How Nigeria Lost The Chance To Create One Million Jobs In 2021 - THE DAILY CRUCIBLE

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Friday, July 15, 2022

How Nigeria Lost The Chance To Create One Million Jobs In 2021


                  •Dr Gbenga Adeoye



The Daily Crucible | Friday, July 15, 2022

By Dr Gbenga Adeoye


I hear stories of how young Nigerians leave in droves to other countries in search of greener pasture. There is hardly a week without a call coming from people who want to relocate. Some have good jobs and in their case, it is about looking for another working system.... Systems that are predictable...with Public wealth. 

Most of those leaving are people who concluded there is no hope for them here.Their perception may be justified based on their experience. Having laid this foundation, it is important to itemise things we must stop forever and things we must do urgently.

I was privileged to know entities set up with less than N10b from land to Equipment and initial working capital now creating about 1000 direct and indirect jobs. If we look at  the N20,000 meant for 1,000 youths in 774 local government for three months, it would have amounted to N46,440,000,000. By adding just N13,560,000,000 it would have amounted to N60b.

OWe could have set up  six factories based on comparative advantage in each geopolitical zone.Some argued with me that...oh...Government cannot run any business successfully ...The answer is NO.We could have handed it over to Professionals even if they are foreigners. As a matter of fact, we can ask them to double capacity every 5 years by establishing one more in the respective zone.

Empirical Data available to me shows clearly that entities established with up to N10b could generate over 20b revenue annually. Instead of 774,000 people to get N20,000 for three months and thereafter return to poverty. There is a better option in perpetuity. We could have successfully mop 1m people out of unemployment forever through direct and indirect jobs.

Assuming we flow along this direction of long term and enduring policies, It means that by 2026, if we are able to double that expansion, another 1m employment would have been created. I know this is a possibility and I know it is not Rocket  Science and I know many intelligent Nigerians who knows that this is achievable without needing any Rocket Science or some sorts of magic...Just critical thinking and implementation. 

Giving N20,000 or any of such amount for three months does not eradicate poverty.
I have seen with my eyes, direct investment in serious manufacturing sector with figures less than the N10b doing turnover in excess of the projection I stated above....Most Financial  Consultants will be my witness on this fact.

We could also say, for 10 years, all tax payable would be ploughed back into a plan to double the business and employment every five years. Hence the Tax Holiday will be to achieve massive creation of jobs. Imagine we do this consistently for 20 years...Just with the seed investment of  N60b , we would have  successfully reduce unemployment by 16m ..( Year One 1m jobs, year five 2m jobs, year Ten, 4m jobs, Year  Fifteen 8m jobs, Year Twenty 16m jobs.)

This analysis is based on the current challenges with power .If we deliberately and aggressively address power,  it means we could do more as cost of energy would have reduce and as such, the capacity could increase leading to higher rate in terms of expansion every five years.
China actually embarked on these type of aggressive setting up of factories by providing interest free loans to companies to do this.Imagine we say instead of paying back..just keep expanding. They were able to make 100m Chinese millionaires and they are not stopping at all.

Another way to do this is by promoting Vertical Mergers which is a merger of entities producing complimentary goods or providing complimentary services to achieve economy  of scales.

I therefore urge whoever becomes the next president or let me say all the Presidential Candidates to start collating data on the following : 

What can we produce or do in each Geo Political Zones...? South West, South South, South East, North Central, North East and North West?

What is the volume of raw materials available in such areas.? What type of skills do they have in abundance there?

How much do we need to set up a standard company with collaboration with Nigerians in diaspora in such a way that each factory can create 1000 direct and indirect job?

How best can we structure the entities legally with water tight clauses to avoid political influence and nepotism that will result in  mismanagement that characterised government owned entities in the past.( Nigerian Airways as an example of failed Government  business but we can safeguard such failure now )

How do we ensure that state government get actively involved.?They own the land anyway?

Let me conclude by stating that as fearful as it may sound to most Governors (excluding Lagos, Ogun, Rivers, Delta, Akwa Ibom, Kaduna and Kano and perhaps any other state with reasonable IGR). We can close our eyes and in my considered opinion I think we should plan to close that eyes and do it soon and  foreclose sharing in a given month.

If we decided that one month every year for the next 5 years, we would not share anything directly to any state account or local government but this funds will go into a trust fund that will be used to set up enduring factories and entities such as mentioned above...Then we would be close to our deliverance....We may say 20% of what is available for sharing will be taken out for this purpose. Imagine in months when we share N600billion...our N60billion is just 10%. What a wonderful success that will follow !

Safeguards from corruption will be that we would not  keep the money in any fixed Deposit account but to start working immediately with time table set for each milestone.( Or else some guys could start collecting cash interest into their pocket  for the fund to remain idle for years.)
State Governors can be asked to set aside land for factory  clusters considering what is good for the kind of comparative advantage of their respective states in each local government.

 As we focus on the coming generation by the end of 2050, which is just 28 years from now, ( it is not far away...1994 was 28 years ago..We watched Tunishia 94 ...it is like yesterday) each local government can have entities that can comfortably employ most of the youths.

If 20 year could give us 16m jobs, every five years we double the base for each year...by end of 25 years...we would have 32m jobs...By end of 30 years we would have 64m....If we started now...by 2052 ...64m jobs would have been created.We must be deliberate with affirmative actions.

There are low hanging fruits we can attack immediately. This is doable if we set out for it.

Finally, my projection of generating revenue of over N20billion with an entity set up with N10bilion is modest based on what I know.Am also sure many people in Nigeria also know this.

While we pursue this, I want to beg our people in government to be consistent with good policies.Stop all forms of harassment of businesses either on the road or in their premises. Encourage Friendly Tax Compliance mechanism like VAIDS introduced by Kemi Adeosun..Even though it is painful that FIRS slept off on this and woke up five years later to start talking about VAIDS.

I will rather suggest we introduce a second scheme of VAIDS...to bring additional people on board ..If you do not know what to do...Many of us love this country we are  willing to offer free service to move the country forward and those who thought the policy out are alive and  reachable...We need collaboration with those that have served before now to revive good policies that are dead.

In the words of Mr Kayode Sofela (a legal ICON), on Friday 8th July, 2022 during a mentoring lecture in Victoria Island Lagos, we must embrace Design Thinking by having proper understanding of the  problem , leading to ideation and we must subject those ideas to test but we must implement same using the information available to us while defining the situation to Chart a course of action from among the alternatives by thinking on our fit and out of the box.

Toyota has one of the best advert I love. 'Good Thinking Good Product.'

We must think out of the box and the time is now. Like the youths will say. We move but I will say, let us move with soeed.

Dr.Gbenga Adeoye holds a PhD in Management Accounting, a Bachelors Degree in Law( LLB).

An MSc.in Banking and Finance, a diploma in Criminology and Security Studies, 

He was among Law Graduates admitted to Queen Mary School of Law for Master in  International Business Law at the University of London in 2020.

He is an Associate of the Chartered Institute of Arbitrators of UK and Nigeria (ACIArb)

He is a Fellow of the Institute of Chartered Accountants of Nigeria.(FCA) and a member of International Federation of Accountants ( IFAC).

He is a Fellow of The Chartered Institute of Taxation of Nigeria.( FCTI)

He was part of  3 Nigerians trained at Harvard Business School, Boston USA  on Innovation and Building New Businesses in Established  organisations in 2011 along with other CEO's and Heads of Strategy  from multinationals all over the world.

He is the founder and Principal Partner of Gbenga Adeoye & Co.(Chartered Accountants)

He is a member of Egba Economic Summit and Nigerian Economic Summit Group.

He is a member of  Professional Practice Committee (PPC) of the Institute of Chartered Accountants of Nigeria.

He is also a contributor  to National Policy on Taxation, Development Economics  and Good Governance.

He is the founder of Gbenga Adeoye Foundation; an NGO focused on the eradication of poverty, ignorance and sickness in Nigeria especially in the rural areas.

He is Passionate about Social & Economic Development of Africa and Nigeria.

He believes the quality of people in leadership determines development in any country.

He can be reached via e mail : dga@gbengaadeoye.com

TEL : +(234)8034050773

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