Buhari administration charts new economic roadmap

Successive administrations have been paying lip service to diversification of the economy. But there are indications that the Muhammadu Buhari administration, compelled by the realities of the recession and its promises of change, has had to take some hard decisions. Deputy Political Editor RAYMOND MORDI examines the drive by the administration to chart a new roadmap for the economy.

THERE is a glimmer of hope that the Muhammadu Buhari administration is  working towards improving the country’s business and economic climate.

First, the announcement came three weeks ago that Acting President Yemi Osinbajo had signed three Executive Orders, to change some of the ways government business and operations are conducted, by removing the issue of duplication of duties and confusion in the operations of the various ministries, departments and agencies.

This was followed up by an interactive meeting two weeks ago between some members of the Federal Executive Council, led by the Acting President, and about 2,000 senior civil servants that would drive the Executive Orders,  aimed at improving the business environment.

With this development, the government appears to have provided the direction of economic planning in the medium term. The shift of focus from short-term plans to medium and long-term planning became discernible two months ago, with the publication of the administration’s policy roadmap, the

Economic Recovery and Growth Plan (ERGP). Experts say the document contains important reform goals, such as increased spending on infrastructure, privatisation of state-owned assets; improvement of revenue collection; achievement of food security, and acceleration of the environmental clean-up in the Niger Delta.

It also provides clarity on fiscal and monetary policy and makes it clear that government is interested in pursuing economic — in particular, fiscal — diversification policies.

With the state of the economy, which is faced with dwindling oil revenues, consistent depreciation in the value of the naira and a slowing Gross Domestic Product (GDP) growth rate, it has become imperative to go back to the drawing board, to reposition the country towards looking beyond oil and leveraging on other resources.

Nevertheless, the reluctance to introduce reforms over the years has often not been a factor of poor planning, but of implementation. Against this background, how far can the Buhari administration go in its quest to reduce the country’s over-reliance on export of crude oil for revenue and foreign exchange?

Experts are in agreement that, after dithering for about two years, the administration appears to have found its bearing on the economy. The National Chairman of the United Progressives Party (UPP), Chief Chekwas Okorie, said there are signs in recent times that agriculture may be revamped and that the country may be self-sufficient in food production in the near future.

A finance and investment consultant, Mr. Akintunde Maberu, puts it in better perspective. He said one thing the administration has succeeded in doing is to discourage the importation of all manner of goods and encourage local production, particularly in the agricultural sector. He said: “We had become so much import-dependent, but since the Buhari administration came on board, import has begun to waiver and exports are gradually picking up.

“I’m in love with what is taking place in the agric sector. The Minister of Agriculture, Audu Ogbe, has done tremendously well. We have seen small farmers being assisted with loans. There are pockets of complaints that the percentage of repayments are not as high as it should be, but we will get there.

“Don’t forget that the partnership between Lagos and Kebbi has produced many millionaires in the northern state. People are now going back to agriculture, because it a veritable way of earning a living; it is a veritable way by which the entire nation can be fed. The country’s capacity in rice production is growing and it is even said that the Nigerian rice is more tasteful. We now know that we have been eating chaff in the name of imported rice. Those who have started eating Nigerian rice no longer wish to go back to the imported variety.”

A lecturer in the Department of Political Science, Federal University, Wukari, Taraba State, Dr. Godwin Dappa, also believes that the impact of the administration’s efforts to diversify the country’s economic base is beginning to yield some dividends. He said: “I think the Buhari administration is making headway in the attempt to diversify the economy. But with his health challenges, so many things are still uncertain, including the sustainability of his policies.

“His cabinet is also not working as a team. We have serious challenges with members of his cabinet, because many of them are not sincere. This is because when one sincere person is working with many others who do not share his enthusiasm, what do you expect? We may still continue to face the challenges of implementation.”

Dappa said diversification of the economy has been very difficult to achieve because there is no political will. He said: “We have very good policies on paper, but we’ve always had problems with implementation. If our leaders had possessed the political will they would have succeeded in achieving some success in that regard.

“Let’s face it, we have not really put our manpower into use; all hands are not on deck, if hands had been on deck, Nigeria would become a great power in the world, like China. If one local government faces the production of cassava and another one faces the production of sugarcane, which is used for the production of ethanol, and so on, we would have gone far.”

The quest to improve the environment for doing business in the country has rekindled the hope that Nigeria can survive without relying solely on oil.

Africa Development Bank (AfDB) former Vice President, Chief Bisi Ogunjobi, said, if the country could sustain its effort in diversifying its agricultural base, it could survive without oil,.

He said: “But this will only happen if we put in place the appropriate macro-economic policies, the necessary agricultural policies, mechanisation of the agricultural sector, the right policy for producers and incentives for farmers. If this happens, the country can survive and even do better without oil.”

Ogunjobi, an economist and the lead partner, McFeley Development Associates, said oil is a free resource and that Nigerians did not do anything to bring it into being. He said: “It is exploited with the assistance of technology and foreign investors. In agriculture, on the other hand, it is the people themselves that produce the wealth. Therefore, the impact is completely different, in terms of employment and the knowledge which the people have.”

He said successive leaders since the 1970s abandoned agriculture, because oil is an easier alternative. He said: “During the pre-colonial days and the early days of independence, the defunct Western Region was built on cocoa. The infrastructure in the region built during that period, including the Cocoa House, Ibadan, was financed from proceeds from cocoa. But, successive governments took the path of least resistance.”

Ogunjobi believes it is a paradox that Nigerians are still talking of the diversification, when the economy is already diversified. He said: “When you look at the geography of Nigeria, you have the forest areas in the South and you have the Sahel savannah in the North. All the agricultural produce of the North is different from that of the South. Even that alone is a built-in diversification, which allows the economy to have a sort of smooth override over a period of time.

“In the South, you have the forests, you have timber, you have palm oil, you have rubber, you have cocoa and other products, and in the North, you have the grains. So, the economy is already diversified and that is what happened in the pre-colonial and the early days of the independence, with cocoa, palm oil, rubber and timber from the South, whereas in the North, we have ground nuts, we have the various other grains, including millet and sorghum. We are talking of diversification because we abandoned agriculture, which was the backbone of the economy before the discovery of oil.”

The economist said but for frequent changes in government policies the country would have performed better in the last 18 years of civil rule. In this regard, he faulted the Buhari administration for not building on what Akinwunmi Adesina did as Minister of Agriculture under the Goodluck Jonathan administration, adding: “Adesina did some positive things in the sector, but rather than build on it, they have tried to reinvent the wheel.”

He added: “Take the case of Lagos State, for instance, I believe the performance of the successive leaderships were largely influenced by the stability and continuity of the governorship management of the state. This ensured that policies remained in the same direction; whereas, when you go to other states you will find that subsequent or succeeding governors usually abandon the policies of their predecessors, by starting all over again.

“This was also reflected at the national level, when the policies enunciated by former President Olusegun Obasanjo were not followed by the late President Umaru Yar’Adua. Similarly, all the policies put in place by Yar’Adua were also abandoned by the succeeding administration of former President Goodluck Jonathan, while those of the latter were also not followed by President Muhammadu Buhari.”

Government after government has only been paying lip-service to diversification of the economy. For instance, states in the North talk in glowing terms of the ground nut pyramids of Kano in the period before Nigeria’s independence in 1960 and during the First Republic. But many of them do not have an agricultural policy regarding the production of ground nut and other grains cultivated in the region. Similarly, states in the Southwest have not been able to do much to resuscitate the growing of cocoa in the region. The same thing applies to palm oil and rubber in the Midwest and the East. What percentage of the budgets of each of the states and that of the Federal Government are devoted to agriculture? The truth is that the emphasis has not been on agriculture.

The signing of the Executive Orders is coming at the right time, because the country needs to improve its competitiveness, in terms of doing business. Government agencies are supposed to facilitate business for local and foreign investors, but they have become a cog in the wheel of progress, because they have failed to provide the enabling environment for the economy to thrive.

Experts say the country can improve its competitiveness, by promoting security, continuity, long-term planning, ease of registering a business, registering properties, access to electricity, as well as enforcement of contracts and putting mechanism in place to fight corruption in the society. For instance, registering a company in Nigeria is done through the Corporate Affairs Commission (CAC). Though the commission has offices in all the states, it is only its headquarters in Abuja that offers expedited registration services. Nigeria is currently ranked 169 out the 190 countries in the World Bank Ease of Doing Business index. This is a slight improvement on the 2015 ranking, where the country was placed 170 out of the 189 countries studied then.

Ogunjobi said the government must increase the tax net, because Nigeria is a country that has the least taxation. He said: “In most advanced countries, the economy is run on taxation. In Nigeria, the average man does not pay tax. So, the tax base has to be broadened. People must be cajoled, convinced or made to understand that payment of taxes is obligatory. Apart from taxes, we have other mineral resources, apart from oil, which are virtually unexploited. Aside from oil, I don’t know of any mineral resources that contribute two per cent to the gross domestic product (GDP).”

Maberu said increasing the number of people in the tax net could be achieved by simplifying the mode of paying taxes. This, he said, could be done by making the electronic filing and payment system mandatory, an approach that would make paying taxes less cumbersome and result in a significant improvement in tax revenue.

The consultant, however, wants the government to eliminate multiple-taxation, because discourages inflow of investment. He said: “Importing agents are complaining; we hope that many of the duties will be streamlined. The clearing agents go through a lot of hassles to clear imported goods and this discourages free flow of business and most times it forces importers to divert goods coming to Nigeria to neighbouring countries, where they are later smuggled in without paying the charges.”

To tap into the global tourism industry, Ogunjobi said Nigeria has a long way to go. He said the government must tackle the growing insecurity in various parts of the country and that it should continue with the development of  the infrastructure.

He added: “If there is no infrastructure, nobody would come; if there is no security, nobody is going to come.”

The biggest problem facing the  administration is its slow pace in taking crucial decisions. It has taken the administration 22 months to publish a policy plan, which experts have described as a rehash of proposals previously espoused by past administrations. Elder statesman and Second Republic politician, Alhaji Tanko Yakassai, said a party campaigning to take over government ought to have a blueprint for the economy. He said: “It is a matter of necessity for you to have a plan, if you are coming into power. The economy had no direction in the last two years, because the government in power had no plan.”

With only two years remaining in the administration’s four-year mandate, it does not appear to have enough time to pursue the implementation of the new roadmap to logical conclusions, since the country would be entering the electioneering campaign mode by the middle of next year. The timeframe does not provide much of a window for all the reforms outlined in the ERGP to be carried out.

But, it might still be able to pull it off, if it could muster the political will to forge ahead with it against all odds. Ogunjobi said this could be, provided that the same government would be in place beyond 2019.

He said: “One of the problems we have is that there is no continuity; we don’t follow up. Every leader always wants to come up with his programme and do not always want to identify with that of his predecessor.”

Observers said the re-election of the All Progressives Congress (APC) administration-led by Buhari would largely depend on his health and whether he would be seeking  a second term in in 2019. Only time will tell.


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