How Nigeria invests the remaining $34bn left in her foreign reserves will determine whether we come out of this coronavirus crisis an industrial producer or as a indebted beggar and impoverished economy

By Ayo Akinfe

(1) With Nigeria receiving no revenue at the moment due to the collapse in both the price and demand for crude oil, we are facing a dilemma. How do we generate income to keep the economy going when nobody is interested in buying the one commodity that we rely on for survival?

(2) Any thoughts of meeting the projections of the 2020 budget are utopian. In January, President Buhari signed a budget of $28.8bn into law but at this rate, we would be lucky to have $10bn available to spend. There is indeed fire on the mountain

(3) For me, the way forward is to produce our way out of this crisis by stepping up the production of goods and services that will generate revenue. Unfortunately, Nigeria currently manufactures very little and that simply has to change in 2020 if we do not want to become another Somalia or Afghanistan

(4) So far, the International Monetary Fund, World Bank, European Union, US and several leading economies like China have been making some good noises. I think what we should do is tell them to just fund the 2020 budget of $28.8bn and we take it from there

(5) Nigeria is actually fortunate to have a $34bn war chest in foreign reserves. For me, that is our lifeline out of poverty. We simply need to use that capital to build our industrial base by buying as many manufacturing concerns as we can to kick-start our comatose economy

(6) In the past, we have squandered the contents of our foreign reserves on salaries and recurrent costs. That nonsense has to end today. I would ringfence $30bn of our reserves and use it solely for the purchase of going concerns

(7) Fortunately, there are a lot of steel producers, car manufacturers, airlines, railway carriage manufacturing companies, aircraft manufacturers, ship builders, etc going for cheap. I would spend that $30bn purchasing as many of them as possible. These companies would then bring their expertise, technology, skilled workforce, etc to Nigeria to create jobs, generate wealth and help us diversify our economy

(8) Our foreign reserve situation is actually not too bad as we are number 50 in the world. Only four African nations have bigger reserves than us - Libya ($71.6bn), Algeria ($62bn), South Africa ($54.7bn) and Egypt ($45bn). Ideally, Nigeria’s reserves should be the same size as that of say Indonesia ($121.2bn) or Vietnam ($81.2bn) but alas, we have to deal with the reality of what we have. If we spend that $34bn judiciously, we can get out of this mess better than we were before the crisis

(9) Just to give you an example of what I am taking about, Britain’s Liberty Steel is facing financial difficulties and would be available for purchase at a bargain basement price. This is company with plants in Dubai, Singapore and Hong Kong and factories across the UK in Rotherham, Stockbridge, Brimsworth and Wednesbury. It also owns an Australian subsidiary called Arrium. Liberty Steel focuses on ferrous and non-ferrous metal trading, metals recycling, steel and aluminium production and engineering products and services. Just imagine how many jobs and foreign exchange such a company would generate for Nigeria. Earlier this week, I floated the idea of buying Virgin Atlantic Airlines. By my estimation, if we bought 20 such companies with our $34bn, we will be home and dry

(10) Nigeria should be purchasing companies like Liberty Steel and getting them to take over facilities like the Ajaokuta and Aladja steel plants. They should then open dozens of other plants across Nigeria to furnish their global supply chain. If this is repeated across the economic spectrum in maybe about 12 different industrial sectors, this coronavirus pandemic could end up being a blessing in disguise