“Over decades, the commitment of funds to the production of fuel and its derivatives is well above that which is required for adequate power supply in the nation. The availability of steady power supply in turn translates to less fuel being demanded by the regular users. With the advent of efficient road network, less fuel will be demanded. The over time implication of this is that less fuel production would become operational as less fuel would be required or demanded and cost of its production would go down leading to a marginal profit which can be directed to other needful areas as subsidy or capital.“
THE backward state of our nation is, to a large extent, hinged on the incapacity of her not being an eligible candidate for international competition. Our position in any international productivity or economic influence is like that of the back benchers of a classroom.
The outstanding qualities which allow a country to qualify on international competition grounds from the production or industrialisation umbrella is price; a function of cost at all levels and quality; as well as technology. However, the usability of a product to meet consumer expectation is of utmost consideration.
The overall cost is not only a factor in the production of goods but also the environment (our nation) and the undergirding policies. A product produced in China is unquestionably affordable compared to prices of goods produced in the nation. Individuals, production firms and agencies, indeed all Nigerians should be appalled by this scenario. The price in question is after taking into consideration high import duties, corruption at the customs, sundry port levies and all manner of extortions in the chain before the goods get to the end users. That this is what obtains demonstrates that we are far from the Nigeria of our hope and striving. The agricultural sector does not fare any better unlike in the days of old when cocoa and groundnut gave us an edge and put us in the frontline of international competition.
The reason behind this may not be farfetched.
The cost of production in most developing countries like ours deserves special mention because the cost incurred outside the walls of producing companies revolves around the same figure that is within. This is wrong and it is the first major setback in the production line as it affects the end price.
Most estate developers who go into residential property business find themselves providing most things a local government should ordinarily cater for. How do I mean? Mr. Hakeem Ogunniran, managing director of UACN Property, has been reported as giving an example of how 30 to 40 instead of about five per cent of the budget prepared for a residential development for low-cost housing goes into road construction to the site, water supply, electricity and a host of other infrastructural provisions which should, in actual fact, be the full or partial responsibility of the government. What most commercial and industrial concerns spend on infrastructural development is even higher. This is reflected in the end price of the product.
The one word that covers the outside-industry-wall costs is called infrastructure. Although a number of definitions is attributed to this but for the purpose of this article, I choose to describe infrastructure as all provisions, tangible or intangible, provided either by the government (mostly by them), or individuals or association of individuals, or partnership of both that positively enables dwellers’ activities and also act like lubricant to the dwellers of such of nation thereby making possible for less cost and stress to be incurred within and outside their dwelling or production compounds and making living easier and its standard higher.
The definition above is encompassing. However, worthy of note is the fact that it likens infrastructure to a lubricant and intangible infrastructure is policy. Thus polices are as well a type of infrastructure.
In a paper presented at the 43rd annual conference of the Nigerian Institution of Estate Surveyors and Valuers, March 2013, Dr. Ghaji Bello, the acting director-general, Infrastructure Concession Delivery Commission, said that for ‘’every dollar spent on public infrastructure investment, the gross domestic product of the country will increase by approximately 0.05 to 0.25 dollars’’. Picture what a thousand dollar will yield, a million dollar will yield and a billion dollar will yield.
On the other hand, the second Vice President of NIESV, Dr Bolarinde Patunola-Ajayi, made the disclosure that infrastructure is the underpinning on which strong national development is built, while also speaking recently during the 43rd annual conference of the Nigeria Institution of Estate Surveyors and Valuers (NIESV) held in Benin. In a lecture entitled: ‘‘Infrastructure development and economic empowerment.’’ He spoke on the premise of a survey report on infrastructure and household by the Lagos State Central Office of Statistics 2006, which revealed that 90 per cent of households in Lagos relied on street vendors and private neighbourhood for water and only about 39 per cent treat their water for safe drinking. He also made mention of facts which emerged that based on information provided by the Global Competitiveness Index (2012-2013), Nigeria ranked 130 in overall infrastructural development. Deducible from the foregoing facts is the pointer to the fact that the overall position of our infrastructure state is one close to ground zero.
Moreover, in an industrial or production environment, the basic infrastructure required outside policy is that of road and electricity which are evidently grossly inadequate.
In as much as we have inadequate roads, the state of even the ones we have is quite appalling. The road network is terrible and poorly rated on a scale of efficiency as the lubrication that should be inherent in an infrastructure.
A highly efficient road network gives birth to highly effective road usage. There are a number of roads and drainage constructions going on especially in the Lagos State, but the focus point should be on their strategic connectivity and network else, more money would be needed on its maintenance because cars have more reasons to remain on the road which in turn creates or contributes to wear and tear, larger fuel consumption and production.
Planes are piloted through shortest possible distance in space; ships are directed in the same line in the ocean. The efficiency creation strategy if employed in road construction would lead to cost-cutting effectiveness. If cars stay fewer hours on the roads, less fuel would be consumed or required. This will translate into less cost which will in turn result in marginal surplus at the federal level.
The president has personal or general wishes and has made endless promises concerning this matter. Unfortunately, each promise is always carried over to the following year which never ends. It is incomprehensible that our leaders do not seek alternative sources of electricity. We all know fuel is ready substitute for electricity in the nation as most appliance, devices and machines gets powered by it.
Over decades, the commitment of funds to the production of fuel and its derivatives is well above that which is required for adequate power supply in the nation. The availability of steady power supply in turn translates to less fuel being demanded by the regular users. With the advent of efficient road network, less fuel will be demanded. The over time implication of this is that less fuel production would become operational as less fuel would be required or demanded and cost of its production would go down leading to a marginal profit which can be directed to other needful areas as subsidy or capital.
Commitment at the federal level should be directed to electricity generation over the fuel sector. The reason is that it costs less over all. There are more light consumers than fuel consumers industrially and in other areas. A government with a reasonable standard of living by its citizens at heart who is indeed looking for a way out of various menacing problems most of which are traceable to the economic environment that our leaders have created for us should concentrate its energy on what most people need over what they only want. Giving solutions at the smallest cost possible is wisdom.
In summary, among the advantages of the strategies being shared in light of efficiency and effectiveness in road usage and also in electricity are that our standard of living goes up and cost is reduced at the federal level thereby creating extra funds for other projects required for the nation’s sustainability. It also supports the eco-green movement and lots more.
There is a mafia quote that says ‘every matter has the handles’. For me I do believe ‘’every matter has two handles or more’. Developing countries often fail at getting revenue from projects because projects hardly get completed and the completed ones are poorly managed. Thus it is best for such nations to find ways to reduce cost and diversify cost saved to other needful areas of their economy.
The impact of exportation outweighing importation is that it gives advantage of a positive drastic shift in the economy because exchange rates become friendlier and GDP gets an upward pull. Hence more and more international businesses as countries with same currency or close exchange rate do more business with one another than those of a wider gap.
Thus, it is not enough for a nation to go into production for its citizens alone as the target consumers without actions geared towards exportation and international competition. The end of such is an economy devaluation and relegation.
This piece was written By Adebiyi Adeyemi.
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”