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 February 8, 2016 - 1:40 AM EST
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Nigeria's Economic Woes Rooted in Lack of Research

Nigeria
is often ridiculed as a giant in the sun. It is said to have abundant resources that are yet to be tapped. For close to three decades, the country has been talking about diversification of its economy. Each time there is an external shock, the noise about diversification gets louder but as soon as things get better, every one goes back to the old ways of doing things. As a result, no headway has been made in the bid to diversify the nation's economic base. Leaders and policymakers thrive on rent-seeking activities, and do not engage in hard thinking.

In the current crude oil price collapse,

Nigeria
is facing dwindling oil revenue, shortage of foreign exchange, and manufacturers, traders and others have said that access to foreign exchange has become a problem because the nation is not earning enough.

Yet, there are abundant natural resources the country can tap into and develop that could earn the country huge foreign exchange that could end years of economic stagnation. Apparently, one of the key factors missing in the Nigerian economic equation that no one is paying attention to is the lack of will to invest in research and innovation.

Government officials and companies operating in the country want to do things the old way. To Nigerians, it should be business as usual. None is ready to make a change or improve the process of doing things. Globally, research and development are at the centre of economic progress and change. Companies invest in research to improve their products in order to retain their position in the market place.

This is why you keep having new model of products. But this is not the case with companies operating in

Nigeria
. They continue producing the same thing year in year out. There are no innovations and the products they churn out cannot in any way compete with those produced outside the country.
Nigeria
is fond of half hazard policy implementation. The nation would have been saved several billions in foreign exchange if it had continued with its industrial policy of the early 1970s to late 1980s. Then
Nigeria
had the Volkswagen Plant, Peugeot Automobile, and Leyland etc. It had the Oshogbo Machine Tools and various steel plants across the country. Due to lack of foresight and needed research and development, these laudable economic projects were grounded.

Volkswagen was killed because the Japanese came to

Nigeria
, did their research and introduced what was known then as Panel Van. It was the same model with Volkswagen beetle, with one door but had air conditioner. It had a radiator that added to its cooling system. Because of the hot nature of the Nigerian environment during the dry season, many Nigerians went for the Japanese Panel Vans.

So, Volkswagen made a feeble attempt to counter panel van's incursion into its market in

Nigeria
by sentiment of 'There is no killing the Beetle.' Of course, the beetle was killed due to lack of market research. So the Japanese companies came into the country having done their research, introduced cheaper cars than Peugeot and others and took over the Nigerian auto market.

The phrase 'research and development' also R and D or, more often, R&D, according to the Organisation for Economic Co-operation and Development (OECD), refers to 'creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications'. Furthermore, Investopedia defines 'research and development' as 'investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Research and development is one of the means by which businesses can experience future growth by developing new products or processes to improve and expand their operations'.

It is unfortunate that Nigerian companies any time there is financial crisis, hide under the guise of raw material importation to ask for concession. Why in the world will a company exist for 10 to 20 years and not be able to source its materials locally? Take the brewing industry for instance. Why will they continue to depend on official source of foreign exchange when they could develop local source of raw materials by using sorghum, millet and other associated products? Why will the bread baking sector continue to import wheat and flour when they could research and refine the use of cassava flour for made in

Nigeria
bread? If Nigerians can eat Eba, pounded yam, why not bread made of cassava flour? Why should
Nigeria
be importing rice when offada and Abakaliki rice can serve the same purpose if refined and de-stoned?

The greatest challenge to

Nigeria's
industrialisation is that there is no close collaboration between Nigerian industries, research institutions and the universities. The questions this government should find answers to are these: What is the level of collaboration between private sector, industries and Nigerian universities? To what extent are Nigerian companies making use of research findings? Why are they not investing in research and development? How much funding is government at various levels committing to research and to what use are the findings being put?

It is widely known that major objectives of educational institutions are training, research and consultancy. During the process of developing new innovations and technologies, universities are likely to bring valuable resources into the process. Research institutions including universities, have vast areas in which they can make invaluable contributions to the process of diversifying the Nigerian economy. Research institutions can conduct basic and action research findings; access to funding; access to the latest and most up-to-date knowledge base; access to physical assets such as technology, specialised equipment and more.

Research institutions that spin off research to companies to create viable products, in other ways, this linkage can improve quality of human resources from the universities to be employed by industries. When industries and corporate organisations see that research institutions can boost their productivity, they are likely to set aside more money for commissioning universities to conduct researches, hence more funding for universities. This is the way to go. As a change government, the Federal Government should adopt this approach to bail out the country from its current financial distress.

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Source: Equities.com News (February 8, 2016 - 1:40 AM EST)

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