Daily Independent (Lagos)
Ernest Shonekan
3 July 2009
document
Lagos — It affords me great pleasure to be with you this morning and I would like to begin by congratulating the council members and indeed, the rank and file of the members of the Nigerian-British Chamber of Commerce on yet another milestone in the history of the Chamber, the commemoration of this year's business day. What the Chamber seeks to accomplish by marking the business day is well known to many of us. Suffice it to say that it is a day set aside to reflect on, ponder the prospects and reaffirm the trade and investment relationships between Nigeria and Britain with a view to strengthening these for our mutual benefits.
It is particularly gratifying to note that the Chamber has kept the flag flying by marking this business day over the years. I would on this occasion like to impress it upon the Chamber to continue to intensify its efforts to chart a new course for promoting trade and investment flows between our two countries.
There is no denying that there is considerable scope for doing more in terms of fostering trade and investment between the two countries. What is more, it is widely acknowledged that whichever sector of the Nigerian economy we look at, opportunities for foreign investment and trade are immense. Britain with her deep historical, cultural, economic ties with Nigeria is well placed to harness these opportunities. Needless to say that both sides must take the initiative to explore and appropriately harness these opportunities.
As the letter inviting me to this occasion clearly indicated one theme of this lecture is, "Coping with Global Recession" The Nigerian-British Experience". So much has been said or written about the genesis and the impact of the global recession. As some of us would recall, this is a crisis that originated from the financial services industry. The combined effects of reckless lending and the availability of easy credit in the West, the globalisation of financial services and the absence of an effective regulatory framework and institutions for cross- border financial transactions were the remote causes of the recession.
Its impact has been severe worldwide. Trade and investment flows are declining, unemployment is soaring while public finances are deteriorating, among others. This is particularly true of the United Kingdom and the West as well as other major economies.
The World Bank has estimated that 53million more people (most from the developing world) will be plunged into poverty as a result of the global recession. Economies that are primarily export-driven such as Germany and Japan have been hard hit as the recession in the consuming nations has negatively impacted import demand. Concomitantly, protectionist policies, which are undoubtedly antithetical to growth, are being promoted.
What is particularly remarkable to note here is that governments around the world took bold and decisive steps to introduce fiscal and monetary stimuli to arrest the decline in economic activities.
Today, banks in the US and UK now have substantial government ownership as a result of the injection of tax payer funds into these institutions to shore up their capital and ensure that they do not fail.
A recent headline in the respected Economist Magazine of London proclaimed the descent of the Anglo-Saxon version of capitalism and the ascendancy of the French version, which emphasises more of government control.
The headline-Europe's New Pecking Order-included a lead article which asserted that Europe and France in particular, with its more efficient public sector, higher taxes and heavier regulation appears to have fared better under this recession.
Here in Nigeria, some analysts had assumed that the country was immune from the global recession.
Today, we know better. The fact that our economy is largely dependent on the export of crude oil enjoins it upon us to be prepared to take appropriate steps to ensure the economy is in a position to effectively cope and wriggle out of the recession. The choices are not easy, but they must be made. And that is a test of leadership in today's world.
Distinguished ladies and gentlemen, what I am saying here is that it is common knowledge that both Nigeria and Britain are impacted by the global recession. While the magnitude of the impact may be different, both necessarily need to take steps to halt economic decline and promote growth acceleration. Britain as part of the G20 nations has implemented both fiscal and monetary stimuli and it appears that the economy, may be approaching the bottom of the recession after which there will be recovery.
Nigerian policy makers can of course, consider launching a stimulus package that can help shore up the nation's economy. In particular, a stimulus package that has infrastructure as it focal point can only bode well for trade and investment in Nigeria.
For all practical purposes, it is fair to say that Nigeria faces the challenge of ensuring that the economy is competitive in terms of attracting local and foreign direct investment. The cost of doing business continues to sky-rocket as businesses have to provide power, water, transportation and other infrastructure directly.
The environment simply put, needs to be more supportive of business Activities if we are to be able to boost trade and investment between Nigeria and Britain. I would hope that this Chamber will continue to intensify its advocacy efforts before policy makers such that the policies that are supportive of trade and investment can be pursued.
I have no doubt in my mind that the speakers lined up to address this theme, Prof. Pat Utomi, distinguished academic and business consultant and Ngozi Okonji-lweala, former Finance Minister and a top executive at the World Bank are well qualified to address this topic and lead the discourse today. I would hope that we would all be enriched not only in regard to what we know about this global economic recession, but also on what Nigeria needs to do to get out of it.
Let me also take a brief moment to talk about the other lecture to be given by the Director-General of the Nigerian Export Promotion Council (NEPC) on "How to Export Nigeria out of Global Recession
As I indicated earlier, Nigeria's economy is largely dependent on the export of crude oil. The global recession has of course, implied a reduction in the global demand for crude oil resulting in falling prices until the last few weeks. To this can be added the crisis in the Niger Delta region which has severely constrained Nigeria's ability to produce oil and gas.
The picture that emerges from the foregoing is the need to diversify the economy or put simply, the need to focus on building other engines of growth for the economy.
For me, the question is how can we design an industrial policy that can help promote export-led growth from the perspective of the non-oil sector?
This is at the centre of any efforts or initiatives at promoting export of non-oil goods.
It, is widely acknowledged that it is challenging, but not insurmountable.
It is never more so at this time when so many nations around the world seem to be adopting trade protection measures as they strive to stimulate their economies out of recession. We need to work with other nations to promote policies that are friendly to trade and we cannot afford to wait. As the late President Lincoln of the United States said, "Things come to those who wait, but only the things left by those who hustle".
The starting point is to invest in infrastructure and significantly reduce the cost of doing business in Nigeria: it also includes focusing on technological acquisition and innovation such that the quality of our offerings can compare favourably with the best around the world. Having an appropriate policy environment that supports export-led growth is of course, a sine qua non.
Again, I am confident that the guest speaker is well qualified to address this topic.
I want to challenge and encourage all of us to take a keen interest in the discourses of today so that we would not only be enriched in our knowledge, but also we can propose sensible policies for the overall benefit of the two economies.
Again, I am pleased to be part of this and it is my pleasure to welcome all of you.
Thank you.
Shonekan, former Head, Interim National Government (ING) delivered this lecture at the 2009 Annual Lecture of the Nigerian-British Chamber Of Commerce, held in lagos, recently.
Be the first to Write a Comment!
Copyright © 2009 Daily Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
