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ENHANCING NIGERIA’S ECONOMIC DEVELOPMENT: INSTITUTIONAL AND REGULATORY REFORMS

Posted on: 20 Feb 2017

For Nigeria to experience economic development, it must strengthen its institutions and carry out the right reforms to guarantee sustainable growth and development.

Dr Konyinsola Ajayi (SAN), Managing Partner, Olaniwun Ajayi LP, made this  submission while speaking on the  topic “Enhancing Nigeria’s Economic Development: Institutional and Regulatory Reforms” at the  January Edition of Nigeria-South Africa Chamber of Commerce breakfast meeting which was sponsored by Protection Plus Services Limited.


Dr. Ajayi believed Nigeria was in dire need of key reforms that can enable businesses to grow, not inhibit their prospects of expansions and contribution to the economy.


Taking a critical look at the “Anti-corruption” crusade, he expressed concerns that the approach so far is seemingly subjective.



The Legal expert cited the case of the current Acting Chairman of the Economic Financial Crimes Commission (EFCC) who is still in office, despite the Senate’s non-confirmation and the inaction at the moment from the Presidency.


At the economic front, Ajayi decried the fact that despite the understanding that economies are driven by companies and competition; the State officials are the ones competing in the economy from travelling across the globe to stifling Local Governments.

He is worried about that monster called corruption “said to be greatest issue” in Nigeria – it is truly the biggest issue. Konyinsola is worried about inconsistency in government policy making. He is disturbed by the “Magu v Daura” theatrics in the nation’s parliament; about the operations of the EFCC; about multiple taxation – illustrating his argument with the glaring and ridiculous example of Apapa Local Government Area of Lagos State; and more.

He notes that “economy is driven by companies & competition”, and regrets that there are “Too many laws, regulations, by-laws; as if   we are “Leaving in 1960 in 2017:  Our technology … Our education, Our toll gates: Busy bodies, Too much power in the centre, Excessive legislative interference. He questions our budgetary system.

He is scared that with our “FX Policy: Naira/$ would (soon) be closer to N600/N625 =$1”.

And he is also concerned by the world of instability, whose fallout we are not shielded from the factors he listed below:

  • Russia; USA; China; Brexit; France & Germany
  • USA embassy move provoke Muslim world – drive oil prices up or down
  • Klaus Schwab says 3.5m cashiers & 3.5m truck drivers face job loss from technology
  • Threat of soft target terrorism curtailing leisure & business travel: global hotel revenues down 15% and 30% in Nigeria
  • Political uncertainty and possibly increased protectionism and slowing of international trade spawned by Trump and Brexit
  • Clamp down on immigration in US and UK and possibly then Italy, France.
  • Techno make things easier & more efficient so more disruption

Economic Development in Nigeria (Negatives).

He mentioned the following:

  • 173 million people: with largest population of poor relative to population.
  • More than 40% live below the official poverty line
  • Low productivity in agricultural sector, poor employment options & poor infrastructure, security threats negatively impacts economy.
  • The global fall in oil prices. Over dependence on Oil. Impact on foreign reserves. Inflation. High levels of unemployment .Growing population
  • Policy inconsistency + inertia + (in) competence?

He added that we are living in the past when steering wheel is going (Opel Group); Electric car is coming; levitating trains here – yet our eye sores

Positives

  • Nigeria has great potential to exceed its current economic realities based on its available natural and human resources.
  • With a population of 173 million+ people, (we hope) Nigeria has the largest population in Africa, accounting for 47% of Africa’s population.
  • We are entrepreneurial people
  • We are great consumers (big market)
  • Need for housing & Fast Moving Consumer Goods (FMCG)
  • Room for Financial Inclusion


According to him
“This is affecting the private sector, who are supposed to be involved in shaping prices, products and services”, which was vital to the economy of the country.

Speaking further on the issues of the business environment, the Managing Partner of Ajayi LP tackled the suspended Financial Reporting Council of Nigeria (FRCN) Corporate Governance Code, describing it as a disincentive to businesses and investments.


Ajayi was of the strong view that it was time to query governance codes that have the tendency to impede the growth of businesses in the country, particularly with laws and provisions that undermine the foundation of companies/organizations and the leadership structure.


Giving further insight he emphasized the need for stakeholders from professional groups to organizations, to be involved in the reforms/regulatory process in the country resisting every form of impunity and excessiveness.


Speaking further the notable lawyer called for simple and fewer laws in the country, fewer regulatory bodies, independence of the judiciary and reform for federalism in the country.


With the changes in the 21st century, Dr Ajayi also tasked the government to explore the “Leap Frog Policy”, which encourages innovation in policy e.g Robotics in Mining, Digital/Virtual money & Banking and Renewable energy opportunities in Power sector.