Oluwatobi Ogunbayo argues that increased capital spending on infrastructure is strategic: it will attract investors and boost domestic productivity
Africa’s one billion population spends at least $25 billion on food imports every year; a continent that has 39 million hectares of agricultural land suitable for irrigation, but only 7% of this formidable land is currently irrigated. Nigeria represents 20% of African population of which 65% are small holder farmers (SHF) that derive their livelihood and existence from the produce of their farms. Nigeria’s outlook for poverty alleviation is currently weak with over 44% living under $1.90.
This extreme poverty has been prevalent in Nigeria for decades, largely occasioned by scare resources. This is evident in the growing number of out-of-school children, high rate of hunger, increasing population without access to safe drinking water or basic sanitation and other developmental indices. This has been further compounded over the years by negative trade imbalances and the tragedy of armed conflict that has rendered over two million people displaced within Nigeria. Despite the abundance of vast natural resources, poverty still prevails and remains the order of the day. Currently, there is poor access to food and malnutrition is widespread in Africa’s largest economy.
With concerted efforts at diversifying from a mono-economy based on oil, Nigeria’s mining (Iron ore, metals, minerals, gemstones and oil) outlook is weak and has been subjected to fluctuation. Smuggling has consistently slowed down our economic growth rate, Gross Domestic Product (GDP) making the government lose out on its domestic revenue due to serious leakages in this critical sector and has adversely affected our competitiveness in the global market. These and other leakages have further compounded the poverty crisis.
Since the discovery of oil, two generations of Nigerians have not gone into farming, thereby making agriculture look as if it is going out of fashion. Production of stable foods such as maize, groundnut and other legumes have in the last three decades decreased by an average of 30 percent. Understanding that agriculture is, and will remain a significant source of employment opportunity, GDP growth is the driving force behind Godwin Emefiele’s presidential directive at financing Nigeria’s 10 essentials crops.
Also, significant progress in alleviating poverty has been made by the Central Bank of Nigeria (CBN) under the Anchor Borrowers’ Programme and other agricultural initiatives to boost local employment, increase productivity and agricultural output across their value chains — an effort that needs to be complimented by other stakeholders in the development sector starting from the federal to states and local authorities. In developing the Nigeria Agricultural Action Plan (NAAP) to create a comprehensive agricultural road map that will end the challenge of entry and exit of small holder farmers as well as eliminate vulnerability, risk and other intrinsic or extrinsic factors, the key to unlocking production and lifting Nigeria out of poverty is to create an enabling market demand economy for the real sector, bringing in millions of employers and beneficiaries. With pockets of opportunities across various other sectors, fiscal transparency and robust economic frameworks, which are great assets as well as catalyst for a vibrant and competitive economy, Nigeria is on the right path. The struggle to lift more Nigerians out of extreme poverty is a task for the current and future administrations. There are, however, certain procedures that need urgent attention.
Budget implementation through increased capital spending to finance infrastructure gap that is strategic and that will endear investors, boost domestic productivity is key. Raising capital expenditure to 40% of the annual budget consistently over the next five to 10 years is a form of financial restructuring Nigeria needs that will fix our deplorable roads, transform our medical and power infrastructure, fast-track nationwide rail development and open floodgate of innovation and industrialisation that will raise the standard of our local industries thereby moving Nigeria closer to being integrated internationally. Good governance indices — political, business, financial, economic and other enabling environment should be developed to create flexible labour markets and facilitate the development of labour-intensive sectors that can complete globally while opportunities for discussion on non-complex trade liberalisation should be pursued painstakingly through our multilateral development cooperation.
Going forward, there is need to address as a matter of urgency the issue of high unemployment and mismatch of qualifications in Nigeria by increasing the labour force participation through the establishment of skillset trainings and creation of employment opportunities. With high quality jobs predominantly provided by the private sector, there is need for a paradigm shift to creating entrepreneurship. Constant engagement and supports of the informal sector as a deliberate policy to serve as incubators to big cooperation is important as they have their role to play in the emergence of a new generation entrepreneurs.
Again, poverty, education and development are intertwined and as such proven as a tool to advance socio-economic development. Although emphasis has been made on achieving primary education in Nigeria, as a country, there is need for effective legislation aimed at ending the phenomenon of out-of-school children. This should be one of the topmost priorities of President Buhari’s second term agenda. Such improvements and outcome of this education overhaul will massively shape Nigeria’s effort in alleviating poverty. Policy implementations in addition to social, cultural and attitudinal change are capable of providing foundations and unleashing the potential of an increasingly educated and cosmopolitan society.
In conclusion, having received the mandate to serve Nigeria for another four years and the positive outlook for 2020 and beyond, this is a golden opportunity for the Buhari-led administration to restore hope and lift the citizens out of poverty by putting together a team that is goal driven, selfless, and energetic, that can drive Nigeria out from the current doldrums into prosperity.
––Ogunbayo is a Board Member of the National Cooperative for Commercial and Industrial Agriculture and a member of the non-partisan socio-political group, G57