Double-digit growth will come – Okechukwu Enelamah
A key recruit to Nigeria’s economic reform team, Okechukwu Enelamah is a man of proverbs and patience. As befits a minister for trade and investment who took up his post in the worst recession for more than two decades, he is also a fully paid-up optimist.
One of his favourite proverbs states unarguably: “You can’t be taller than me and shorter than me at the same time.” This has a relevance for economic development as well, he explained to a packed conference of business students, meaning that “our perceived weaknesses may well provide the opportunity and motivation we need.”
A strategic sense, combined with new policies and systems, is helping to launch an industrial revolution in Nigeria, insists Enelamah. But forget headlines and spectacular announcements, he warns. New realities on the ground are more important: fast-rising local rice and wheat production and a new generation of petrochemical plants and oil refineries are changing the economic landscape.
Enelamah is close to vice-president Yemi Osinbajo. They are both technocrats who hail from Lagos, trying to get the worlds of business and government to work together. Enelamah started out as a medical student at the University of Nigeria, where he qualified with distinction. A decade later, a scholarship to Harvard Business School sent him into finance, first with Zephyr Management in South Africa during the Nelson Mandela years and then to establish his own private-equity firm, African Capital Alliance, in Nigeria. A decade later, it was the biggest in the country.
TAR: Your government is committed to industrialisation and cutting import dependency. How much progress are you making?
Okechukwu Enelamah: The ultimate objective is to create jobs, and to export and get foreign exchange. So there will be some things you need to import, like welding machinery and raw materials. One has to innovate and look for ways of producing more locally, because ultimately that creates jobs and adds value to the economy. But it can be dynamic, it can evolve over time.
For supporters of the ‘Washington consensus’, industrial policy is anathema, state intervention in the markets worse still. Where do you stand?
You need to give some credit to the World Bank. They work with governments. It is not necessarily intervention – we call it engagement – but it defines an important role for government. The type of industrial policy we embrace is saying that government has a responsibility to make choices on how you will support the private sector: policies that would support local manufacturing; monetary policy that would support things like foreign exchange; fiscal policies that would support green [projects].
Do you see dangers in some of the pro-market theology?
There was a concern that the World Bank, in supporting markets, did not care enough about the consequences in the short or even medium term. Because when products come flooding in and nobody is paying attention, a lot of imports are dumped. Every country has a responsibility to make sure it is not a victim of dumping, or of sub-standard goods or goods that can be manufactured locally.
Your recovery and growth plan has some very ambitious targets. Vice-president Osinbajo talks of raising $24bn in new investment by 2020. How realistic is that?
Depending on who you ask, they will say those targets are not ambitious enough. Look at the investment Nigeria needs for infrastructure, industry, services and employment. There are tens of billions [needed]. Last year alone, investments of $60bn plus were announced in Nigeria.
South Korea chose to go into shipbuilding and became a world leader. Where is Nigeria’s comparative advantage?
South Korea would be an extreme case where you decide to do lot of things at the same time […] iron ore, steel. In a competitive world in the 21st century, you can learn from others and refine your strategy. Our comparative advantage is agro-processing because we grow most of the things here. They are labour-intensive, and our labour is cheap. You also have to look at industries, whether it’s petrochemicals, light manufacturing or agro-processing. What is needed is to bring in the right equipment, give the right training to the people and motivate them by setting the standards.
Are you going to hit the target of self-sufficiency in rice and wheat by the end of 2018?
There is a great expression: ‘Don’t worry about when, worry about if.’ If you’re going to be self-sufficient in rice and wheat that’s already a victory, even if it takes 10 years. Trends are more important than levels. We are on the right path.
Some Nigerian policy experts talk of using oil to get beyond oil. Is that anything more than a slogan?
There are countries that have managed their oil right […] like Norway, where they have a big trust fund for their oil and they continue to do well in other areas. In Saudi Arabia, they are saying business as usual will not cut it, and they are going to fairly extreme lengths to try and correct it. We are in the recovery and growth plan, and are really committed to it, not just talking about propaganda. We have to implement the solution that diversifies us away from oil, while making use of the oil revenues to help that diversification.
Given you have a country of 180 million people with world-class oil and gas reserves, are your growth targets of 3-5% ambitious enough?
That’s why you have to look at the trajectory rather than a single point. Whether it’s 2.7% or 3.5%, it’s not nearly enough. Our target is double-digit growth. We’re planning to do 7% in the next couple of years, but then move to 10% to rebuild the economy. You have to give credit to this government […] we’re trying to be realistic so that people won’t say you over-promised. If we complete our infrastructure, reforms, industrial revolution and special economic zones, things will be mutually reinforcing so that it will create a very powerful virtuous cycle, and 10% growth will come. And we’re pushing hard.
This article first appeared in the March 2018 print edition of The Africa Report magazine