16th July 2024, NewsOrient,
Opinion, Column, Governance And Development, News
By Anthony Nwaubani

The Economic Benefits of Stable Power Supply:

As stated in Part 1 of this series, one of the strategic approaches to proffering solutions to economic challenges is the Pareto Principle, also known as 20-80 Rule.

It focuses on the identification of and dealing with the small percentage (20%) of any human challenges that are responsible for the greater percentage (80%) of the overall challenges.

For instance, if in a certain nation, it’s disclosed that 20% of the politicians accounted for 80% of all the looted public funds within a period of time, to significantly reduce looting of funds in that country, that 20% must primarily and intentionally be dealt with.

Therefore, in the Pareto Principle, the root of the challenge is attacked to bring about meaningful and multidemensional solutions.

How Does the Stable Power Strategy of Governor Alex Otti fit into the Pareto Principle?

In Nigeria, the provision of stable electricity over the years has assumed a mirage status. This inability is at the root of and has worsened so many socio-economic challenges, including unemployment, cost push inflation, crimes, youth restiveness, and low purchasing power, among others.

Logically, the provision of stable electricity as targeted by Governor Alex Otti in the Geometric Plant Partnership will be fundamental to significantly addressing those socio-economic challenges facing our people in Abia State.

Consequently, it’s obvious that the Stable Power Strategy fits into the Pareto Principle in the following ways:

Engagement in Economic Activities: With stable electricity and with Aba being literally littered with artisan shops, many of our youths will be meaningfully engaged in economic activities. This, on its own, has a lot of desirable effects. The artisans will become agents of economic growth as they actively contribute their quota to the economy of the State. Again, they will be in a position to attract other youths for training under apprenticeship arrangements, thereby reducing youth unemployment.

Reduction in cost of doing business: Businesses in Nigeria are often powered by generators. With fuel/PMS or gas at obvious exorbitant prices, particularly in the Tinubu Administration, high overhead cost has been a feature of the cost structure of businesses in Nigeria. With a stable power supply, the overall cost of doing business will be reduced. The outcome will be competitive products and services translating to higher demand and business sustainability.

Increase in business volumes and spring up of new ones: With the right enabling environment, businesses thrive, and new ones spring up. The provision of stable electricity is a key enabler. The drive of Governor Alex Otti for a stable power supply in Aba is not fruitless. The general opinion in Aba is that business volumes are increasing and new businesses spring up.

General reduction in unemployment: Generally, when businesses are competitive, volumes increase, and expansion and springing up of new businesses become the default outcomes. Business expansions will necessitate the need for more hands. Thus, the availability of stable electricity can lead to a general rise in employment and hence a reduction in unemployment. Unemployment is one of the worst enemies of the economy and the masses because of its incapacitating effects on the ability of an individual to meet his or her basic needs.

Increased IGR: Increasing business activities and springing up of new businesses are normally part of drivers of improved Internally Generated Revenue (IGR) for a State. Increased or increasing IGR enlarges the capacity of a responsible government to provide more infrastructure and deliver more dividends of democracy to the citizenry. Improved infrastructure, in turn, drives further reduction in cost of doing business with resultant business competitiveness and sustainability. In effect, a positive cycle of cause and effect is set up.

Inclusive Economic Growth: One of the popular measures of the size of an economy is Gross Domestic Product (GDP). In the simplest sense, GDP is the total monetary value of all final goods and services produced in a country within a period of time, usually one year.

The GDP can also be computed for State in a Federation, Sub Regions, Regions, and any Economic Bloc provided the relevant and reliable data are available.

Economic growth again simply refers to positive increase in the size of the GDP over a specific period of time (expressed in percentage) when compared to a base period. Usually, a growth in GDP is taken to be a popular indicator of economic well being.

However, a yet to be published Research Work carried out by my humble self, has empirically revealed that mere GDP growth does not translate to economic well-being of the citizens. The Work which covered major economies of the World including the USA, China, Sub Saharan Africa leading economies among others, interestingly showed that the impact of GDP growth on economic well-being weighs heavily on the nature of the Growth. Inclusive economic growth positively rubs off on the economic well-being of the citizens.

When more hands in the State or Country contribute to the growth, it becomes inclusive in nature and useful to the State and it’s citizens. Stable electricity supply in Aba empowers the numerous artisans and generally the greater population of the city to become agents of inclusive economic growth for Abia State.

Reduction in Crimes and other Vices in the Society: It is said that idle hands are the devil’s workshop. Now in Aba many more hands are being engaged in economic activities as explained so far. With this, the devil will find it difficult to find workshops in Aba. What follows is reduction in crimes and other vices in the Society. A society tending towards crime free is a boost to business activities.

There are many more obvious benefits of stable electricity supply to the economy and the community as a whole.

At this point, it has become clear that putting the benefits of His Excellency, the Governor, Dr. Alex Otti’s Stable Power Strategy side by side with the Pareto Principle, one is not in doubt that they fit into each other. This means that Dr. Alex Otti as a Servant leader, understands and takes his time to address the issues which are the root cause of the greater challenges of his people and State. This is strategic thinking.

Dr. Anthony Nwaubani is a Senior Special Assistant to the Abia State Governor on Finance.

~ NewsOrient