Ahmed: Economy Still in the Doldrums
Since her emergence as Finance Minister about eight months ago following the sudden resignation of her predecessor, Kemi Adeosun, over certificate forgery, not much has happened under Zainab Shamsuna Ahmed, reports Ndubuisi Francis
In spite of the economy exiting recession, there had been a subdued economic outlook, with downside risks persisting.
During the recent Article IV consultation in Nigeria by a team of the International Monetary Fund (IMF) economists to assess economic and financial developments and discuss the country’s economic and financial policies with government and central bank officials, many things stood out.
The IMF observed that although the Nigerian economy exited recession (real GDP increased by 1.9 per cent in 2018, up from 0.8 per cent in 2017), however growth is still too weak as a result of persisting structural challenges.
Among the team’s observations include large infrastructure gap, low revenue mobilisation, governance and institutional weaknesses, and banking sector vulnerabilities, which according to the IMF, are dampening long-term foreign and domestic investment and keeping the economy reliant on volatile oil prices and production.
The IMF also noted that the current economic expansion is below where it ought to be to reduce poverty and improve human development indices, such as healthcare and education.
For the IMF, policy choices such as continued foreign exchange restrictions, and petrol subsidies are the major culprits.
It noted that over the medium term, absence of strong reforms, growth would hover around 2½ per cent, implying no per capita growth as the economy faces limited increases in oil production and insufficient adjustment four years after the oil price shock.
Asphyxiating Debt Burden
There has been growing apprehension over the nation’s burgeoning debt burden. This concern was again reinforced by the IMF during the recent Article IV Consultations.
Acccording to the IMF, interest payments by the federal government on its outstanding debt will remain elevated at unsustainable levels of 63 per cent of FGN revenues for 2019, and falling slightly to 50 per cent of FGN revenues by 2020.Total FGN debt, it added, will also rise to 26.8 per cent of GDP in 2019, and 27.7 per cent of GDP by 2020.
The position of the IMF on the need for economic reforms further lend credence to the fact that the flagship Economic Recovery and Growth Plan (ERGP) which Zainab Ahmed was a major facilitator when she was the Minister of State for Budget and National Planning has failed to meet most of its targets
The IMF urged the authorities to reinvigorate implementation of structural reforms to diversify the economy and achieve the Sustainable Development Goals.
The Fund alluded to the importance of improving the business environment, implementing the power sector recovery programme, deepening financial inclusion, reforming the health and education sectors, and implementing policies to reduce gender inequities.
It also emphasised the need to strengthen governance, transparency, and anti-corruption initiatives, including by enhancing Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) and improving accountability in the public sector.
Gauging Her Performance So Far
There is still not much to applaud over budget implementation and revenue generation.
However, the minister made a major drive to boost government income with the launch earlier in the year, of the Strategic Revenue Growth Initiative (SRGI) to generate more revenues to finance national development.
According to the minister, the SRGI will be implemented in the areas of achieving sustainability in revenue generation to optimally collect revenues to maintain fiscal buoyancy and resilience.
But the move to improve revenue generation is coming with a proposal to increase Value Added Tax (VAT) as well as the removal of subsidy on fuel, two critical areas which have created serious apprehension in the land.
Under Ahmed’s watch, the Excess Crude Account (ECA) has been drawn down from over $2.5 billion to about $183 million, leaving the economy with little or no fiscal buffers.
Usani: Torn Between N’Delta Needs and Political Ambition
Although there are some achievements, the Minister of Niger Delta Affairs, Usani Uguru Usani, who prefers the prefix ‘Pastor,’ cannot lay claim to realising much of the dream programmes he envisaged for the region, writes Ndubuisi Francis
His Political Foray and Controversies
Since 2003, Usani Uguru Usani had thrown his hat into the ring, contesting the governorship seat of his native Cross River State. Each time, he did, mother-luck had remained reluctant to smile at him.
In the desire to govern, 2019 was not an exception. In deed, his contest generated several issues as the All Progressives Congress (ACP) in Cross River State became factionalised, with one of the factions accusing the minister of working against the party and causing its massive defeat during the general elections.
But his reaction to these allegations were simply that they were not strange to him. In an interview with a national daily, he had said: “You can cross-check everything I am going to say because they are verifiable. From 1999 to 2015, I have had reason to dine with the PDP. It was a political fallow season.
“You will probably be surprised to hear that when I contested for governorship in the opposition in 2003, there was an attempt in broad day light to assassinate me and I ran out of the country to return after two years. At that time I was asked to join the PDP and contest for the senate but I declined.
“In 2012, when I contested against the PDP candidate, offers were made to me and I declined. If you talk to Cross Riverians, they know us by character. So, when I had a political fallow season, I did not accept overture from them, what will now attract me now as minister? If for 16 years, I declined everything that tended to be offered to me, now that I am minister, what do I intend to gain? Is it that if I support them, I will become president?
“This is a crafted blackmail intended to decimate my reputation. Thank God as journalists, you have the capacity to verify what you get or the information you receive.”
Programmes for the Niger Delta
Since his emergence in 2015 as the minister overseeing the Niger Delta Affairs, the ministry has not recorded a quantum leap. The flagship project—East-West road is yet to be completed in spite of several assurances to evolve innovative funding initiatives to ensure completion.
Only last month, the minister told a delegation from oil and gas producing areas in the Niger Delta that the federal government had approved N100 billion to complete sections 1-4 of the critical project.
One of the minister’s achievements was to bring the Niger Delta Development Commission (NDDC) under his ministry’s supervision.
Empowerment Programmes/Skills Acquisition Centres
Although the minister executed a couple of empowernent programmes for women and youths in the region, most of the skills acquisition centres he inherited from the previous regime, especially in the South-east are yet to be completed.
In 2016, the minister unveiled a lot of initiatives, which looked wonderful on paper. Some of them included common economic and communication projects for all the oil-producing areas. Among them was a fibre optic project. The dream projects which were unveiled with funfare in Akwa Ibom State with some governors in attendance, suffered death before arrival.
The same fate also befell a proposed trust fund for the region. Alhough the minister did not divulge much information on the proposed trust fund, it was configured in a way that donor agencies, international oil companies (IOCs), local and multilateral international financial institutions and corporate entities would contribute to a pool of funds that would be deployed in developing the Niger Delta.
Usani however oversaw a technical audit report of projects from the ministry’s inception and how funds were frittered away.
Udoma’s ERGP Battling with Growth Constraints
Obinna Chima writes on the performance of the Ministry of Budget and National Planning in almost four years
Although the Minister of Budget and National Planning, Senator Udoma Udoma was appointed in November 2015, it took him 17 months to introduce the Economic Recovery and Growth Plan (ERGP), a medium term all-round developmental initiative focused on restoring growth, investing in people and building a globally competitive economy.
Specifically, the ERGP which was launched in April 2017, is a three-year programme which would terminate in 2020. The economic agenda of the ministry is completely hinged on the plan.
The vision of the ERGP is one of sustained inclusive growth. It is aimed at increasing national productivity and achieving sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security. It also provides a blueprint for the type of foundation that needs to be laid for future generations, and focuses on building the capabilities of the youth of Nigeria to be able to take the country into the future.
The ERGP has three broad strategic objectives that would help achieve the vision of inclusive growth and they include restoring growth; investing in people and building a globally competitive economy.
Interestingly, the ERGP in the past two years (2017 and 2018) missed its economic growth projection as the country continues to battle growth constraints.
The ministry conducted an ERGP Focus Labs to develop solutions to some of the challenges in the economy identified by the plan. The focus labs were designed to identify projects that can drive economic growth and create jobs through mobilising private investments in three vital sectors of the economy. The initiative took place over a six-week period between March and May 2018 and involved 180 organisations including ministries and government agencies. The labs had set a target of $9.25 billion for private sector investments into manufacturing and processing which would create over three hundred thousand jobs across the six geo-political zones by 2020.
However, in line with the plan, the drive by the federal government to promote activities in the non-oil sector appears to be gaining traction. This is evident in the Gross Domestic Product (GDP) figures being released by the National Bureau of Statistics, which have always indicated an uptick in non-oil activities.
For instance, the non-oil sector contributed 92.94 per cent to real GDP in the fourth quarter (Q4) of 2018, slightly higher than the 92.65 per cent recorded in Q4 2017. The sector grew by 2.70 per cent in real terms within the review period. This was 1.25 per cent higher than the growth rate recorded in Q4 2017, and 0.38 per cent higher than the growth rate recorded in Q3 2018.
But some commentators have argued that implementation of the plan partly supported the recovery of the Nigerian economy since it slumped into recession in 2016.
In their assessment of the ERGP, analysts at Deloitte, one of the leading professional services firms in the country identified challenges such as funding, budget implementation, security challenges (specifically in the North-East and North-Central), fluctuation in global oil prices and increasing use of alternative sources of energy (e.g., shale oil), as factors that have continued to affect the plan.
However, while some of the target metrics in the plan appear overly ambitious, the fact remains that the citizens are yet to feel the impact of the policies of the Ministry of Budget under Udoma since his appointment.
Another downside to the performance of the ministry under the leadership of Udoma is the fact that he has been able to work with the National Assembly to tackle the issue of budget delay, which appears to have become a norm in the country. This has necessitated the call for the country to return to a January- December budget cycle to allow for effective planning by businesses as well as to promote investment.
Finally, the ministry which is also saddled with the responsibility of budget monitoring and evaluation cannot be said to have efficiently carried out this task.
Onu: Still Searching for Landmark Breakthrough
Most Nigerians would have really wished that the country’s scientific and technological breakthroughs move from theories to practical inventions, writes Davidson Iriekpen
As a first class Chemical Engineering graduate and with a PhD in the same field, when President Muhammadu Buhari appointed Ogbonnanya Onu as Minister of Science and Technology, many did not consider it as a mistake.
Since his assumption of office, he has tried to lay emphasis on the patronage of indigenous goods and services especially as the ministry was considered one of the 13 ministries critical to the actualisation of the federal government’s programmes on sustainable growth of the Nigerian economy.
Though the ministry is not saddled with the implementation of substantial projects, it is at the forefront of the diversification drive towards science, technology and innovation.
This has led to the new policy document on National Science, Technology and Innovation Roadmap (2017-2030), vital to the diversification of the Nigerian economy.
Based on this, President Buhari recently issued Executive Order No 5 which seeks to promote self-reliance and enhance industrial capacity, especially in new and emerging technologies.
The ministry also launched National Strategy for Competitiveness in Raw Materials and Products Development in Nigeria in September 2017. It is believed that owing to the paucity of funds and low funding of the ministry, implementation of the ministry’s projects under Ogbonnaya’s watch has not been encouraging. Nevertheless, he has encouraged all the agencies under the ministry to try and fulfill their mandate. First was his directive to all the 17 agencies under the ministry to patronise Innoson vehicles as well as other local manufacturing companies. His administration began the National Science and Technology Week which first held successfully in April 2017 and then March 2018 to showcase inventors and inventions. The maiden edition of the expo which held between April 13 to 17, 2017 in Abuja, according to the minister, was productive as he noted that various products from research institutes under the ministry displayed at the event.
These products were later commercialised by investors which later led to a second edition to further drive the need to develop the country’s technology.
Notwithstanding, efforts to promote indigenous products and the advocacy has not been very effective as there is still low patronage from Nigerians and encouragement from the government.
Onu signed a Memorandum of Undertaking (MOU) with three international companies to export indigenous technologies and food and another one with NASCO to kick off commercial production of High Nutrient Density biscuits.
The minister fulfilled his promise to encourage and empower youth in science and technology when in 2016, the ministry commenced a process to encourage youth in all 774 LGAs of the country to participate in science and technology in a programme tagged: “774 Young Nigerian Scientists Presidential award (774-YONSPA)”.
The award is an initiative of the Federal Ministry of Science and Technology held annually. It is aimed at effectively encouraging and developing the interest of Nigerian youth in science, technology, and innovation (STI).
The competition is organised at the 774 local government areas across the country and the best 37 students are selected to represent each state of the federation, including the FCT.
Participation in YONSPA awards cuts across all senior secondary schools (private and public) through competitive examinations.
Under the minister also, 19 new high yield crop varieties were released by the Federal Ministry of Science and Technology to enhance agriculture.
The National Variety Release Committee (NVRC) approved the release at its 26th meeting held at its secretariat, National Centre for Genetic Resources and Biotechnology (NACGRAB), Ibadan.
The varieties include: one soybean (SC-SL01), five maize hybrids (P4226, P3966, P4063, WE3205 and DKB350) and two maize varieties (AMANA-1 and AMANA – 2), one sweet potato variety (Solo Gold); three groundnut varieties (SAMNUT 27, SAMNUT 28 and SAMNUT 29); and three sorghum varieties (SAMSORG 47, SAMSORG 48 and SAMSORG 49).
Almost four years on the saddle, with no renowned scientific and technological breakthrough, in spite of the role science and technology play in country’s development, many Nigerians believe that the ministry has not achieved much.
Nigeria’s automotive industry, for instance, is yet to compete favourably with foreign companies. The minister blames this on the absence of research and development.
A year after the federal government signed an agreement with the Russian state-owned nuclear energy corporation to build and operate a nuclear power plant, the first of its kind on the continent, as well as a research centre that would house a nuclear research reactor, nothing has been done so far.
Bello: Remarkable Turnaround in FCT Projects Execution
FCT under Muhammed Bello has witnessed a turnaround in projects execution reports, Wale Ajimotokan
Before he joined the cabinet as the FCT minister four years ago, Malam Mohammed Musa Bello was the Chairman of National Hajj Commission of Nigeria (NAHCON) from 2007 until May, 2015.
But his stint witnessed remarkable turnaround of several projects inherited from the previous administration in spite of budgetary constraints.
For instance the FCT administration proposed budget for 2017 was N222 billion but from the outset it confronted with drastic shortfall in its statutory budget. The National Priority Budget which in 2016 stood at N109 billion, fell to N30.4 billion in 2017 and N40.3 billion in 2018 and N30.7 billion in 2019. More so, of the N30.4 billion appropriated in 2017, it could only access N12,198,561,435.40. In addition, the monthly statutory allocation slumped from about N5 billion to about N2.7 billion against a wage bill of over N4 billion.
The realisation of over N21 billion by the newly reconstituted FCT Internal Revenue Service in the first quarter is one of the untiring efforts of FCT Administration to shore up its revenue profile and wean itself from statutory revenue of federal government. The board anticipates a revenue of over N130 billion in 2019. This has been described by experts as landmark.
In addition, it is also leveraging technology through a digital infrastructure to stem revenue leakage in the collection and monitoring of payments at FCT’s main revenue sources.
The generated revenue and statutory budget allocation, enabled FCTA to complete several key road and national projects in the past four years. They include: Kubwa – Zuba Expressway, known as the Outer Northern Expressway; Shehu Musa Yar’Adua Expressway – (Airport Expressway), Bill Clinton Interchange/bridge which connects Nnamdi Azikiwe International Airport. The Aso Villa Roundabout Bridge, which was initiated and completed by the administration, Constitution and Independent Roads (Roads B6 and B12), running from the National Stadium to the Three Arm Zone and back.
Inner Southern Expressway (Goodluck Ebele Jonathan Expressway). The east portion and west end of this road have been substantially done. Bill Clinton Drive: The Federal Executive Council (FEC) last year approved N1.95 billion for the reconstruction and rehabilitation works on the road. Built more than 20 years ago, it has since exceeded its lifespan and is currently in serious state of disrepair.
Southern Parkway traversing the Central Bank, NTA and Muhammadu Buhari Way. Karshi-Apo Road:This road is designed to create alternative route to the city from that axis.
Apo-Wasa Road Dualistion Project was also designed to pull up the Karshi Apo Road to the heart of the city. While the Nyanya-Gbagarape Road, measuring 1.9km is 88 percent completed and has rekindled the economic and social lives of the community.
Kuje-Gwagwalada bypass road traversing major agricultural firms and farmlands is complete. In Karu Satellite Town Infrastructure, FCTA has secured approval of the sum of N2.6 billion by the Federal Executive Council (FEC) for massive construction of infrastructure within Karu Phase 2.
In the Abuja Light Rail project, the FCT Administration has met the two packages of the project at an average of 60 percent completion and has driven it to 98 percent completion. The rail transport would open the corridor of 12 modern stations, for tourism, commerce, investment and job creation.
1.2MW Lower Usuma Dam Solar Power Project. N46.5million was paid out to the Japanese International Cooperation Agency (JICA) as counterpart funding for the project designed to improve FCT water supply.