The Business of Policy Making, By Ifeanyi Uddin

Last week, the federal government upped the policy ante. In the wake of the recent launch of a national automotive policy, its inauguration of the Nigeria Industrial Revolution Plan and the National Enterprise Development Programme is nothing if not ambitious. According to one newspaper report, “both programmes, initiated and spearheaded by the Ministry of Industry, Trade and Investment, are aimed at launching the nation’s industrial revolution”.

Given the serious development challenges confronting the nation, it is hard to carp about a policy that aims to “build a great economy based on solid industrial sector, with well diversified minds and sources of revenue”. Still, it is difficult to resist a question that is so contingent on the nature and timing of these policy measures. How much of this new policy thrust is part of a programme? What are the dimensions of this programme? Put differently, why is government implementing these programmes in the twilight of its current tenure? Without doubt, a lot more value could have been obtained off such important initiatives if they are implemented early. And how is government sequencing the implementation of its programmes?

Answers to these questions matter. Not simply because policy success is negatively correlated with arbitrariness. Nor because headlines events so close to an election year, suggest something different. It matters more because the mortality rate for government policy making is unsustainably high here. To take but one example both the NEEDS and NEPAD documents were no less visionary in their time. What has become of these and the lofty goals they were pledged to?

On a different level, ought we to worry that government is still bent on picking industrial champions? The response to this question is easier: yes. Because whereas we have examples of industries that have thrived in spite (indeed, because) of government’s inattention (the domestic movie industry until recently, and India’s IT sector are but two useful examples), it is harder to indicate successful industrial policy anywhere.

Besides, which is the more difficult challenge with domestic industry today? Is it the absence of an all-embracing set of policies? Or the litany of lets to doing business across the land? Government may well claim to be on the path to solving the power problem, which for decades has been regularly cited as a major component of domestic business costs.

However, where does land reform feature in all this? Land prices in Nigeria (on account of the burdensome provisions of the Land Use Act) are the highest on the continent (second only to Angola). And both the cost and processes involved in securing access to and use of land go a long way to holding back entrepreneurial activity here. Innumerable studies attest to the huge amounts of “dead capital” currently concealed in our rural communities because of improper titling arrangements.

Sadly, these are but a small part of a much larger story. On the strength of available evidence, in Nigeria, it takes 8 procedures (5 in South Africa) and 28 days (19 in South Africa) to start a business. Whereas here, the cost of starting a business (as a percentage of income per head) is estimated at 58.3, it is well below 1% in South Africa. Does this surprise? No it shouldn’t. By the time the number crunchers are done re-basing the budget, expectation is that we would have become a bigger economy than South Africa. But with private credit bureaus covering a little under 5% of our adult population (55.6% in South Africa), access to credit would remain a big problem here.

The list of reasons why it is more difficult to do business here, than elsewhere is near endless. But what these impediments point to is the need for painstaking reform across every sector of our lives. Some of these reforms may not show up in the newspaper headlines that might guarantee an incumbent administration more votes ahead of a general election, but they are likelier to deliver more mileage than the standalone plans and programmes that our governments are enamoured of.

Reforms to policing for instance are so important to contract enforcement in the country. At first blush, these would be about how the police gather intelligence, as it would be about how they deal with crime scenes. DNA and fingerprint evidence would matter just as much as authorised wire-tapping in a sting operation in securing convictions. However, the larger contract enforcement need is about setting our criminal justice system aright.

Here, the courts matter as well. Constant power would ensure that the courts are not the ovens that they currently are; while improving the ability of the system to capture proceedings in real-time. Additional reforms should aim at speeding up the turn around time for cases; and clearing existing backlogs. We could then hope to reduce the procedures for enforcing a contract from the current 40 (29 in South Africa) to a more manageable 10. While reducing the costs of and time needed for enforcement.



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