Posted by News Express | 3 June 2014 | 4,326 times
This current Jonathan Administration is committed to supporting tertiary education in our country. As Kofi Annan once said,
The university must become a primary tool for Africa’s development in the new century. Universities can help develop African expertise; they can enhance the analysis of African problems; strengthen domestic institutions; serve as a model environment for the practice of good governance, conflict resolution and respect for human rights, and enable African academics to play an active part in the global community of scholars.
As you may know, this Government recently established three additional Federal Universities, and we have also committed N200 billion for the upgrade and reconstruction of infrastructure for our tertiary institutions.
The Jonathan Administration also recognizes the important role which Churches and the Private Sector are playing to support tertiary education in our country. We need to train our young population, and the Government cannot do it alone. As you may know, Nigeria, and indeed the entire African continent, is experiencing a demographic bulge. In Africa the median age of our population is only 20 years – compared with 29 years in Asia, and 40 years in Europe. So we greatly welcome the support being provided by the private sector and religious bodies in providing a University education to our young men and women. We will continue to work with all our stakeholders to ensure that our sons and daughters are well-trained and equipped to enter the workplace.
I will also urge you to ensure that the Babcock academic curriculum remains practical and entrepreneurship-oriented, so that Babcock students graduate with skills and not only diplomas. If we can equip our young students with career skills, then our graduates would enter the labor market as job creators rather than as job-seekers! Babcock should also strive to develop connections and relationships with industries and the private sector, so that your students are trained in those skills which are needed in the labor markets.
Now let me turn to my main address, which is entitled: Transforming the Nigerian Economy: Opportunities and Challenges.
Africa (and Nigeria) rising
To the graduating students, let us say that despite the despondent mood in the nation today following the abduction of the Chibok girls, and the destructive activities of Boko Haram, you will be entering the real world at a time of great promise for our country and also for the African continent. Today, the African continent is being celebrated as the rising continent. Inflation is being contained in most of our economies; our debt levels have declined and foreign investors are all looking for opportunities on the continent today. In the past decade, the African continent has grown at about 5 percent per annum, faster than any other region of the world except for East Asia.
Nigeria has been one of the strongest economic performers in Africa, and in the world overall. Our economy has grown steadily at an average of about 7 percent in the past decade. Today, following our recent GDP re-basing, we have Africa’s largest GDP of about $510 billion; and also the 26th largest economy in the world. Some people want to downplay this or give it a negative twist. But whether you like it or not, it is a fact and we must embrace it as the rest of the world has. The UN Conference on Trade and Development (UNCTAD) says we are the #1 destination for investments in Africa. And Nigeria’s has recently been classified as one of the MINT economies (i.e. Mexico, Indonesia, Nigeria and Turkey) which will be among the economic giants of the future.
Nigeria’s economic history
But let us not forget that our economic situation has not always been like this. In the early 1980s years, when I was also graduating from my doctoral program, the economic situation in Africa and for Nigeria was very different.
For Nigeria, the 1980s was a difficult decade. Oil prices had just collapsed, and our economy slipped into a recession. Our average GDP growth in the 1980s was negative, at -1.42 percent, while our population continued to grow at about 2.6 percent. Although we had enjoyed high oil prices in the 1970s, we had forgotten to save, and so we entered the 1980s without any fiscal buffers. It was at this time that Nigeria became heavily indebted, and had to re-schedule debt payments. As the 1980s went on, our standard of living fell as GDP per capita dropped from $871 in 1980 to $260 in 1989. For the first time in our modern history, our nation was classified as a low income country.
The 1990s also came along and did not help us much. The economic instability remained, with periods of hyperinflation. In 1995, inflation went as high at 73 percent! We did not diversify our economy and so became even more dependent on oil revenues which now accounted for over 90 percent of exports. Our debt burden worsened, and occasionally we had to suspend our debt servicing. Economic growth was very slow, with GDP growth of about 2.5 percent. Population growth was also at 2.5 percent so we were basically at a standstill. The quality of our infrastructure deteriorated, and our institutions were poorly managed. And by the end of the 1990s, our human development indicators were comparable to that of other least developed countries in the world. Overall, the 1980s and 1990s were lost decades for our economy. These two lost decades explain much of the pain and deprivation we feel today. If your economy is contracting, and you do not invest in infrastructure for 20 years, it will take some time for you to catch up!
Nigeria’s recent reforms and achievements
But then came 1999, and the start of democratic rule. We began to put in place various macroeconomic reforms and structural reforms to manage our economy better. We obtained debt relief which lifted a $30 billion debt burden, and provided us with fiscal space to invest in capital projects in our country. We also implemented important reforms such as telecoms liberalization, banking sector consolidation and privatization of government enterprises. In my book, Reforming the Unreformable (published by MIT Press), I discussed most of these reforms, so let me not dwell too long on the technical details.
Today, the ongoing Transformation Agenda of President Jonathan continues to build on these economic reforms. And it continues to deliver results for Nigerians. Let me share highlights of some of the recent achievements with you.
Macroeconomic performance. Our macroeconomic performance has been robust in recent years. Inflation has remained in single digits at 7.9 percent (as at April 2014) while the exchange rate has remained relatively stable within the target band of N155-160 to the US Dollar. Our fiscal deficit is low at about 1.85 percent of GDP, and our debt-to-GDP ratio is now also low at 11 percent. Our sovereign credit ratings have been reaffirmed by our rating agencies at BB-, and last year, our $1 billion Eurobond was four times oversubscribed!
Let me add that our stable macroeconomic environment has provided a stable platform for the economic growth which has been observed in the country in recent years. Whenever you speak to private sector investors, one of their main concerns when investing in a country is the need for a stable macroeconomic environment where they can plan for their businesses. So Nigeria’s strong macroeconomic performance must be celebrated, and we will continue to build on this. Without this stability, we cannot even tackle poverty.
Transportation Infrastructure: Let me mention just a few examples of what is being achieved.
For roads, we have made progress in the construction of various projects across the country, such as the Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road, among others. We also successfully flagged-off construction for the second Niger Bridge.
For railways: the Western line linking Lagos and Kano is now functional; and work is progressing on the Abuja-Kaduna Standard Gauge line (72% completed); the Itakpe-Ajaokuta-Warri Line (to be completed by end-2014)and the Eastern line linking Port Harcourt to Maiduguri (2 of 3 sections to be completed by Q3 2014);.
For inland waterways: We have dredged about 72 km of the lower River Niger from Baro in Niger State to Warri in Delta State; and have also completed construction of the Onitsha inland port. As a result, we have increased cargo volume on the inland waterways from 2.9 million metric tons in 2011 to over 5 million metric tons in 2013.
Water resources: In 2013 alone, we completed construction of 9 dams thereby increasing the volume of the nation’s water reservoir by 422MCM. We also made progress on major projects such as the South Chad Irrigation Project, the Bakolori Irrigation Project, and the Galma Dam. Overall, total irrigable area increased by over 31,000Ha and increased production of over 400,000Mt of various irrigated food crops. We have almost completed the Kashimbila Multipurpose Dam Project in Taraba State, which will provide irrigated land and hydropower. This dam will also provide us with pre-emptive protection against floods and noxious gases of Lake Nyos (in Cameroon) should it burst its banks, as the UN Environment Program (UNEP) has warned.
Aviation: In the aviation sector, we completed the upgrade of 11 airport terminals and work on the remaining 11 terminals is in progress. In the past year, the Enugu Airport became operational as an international airport with a new terminal under construction. We have also commenced work on the construction of three new international airport terminals: in Lagos, in Kano, and in Abuja.
Power: As is well-known, Nigeria has embarked on one of the most comprehensive and transparent power privatization and liberalization programs worldwide – with the privatization of all its power generation and distribution companies. All Nigerians would like to see uninterrupted power, and I know we are not getting that yet. But much like privatization of the telecoms sector took some time to begin yielding benefits, the power sector will improve after a 1-2 year transition period. We hope for the day when Nigerians will no longer remember what it was like to be without electricity, just like most people now cannot remember what it was like not to have a telephone.
Services Sector: As our GDP re-basing results showed, the services industries comprise about 51% of our GDP, and employs many Nigerians. We are therefore investing in services sectors such as ICT and the Creative Industries.
Communications Technology: For ICT, we constructed 500km of fibre-optic cable to rural areas and total of 266 Public Access Venues were established in 2013. We also deployed a fibre-optic high-speed internet network to connect 27 Federal universities, and provided computing facilities to 74 tertiary institutions and 218 public schools across the country. Finally, we have established innovation centers to support entrepreneurs in the ICT sector, and launched a $25m Venture Capital fund for ICT businesses.
Creative Industries: We are also working to fully harness the potential of our creative industries. Last year, we launched the Project Advancing Creativity and Technology (PACT) in Nollywood, which is a N3 billion grant programme for Nollywood. In 2013, the Fund already supported capacity building and film production in the industry.
Housing and construction: The housing and construction sector is a critical sector in any economy. When the housing sector booms, it creates additional jobs for architects and masons, for electricians and plumbers, for interior decorators and so on! However, for many years, Nigeria has not properly harnessed the potential of this sector. I am pleased to inform you that in January this year, this Administration launched the Nigeria Mortgage Refinancing Company (NMRC) which will provide a secondary market for mortgages. We are working in a number of pilot states where the Governors’ approvals will be fast-tracked. So I am confident that, very soon, many more hardworking Nigerian families will realize their dream of owning a home.
Industry, Trade and Investments: Last year, we also launched the National Industrial Revolution Plan (NIRP) which has a strategic plan for Nigeria’s industrialization. Nigeria also attracted over $7 billion in FDI and was named the #1 destination for investments in Africa by UNCTAD for the second year running. Some major investments in the industrial sector include: a $250m investment by Procter and Gamble, right here in Ogun State; $40 million in agricultural projects by Dominion Farms in Taraba State; $1.2 billion in fertilizer and petrochemicals by Indorama; a $200 million steel plant by Kam Industries in Ilorin; and a $9 billion investment in a petrochemicals and refinery complex by the Dangote Group. At the recent World Economic Forum in Abuja, Unilever also announced plans for a 150m Euro investment in Nigeria; and Nissan is also planning to invest in 2-3 car assembly plants in the country.
The Government also successfully negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners which would enable us to protect our strategic industries where necessary. As a result of our backward integration policies, Nigeria is now a net exporter of cement and expanded cement output capacity from 2 million metric tonnes in 2002 to 28.5 million metric tonnes in 2013.
Oil and gas: In the past year, we completed work on important projects such as the 136km gas pipeline from Oben to Geregu, the 31km pipeline from Itoki to Olorunshogo and the acquisition of 250 square kilometers of 3D-seismic data for the Chad basin. The government also initiated the Ogidigben Gas Industrialization Project which will provide a petrochemicals complex in Delta State.
Agriculture: In agriculture, the Government’s Growth Enhancement Scheme (GES) is providing subsidized inputs to farmers via an e-Wallet program. In 2013, an estimated 4.2 million farmers received subsidized inputs via the Government’s Growth Enhancement Scheme – and we hope to reach even more farmers this year. In the 2013 dry season, we also engaged over 250,000 farmers in producing 1.1 million metric tonnes of dry season rice. Most importantly, our agriculture is undergoing a revolution in attitude. Young people are now learning to think of agriculture as a business for entrepreneurs, and this is making a difference to value addition in our agricultural sector.
Health: As part of the Saving One Million Lives programme, we recruited 11,300 frontline health workers who were deployed to under-served communities across the country. Through this programme, we have reached over 10,000 women and children with conditional cash transfers across 8 States (Anambra, Bauchi, Bayelsa, Ebonyi, Kaduna, Niger, Ogun, Zamfara) and the FCT. Today, over 400,000 lives have been saved through our various interventions and Nigeria’s national immunization coverage has now exceeded 80%. The Type-3 Wild Polio virus was contained in 2013, with no recorded transmissions for more than one year; and Guinea worm that previously affected the lives of over 800,000 Nigerians yearly has been eradicated.
Education: This sector faces serious problems as quality and access to education is a real challenge. But this Administration remains committed to improving the education of our children. In 2013, we constructed 125 Almajiri schools while special girls’ schools were constructed in 13 States of the Federation. Last year, we also rehabilitated 352 science and technical laboratories while 72 new libraries have been constructed in the Federal Unity Schools. The laboratories of all 51 Federal and State Polytechnics were rehabilitated and micro-teaching laboratories are being constructed in 58 Federal and State Colleges of Education. Finally, the Federal Government also committed N200 billion to the upgrade and reconstruction of infrastructure for our tertiary institutions.
Women Empowerment: To empower girls and women, we are working with the Ministry of Women Affairs and 5 pilot MDAs (agriculture, works, health, communications technology, and water resources) on an innovative approach to mainstreaming gender called the Growing Girls and Women in Nigeria (G-WIN). Last year, the G-WiN program yielded some strong results:
In agriculture, the Ministry of Agriculture trained over 2000 young women across the country, and provided them with farming starter kits for fishery, snail keeping, cassava, rice and animal rearing;
In health, the Ministry of Health has undertaken about 2000 repairs of VVF patients in its various national centers across the country;
For the Ministry of Works, FERMA has specifically targeted and rehabilitated three major Trunk A roads which target areas of high market activity by women.
But we fully agree that despite this growth, challenges remain in creating jobs, in addressing poverty, and also in tackling rising income inequality in our country. The fact is, although our economy has been growing, it needs to grow even faster – and in sectors that create jobs – if we are to tackle these three challenges of jobs, poverty and inequality.
For job creation: we have made progress in creating jobs each year in the country. According to the National Bureau of Statistics, about 1.2 million jobs were created in 2013 (and a total of about 1.9 million jobs have been created since we started tracking the jobs data in Q3 2012). Many of these jobs came from the agriculture sector, from the manufacturing sector, and also in the services industries. In addition, the Government’s special intervention programs have also created jobs, such as: YouWiN (27,000 jobs) and the SURE-P Community Services Scheme (120,000 jobs). However, we agree that given the large number of graduate and new entrants into the labor force each year (about 1.8 million), we will need to maintain our unrelenting focus on creating even more jobs in our economy for our citizens.
Addressing poverty and tackling income inequality. The government is also committed to improving the welfare of poor households across our country. We are providing resources to sectors such as agriculture, to help create jobs and livelihoods for many low-income households across our nation. To address inequality and also cater for the needs of poor households, we are also designing social protection or safety net programs to provide a cushion for vulnerable members of our society. This social protection scheme will build on existing programs such as maternal and child health interventions (e.g. the Saving One Million Lives program), and conditional cash transfer programs which been piloted in some States. The program will follow the example of successful safety net programs in Latin America, such as Opportunidades (Progresa) in Mexico, and Bolsa Familia from Brazil.
Role of Sub-national Governments in Nigeria’s Transformation
But clearly, the Federal Government cannot do it alone in transforming Nigeria! What should be the role of our State and Local Governments in supporting our Transformation? We know from the Constitution, that the provision of many public services (such as, health, education, agricultural services) falls on a “concurrent list” – and so are the joint responsibilities of Federal, States and Local Governments. However, it appears most responsibilities – from immunization to supply of agricultural inputs – have now been pushed in the public perception mostly onto the Federal Government!
Do States have the resources to deliver these services? And why do some States happen to do more and better than others? How can we hold our States and Local Governments more to account, just as we hold the Federal Government to account?
In terms of the resources, I can confidently say based on the available data that our states are reasonably well-resourced. But, of course, I know all of them would want more revenue as we all do even at the Federal Level.
About half of our total government expenditures occur at the sub-national level; and if you look at allocations to States and Local Governments, there are some interesting trends.
In 2013, the top 10 allocations went to the following States: Akwa Ibom (N260b or $1.7b), Rivers (N230b or $1.5b), Delta (N209b or $1.3b), Bayelsa (N173b or $1.1b), Lagos (N168b or $1.1b), Kano (N140b or $0.9b), Katsina (N103b or $0.7b), Oyo (N100b or $0.6b), Kaduna (N97b or $0.6b), and Borno (N94b or $0.6b). (Note that all this data does not include internally generated revenues (IGR) of these States, which are significant in some instances such as Lagos State, and very commendable.)
Our analysis shows that:
Many Nigerian States receive revenue allocations which are larger than the budgets of neighbouring countries such as: Liberia ($433 million), or Gambia ($210 million) or Benin Republic ($1.47 billion).
The top two recipients of State allocations –Akwa Ibom and Rivers –receive $3.1 billion, which is about half of the entire budget of Ghana (about $6.4 billion).
On a per capita basis (i.e. revenues/population), the top three recipients of FAAC allocations are: Bayelsa (N84,500 or $545), Akwa Ibom (N55,600 or $360) and Delta States (N42,000 or $270).
On this per capita basis, many Nigerian States receive more than neighbouring countries such as: Ghana ($255), Benin Republic ($146), Liberia ($103), and Gambia ($117).
I note that one of the Commissioners from Borno State recently said that poverty is part of the equation for the problems with Boko Haram – and I agree. Extremist ideology can sometimes spread quickly when poverty is a problem. However, the issue I have is that the Commissioner spoke about the poverty problem almost like something disconnected from the responsibilities of the State Government. He did not mention what the State Government is doing to tackle the problem! So the question I have is: what has the Borno State Government been doing with its revenue allocations and IGR all these years? It receives the 10th largest allocation in the country (N94b or $600m). This is about 50% more than the entire budget of Liberia ($433m) which has a comparable population! [The other North Eastern States under emergency rule also receive sizable allocations: Yobe ($440m) and Adamawa ($487m)].
Some States within their resources appear to have handled some issues relatively well. Just to give a few examples: Anambra State has improved its educational outcomes after the handover of schools to Missionary groups and at a cheaper cost. Gombe State has also improved its school enrolment rates. In Kano State, the Federal and State Governments have worked with various development partners to improve school enrollment for girls. Public infrastructure has improved in a number of States, for example: in Jigawa, Delta, Akwa Ibom and Edo States, to name a few.
Lagos State has greatly improved its environment and sanitation in recent years, and is now a pleasant place to visit. And in Cross River, the State Government has maintained its good environmental standards. In Abia, the State Government has also commenced an urban renewal program in Umuahia which would gradually lead to a cleaner city. And in Ondo and Ekiti States, health service delivery has improved. Bauchi State has impressed by absorbing millions of displaced people fleeing the insurgency in the North East within its present resources.
I am convinced that if the States and Federal Government were to work more closely and collaboratively, and be jointly accountable, the country could do much better in the provision of basic public services such as health care, education, water, sanitation, and so on. Our Transformation will not be complete until we are able to improve on the delivery of public services by our States and Local Governments.
A social compact for all Nigerians
Finally, let me stress that the biggest challenge we face to transforming Nigeria today is how to build a social compact among all Nigerians. A compact in which we all agree on some standard norms of behavior within our local communities, our places of work, our civil society groups, and ultimately, in our nation.
As many of the faculty and students here will know, this idea of a social compact (or a social contract) has a long history going back to philosophers like Locke, Hobbes and Rousseau. Their basic idea was that for any organized community or society or nation to exist, its citizens must agree on some basic principles and cede some of their rights to the government. In return, the government guarantees the protection of its citizens, and promises to provide the basic necessities for their human existence.
But for this social compact to work, citizens must agree on some common principles. And both government and the governed must be aware of their rights and responsibilities. In some instances in Nigeria, I am worried that this social compact appears to be in serious trouble.
For example, look at the power sector. Government may work tirelessly to invest in laying pipelines to deliver gas to power plants. But the next moment, some of our own citizens go ahead and vandalize this infrastructure for their narrow personal and political interests. We may invest our common wealth in laying electricity cables around the country, only to see selfish individuals destroying and stealing these cables for their own private interests. There is also: the vandalization of our oil pipelines, stealing of our national crude oil, vandalization of telecoms base stations, stealing of solar panels on our highways, kidnappings for ransoms, abduction of school girls, and killing of our fellow citizens as Boko Haram has recently done. Is this the way to treat our fellow citizens and to deliver on a social compact among all Nigerians? Where is our outrage at the lack of basic minimum standards of behavior in this country?
When I look around many other countries in the world – such as Ghana or Malaysia or Thailand or the USA – it appears that for most countries, their citizens have some areas of common national agreement which are sacrosanct, or no-go areas. So citizens can demonstrate when they are unhappy, but they will not vandalize national infrastructure. They can vent their frustrations at government, but they will not spill the blood of their fellow citizens. They may insult their politicians, but never, never insult their nation!
President Obama once said to his fellow Americans that:
We, the People, recognize that we have responsibilities as well as rights; that our destinies are bound together; that a freedom which only asks what's in it for me, a freedom without a commitment to others, a freedom without love or charity or duty or patriotism, is unworthy of our founding ideals, and those who died in their defense.
I strongly believe that this strong culture of a national social compact, which President Obama mentions, needs to be better cultivated in Nigeria – in our schools and Universities, in our places of worship, in our work places, in our local communities, and ultimately, in our nation. To put the love of our communities and our nation above our narrow parochial and political interests. And to pursue the development of our country as one people “bound in freedom, peace, and unity”.
To conclude, let me wrap up by congratulating the Class of 2014 once again. The future of Nigeria and Africa belongs to people such as you – not me, nor your parents nor your professors. You are going to be our nation’s future business men, teachers, politicians, scientists and administrators. Our nation’s success in the coming decades will rest with you. Your parents and teachers have brought you this far. Babcock University has also given you a good educational foundation. Now it is your turn to step up and help build our country.
Make no mistake about it – there will be challenges ahead of you. There will also be temptations ahead of you to take short-cuts and compromise on your ethical beliefs. The road ahead may not always be easy. But as the former US President John F. Kennedy once said, “Do not pray for easy lives. Rather, pray to be stronger men [and women].”
•Being the Convocation Address delivered by the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala (shown in photo), on June 1, 2014 at Babcock University, Ilishan-Remu, Ogun State, Nigeria.
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