AGOA, Nigeria’s missed opportunity

Today, when we talk about maritime and shipping, it is almost impossible to remember that it involves not just import but also export. This is because Nigeria at present is a mono-export economy, mainly dependent on the export of crude oil for survival. We don’t even manufacture the toothpick we use to clean our teeth after eating, not to talk of exporting it.
Why is this so? Many reasons have been adduced. But let us look at the 1960s when we were a multi-export economy. Then we exported various cash crops in very large quantities. The Northern Region was known for its towering groundnut pyramids. The Western Region was known for supplying the world with cocoa, for which the famous Cocoa House at Ibadan became a poster child.The Eastern Region made Nigeria the world’s biggest exporter of palm oil – a raw material used not just to cook your OfeAku and Banga Soup delicacies, but also for the manufacture of a wide range of products, including soaps, creams, waxes among others.
But then something happened. Crude oil was discovered in commercial quantities, and with its prices being what they were in the 1970s we conveniently forgot about going to the farms to tend to our palm trees, cocoa trees and groundnut pyramids. Suddenly, the Shells, theMobils and Chevrons of this world set up their shiny offices in Nigeria and began paying us huge amounts of money to prospect for crude oil and to drill and export it. We didn’t strive to imitate the hard-work-ethic of these foreigners in the area of technology, but rather we hastened to drop our own hard-work-habits in agriculture.
A magical company called NNPC was formed whose major role, as far as I’m concerned was to just sit back, and wait till the international oil companies brought us the next paycheck for exploiting our oil. We were on a roll, living the good life. So good was life that then President Yakubu Gowon once complained that the problem of Nigeria is not money, but how to spend it. When, during those 70s, Nigerians suddenly decided that the country needed to build better houses, especially since oil money was flowing like water, the attempt to import (not manufacture) the cement needed led to what was famously known as the Cement Armada. Scores of ships arrived Nigeria, loaded with so much cement that there was no capacity in our ports for them to be offloaded. Money was simply everywhere.
Since then our economic fate seemed inextricably bound to the price of crude oil and whenever the price falls, our economy goes into a tailspin. At the highest levels of policy making in the country, the major indices used to chart the course of our economy becameour estimate of the price of crude oil. Well that sounds a lot like gambling, doesn’t it? It is sad when the fate of a country seems entirely bound by the price of a finite resource.
We have had chances to reverse this trend over the years and have had help from foreign friends, but again and again, we have blown our chances.
For instance, look at AGOA (African Growth Opportunities Act) which was initiated by US President Bill Clinton in 2000 to enable African countries easy access to the lucrative US market. Nigerian entrepreneurs had the chance to export over 6000 products to the United States, without having to pay a single dollar as import duty, between 2000, and 2015; but as you and I know, that opportunity was not utilized. It was only our crude oil industry that benefited.
AGOA represented an opportunity for Nigeria to create a new class of multinational small and medium sized companies like the Mittelstands of Germany. The German economy, which is the third most industrialized after the US and Japanese economies, depends not on its big corporations like BMW and Volkswagen, but on thousands of these small and medium scale exporters. What a mittlestand usually does is that; it picks a particular product; say generator bolts, as its product of choice to manufacture, and through specialization over time builds so much experienceand recognition in that narrow field that they become the go-to place for any company that wants that product in the world.
That is the chance that we missed with AGOA. We would have built our own mittlestands, and perhaps now we would have become a Second World economy (not an economy verging on Fourth World Status).
If I had the chance to be Nigeria’s president during this wasted AGOA period I would have created a Ministry of AGOA, the same way the Ministry of the Niger Delta was created.That ministry would have had offices all over the country devoted to holding seminars not only to sensitize the average Nigerian of the AGOA opportunity, but also to give them all the technical, motivational and entrepreneurial knowledge they would need to benefit from it. I would have created an AGOA Bank of Nigeria, specifically dedicated to providing loans to these entrepreneurs. In ten years we would have had a crop of successful SMEs that would have been exporting to the US and other advanced markets. Throughtraining, the AGOA SMEs would have become used to the stringent quality standards that these countries have for their imports. The AGOA ministry would have gone on to sign similar deals like AGOA with other big markets like Japan and the EU.
If such a thing had been done, life would have been better for us as a country today, because the falling price of oil would not have mattered so much to us, since we would have had about 6000 other significant exports. The pressure on our Naira would also have been less.
Anyway, that is all water under the bridge now. But with the new Buhari Administration, we hope that Nigeria has another chance as a country to come out ofFourth Worldstatus and enter Second Worldstatus. Already there are good signs, from the reawakened petrol refineries in Port Harcourt and Warri to the more constant power supply experienced in many parts of the country last month. If the Buhari administration continues making little improvements like these, then I think in four years time, we may be unto something significant. I am tired of our suffering as a country.