies that will improve industrial capacity utilisation in targeted industries where Nigeria has a comparative advantage

• initiate and sustain capacity building in those high technologies vital for 21st century industries, such as electronics,  computers,  information technology and bio-technology.

The report identified that for Nigeria to achieve the above,  it requires the development of industrial clusters in various parts of the country.  These requirements call for rehabilitation of laboratories in polytechnics and universities. Nigeria needs to enhance research and development (R&D) in public and private sector activities,  and also upgrade the facilities in technical, vocational and secondary schools.

Good and Stable Governance,  through leadership by example and promotion of role modelling are the keys for achieving the objectives of Vision 2010.  The Committee’s report recognised and lamented that the Vision may not be realisable unless and until a significant improvement in the quality of governance is attained.

Finally,  Law and Order is the critical success factor in the realisation of the Vision.  The Committee identified that there are serious problems with Nigeria’s current law making,  law enforcement and the judicial systems,  which hamper the nation’s ability to protect life and property,  and ensure the adequate liberty of the citizens.  The Committee demands restructure and effective maintenance of law and order.

After measures to revamp the economy had been applied,  below is post Structural Adjustment Programme (SAP).

 Chapter Three

3. THE POST SAP ECONOMIC SITUATION
   

With all the above economic recovery policies of structural adjustment programme,  it was pointed out in the Vision 2010 Committee’s report 1997,  that the economy had shown signs of recovery.   With the all time low of less than 2% in 1994,  the economy has risen to 3.3% in 1996.  It was said that the inflation has declined to about 30%.  The balance of payment deficit had also declined significantly to less than $800 million dollars,  and the external reserve had risen to about $4 billion dollars.

Irrespective of the good economic indicators,  the Vision 2010  Committee expressed dismay at unchanged economic structure which has remained mono-cultural,  the primary product being crude oil instead of agriculture as it was in the 1960s and 70s.  Production activities were still highly dependent on import.  The proportion of consumer goods out of the total import was over 30%,  and oil accounted for 95% of total export earnings. Inter-sectorial linkages remain weak,  value of currency continue to fall,  private sector activities remain unimpressive,  and unemployment remained high, rising and problematic.

3.1     The Currency

According to the Central Bank of Nigeria’s 1996 Annual report,  after ten years of economic recovery programme,  the national currency (Naira) exchange rate continued to fall from NGN1.50 to one US dollar in 1985.  The Federal government maintained two rates of exchange.  A few selected banks,  federal government agencies and parastatals, and the oil companies maintained domicile account with the Central Bank of Nigeria (CBN) and used a fixed rate of NGN21.8860 to one US dollar.  Other transactions,  including private sector,  used Autonomous Foreign Exchange Market (AFEM) fluctuating rates between NGN80 and NGN85 to one US dollar.  This made Naira almost inconvertible.

The AFEM rate affected private business transactions.  The continued fall of Naira made business unpredictable and unprofitable.  This caused a lot of the remaining businesses to closure,  leading to massive unemployment

Peter Drucker (Post Capital Society 1993)  and Michael Porter (The Competitive Advantage of Nations 1990 and 1998)  have repeatedly argued that devaluation of national currency is not the best option for economic recovery.  The devaluation of Nigerian currency,  Naira worsened the situation for private business investors.

The value of businesses was drastically reduced to almost nothing.  Repatriation of profit was very difficult because of the regulation.  The government did not achieve their aim of high productivity and export oriented competitive market.

To allow free movement of currencies,  and to monitor the currency,  the federal government abolished the restrictions on importation of foreign capital and the repatriation of dividend through Decree No. 17 promulgated in 1995.  This decree repealed Decree 16 of 1962 and liberalised the foreign exchange market operations.  

3.2     Private Investment and Ownership Structure

In order to encourage foreign investment,  the federal government introduced Nigerian Investment Promotion Commission  Decree No. 16 in 1995 to completely remove all quantitative and qualitative barriers to free investment in Nigeria.  The provision of the decree allows foreign investors to buy unlimited shares of any quoted companies through the Nigerian Stock Exchange in any convertible currency.

The decree also allow all foreign investors to hold 100% equity ownership of any business,  and repealed Industrial Development Co-ordination Committee Decree No. 36 of 1988,  Nigerian Enterprises Promotion Decree of 1972 as amended in 1977 and 1989 which reserved the right of ownership of certain businesses for Nigerian.

3.3     Privatisation and Commercialisation

For the government to begin the divestment of its interests in some public sectors which would be best suited for private investment and management,  Decree No. 25 of 1988 was amended in Decree No. 28 of 1999,  for the government to stop injecting funds into enterprises that could be better operated on commercial basis. Such sectors include National Electric Power Authority (NEPA),  Nigerian Telecommunications (Nitel),  Nigerian Ports Authority (NPA),  Nigeria Airways,  and others.  By 1991 and according to the conditions of structural adjustment programme,  the government had already divested its interest in 78 out of 110 organisations,  and had raised NGN1.6 billion.  The government’s investments in Nigeria was NGN23 billion with annual returns of NGN500 million.  By 1999,  the above mentioned organisations were still firmly in the hands of the government.

3.4     Business Investment Incentives

According to the Nigerian Investment Promotion Commission (NIPC) publication of August 2000,  the government plan of attracting investment and moving from oil based economy to manufacturing based economy with export orientation is given impetus,  as the government introduced a lot of tax incentives. The incentives are spread out categorically and according to industry sectors as mentioned below:-

Tax Holiday provides holiday period of five (5) to seven (7) years to industries located in the economically disadvantaged area. The industries that benefit from the tax holiday are those which the government considered to be beneficial to the public,  e.g. providing employment and assisting in developing rural or disadvantaged areas.

One of the obvious reasons of tax relief is to achieve reasonable level of productivity which should be ploughed back into the business to enable growth. It is aimed at attracting capital into Nigeria in the development of natural resources and expansion of industrial capacity.

To qualify for the tax holiday,  an organisation has to invest minimum of NGN5 million in the case of joint venture,  and NGN150,000 in the case of indigenous company.

Investing in economically disadvantaged areas attracts huge 100% tax holiday for seven (7) years  and  additional 5% depreciation over and above the initial capital depreciation.

Other incentives to organisations whose business activities involved the following will benefit from the tax relief:-

• Local raw material development
• Local value added
• Labour intensive process
• Export oriented activities
• In-plant training

Tax Relief for Research and Development (R&D) is 120% of expenses and it is deductible from earnings, provided it is carried out in Nigeria and be patented and protected in accordance with internationally accepted industrial property rights.

Local raw material utilisation attracts 30% tax concession for five years to industries that attain minimum local raw materials as follows:-

• Agro industry                      –     80% local raw material utilisation
• Agro-Allied industry        –     70%                    ,,
• Engineering                         –     65%                    ,,
• Chemical                               –     60%                    ,,
• Petro-Chemical                  –     70%                    ,,

Labour intensive mode of production attracts 15% tax concession for five years.  The percentage rate graduates as follows:-

• Industry employing one thousand (1000) persons or more enjoys 15%
• Organisations employing two hundred (200) persons attracts 7%
• Businesses employing one hundred (100) persons only enjoy 6%.

Local value added enjoys 10% concession for five years and is only applied to engineering industries where finished imported products serve as inputs.  The concession is aimed at encouraging local fabrication rather than merely assembling completely knocked down parts.

In-plant training attracts 2% tax concession for five years of the cost facilities for training.

Export oriented industries attracts 10% tax concession for five years to organisations exporting not less than 6% of their products.  This is to encourage export oriented enterprises to help improve balance of payment and make Nigerian products competitive on global market stage.

Infrastructures (road,  water and electricity) provision to areas where they not in existence attract 20% cost tax concession and it is deductible once and for all.  This is to encourage organisations to help in rural development

3.5     Protection and Monitoring of Capital Market

In order to protect foreign investment,  regulate and monitor capital market,  the government enacted Investment and Securities Decree 1999.  This decree empowered only the Securities and Exchange Commission to regulate the capital market and register securities to be offered for subscription or sales to the public.  Foreign investors are allowed to participate in quoted companies and bond transactions on Nigerian Stock Exchange without any restriction.

3.6     Repatriation of Proceeds

Repatriation of capital,  profits and dividends are allowed,  while technical fees and royalties on imported technical services and technologies are payable. Repatriation of proceeds from disposal of assets is allowed,  and foreign exchange transactions are carried out at the Autonomous Foreign Exchange Market.

3.7     Negotiable Duty Credit Certificates (N-DCC)

Negotiable Duty Credit Certificates (N-DCC) is an incentive established to encourage and assist exporters to increase and diversify the total value and volume of non-oil export from Nigeria.  It is also aimed at addressing major problems of supply,  demand and price competitiveness of Nigeria’s export. The export incentives are categorised as below:-

3.8     Manufacture-in-bond scheme

Manufacture-in-bond scheme is designed to encourage manufacturers to import raw material inputs and other intermediate products duty-free for the production of exportable goods,  backed by a bond issued by any recognised financial institution. This bond will be discharged after evidence of exportation and repatriation of foreign exchange has been produced.

3.9     Duty drawback scheme

Duty drawback scheme is an incentive designed to refund any duties or surcharge on raw materials including packaging,  and packaging materials used for the manufacture of products upon effective exportation of the final product. 60% is automatically refunded on initial screening by the Duty Drawback Committee and upon the presentation of a performance bond from a recognised financial institution.

3.10     Export expansion grant scheme

Export expansion grant scheme entitles exporters of 20% grant of their total annual export turnover subject to the receipt of confirmation of repatriation of proceeds from the Central Bank of Nigeria and also subject presentation of a performance bond from any recognised financial institution. In order to qualify for this scheme,  exporters have to export minimum five hundred thousand Naira (NGN500,000) worth of processed products.

3.11     Export development fund scheme

Export development fund scheme provides financial assistance to private sector exporting companies to cover part of their initial expenses in respect of the following export promotion activities:-

• Participation in training courses, symposia,  seminars and workshops in all aspect of export promotion
• Advertising and publicity campaigns in foreign markets
• Export market research and studies
• Product design and consultancy
• Participation in trade missions, buyers-oriented activities,  overseas trade fairs, exhibitions and sales promotion
• Cost of collecting trade information
• Backing up the development of export oriented industries.

3.12     Trade Liberalisation Scheme (TLS) of Economic Community of West African States (ECOWAS)

The objective of trade liberalisation scheme is to provide incentives to exporters,  in order to significantly expand the volume of intra-community trade in the sub-region through the removal of both tariff and non-tariff barriers to trade in goods originating from ECOWAS countries. This scheme affords exporters with preferential access to the ECOWAS market from Nigeria.

3.13     Advance Fee Fraud (aka 419)

The Federal Government,  in conjunction with Central Bank of Nigeria and the international law enforcement agencies,  have issued strong warning to fraudsters that they will be punished according to the provision of the relevant law.  The Central Bank of Nigeria has issued warning which is aimed at educating those who may fall victims of this fraudulent practice through publicity campaign,  seminars,  press statements,  and co-operations with law enforcement agencies. Advertisement aimed at exposing the methods used by fraudsters to attract foreigners who want to get rich quick in Nigeria  is issued in over 80 newspapers and international magazines in 36 countries,  using 12 language.

Having identified the state of the Nigerian economy since 1985,  and having also identified the policies introduced by the various governments to rectify and improve the economy,  I will now discuss about my investigation from 1985  to  the year 2000

Chapter Four

4. DISCUSSION
   

Having introduced this report and having also identified the problems Nigerian governments faced since 1985 and the measures they have undertaken to correct the problems and to improve the economy in order to benefit from the growing globalisation of businesses,  I have to begin this discussion by analysing the environment through Force Field Analysis as identified by Lewin (1952).

4.1     Force Field Analysis

Lewin (1952) argued that in an organisational situation,  there is a balance between the  ‘driving’  forces (those promoting change) and the  ‘restraining’  forces (those disabling change).  In order for a strategist to begin solving a problem,  he or she has to begin by identify the forces,  their origins,  and there consequences.

Nigeria,  on a strategist’s view point,  some of the forces enabling and disabling business and economic development and growth have to be identified in order to design strategies to address them (see original publication on the enabling and disabling forces).

Looking at the above list of forces,  there are very few driving forces to encourage investors, especially the multinational corporations whose investments are much needed to boost the economy and restore confidence.  The disabling forces totally out-numbered the enabling forces.  This demonstrates that Nigeria has a lot to do to correct her problems.  Most of the problems are due to the lack of maintenance and implementation culture.  The governments lack co-ordination to implement good policies. This is caused by lack of leadership and corruption.

4.2     Strategic Formation

Looking at Nigeria as a business entity with strategies to solve its problems,  I have to point out what strategic formation is academically and why it should be relevant to apply it in Nigeria’s case.

Bob de Wit and Ron Meyer (Strategy Synthesis 1999) described strategic formation as a logical activity including identifying opportunities and threats in a company’s environment and attaching some estimate or risk to the discernible alternatives. Before a choice can be made, the company’s strengths and weaknesses should be appraised together with the resources on hand and available.

To capitalise on the above suggestion,  I have to analyse Nigeria’s environment by using a SWOT (strengths,  weaknesses,  opportunities and threats) model.

Strengths

I have to identify Nigeria’s strengths as a nation,  to counter her weaknesses and threats,  and to explore her opportunities. The strengths are as analysed below:-

• Nigeria’s 120 million population is an advantage to her in terms of providing labour, skills,  science and technology and professional managers. The population is also an opportunity for stimulating demand and supply.

• Nigeria earns more than $15 billion dollars foreign exchange a year through her national resource.

• Nigeria has a liberalised economy with added incentives which is attractive to international business community.

• For comparative advantage, Nigeria has 33 (thirty three) solid mineral resources attractive to both multinational corporations and private investors.

• There is unhindered access to West African sub-regional market from Nigeria, and a spring board for African continental market.

Weaknesses

For an organisation or a country to operate successfully,  it has to know what her weaknesses are.  Knowing Nigeria’s weaknesses will enable her to improve and make provisions to counter it.  The weaknesses are identified as below:-

• The inconvertible currency of Nigeria makes investment unattractive. An investor should be able to predict the return on his investment.  The continued devaluation of Naira devalues assets in Nigeria. This also affects the international financial market,  such as credit card and financing of international trade.

• The breakdown of infrastructures (transport system, electricity and telecommunication)  make productivity almost impossible.  There are no good roads and rail tracks to transport goods and also facilitate delivery.  Electricity is almost non-existent.  Business organisations have to rely on private generator plants for electricity supply.  Telecommunication is totally insufficient and constantly breaks down.  This makes communication very difficult, thereby affecting the smooth running of businesses. The sea port is congested, thereby making bulk shipment (clearing and forwarding) very difficult and cumbersome.

• Nigerian financial institution is not very organised. Some banking officials are corrupt as some of the officials and managers of the distressed banks are still employed in the industry.  The banking system is not mechanised,  the bank automated system which is taken for granted in developed countries is totally no-existent.  This makes banking transactions (nationally and internationally) very difficult.

• Corruption plays a negative impact on business confidence. On all levels of management (both private and public),  there are a lot of individuals whose aims are to dupe their organisations or governments.  Corruption also permeated into the governmental levels (local,  state and the federal governments).

• Lack of leadership and role model dampens the morale of the people. The working populace have to emulate good practice,  in order to transcend it into their working environment.

• Constant change of governments and policies disrupt business activities. Organisations are unable to make future business plans for the sake of development and growth.

• Because of poverty, Nigeria has not got a sophisticated consumer population. Poverty rate is too high and cannot sustain high level of demand needed for technology and knowledge based productions

Opportunities

The opportunities open to Nigerian investors are:-

• Numerous mineral resources in Nigeria waiting to be exploited. There are 33 (thirty three) declared solid minerals in Nigeria.

• Nigeria is aimed at exporting most of her production and has therefore, given a lot of incentives and tax holiday to attract export oriented industries.

• Educated workforce and low wages are opportunities to investors. Low cost production which Nigeria presents,  makes Nigerian products price competitive as compared with Asian countries like India and China.

• Access to all West African market from Nigeria, and the platform for African market makes investing in Nigeria worthwhile.

Threats

Nigeria as a nation is facing enormous challenges from Africa and Asia as multinational corporations search for where to locate their production and research centres.  Nigerian threats are as mentioned below:-

• Asian continent, including china are more technologically advanced than Nigeria.  The world businesses are fast moving from labour based to knowledge based as identified by Peter Drucker (Post Capital Society 1993).  Asian countries have acquired the skills needed to produce knowledge based products to meet the challenges of high quality and cheaper price facing multinational corporations.

• Though the low wages experienced by Asian countries in the 1960s and 1970s has declined and workers’ wages, especially South East Asia have risen as the economy grows, Labour in Indian sub-continent is still low to the attraction of multinationals and are more highly skilled and technologically advanced than Nigerian workers.

• Nigerian businesses are still at infant stage and may not be able to face the challenges of global products with high quality and competitively priced.

• Even though labour may be cheap in Nigeria, the cost of importing technology needed to produce global products is very high,  forcing prices to be uncompetitive.

• Nigerian currency faces huge challenge from the Asian currencies which have already stabilised. Nigerian currency remained,  as at today,  inconvertible and it is not quoted any where in the world  on stock exchange.

Continuing below with the environmental analysis,  I will employ the TOWS matrix attributed to Professor Weihrich.  This matrix points out at a glance Nigeria’s strengths to exploit opportunities open to her and to counter threats to her economy and business development.  This same matrix at a glance shows Nigerian weaknesses to make use of the opportunities and to counter any threats to her business growth.

4.3    TOWS matrix attributed to Prof. Weihrich (See original publication

In continuation with the environmental analysis, there is need to evaluate Nigeria’s internal capabilities to sustain business development and growth.  In search of suitable model to analyse Nigeria’s complex situation, I decided to use the application of Michael Porter’s diamond effects model as identified by De Wit and Meyer.

4.4     Porters Diamond Effects

There are four identified segments of diamond model,  namely,  firm strategy, structure and rivalry;  factor conditions;  demand conditions;  and related and supporting industries.

I will diagnose Nigeria’s internal capabilities to sustain business growth by using the four mentioned segments relevant to industry needs,  in order to identify the attractiveness of Nigeria as a nation attracting foreign investments.

Arthur Schopenhauer 1788 – 1860,  German philosopher (according to De Wit and Meyer) said that  ‘every man takes the limits of his own field of vision for the limits of the world.’

By diagnosing Nigeria’s internal capabilities I will identify whether her Vision 2010 aims and objectives are beyond her limits own field of vision which she thought was the limits for world vision.

4.4.1     Nigeria’s Strategy, Structure and Rivalry

The style of Nigerian management does not match the multinational’s organisational management style.  Nigerian managers have not got the experience and exposure relevant to manage a multinational corporation.

The three governmental structure (local,  state,  and the federal) is cumbersome and bureaucratic.  Foreign investors may not have the patience to go through the structure which causes delay to business activities.  There is no one stop shop where investors can go and have things done at once.  Approval of businesses are in stages and in layers, thereby frustrating the smooth running of business in Nigeria.

Nigeria may not yet attract large multinationals as the cost of entering into Nigerian business may outweigh the projected returns.  Granting tax holiday and other incentives to businesses may not be enough as intending investor will incur huge capital expenses to install technological equipment and training workers to transfer the knowledge and skills needed to operate in knowledge based production.

Investors aimed to be rewarded with healthy profit but the inconvertibility of Nigerian currency,  and the lack of sophisticated consumers make investment in Nigeria unattractive.  It is true that Nigeria has cheap labour but the lack of infrastructures relevant to business activities are barriers affects performance in many ways. This will affect transportation, communication, production and delivery of goods and services to final consumers.

Business rivals in other West African countries like Ghana,  Ivory Coast or Cameroon with better infrastructures,  more stable currencies and sophisticated consumers may be more competitive.

4.4.2     Factor Conditions

The factors of production were usually land and labour,  but in present time and emergence of full capitalism,  it is capital and technology.  Nigerian population of 120 million people is not very relevant to productivity.  Nigeria has not got the capital to rebuild its infrastructures.  Her educational system is destroyed and the working age population have not acquired the relevant skills and knowledge to work in a knowledge based production which is inspired by the fast improving technology.

The Vision 2010 Committee talked about establishing good science and technology institutions and opening various research and development centres.  This has remained at talking level.  Has any action been taken to implement the strategy?  The answer is no.  Nigeria has to start implementing the strategies in order to reassure the investors that her aim of attracting knowledge based industries is real.

In the Western universities, there are a lot of students from almost all Asian countries studying at all educational level in Europe, especially United Kingdom. Most of these Asian students are sponsored by their governments.  Majority of Nigerian students in United Kingdom universities are self-sponsors.

While Asian countries prepare their working population to embrace the knowledge based productivity, Nigeria remains a talking shop. When Japan took the bold move to industrialised its economy through Meiji Restoration of 1868,  the government sent representatives to Europe to study Western culture,  education,  and technology.  The publication in 1997 by Japan Foreign Press Centre,  titled ‘About Japan’  series 2 pointed out that government’s effort to develop the industries were first directed towards improving the physical and institutional infrastructure for capitalistic development in such areas as transportation,  communication,  and the financial and monetary systems. Nigeria in my mind has a lot to do to achieve Vision 2010.

4.4.3     Demand Conditions

Nigeria has not got sophisticated consumers to stimulate demand for knowledge based products. Unemployment and poverty have affected demand.  Even though the Vision 2010 aim is export oriented,  producers begin by marketing their products locally until such a time the local market is saturated and through economies of scale that organisations seek to export their produce.

It is true that West African Economic Community (ECOWAS),  like European Union,  is seen as a single market, the countries with the exception of Gabon,  are under developed,  and they,  like Nigeria are not sophisticated consumers.  It is an impoverished region and lacking in every aspect of economic development.

With the introduction of internet and sky television,  Nigerian elite try to emulate Western nations in terms of demand,  but they rather buy from Europe,  Japan and American than buying a Nigerian product.  This they call class and try to disassociate or differentiate themselves from the majority of the people.  Will the tastes of the few sophisticated consumers change so that they can now buy from Nigerian manufacturers. This remains to be seen.

Distribution channel in Nigeria is one of the worst in the world.  The road and rail systems of transport are non-existent.  There are not good roads and in some areas there are no roads at all.  Nigerian rail was build at the beginning of the last century and since then there has been no improvement.  In developed countries, transportation of bulky goods are by rail but Nigeria has not got such infrastructure.  This makes distribution network very difficult for an organisation.  Good cannot get to its destinations as planned,  thereby preventing businesses from selling their products.

4.4.4     Related and Supporting Industries

Supply to industries depends on import.  Nigeria has not got related industries to supply some raw materials,  partly finished good meant as input to produce goods or spare parts either for construction or repair of equipment meant for production plants. Nigerian industries rely heavily on import and thereby spending their earnings buying foreign exchange.  For Nigerian industries to survive,  they government has to help to develop industries as suppliers of raw materials or partly finished goods to manufacturing or construction companies

4.4.5               The diamond model (see original publication)

Continuing further with the environmental analyses,  Nigerian attraction to the world business community will begin with establishing business confidence.

4.5     Business Confidence

It is true that the various governments in Nigeria since 1985 have been trying to improve the economic decline and to attract multinational corporations who have the much needed capital to invest in non-oil sectors of Nigerian economy

The various governments (military and civilian) have designed several policies and strategies to woo investors.  They have also changed business structure by amending the law to accommodate foreign businesses with irresistible tax incentives,  but they have not done enough to change the perception of the world business communities and their governments.

Since 1980,  two elected democratic governments have been overthrown by the military.  The present government is the third elected government in two decades,  but the question asked within and outside Nigeria is will democracy last?  No investor,  no matter the amount of incentives given to him will invest in an unstable environment.  Nigeria is quite unstable and the government should work hard to correct that.  There is no assurance that the fragile government will not be overthrown. Incidence such as the January 2002 ammunition dump explosion in Lagos and the ethnic clashes which led to destruction of lives and property are not in any way encouraging.

Corruption is still rife in Nigeria both in public and private sectors.  It is equally rife in government.  The government has done little or nothing to address the issue. Investors are still wondering what will happen should they take the high risk and invest in a country no one (including the government) is certain what will happen next.

Since 1985,  the value of the currency has continued to fall from $1.5 to NGN1.00 to NGN105 to $1.  To restore business confidence,  the currency has to be stabilised.  The present government has talked about allowing the currency value to fall in order to determine its correct value.  Without a drastic measure,  the currency will continue to fall against major international currencies.  Even though the pounds sterling is strong and the United Kingdom’s economy is one of the strongest in the world,  the sterling fell in 1992 on the black Wednesday which left Britain crashing out of the European Rates Mechanism (ERM).  No country allows its currency to be determined by the full force of the market alone. Currencies are partly fixed and supported by policies. Reconstruction of Nigeria must begin from getting the currency value to an acceptable value and must be stabilised. Under developed economy does not allow the currency to float and be subjected to the full force of global market.

While Nigeria is building its business confidence,  they should also and at the same time begin the reconstruction of their infrastructure.

4.6     Infrastructure

In business and management, infrastructure is as important as capital. Since Michael

Porter designed the value chain analysis in 1985, many strategy writers and commentators have placed many emphases on it.  The value chain analysis of an organisation will not be complete without good infrastructure.

Business organisations must map out how they will receive their supply and distribute their products to buyers and consumers.  There is no need producing products without good transport system to distribute them.  Other infrastructures such as electricity and communication system are equally important.  Communication equipment works with electricity and telephone and without them business activity is grounded.  Industries need telephone to communicate with suppliers and buyers and within themselves as well.  Majority of businesses are conducted over the telephone and other communication apparatus such as internet which also work with a telephone line attached to it.

Nigeria’s infrastructure must be repaired or upgraded before investors are asked to come and invest in it.  Production is facilitated by electricity and without electricity,  plants and equipment do not operate.  Nigerian National Electric Power Authority (NEPA) operate with outdated equipment and constantly breaks down.  Electricity supply is often cut without warning and people live or work days without one.  Business organisation coming to Nigeria must make provision for a generator plant if they want uninterrupted production.

The outdated and dilapidated infrastructure in Nigeria cost huge expenses and damages to business organisations.  Bad roads damage vehicles used for running the business,  thereby causing delays and loss of business.  Organisations spend to much money replacing or repairing their vehicles.  The constant power (electricity) cut many a time,  lead to damage of office equipment and production plants.  This cause huge sums of money to either replace it or repair it.  The damage to businesses caused by outdated and dilapidated infrastructure lead to negative balance sheet.

Nigerian government aimed at exporting most of the products manufactured in Nigeria,  but without good distribution channels,  the goods will end up damaged before they get to the intended consumers.  Nigerian ports are congested making forwarding and clearing of goods very slow and difficult.

Until Nigerian infrastructure is repaired and upgraded,  Vision 2010 remains a dream.It is true that repairing or upgrading infrastructure, such as road and rail cost huge sums of money or in Nigeria’s case, foreign exchange.  Britain with good rail system of transport  is still,  investing £30 billion over the next ten years to upgrade it according to Steven Byers,  the transport minister.  Nigeria should emulate other countries like Britain and must also commit themselves to begin the reconstruction of the whole transport system. Good infrastructure,  with good tax incentives,  and stabilised currency rate will then attract foreign investors.

4.7     Business Incentives and the three Tiers of Government

The business incentives as published by the Nigerian Investment Promotion Commission (NIPC) in August 2000,  outlined in details of all the incentives,  including tax holiday,  in all business sectors.  It also outline the thirty three solid  minerals and their locations.  The Commission lay more emphases on manufacturing sector with a shift from oil production which they intend to reduce as source of revenue by 2010 from 95% to 20%.  The manufacturing sector is encouraged to be export oriented and to dominate West African market. All these attractions lack implementation strategy.

It was identified during the investigation that investors have to deal with three bureaucratic governments (local, state and federal).  The joint venture case study of Beijing Automobile Corporation and Chrysler as contained in Business in Context, published by David Needle, the Head of Corporate Studies in East London Business School, identified as a problem, the two tier governments in China which the management had to deal with.

Foreign investors have layers of officials to deal with in Nigeria.  Granting business licence by the federal government is the beginning of the problems.  The location of the business has to be provided by the state and local governments.  The officials are corrupt and bureaucratic.  This leads to delay and frustration.  Business incentive is like a two-way traffic in Nigeria.  The government gives incentives to business organisations who in turn give incentives to the corrupt officials who process the documents.

By structure of Nigerian government,  all the three tier governments are elected and are autonomous and protected by the constitution.  All these governments have different policies,  different strategies of implementation,  and also different expectations.

This three-tier governmental structure will surely frustrate the efforts of investors.  The Investment Promotion Commission has to develop a one-stop strategy to reduce the burden of bureaucracy if they want an effective foreign direct investment.  The 100% ownership structure will be directly affected as a result of ineffective three-tier governmental bureaucracy.  Without a coherent strategy to reduce the bureaucracy,  the only options open to investors are through acquisitions/mergers and joint venture.

According to a newspaper publication (THISDAY,  The Sunday Newspaper,  February 17,  2002),  Mrs Ketie Kappmann,  a member of Washington based International Centre for Private Enterprise,  answering questions from journalists after delivering lecture at a three day workshop in Abuja,  in February 2002,  described it as a Nigerian factor.  She said that Nigeria would join the industrialised nations if it create an enabling environment and jettison the Nigerian factor and make conscious efforts to always abide by the rules and regulations.

This honourable lady is right.  The Nigerian factor and creation of enabling environment which she respectfully referred to,  include corruption,  lack of commitment,  bureaucracy,  lack of implementation strategy, and lack of infrastructure to mention but a few.   Continue with the conclusion.

4.8      Conclusion

I will conclude this report with a PERSTICLE analysis (Political,  Economic,  Relationship,  Social,  Technology,  Infrastructure,  Culture,  Legal and Education).

4.8.1     PERSTICLE

PERSTICLE is a modified version of the original PEST model and it is suitable to analysing the Nigeria’s environmental factors.  Foreign investors in Nigeria have to consider these Nigerian-factors before committing their resources.

4.8.1a     Political

Politics is not stable in Nigeria.  There are constant change of governments in Nigeria,  from civilian to military and military to military.  As the change in government continues,  so is the change in policies.  Nigerian governments issue decrees upon decrees without implementation,  and some are abandoned half way through.  All these changes disrupt business activities,  thereby leading some businesses to closure. It is difficult to predict political future of Nigeria,  and this factor affects business confidence. Politics is dangerous in Nigeria as it sometimes lead to killings, imprisonment and harassment.  The actions of the governments sometimes lead to world leaders imposing economic sanctions.  These sanctions usually affect business investments and development.

4.8.1b     Economic

Certainly the economic sanctions (whether selective or not) will affect the economy of Nigeria.  Cateora and Ghauri (International Marketing 2000) said the most important reason why governments encourage foreign investment is to accelerate the development of an economy.  This is true as Nigerian governments have changed policies many times in order to attract foreign investments. For more than fifteen years, Nigerian economic managers have been struggling to revive the economy where inflation and unemployment have risen sky high as indicated early in the report.  Investors are attracted to developed or developing economy and not one that is below the poverty level. Every investor aims to receive reward on his investment,  but in Nigeria’s case,  the currency is not convertible and has continued to be devalued

since 1986. Many businesses,  including banks have gone burst,  and as I am writing this report,  Savannah Bank,  of the top ten banks in Nigeria is under receivership.  The economy of Nigeria, as it is now,  is not ripe to attract foreign investments.

4.8.1c     Relationship

This is a new factor of the world new order.  There are growing trend of terrorism and countries, especially Europe and America are now more concerned with this factor.  You are either with us or you are against us said George Bush Junior.,  the American President,  during his campaign to shore up support for action against the Taliban regime.  The West view with suspicion, countries who have links with the so called terrorist countries or organisations.  Transfer of technology and trade liberalisation are dependent on this factor.  Any countries found within this category is punished with economic sanction and military action.

Nigeria at the moment is not found to be supporting any terrorist country or group,  but Nigeria has Muslim groups who have sympathy with these groups and countries. The West has not bombed Nigeria yet,  but during the war on terrorism,  there were wide spread violence against the Christian interests in the Northern region of Nigeria.  In fairness, the government acted quickly to quell the violence.

The question remains whether this discontent will grow to attract international action against Nigeria.  Any investor to Nigerian economy will have to evaluate this factor,  though not a problem at the moment.

4.8.1d     Social

Poverty level is high in Nigeria,  though Nigeria as a country is rich with Oil.  Per capita income in Nigeria is £320. Disposable income for average working population is lacking due to high cost of basic amenities.  Unemployment is very high and is resulting to violence and crime.  Corruption is high due to lack of employment and social welfare system.  Death rate is high as health system is destroyed or should I say dilapidated. Knowledge store is destroyed as life expectancy is 54years due to lack of  medical facilities. Nigerians may not be the sophisticated consumers as required.

The above factor affects business activities and developments.  This results to official embezzlement and stealing of office equipment in order to cope with the growing pressure of very low wages and high cost of basic needs.

4.8.1e     Technology

Nigeria is not technologically advanced.  Technology based industries will have to import the equipment and spend more on training and development in order to raise the skills needed to operate technological equipment.  This factor will affect businesses and production,  and will also force industries to be dependent on import for equipment and spare parts.  This will also force industries to recruit engineers or technicians from abroad,  or incur more expenses on training.  There are few Science and Technology institutes in Nigeria and they are not equipped to cope with the growing and constantly changing technology. Science and Technology graduate in Nigeria may know the theory but lack the practical experience to operate in a technology based production.

4.8.1f     Infrastructure

This factor may be new but it is very important for an investor in Nigeria to consider this factor very highly.  Nigeria lacks basic infrastructure and without it no business operates smoothly.  The rail transport system is almost non-existent and few tracks are obsolete,  electricity supply is insufficient and often interrupted,  and road transport system is non-existent.  How can a nation without basic infrastructure invite investors to their economy. Infrastructure is an enabling force to business activities and without it distribution and supply will not function.  Almost every production and office equipment is operated by electricity supply,  but there is constant electric power failure,  disrupting business activities in Nigeria.

4.8.1g     Culture

Culture is now being recognised as a factor which can affect business development and growth.  Difference peoples behave differently.  People of the same creed share similar values. People of the same culture have similar system of rewarding good behaviour,  promoting and motivating hard work,  and also encouraging learning and development.

There is culture-free which allows people to learn from other cultures in order to expand their knowledge base,  and there is culture-specific which is traceable to people of the same background. In this case,  Nigeria has cultural values specific to

her way of life.  Nigerian culture lacks patience,  maintenance and long termism. Nigerians do not follow the rules,  as they always seek for a short cut to accomplish their aims.  This is in contrast with Western culture that obeys the rules and follows it strictly.  The Western culture,  especially British,  is patient and seek more tolerable ways of accomplishing their aims.  The British are contented with what they have,  but the Nigerian are not and always want more.

The Western culture identifies the skills and talents in people,  supports, motivates and develop it for the interest of all.  Nigerian culture may recognise the talent or skill in a person but does nothing to support it.  This is why Nigeria lacks skilled labour, scientist and managers.  A business organisation in Nigeria has to take account of this, in order to motivate and retain their workers to develop the required skill and knowledge to operate in knowledge based production.

4.8.1h     Legal

Nigeria’s legal system is borrowed from Britain.  One of the problems of Nigerians is that they do not obey rules and regulations.  This factor affects business development and also affects all departments of business activities in Nigeria. Nigerian legal system is corrupt and causes some organisations to lose revenue and human resources.  The Western culture respects labour laws on which businesses and employees operate. None tries to circumvent the loop-holes in order to exploit its advantages.  In Nigeria, business organisation will try to close those loop-holes to avoid the temptation of official corruption.  Nigerian workers must be educated and encouraged to respect the labour laws and also the policy of the organisation they work for.

4.8.1i     Education

The level of education is inadequate for business organisations to rely on.  Education has been destroyed since the emergence of get-rich-quick system in Nigeria through out the 1990s.  The government helped to destroy education by not paying teachers.  Teachers are not trained as teaching profession is reduced to lowest.  People can only take teaching profession as the last resort.  Teachers salaries are not paid for over six months. Teachers in Nigeria reduced themselves so low as to borrow money from their pupils and students.

While teachers suffer,  Nigerian children receive no education.  They go to school but no teachers and books to teach them. Schools are in disrepair and no teaching materials for humiliated teachers.  High education suffer so much as lecturers left for developed countries in search of  better life. Students pay for lecturers’ hand-outs and there are not laboratory equipment for schools.  There are no computers in schools for students.  Students can only read but no equipment for practical experience.  Government officials make promises which end up on the pages of newspaper and television.

For Nigeria to call for foreign investors,  it must revive its educational system and promote training and development.  This must surely affect business activities and knowledge based production. Nigeria should emulate the GNVQ educational system of Britain if the government want to develop the workforce to attract multinationals in the 21st century technology based productivity.

Below is the PERSTICLE Model at a quick glance for global corporations.  The middle circle is investment, business development,  expansion and growth.  The larger circle surrounding it is the Nigerian Factor described above which is barrier to business investment and development.  The arrows are the associated factors that need to be overcome in order to break the surrounding barriers to business.

7.1j     PERSTICLE Model (see original publication)

PERSTICLE Model     attribute to Oguchi Martins Egbujor

To achieve the objectives of this report, I will now  recommend relevant strategies in line with the objectives of Vision 2010.

Chapter Five

5. RECOMMENDATIONS

Having introduced this report and identified its rationale and objectives,  having also identified the problems and the measures taken by the various governments in Nigeria to solve the problem,  and having critically assessed the problems and the measures through my constructive discussion,  I will now recommend strategies to achieve Nigeria’s aim of joining the industrialised nations.

The recommendations will be made under separate issues necessary to achieve progress.  These are –

Education and Training,  Cultural change and the Rule of Law,  Provision of Infrastructure,  Currency and Financial Market Stabilisation,  Business Confidence and Good Image, Three Tier Government and Unaccountability

5.1     Education and Training

In accordance with the provisions of Vision 2010, the Committee recommended a compulsory education for children and young people between the ages of 5 and 24. The Committee also suggested a sound basic education in the science and technology.

I therefore recommend that for Nigeria to educate her youth in order to take up the challenges facing them within this 21st century, Nigeria has to emulate the British Educational system. In Britain, education is free and compulsory up to the age of sixteen.  For those who want to further their education, there are colleges and universities ready to admit them.  British colleges and universities are equipped to meet the educational standard. In Britain, there are laboratory equipment, computers, up-to-date books and research publications, all the necessary technological equipment for science and technology students, and indeed, trained and fully qualified teachers and lecturers. Teachers and lecturers in United Kingdom continually update their knowledge through seminars, lectures and further training.

Nigeria also has to adopt the vocational qualification system of Britain in order to develop their workforce to acquire the skills, experience and knowledge needed to work within knowledge based industries. In UK, in order to develop and improve skills needed for the knowledge based productivity at work place, Training and Vocational Educational Initiative (TVEI) was introduced in 1982. This is to be achieved through the links between the Youth Training Scheme (YTS) and further education. In 1986, Britain also set up City Technology Colleges in order to develop and equip students and workers with the advance technology. Nigeria can develop knowledge based workforce by emulating British educational system and also by promoting welfare and motivation system for teachers and lecturers.

5.2     Cultural Change and the Rule of Law

The culture of get-rich-quick,  and too much emphasis on material wealth have to be changed. Due to the break down of educational system,  and the emergence of Get-Rich-Quick through fraudulent practice,  have led youth to be uninterested in education.  The role model has changed from higher education aspiration to money and material wealth aspiration. The new millionaires, who are now the role model to the youths, have little or no educational qualifications.  The educated people and qualified teachers are now poorer than the new millionaires.  Children and youths emulate what they see as the norm.  Who will blame the youths for wanting to be rich and successful?  These new millionaires emerged through corruption. The society accept it as normal. Many of these new millionaires are elected to the high political offices,  and some are also given high political offices by the government that is supposed to clamp down on corruption.  Even though,  the new millionaires are widely seen as corrupt,  they are honoured with traditional titles by the traditional rulers of the communities.

These new millionaires emerge through dubious means.  Many emerged through embezzlement of corporate funds, stealing from the national purse, or by robbing intending foreign investors. They all get their wealth by breaking the law and escaping justice.

For Nigeria to join the industrialised nations, the perception and aspiration of get-rich-quick has to be changed.  This culture will only change through the denunciation by the government and the traditional rulers that this fraudulent practice is wrong and will not help Nigeria to attain her aspired status. This will also be done through promotion of good practice and rewarding good behaviours on national, state and local levels. Youths should be encouraged to choose career paths and must be properly rewarded for their efforts.

Granting pardoning to the Speaker of the Federal House of Representative who forged a postgraduate qualification will not help in promoting good practice in Nigeria.  In the eyes of foreign investors and Nigerian youths, this is not a sign of encouragement. Corrupt people like the former Speakers of the House of Representatives must be punished to demonstrate that the law does not condone any wrong doing. Punishing the Federal Speaker of the House of Representatives will go a long way to act as deterrent to other people of dubious minds.

5.3     Provision of Infrastructure

Basic infrastructures such as electricity,  water,  telecommunication, and transport will help business activities and free movements of people and goods. Vision 2010 specified of Nigeria focusing on manufacturing section.  Many industries need water and electricity to operate.  To start with,  the government of Nigeria has to work hard to stabilised electricity and water supply by investing on new and advanced technology to support production.  Transportation is a problem in Nigeria. There must be good and up-to-date transport system to sustain the free movements of good and people. This required government investment to procure the necessary equipment. Telecommunication is the key to business success.  Provision of necessary technology to improve communication will help business development and growth.

Development and improvement of road and rail transport systems will support business growth.  This will involve constructing new rail lines to link up industrial cities. It will also involve investing in modernising the old rail tracks currently out of date. There is no need linking North and South of Nigeria with a single line.  It needs linking up of industrial cities. Investment will also be intensified with private partnership to fund construction and repairs of roads and rails.  Road and rail transports should also be constructed to link Nigeria and other West African states as they aspire to dominate the regional trade as Vision 2010 specified.

Sea Ports should also be improved.  If we are to compete globally, Nigeria must reconstruct their sea ports to accommodate large quantity of consignments. Global goods are transported by sea and Nigerian governments should construct new sea ports with advanced technology to accommodate the large volume of inward and outward goods.

Value chain distribution system will not work if adequate transport system and telecommunication system are not provided.  Industries have to receive and distribute their goods and therefore, require adequate transport system.  There is no need for Nigeria to invite multinational corporations without providing means of receiving and distributing their goods to required destination without added costs and difficulties.

5.4     Currency and Financial Market Stabilisation

Stabilisation of currency is one of the policies of the present government of Nigeria.  Nigerian Currency has continued to depreciate against major international currencies. On a global economy,  allowing national currency to be subjected to the full force of free market will have an adverse effect on the economy.  International currencies are partially pegged and supported by policies aimed at reducing the impacts of market force.  This is one of the reasons why the pounds sterling was withdrawn from the ERM in 1992.  If a major currency like the pounds sterling with the backing of strong economy could not stand the heat of the market force,  it is unlikely that Nigerian Naira, with a collapse economy will.

The Federal Ministry of Finance working together with the Central Bank of Nigeria must find a way of stabilising the currency.  They must evaluate the currencies of other developing economies like china,  South Korea,  South Africa and India,  and compare their rates of exchange against the developed economies’ currencies like US dollar, UK pounds sterling, French Franc, Dutch Mark and Japanese Yen.  This will help the government of Nigeria to determine an exchange rate for the national currency (Naira).  Unless and until the currency become convertible,  investors,  especially foreign,  will not be comfortable investing in Nigeria.

I therefore, recommend that the government of Nigeria should send a team of economic managers to Germany to study and understand how they stabilised their currency after the Second World War, when it became inconvertible and valueless against the world’s major currencies in 1945. Germany has the experience and the Nigerian government should learn from them.

5.5     Financial Market

The failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree 1994 has done little or no progress in the financial market management in Nigeria.  The collapse in February, 2002 of Savannah Bank,  one of Nigeria’s biggest banks with foreign backing is an evidence that financial market in Nigeria is not reliable.  I am a victim of mismanagement in this failed bank with an unbearable loss.  Any business organisations banking with Savannah Bank will go bankrupt and investors will lose their money.

Nigerian financial market is not yet ready for global market.  The financial business community will not risk their investment in Nigerian banking system. The government must work hard to stop these corrupt practices in the banking system before inviting multinationals to invest in the economy.  Nigeria has potential for huge financial market if the corrupt practices in the banks are controlled. Nigeria should Japanese its business activities.

5.6     Japanisation of Nigerian Business Activities

Japan, like Nigeria with SAP and Vision 2010 policies, had two notable economic policies. Japan’s economic and industrial developments depended on two bold policies, the Edo period 1603 -1868 and the Meiji Restoration 1868. These two policies, especially the Meiji Restoration paved the way for Japan’s development. Japan sent groups of individuals on fact finding missions, to study the Western economic, industrial and technological developments.  Some of the groups were sent to Europe and others to the United States of America.  The most notable of them all, was the Iwakura Mission of 1871 -73, charged with studying and understanding the Western educational system, culture, technology and management methods. When the groups returned, Japan copied all that they had learnt into their system.   I will say that Japan’s success depended on these missions through which, they emulated good practices and now does it better than those who taught them.

Nigeria should emulate Japan if they want to achieve the objectives of Vision 2010. Advanced management study encourages co-operation more than competition,  and this is what globalisation is all about.  Countries and industries share knowledge,  research and development,  and technological advancement. Nigeria must participate in sharing knowledge and good practice. It will be of immense benefits to Nigeria to send groups of young men and women to fact finding missions to Europe,  America and Japan to study how they develop and manage their economies and the industrial technology.  Since the late 20th century,  the world over have been studying and copying the Japanese industrial management system.  Japanese business practices,  such as Zaibatsu and Kaizen are now widely practised all over the world.

5.6.1     Zaibatsu System

The strength and success of Japanese industries is the coming together of industrial and financial groups. These two groups co-operated with each other and also own shares in each other’s businesses. The zaibatsu system enables them to share knowledge, skills and financial risks.  They complement each other’s strengths and weaknesses, and are inter-twined in business ownership structure.  The practice of Zaibatsu prevents businesses from collapsing as fund, expertise and co-operation are widely available.  In Japan, the business ownership structure is linked as many established industries pool resources together to jointly own banks and financial organisations.  On the other hand, financial organisations also share ownership of other industries, resulting to diversification which Japan’s industries are known for.

If Nigeria emulate the zaibatsu system of Japanese industries,  the problem of distressed banks will be solved as industries share their knowledge and support to assist any distressed organisation. If well established business organisations in Nigeria join hands together financially in establishing and supporting these privately owned banks,  the question of  ‘distress’  will not arise.  In Europe,  America and Asia,  there have been a lot of publicised diversification through acquisitions,  joint ventures and shared technological break through,  through shared research and development.  Nigeria must,  and I repeat,  must start now to emulate good practices from other parts of the world to avoid being left behind.  Other parts of Asia have done what Japan did and they are now centre for attraction for the rest of the world.  Nigeria is lucky as they are surrounded by the developed world.  We must now study and copy as much as we can to enrich our knowledge store, for the benefits of the envisaged knowledge based industrialisation as contained in Vision 2010.

Nigerian family owned businesses should open their doors for other investors to share the risks.  Nigeria should move away from family business to public limited liabilities where investors pool their resources together to share risks. For a country to advance in technology,  there must be co-operation in Research and Development. Staff training and development takes time and money in order to build a knowledge store.  Co-operation from other industries and professionals will ease the burden,  thereby leading to technological advancement,  new product development,  market penetration and profitability.  One of the best systems of improving knowledge store is through Japanese Kaizen,  known in the West as continued improvement.

5.6.2     Kaizen System

Kaizen system, in management understanding is Continuous Improvement.  Nigeria lacks continuous improvement.  Many programmes in Nigeria were abandoned half way through, leading to lose of revenue and time.  Most parts of the West, with the exception of Germany, practise revolutionary change in industry development.  Japan and Germany practise evolutionary change.  Nigeria is not matured yet to practise revolution in organisational change unless they are capable of frog-leaping.  The best system for Nigeria at the moment is to establish a system whereby knowledge can be increased through gradual and continuous learning and improvement of good practice rather than fraudulent one.

Skill can be developed through apprenticeship.  One has to learn the basics of any act or invention, before he can learn how to improve it. Continuous improvement means starting from the basics to know how things are done. It is better to learn from the ‘inside-out’ rather than ‘outside-in’.  An apprentice will first of all, learn the names of the tools which his master uses.  He will then improve by learning what they are used for, before he can apply them to work, and continues to use them to become a master.

Nigeria must pause now,  go back to basics as John Major,  the British Prime Minister had suggested to his country,  to find where their problem lies and then start from there.  If we continue the way we are going at the moment,  it will be like building without foundation,  which will eventually collapse. My suggestion is that we must send our young people on a mission of learning how others build and manage their economies,  industries and politics,  so that we can copy and apply them at home for our own benefits.  We will then continue to improve upon what we have learnt.

5.7     Business Confidence and Good Image

There are many disabling factors against Nigeria.  There is the instability of the economy,  the inconvertibility of the national currency,  the official corruption,  the ineptitude of business managers,  the dilapidation of educational system and basic infrastructure,  and the internationalisation of fraudulent practices known as ‘419’.  The world business community has lost confidence in Nigerian economy due to these mentioned factors.

For Nigeria to regain business confidence and reposition their image as a country aspiring to join the developed nations,  the government must design strategies to tackle these problems.  There is no need giving attractive business incentives without reassuring investors of how to protect their investment.  Investors will not be happy if their investments continue to depreciate continually. Nigeria must be seen by the world business community to be doing some thing positively to correct these anomalies.

5.8     Three Tier Government and Unaccountability

The process of documentation is cumbersome and can lead to corruption.  The Nigerian Investment Promotion Commission should have designed a system whereby investors can process their documents without having to go through various levels of governments. The Commission must provide one stop shop dealing with all matters relating to foreign investment.  Going through Federal,  State and the Local governments gives room for delay and corruption. Nigerian officials are known for intentional delays of process which give room for bribery and corruption.

The Federal government must design a system which ensures accountability by all officials.  The official corruption in Nigeria is at all levels and there is no need forcing investors to pass through dubious officials who have selfish interest.  Until the world business community see Nigerian government as doing some thing to tackle corruption in order to enforce accountability,  all the incentives to woo investors will be a wasted effort.

I therefore, finally conclude that even though the Vision 2010 policy is ambitious, it is achievable but not within the time frame, if the Nigerian government will implement the above recommendations.  The problem of Nigeria is not inability to design good policies, but the will, determination and good leadership needed to implement them without selfish interest and favouritism.

Note:

International Monetary Fund (IMF)

International Monetary Fund (IMF) was formed on the 29th day of December,  1945.  Even though 44 nations attended the Bretton Woods Conference in July 1944,  organised by United Nations,  to draft the charter for IMF,  only 29 states signed the Articles of Agreement.  IMF began operation in May 1946,  with Headquarters in Washington according to Professor Ray August,  the author of International Business Law,  3rd edition.

The purpose of IMF establishment was to correct the imbalance of Gold Bullion Standard and the difficulties of currency exchange and to oversee the international monetary system.  Some of the IMF functions and powers include,  as mentioned below:-

• The overseer of member states’ monetary and exchange rate policies

• As the guardian of a code of conduct, and establish a system of surveillance to ensure that member states abide by a code of conduct in their external monetary relations.

• Make sure that member states do not lend or borrow money at unsustainable level, follow unwarranted monetary or fiscal policies for balance of payment purposes.

Provide system of currency support by providing short term financial resources to member states to help correct the payment imbalance

 REFERENCES

1. African and Economic Structural Adjustment

Okogu 1992

2. Debt Cancellation (A Case For Nigeria)

31st March,  2000

3. Economic Policy Of The Obasanjo Administration (For 1999 – 2003)

18th January,  2000

4. Foundations Of A New Nigeria (The IBB Era)

Olagunju and Oyovbaire 1991

5. Investment Incentives In Nigeria

(Nigerian Investment Promotion Commission)

August,  2000

Investment In Nigeria

(Vast Opportunities,  Rich Returns)

Abuja,  September,  2001

7. National Council On Privatisation

(Federal Republic of Nigeria

June,  2000

8. New Democratic Nigeria (Volume 3 – 6)

–   Volume 3 (The Commonwealth – Nigerian Investment Conference)

Abuja,  28th February 2000

9. Quarterly Performance Report On The Economy

(Federal Ministry of Finance)

Abuja,  4th December,  2000

10         Report Of The Board of Directors For The Year Ended 31st December, 1996

By Paul A Ogwuma, OFR (Governor Central Bank)

21st April,  1997

11. Report Of The Vision 2010 Committee

30th September,  1997

12        The Babangida Administration (Achievements and Prospects

August,  1989

7. BIBLIOGRAPHY
   

1)     August R. (2000) International Business Law,  Third Edition,  Prentice Hall

2)     Beardwell I & Holden L (Pitman 1994) Human Resource Management

3)     Cateora P R & Ghauri P N (2000) International Marketing,  McGraw-Hill

4)     Drucker P F (1993) Post Capital Society

5)     DeWit B & Meyer R (1999) Strategic Synthesis,  International Thomson Press

6)     Hampden-Turner C & Trompenaar F (1994) The Seven Cultures of Capitalism,

Judy Piattkus

7)     Johnson G & Scholes K (1993) Exploring Corporate Strategy,  Third Edition,

Prentice-Hall

8)     Nariai O (1997) History of the Modern Japanese Economy,  Foreign Press

Centre, Japan

9)     Okogu B E (1992) Africa and Economic Structural Adjustment

10)   Oyovbaire  S & Olagunju T (1991) Foundation of a New Nigeria IBB era

11)    Porter M (1998) The Competitive Advantage of Nations, Macmillan Press

12)    Takeshi H & Minoru K (1997) Japan’s Economic Development

13)    Taylor-Gooby P & Lawson R (1993) Marketers and Managers, Open University

Press

 

Originally published in August 2002 by:

Oguchi Martins Egbujor

Dissertation for his MBA International Management (2002)