Nigeria, Confronting the Challenges
One obvious truth about our country today is that it is successfully grappling with those challenges of nation building that are inevitable for any country that wishes to attain real greatness. I make this statement against the background of the many thoughts that were going through my mind as I sat in the auditorium of the Federal Ministry of Finance and listened to the Coordinating Minister of the Economy (CME), Dr Ngozi Okonjo-Iweala, present details of next year’s budget. The first is that this government is not just resolved to place Nigeria and Nigerians on a firm footing for the 21st century, but is putting that resolution into implementable policy actions with measurable impact on the economy and the people. One clear proof of that is the well thought out, evidence-based budget that was being presented to us on that day. The CME’s submissions ties inflows to the realistically projected expenditure profile for the budget year. The benchmarks shown were scientific and the analysis of the relevant economic variables revealed profound economic pragmatism.
The second thought on my mind was the realisation that the budget perspective is holistic, tying the expected inflows from new revenue sources to genuine projections and not speculation. What I saw was a sober response to current challenges. It is a budget that can work for us if we all gird our loins to work together as a people. I make this later point because the Nigerians must begin to respond to issues and crisis like the rest of the world. This is the 21st century. Its problems are legion, manifesting as political instability, economic downturn and sundry challenges facing many nations. Russia, Mexico, Egypt, Libya, and many other countries have more than their fair share of these challenges in various forms and they are grappling with the issues as a people. Nigeria was not granted any immunity, so we should expect problems with significant impact on every nation within the last five years to affect us.
For instance, the Russian Rubbles has lost over 40% of its value. About 11% of that 40% was lost on Tuesday last week alone. But the Russians are not blaming Putin, or calling its government names. They are rather holding together and struggling to come out of it stronger. Over 25,000 have been reported missing in Mexico the last 18 months or so, including 42 students killed and buried by gangsters. But the Mexicans are not blaming their government, or running their nation down in the media. Some 145 students were recently murdered in Pakistan by Talibans, but without the Pakistanis blaming their Prime Minister, or accusing their government of insensitivity. That is why Nigerians should give themselves a rap on the shoulder and say: “Hey, no one out there is coming to solve our problems for us, if we don’t solve them.
Global oil prices have lost about 40% of its value since June. Russia, Saudi Arabia, Kuwait and all oil producing countries are devising survival strategies, so Nigerians must stay together and support our president at a time like this; especially when he is working round the clock with his economic team to get things right. The nation is not even so badly hit today because we eventually listened the CME’s sustained call for savings at all levels. I recall having attended many meetings as then governor of Anambra, during which she reminded everyone that the price of oil could fall at any time and that we needed to boost national savings, presenting establishment of the Sovereign Wealth Fund (SWF) as another way of achieving targeted saving and long term investment. But the voice of the majority initially drowned her repeated pleas about saving for the rainy day. The louder chorus was “Let’s spend now! The rainy day is already here! In fact is already flooding!” Meanwhile, it was only drizzling at the time! Fortunately, the Nigerian Sovereign Investment Authority was set up after a long and has financed the Abuja-Kaduna rail, the Lagos-Ibadan Expressway and the Second Niger Bridge, among other projects.
The 2015 budget is also pegged on increasing Internally Generated Revenue (IGR) and diversifying the economy. It ties the expected increase in IGR to projected inputs into the economy, which would reflate local economies and increase Gross Domestic Product (GDP). The FIRS is to increase IGR but not necessarily by increasing the taxes. It is blocking leakages and institutional weaknesses in tax administration and increasing the collection rates. Besides the official target of N1.98 trillion, the FIRS was given an additional target of N75 billion, which it overshot and declared N143 billion extra as at last month. This shows that the new collection target of additional $3 billion dollars in three years for FIRS announced by the CME is realisable, as its Integrated Tax Administration System (ITAS, which targets a re-engineering and automating of the Federal Inland Revenue Service (FIRS) core tax administration processes, will yield a seamless, integrated solution that incorporates international best practices for revenue administration with clear monitoring and evaluation systems.
We must all recall that President Barrack Obama’s first concern after being sworn in was the need for alternative sources of energy, to reduce dependence on imported petroleum products. Today the shale revolution has raised domestic production and the US no longer buys our oil. International oil firms like the Royal Dutch Shell, ExxonMobil, Total and Chevron, are using portfolio rotation of assets to diverting more resources into shale oil production. That is why President Jonathan’s persistent call for diversification of the national economy and the effort of the Economic Management Team must be supported; especially as it has been discovered that Nigeria’s oil reserves might finish sooner than was projected. The 2015 budget is a realistic response to the foregoing and more. Other wide ranging measures have been taken by the President’s Economic Management team, led by the CME, to diversify the economy and create jobs, include the creation of Mortgage Refinancing Institution; to make long term funds available and Increase liquidity by funding primary mortgage institutions. The boom in the Housing sector will create more jobs, as it is estimated that every house built will create 6 direct jobs and 4 indirect jobs. The impact of this in a country like Nigerian, with its over 17,000,000 housing deficit, will be phenomenal.
The YOUWIN programme award winners each receives between N1 million and N10 million, in addition to further training through business bootcamps, as well as mentoring through enrolment in a voluntary mentoring programme. Today, many of the 2400 businesses under YouWin 1 and 2 are doing very well, with some receiving national and international awards. About 22,000 jobs have been created by the 2,400 winners from the first two editions of YOUWIN. This translates to about 9 jobs winner. Examples of special award winners include, Binta Shuaibu of Vintage Collete by Binta in Kano, who won the MTN 2012 Designer of the year award, Dr. Saeed Juma of the Smile Shop (a dental clinic) who won the Futures Award Africa prize in Business in 2013, Achenyo Idachaba of Mitimeth in Ibadan who won the 2014 Cartier Women’s Initiative Award as the Laureate for sub-Sahara Africa, and Archibong Eniang of ENELEC GS in Akwa Ibom State, who won the Presidential Standing Committee on Invention and Innovation award by the Hon. Minister of Communication Technology in 2014. By the end of YouWin 4, about 5,400 young entrepreneurs would have benefitted directly from the program.
Still along the lines of economic revival and diversification, the Federal Government is determined to do with the Insurance Sector what it did with the Banking and Pension sectors, thus increasing its assets base from its current N300 billion to N1trillion within the next three years. It will go up to N5 trillion within the next decade. As the sector grows, it will open up vast employment opportunity for our people, both directly and indirectly.
The SURE-P programme continues to support Social Safety Net programmes, like Save One Million Lives, which has saved over 631,250 lives by giving renewed priority to health interventions, nutrition, prevention of mother to child transmission of HIV, malaria control and routine immunization. The Graduate Internship Scheme (GIS) has hired and deployed 13,339 graduates so far and the Community Services, Women and Youth Employment (CSWYE) has created nearly 120,000 jobs; with a minimum of 3,000 in each state and the FCT.
Today we have the Development Bank of Nigeria (DBN), which will increase access to finance for the micro, small and medium sized enterprises (MSMEs) and the agriculture sector.Financial inclusion through improving access to finance will drive economic growth. The African Development Bank (AfDB) will also be investing equity. At the initial stage the Federal Government will raise funds and make same available to DBN for on-lending to the Nigerian MSMEs and agriculture businesses. The DBN should be able to gain a credit rating similar to that of the government within 3 years of its operation; in addition to being able to independently raise funds from local and international sources. The point being made here is that our challenges are as real as the government’s tackling of them. We must hold together as people and also thank God for the determination of Mr President and his Economic Management Team, to set the economy on a strong macro-economic footing.
Source: Reuben Abati
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