n the last one year I have highlighted a few worthy developments in Nigeria, but for the most part I have been more critical of our government for their failures in various areas. Given our ongoing experience with power outages in recent weeks one can be forgiven for thinking that Nigeria is sinking into the abyss. But as they say, it is always darkest before dawn. I have never doubted the sincerity of our president in his effort to transform Nigeria, though in one of my articles last year (President Jonathan…You have failed me) I argued that in spite of his sincerity, the job might be too big for him as he lacks the passion to push his transformation agenda through. I still remember the euphoria and the great expectations when we voted for him in 2011, and how within two years our collective hopes dissolved into hopelessness, despair, gloom, anguish, and depression of unprecedented proportions.
2014 represents the dawn for Nigeria on all fronts. First, the year began with the much talked about Jim O'Neal's latest coinage of the "third eleven"; a classification of some emerging and frontier markets that included countries like Nigeria. I was, however, not thrilled when I saw that Nigeria was grouped alongside Pakistan, Bangladesh, etc. A much better acronym was "MINT" which stands for Mexico, Indonesia, Nigeria, and Turkey. I will get to this later. This week, President Jonathan has been rolling out several programs that have finally gotten the attention of critics like me. First was the Nigeria Power Financing Conference, which attracted over 300 delegations and investors from the World Bank and 29 countries: Then came the Mortgage Refinancing Program, and then, the Nigeria Industrial Revolution Plan and the National Enterprise Development Program.
To be sure, Nigeria has seen several such initiatives in the past that never amounted to anything. I do suspect however that this time the government is quite serious about coordinating these programs in order to achieve a sustainable result. These were the sort of coordinated efforts I have repeatedly called for in the past three years, which necessitated my high criticism of our government when I didn't see such programs. Well, you can always depend on our government to do the right thing after trying everything else, but it is always better to be late than never. I am certainly one of those who believe that the potential for Nigeria economically is boundless, but I have consistently maintained that nothing significant will happen until our government has done the needful in providing adequate electricity that will power these much needed industrial resurgence. It is not the Dangotes and the Julius Bergers that I am worried about, it is the micro, small, and medium enterprise that I yearn for their empowerment.
Nigeria has about 17 million micro, small, and medium enterprises. Most of these businesses are barely getting by even where they could clearly be very profitable. The extra cost of providing power eats deep into their potential profits. Imagine where these SMEs have adequate power to operate on, and each hires an additional employee to run their business, it amounts to another 17 million jobs in Nigeria. In America, Germany, and other developed countries the SMEs account for upwards of 70% of the economy and job creation. According to World Bank and IMF, Nigeria is losing about two percentage points of GDP growth each year as a result of infrastructural deficit, especially in power and transportation. I honestly believe the true figure is about double the World Bank figure. The other major problem facing SMEs in Nigeria is lack of access to funding, or the exorbitant rates the banks charge when they are willing to lend.
Here are the few things this government is now doing that has finally got my attention. In launching the National Enterprise Development Program, the government has now showed its commitment to zero in on this industrial development plan by first, decentralizing the agency that is empowered to actualize the program. Instead of going to Abuja to seek help, any small business that needs the agency's help can now go to their state capital, closer to their area of operation. A better funding and coordination by the industrial development bank which provides low rates to small businesses is a huge step in the right direction. We have already seen how much difference such funding can make in our agriculture sector where the minister has already done a remarkable job of empowering local farmers. There is no doubt in my mind that this renewed effort to coordinate our efforts at industrialization with that of improving the provision and financing of power will go a long way to put the transformation agenda on firm track.
But here is a word of caution and an honest advice from me. We still need a lot of money to make this happen. I have argued in previous write-ups that Nigeria needs at least $10 billion annually for ten years straight to sufficiently address our power problem. According to our Minister of Power, even if we are to quadruple our power generation, it will not be enough to meet our suppressed demand. I have argued that we should target nothing less than 50,000 megawatts. As for all the hundreds of delegates and investors that attended the power financing conference, at the end of the day, if we are lucky we might see a couple hundred million dollars here and there, but nothing close to the $10 billion we actually need annually. I therefore urge our government to consider something more radical, outside the box, like a 5% dedication from all our allocations to federal, state, and local governments, for the next ten years. It will surely go a long way to supplement whatever foreign financing we may obtain, especially towards the building of the much needed new power stations. We know that the Independent Power Producers cannot deliver electricity to the national grid before 2017, but our government can.
Thank God for the improvement in gas production in Nigeria, our government can concentrate on building gas powered power plants, and coal fired power plants, while the highly technical and more expensive alternative energy sources are left to the foreign investors. Whatever the case, whichever way our government decides to go about this, provided it is not just another gimmick that fades away over time; I can see a true beginning in this country, one that can put us at the level we rightfully belong. Remember that group MINT where we now belong, well, our nominal GDP remains at less than a quarter of countries like Mexico. Indonesia and Turkey are at least more than double our GDP. We are just there because of our population, and as a token to Africa, much like South Africa was unofficially included in the BRICS. But with a well coordinated national enterprise program, Nigeria can truly give these other countries a run for their money within ten years. I have that much confidence in the ability of Nigerians to make this happen, but only if our government keeps their promise to remain alert on this issue. It is my wish to see "Nigeria Rising" in my lifetime; I thank God for this awakening even now.