Economic growth: Agbakoba proposes financial sector, trade policy reforms …Says Nigeria’s maritime industry can generate N7tr yearly
Former President of the Nigerian Bar Association NBA, Dr. Olisa Agbakoba SAN has proposed a two-pronged approach covering legal and institutional reforms that would form the basis for the emergence of the next Nigeria’s economy, insisting that the country cannot afford to build a new 100-storey house on an old bungalow foundation.
Agbakoba also said that Nigeria’s maritime industry, which is potentially the largest economic sector outside of hydrocarbons has the capacity to generate over N7trillion annually and creating over four million jobs over a five-year period, citing that the Inland Dry Ports IDPs, established in six geopolitical zones of the country but which cannot function optimally due to poor transport infrastructure.
In a two page-write-up entitled: “Legal and Institutional Restructuring for the Next Nigeria”, Agabakoba said that the development law is a public policy tool that intersects law and economic development, insisting that there is a nexus between law, regulatory institutions, governance, economic development and national welfare.
The legal luminary and principal partner of Olisa Agabakoba Law OAL firm also argued that Nigeria’s legal and judicial framework is hopelessly outdated and needs an urgent review to meet current challenges, regretting that governments generally fail to link legal policy, economic development and governance.
On the financial services sector, which he described as the oxygen and lifeblood of a strong economy, Agbakoba however said that the sector ought to consist of three key institutions including the banks, the National Credit Guarantee Agency, a Development Bank and the Central Bank of Nigeria CBN.
According to him, under this model, the banks lend would to the real sector of the economy and consumers and ensure the economy is stimulated, adding that in Nigeria, it is doubtful if the banks have performed optimally, delivering on cash to the real sector and consumers, as they seem to be engaged in short term lending including treasury bills.
He said: “The result is that the economy is anemic. A banking policy that delivers resources to the economy is needed. In the US, the Glass – Steagall Act and Frank-Dodd Act focused banks on the proper role to lend to consumers at low-interest rates. The second key FSS institution is the National Credit Guarantee Agency. This is absent in Nigeria.
“The National Credit Guarantee Agency supports viable business proposals. When viable business proposals are guaranteed, the economy gets stimulated and expanded and that gets converted to goods and services that are sold on to consumers. The economy will benefit from the establishment of the National Credit Guarantee Agency. The third FSS institution is a Development Bank to lend to the vital sectors of the economy. The Development Bank of Nigeria is undercapitalised and so the CBN plays a distorted role. The Development Bank of Nigeria needs to be properly capitalised so it can support the economy. The CBN is the fourth FSS institution. The CBN as presently constituted is overburdened with far too many things including monetary policy, banking supervision and banking”.
He also called for a review of Nigeria National Trade Policy to stimulate local industry, grow export and reduce dumping of foreign goods, adding that there is also need to strengthen the National Office of Trade Policy, among other.
In addition to the review of the nation’s trade policy; he also said that there is need to review the nation’s Bilateral Investment Treaties BITs, saying that these treaties are part of a country’s trade policy.
“Nigeria is a signatory to over 30 bilateral investment treaties. The recent arbitration awarded to Process and Industrial Developments Limited P&IDLhas raised the question of how fair it is for Nigeria to have arbitration clause with a foreign seat”, he also said.
For the maritime industry, he observed that despite the enactment of the Coastal and Inland Shipping Cabotage Act 2003, Nigeria loses an estimated N7 trillion in the sector, as foreign vessels trade in violation of the Cabotage regime with the attendant capital flight.
He therefore called for immediate enactment of several critical bills pending before the National Assembly, which include the Petroleum Industry Bill PIB, the Ports and Harbour Bill, Maritime Zones Bill, Ocean Bill and a review the National Shipping Policy Act of 1987 to facilitate the legal framework to move the maritime sector to the next level.