AS the President-elect, Major-General Muhammadu Buhari (rtd), prepares to assume the reins of leadership, it is my strong opinion that he will make faster progress if he takes a good look at the economic reforms that are already underway under the Jonathan administration with impressive results.
Even if he does not want to adopt them wholly, he can do well to build upon them by first, scrutinising them thoroughly, second, identifying the gaps or the missing links and plugging them and three, enhancing them to make them better suited to his vision.
What counts in the final analysis is the result and not necessarily the newness of the ideas. And if what exists is working and isn’t broke – as most of the reforms are – there really might be no good reason to loose time, re-inventing the wheel and losing precious time he does not have especially with the near magical expectations of Nigerians. He should resist the tendency of consultants be they local or foreign to project their vaunted egos by condemning what exist so as to pad their egos and get famous for bringing in new plans, new strategies.
Truth be told, the economic reforms of President Goodluck Jonathan’s administration have worked and delivered practical results and presents for the incoming President a strong launch pad for performance and achievements.
First the rebasing of the economy that showed Nigeria as having the largest economy in Africa – with 2013 nominal GDP standing at $510 billion, 80% higher than previously reported – was more than just a statistical exercise. It showed how much more diversified and broad based our economy has become since 1990 and also where targeted government intervention can be most effective at stimulating additional growth.
It also makes Nigeria the 26th largest economy in the world, surpassing not just South Africa (with a GDP of $356 billion as of 2013) but also Austria, Venezuela, Columbia, Thailand, Malaysia and Singapore. This really was a thorough exercise and the Buhari presidency can find this useful for possible inclusion or adoption in their plans.
Second, our economy has actually been growing at an impressive average of seven per cent per annum in the past decade that also includes Obasanjo’s administration.
There have been several arguments against the impact of this growth with claims that it has not impacted the most number of Nigerians.
The truth is that this growth is, of course, not sufficient and we can actually do a lot better.
However, it is a necessary factor for judging our economic wellbeing. What we need is more inclusive growth that translates into dividends for all strata of our growing population. But to have this, the economy needs to grow and the way to make this happen is by stimulating growth in sectors of the economy that have the most reach and impact. This is what the Jonathan administration has been able to do with good success and the Buhari government can leverage on.
Let’s take for instance Jonathan’s legacy in agriculture the one sector that has proven to possess capacity to grant Nigeria economic independence and root out poverty. From a food self-sufficient nation in the 1960s well known for its global position in major agricultural commodities, Nigeria found oil and became dependent on it.
Soon we became a food importing nation spending an average of $11billion on importing wheat, rice, sugar and fish alone! This was in spite of the fact that Nigeria has about 84 million hectares of arable land, about 263 billion cubic meters of water – with two of the largest rivers in Africa, cheap labour force to support agricultural intensification and a population of about 170 million people.
The Nigerian economy had unfortunately descended to being a market for imported food products.
Today, thanks to the agricultural reforms, the situation has been remarkably reversed within a period of four years and Buhari can do well to take off from this point.
Today, Nigeria has achieved close to 85% of national self-sufficiency in rice paddy production; the number of integrated food production has been expanded from one in 2011 to 24 by 2014.
National food production has also been expanded by an additional 21 million metric tons between 2011 and 2014 and the food import bill has also declined from 1.3 trillion in 2011 to 635 billion by 2014.
The government has also been able to end decades of corruption in the fertiliser and seed sectors by putting to a stop government monopoly over procurement and distribution of farm inputs to farmers.
Also, the development of the e-wallet system that allows farmers to receive their farm inputs via electronic vouchers on their mobile phones, a programme which has reached over 15 million farmers nationwide is effectively in place and can be built upon by the incoming administration.
These achievements have been made possible simply because the government was smart enough to adopt a private sector led approach that expanded investment commitments in the sector to $5.6billion between 2011 and 2014.
Again, the Jonathan administration has also made some very great strides in the area of manufacturing and industrialisation. In 2011, industrial development in Nigeria did not have any clear strategic plan. There was no real accurate and clear mapped agenda for deliberately promoting manufacturing and services in the country.
The Jonathan administration has bequeathed the Nigeria Industrial Revolution Plan (NIRP), which has been internationally acclaimed by reputable development specialists as the most strategic, integrated and all-inclusive industrial development plan Nigeria has ever had.
The partial implementation of this plan has led to the impressive growth of the manufacturing sector by 22% in 2013 as it now contributes over 13% of formal sector jobs. This plan has also helped to double cement production capacity in the country from 16.9 million tons to 39.5 million tons within four years.
Another major achievement of this plan that should also be given attention by the incoming administration is that it has been able to attract at least N18billion in investments.
For instance, the auto policy has attracted four international car companies into the country, number of steel mills have been increased from five to 21 within four years, $14 billion investments have been attracted into the integrated petrochemical and fertiliser industries for the first time ever.
The Jonathan administration has also been able to establish a reliable mechanism for tracking employment trends. With this system in place, we now know that between 2012 and 2014, the Nigerian economy was able to create a total of 2,826,552 with clear indications of exactly where the jobs were created and in what particular sectors of the economy they were created.
This is a commendable tool that can also be utilised by the Buhari government. Adopting a system like this will also help them save very good time as they make haste to hit the ground running.
Again, the World Bank recently released its 2014 Nigerian (NER), providing the most up to date analysis of the poverty and living standards in Nigeria. It provides evidence that Nigeria’s poverty rate is significantly than had been previously reported. From the survey, it is established that only 33.1% of the population are living below the poverty threshold.
This of course is not sufficient but it shows that the actions that have been taken so far by the Jonathan administration have caught some traction and are effectively changing the statistics for better.
Also the recent launch of the DBN has indeed opened a new vista of development financing in Nigeria. It represents the most ambitious and well-structured effort of governments to fix the perennial problem of access to finance that has long held down the potential of small businesses in Nigeria.
With the coming of this bank, operators of micro, small and medium scale enterprises can rightly heave that sigh of relief with the knowledge that to get business loans with tenors of up to ten years with a moratorium of up to eighteen months is no longer a dream or mirage.
In addition to the convenience that the moratorium and unprecedented longer repayment time frames that the bank offers, it is also set to offer these loans at interest rates that are far lower than what currently obtains in the market today.
The Jonathan administration has also laid a firm foundation for the growth of the housing sector which the incoming administration can also leverage on.
Given the extensive capacity of the housing sector to contribute to job creation and the growth of the economy, the government set up the Nigeria Mortgage Refinance Company (NMRC) as a private sector-led company to provide affordable mortgages to ordinary Nigerians by raising long-term funds from the local and international capital markets.
In less than a year of its launch, this bank has already processed over 33,000 mortgages. Cantor Fitzgerald an international investment firm has already executed a $1billion MoU with the bank with an ambitious plan to build 10,000 houses within one year.
As activity picks up and construction work begins, jobs will be created and the economy will grow. There will be jobs for masons, labourers, carpenters. The people that are into furniture and household items will witness a surge in demand for their products.
So apart from the shocks on the economy as a result of the global oil crisis, the inherent fundamentals of the economy are still pretty strong. The administration has commendably built some strength into the economy by diversifying its base and building institutions that will stimulate and power growth of non–oil sectors. It is our hope that as the incoming administration sets off to work; it will pause and take a good look at these programmes with a view to building off from where they are at the moment.
This will help to accelerate the speed of delivery and help them maximise the little time the government has to meet the high expectations of the masses.