WHEN THOSE THAT ARE PAID TO KNOW DON’T KNOW

Soludo - seeks solution

Finally, Nigeria has admitted to the fact that she is not immune to the global economic crisis that resulted from the international capital melt-down, which has its origin in the United States of America’s mortgage crisis. The fact of the crisis seeping through our national border to affect our very existence has been known by many except those who should know and are paid to know, in the first place. And why they chose to play hide and seek, still confounds the logically minded. What is, however, important now is to look at ways we can salvage the situation so as to keep businesses going now that our pretensions have fallen flat on the face.

The world or Nigeria is not new to economic crisis which may result from any of the following situations either by way of shortages of goods or services as a result of over-demand, when companies can not meet up with supplies; or inflation when general price level for raw materials and finished goods rises faster and well above annual average; or as a result of recession or depression which is a situation given rise to by slow-down in economic growth, marked by a decline in orders, high inventories, low capacity utilization and lay offs of workers.

Nigeria in particular has experienced all the above stated factors over the years except, arguably, recession or depression. We have had a fair dose of shortages in the 80s may be as a result of the way the economy was being managed then with heavy government involvement. Just as we have had to perpetually contend with inflation which is still present with us till date.

Before this current crisis things have changed for the better in the way the economy is being managed. The economy has been deregulated. Government has divested from most of the concerns that hitherto created bottle necks in the supply chain of goods. How well this approach to running the economy has been is another kettle of fish, however. But of immediate concern is how we can best manage the present crisis.

Before proffering some strategic options, we need to ascertain that we have on our hands all the economic situations as in shortages, inflation and recession and or depression in Nigeria. It can be said that we do not have shortages as in the developed markets of the west, at least basic needs might be costly, but are available.

It is equally difficult to state that we are in a state of recession because the ingredients for recession are not too visible, at least, for now. Some countries in Europe have already declared recession. In Britain, prices of goods are already driving down.

Arguably, the only factor present with us is inflation and economic instability which has to do more with poorly formulated policies and halt-heated application of same. This situation has been long with us and is not about leaving us. So how do we manage it to our advantage, particularly the businesses?

The very first strategy to pursue in times like this is policy consistency. Nigeria has never had a stable policy on any thing. No one policy has ever lasted up to five years in operation. There are some that were even changed as soon as they were made. Policy inconsistencies and lack of basic guidelines in some key areas as well as official tardiness has combined to create instability in businesses’ plans. Just as lack of state plan from which business can draw from and decayed infrastructure has made the operating environment hostile. A good example of official tardiness that impact negatively on businesses is the ugly drama playing out at the port by the name ‘port congestion,’ which is another shame.

Strategic option number two is to look inward and take advantage of local resources both material and men, which is in abundance here. Let us look back to the nineties when our businesses suffered divestments by the west, leaving Nigerian managers in the saddle. Companies like Lever Brothers as it was then called, Guinness Nigeria plc, Nigerian Breweries to mention a few, did so well in their respective areas of business. They recorded growth and expansion to the envy of the run-away investors, now back.

Our businesses are not wanting in the area of product development with local content base. For example, in the 1980s, NBL came up with a soft drink called ‘Green Sandy’ which suddenly disappeared from the market without trace. The performance of our banks in this area is legendary. More of this innovation will leverage us from the hostile global economic environment where we are too technically weak to compete.

One other area to look at is pulling together of resources to fund some special projects of common value and interest just as the banks did in the area of security recently. Research projects in area of raw material sources could also be jointly funded.

Rather than raise prices endlessly, businesses should take the option of concentrating on those products that gives higher returns but at a moderate cost. For example, Cowbell Milk introduced sachet milk to reduce cost of packaging and yet, has everyone taking milk.

Lastly, it will be appreciated if heavy investment is made in the area of infrastructure. Our roads remain in pretty bad shapes. Energy power is completely out with PHCN refusing to give up power it has held on since it came to be. The education sector remains comatose. The communications sector is having a field day short-changing subscribers on the cheap excuse of having to cope with hash business climate.

Just how do we go forward and when are we going to behave?