By Victor Ogiemwonyi
This week, I read a post by Dayo Elegbe that prompted me to amplify some of the ideas he expressed. His argument deserves attention because it challenges one of the most frequently used, and least examined, phrases in economic policy discussions “the enabling environment.”
Dayo argues that we need to stop using the phrase as if it were an economic strategy in itself.
Government must provide an enabling environment. Fine. But enabling what? For whom? And towards what measurable outcome? Those questions are rarely answered.
A more useful question would be, what markets should exist but do not yet exist, and what is preventing them from emerging?
Government’s role should go beyond creating favourable conditions for businesses already in existence. It should actively identify economic opportunities, understand the barriers preventing their development and connect those opportunities with the people, businesses and institutions capable of unlocking them.
That distinction is important.
Government must move,
from being merely a passive regulator, to becoming a facilitator of economic transformation.
From Enabling Markets To Creating Markets
Dayo’s example of the Nigerian cement industry is apt, and perhaps one of the best examples of this principle.
The Obasanjo administration introduced its backward integration policy by making import licences conditional on commitments to invest in local manufacturing. The objective was not simply to improve the business environment but to create an entirely new industrial capability. The policy encouraged investment in domestic production and transformed Nigeria from a major importer of cement, into a largely self-sufficient producer. Today, the country exports cement and earns foreign exchange(FX) from an industry that previously consumed much of our FX.
The lesson is not merely that government supported a successful entrepreneur.
The lesson is that government identified an economic opportunity and deliberately designed policies that mobilised capital, technology and managerial expertise towards building a new market.That is fundamentally different from merely talking about an enabling environment.
Lessons From Nigeria’s Development Planning Era.
What Dayo is really saying is that an enabling environment must be tied to clear, measurable objectives.
To understand what that looks like, we need only revisit Nigeria’s First, Second and Third National Development Plans and the industrialisation strategy of the 1960s and 1970s. At the time, there was a deliberate attempt to move the country beyond being merely a producer of raw materials. The strategy focused on building domestic industrial capacity through import substitution, manufacturing and infrastructure development.
Take the automobile industry as an example.
Five major vehicle assembly plants were established across the country:
• Fiat in Ibadan
• Volkswagen in Lagos
• ANAMCO Mercedes-Benz in Enugu
• Peugeot in Kaduna
• Steyr in Bauchi
The private sector was also actively involved. Chief Gabriel Igbinedion, the Esama of Benin, attracted Hino Motors of Japan to establish operations in Nigeria. These were not isolated investments. They formed part of a broader industrial strategy.
Soon, assembly plants began to stimulate complementary industries. Vehicle spare-parts manufacturers emerged. Windscreen factories were established. Battery manufacturers expanded.
Tyre plants operated by Michelin in Port Harcourt and Dunlop in Lagos took advantage of Nigeria’s rubber resources. In Nnewi, local entrepreneurs built thriving businesses producing automotive components and spare parts.
The result was a chain reaction. Jobs were created. Skills were transferred. Technical capacity increased. Tax revenues expanded. New businesses emerged to serve the growing industrial ecosystem. As local content increased, production costs fell and vehicles became more affordable.
None of this happened by accident. It happened because there was a plan.
The Importance Of Long-Term Vision
Some years ago, I read an interview with Chief Philip Asiodu, one of Nigeria’s celebrated “super permanent secretaries.” He spoke extensively about the Second and Third National Development Plans and their connection to many of the foundational infrastructure projects we still depend upon today. He described development planning as a deliberate exercise in nation-building. The plans were designed within a long-term strategic framework spanning 15 to 20 years. Investments in steel, petrochemicals, gas infrastructure and vehicle assembly were not viewed as standalone projects. They were intended to create backward and forward linkages across sectors of the economy.
His argument was forward looking,exporting commodities without adding value, was underdevelopment by another name.
The same theme appears in Chief Olu Falae’s memoir, “Triumph of Grace”. He recalls the inclusion, in Nigeria’s Third National Development Plan,
a target of generating and distributing 6,000 megawatts of electricity. Think about that for a moment.
Imagine if Nigeria had achieved that target in the mid-1970s and continued building upon it for the next half century. The country might today occupy a very different position economically.
Instead, more than fifty years later, electricity remains one of our greatest constraints to growth. The lesson is not that plans guarantee success. The lesson is that countries that develop successfully, usually have plans, priorities and measurable objectives. Countries that drift often have slogans.
What China Teaches Us
China’s transformation over the last four decades offers another useful lesson.
Nobody built modern China around endless discussions about enabling environments. The Chinese identified strategic sectors, invested heavily in infrastructure, established long-term goals and consistently pursued them.
They created industrial parks, transportation networks, export zones and manufacturing clusters.
They built capabilities and supported industries until they became globally competitive.
Most importantly, they measured progress against clearly defined objectives.
Infrastructure targets were not abstract aspirations. They were milestones to be achieved. Nigeria needs the same mindset.
Instead of speaking broadly about creating an enabling environment, we should be discussing targets – reliable electricity, efficient ports, modern rail networks, healthcare infrastructure, industrial zones and globally competitive manufacturing industries. These are measurable goals. Citizens can assess whether they have been achieved or not.
The Dangote Example
The cement industry demonstrates how focused policy can transform a market.
We no longer spend substantial foreign exchange importing cement. Instead, we produce enough to meet domestic demand and export the surplus. The same conversation is now unfolding around petroleum refining.
For decades, Nigeria exported crude oil and imported refined products at enormous expense. The emergence of the Dangote Refinery has begun to change that equation by reducing dependence on imported fuel and creating the possibility of export earnings from refined petroleum products. Some critics argue that this could create excessive market concentration or monopoly power.
That concern deserves consideration. Competition remains important in any economy. However, industrial policy must also recognise the value of large-scale investments that solve strategic national problems.
A country should not become so committed to abstract free-market principles that it undermines productive investments that strengthen domestic capacity and reduce import dependence.
The challenge is to strike the right balance between competition, efficiency and national development objectives.
READ ALSO:The Living Wage Debate In Nigeria
Institutions Are The Missing Foundation.
This is where discussions about enabling environments sometimes become dubious. Most economists would agree on the ingredients of a healthy business environment, that includes political stability, policy consistency, an effective judiciary, secure property rights and the rule of law.
The difficulty is that these conditions cannot simply be declared into existence.
Political stability cannot flourish where elections lack credibility. The rule of law cannot thrive where corruption remains pervasive.
An effective judiciary cannot emerge from systems that are structurally incapable of delivering timely justice.
I recently read that the Nigerian Supreme Court has a backlog of over 2000 cases, with hearing dates stretching into 2028 . Whether one is an investor, entrepreneur or ordinary citizen, confidence in the legal system suffers when justice becomes excessively delayed.
Former Supreme Court Justice Amina Augie recently drew attention to the corruption in our courts and the absurdity of relatively minor disputes, finding their way to the apex court. She gave the example of a matter that involved 7 goats.
That points to a deeper structural problem.
In many jurisdictions like the United Stated, the supreme court, primarily handle constitutional issues and cases of significant legal importance. They do not function as courts of routine appeal in every dispute.
If we truly want an enabling environment, institutional reform must be part of the conversation. This must include constitutional reform, improvements in our judiciary and public governance. Without those foundations, economic progress will remain fragile.
Ultimately, an enabling environment is not something that can be achieved through rhetoric. It emerges from deliberate planning, credible institutions, measurable goals and disciplined execution.
Nigeria’s most successful economic achievements, from cement production to earlier phases of industrialisation, were accomplished because there was a clear objective and a policy framework designed to achieve it.
Rather than endlessly debating the need for an enabling environment, we should focus on identifying opportunities, building markets, setting targets and holding ourselves accountable for results. The question is not whether Nigeria needs an enabling environment, the real question is whether we are deliberately creating the markets, industries and institutions that will generate the country’s next wave of economic value. If we answer that question correctly, the enabling environment will take care of itself.
Victor Ogiemwonyi is a retired investment banker and writes from Ikoyi, Lagos.
Marketconversations.stubstack.com