•Targeted reforms, tough decisions needed to fix economy, says Ahmed
James Emejo in Abuja
The call by President Muhammadu Buhari yesterday, that both public and private sector leaders should look inward in proffering solutions to the unique challenges confronting the country’s socio-economic development has been endorsed by some analysts.
They agreed with the president that most of the social economic challenges in the country cannot be solved by external bodies, stressing the need for home-grown policies to address Nigeria’s peculiar challenges.
Buhari had tasked business leaders to look inward in proffering solutions to the country’s unique challenges.
He spoke at the opening of the 25th Nigerian Economic Summit (NES25), themed: “Nigeria 2050: Shifting Gears,” where the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said in order to seize advantage of the population growth, the country would require targeted reforms, tough decisions as well as a radical shift in the current culture, particularly attitudes towards taxes and public finance to fix the economy.
Buhari said his administration would continue to collaborate with the private sector in designing and implementing developmental projects that will keep Nigeria on track for sustained, inclusive and prosperity-driven growth.
Buhari, who made his first appearance at the annual summit, having been often represented by Vice President Yemi Osinbajo, also noted that the successful conclusion of 2019 general election and the resort by aggrieved candidates to seek redress in the courts rather than the street was proof that the country’s ‘‘democracy is maturing.’’
By this, he said Nigeria has demonstrated to the world that it is capable of electing leaders in a peaceful and orderly manner.
He said: “The elections have come and gone. Our country, once again, has shown the world that we can choose our leaders in a peaceful and orderly manner.
‘‘Apart from a few pockets of unrest, majority of voters exercised their civic rights without hindrance. Furthermore, we also saw an increase in the number of aggrieved candidates, and supporters, who took their concerns and grievances to the courts as opposed to the streets. This is how it should be. Ladies and Gentlemen, what this clearly shows is that our democracy is maturing.”
The president assured his audience that his administration was determined to equip citizens with the means to seize any opportunities that may arise from the anticipated population growth to about 400 million by 2050.
To this end, he said the government would sustain investments in education, healthcare, infrastructure, security, strengthen and entrench the rule of law.
Buhari further bemoaned the concentration of wealth in the hands of a few individuals at the expense of ordinary Nigerians, adding that the development had contributed to the current insecurity bedevilling the country.
“A significant proportion of Nigeria’s prosperity today is concentrated in the hands of a few people living primarily in four or five states and the FCT,” he said, adding that some of the most prosperous Nigerians were present at the event.
“This leaves the remaining 31 states with close to 150 million people in a state of expectancy and hope for better opportunity to thrive. This, in the most basic form, drives the migratory and security trends we are seeing today both in Nigeria and across the region,” he said.
The president said going forward, policies and programmes must focus on promoting inclusivity and collective prosperity.
‘‘In recent weeks, I have been to Niger Republic to attend the ECOWAS summit; Japan with fellow African leaders to attend the Tokyo International Conference on African Development; the United Nations General Assembly in New York; and South Africa on a state visit to exchange ideas on the common themes we share as the two largest economies in Africa.
‘‘What was very clear at these meetings, and numerous others I have been privileged to attend over the years is the increased consensus by leaders that to address population growth, security and corruption matters in developing economies, our policies and programmes must focus on promoting inclusivity and collective prosperity,” he said.
Buhari added: ‘‘This shift implies that the concept of having competitive free markets that focus on wealth creation alone will be replaced by those that propagate the creation of inclusive markets which provide citizens with opportunities that will lead to peaceful and prosperous lives.’’
Stakeholders Back Buhari on the Need to Look Inwards
Meanwhile, analysts, who spoke THISDAY last night agreed with the president’s position.
The President, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uche Olowu, said what the president meant was the need to design integrated policies that would address socio-economic challenges confronting the country.
He said: “These socio-economic crises include social unrest as a result of the lack of job creation, poverty and all that. So, who is going to do that for you? Of course, you don’t expect any other person than concerted efforts, united in one voice, in making sure that we develop policies that would address all those challenges.
“Look at population growth. It is a threat and at same time an opportunity. So, are you saying we should wait for somebody from outside to address the challenge of population growth for us?
“So, I buy into the president’s vision on that because it is very easy to know that it is only Nigerians that can solve Nigeria’s challenges.”
The Head of Research at Agusto & Co, a Pan-African credit rating agency, Mr. Jimi Ogbobine, who welcome the president’s position, however, pointed out that the world had gone global.
According to him, the advent of the internet has shown that the world is more connected than is thought of.
“So, while we are looking inwards, we must also be prepared to compete globally, if not we might miss out of global opportunities,” he said, adding: “We must understand global trends, global dynamics and we must be globally competitive.”
An economist and Chief Executive, Global Analytics Company, Mr. Tope Fasua, said though it was a laudable move by the president, a lot still needed to be done towards actualising the target.
He told THISDAY:”I believe the theme of the summit is too far into the future. Horizons have become shorter. Next week is short term. Next month is medium term. Next year is long term. And if you want to project into the deep future, five years may see the world vastly different from how it is today. In 15 years time, human beings may be able to fly to anywhere they want with electronic wings.
“Crazy things will happen. A theme that projects 31 years hence may, therefore, be escapist. Or unrealistic. I hope they give a breakdown of how the different long terms will roll into 2050, which is ages away going by the speed of today’s thinking.”
He said he agreed with the president that economists needed to look inwards but contended that as the leader, the president should take the lead.
“Already we have lost ground vastly. Our definition of development is such that we borrow from abroad, bring technology and labour from abroad and expect foreigners to innovate everything we need,” he said, adding: “Foreign investors will never develop this country. Without responsible governance and a deep resolve to lock down and activate our youth, the private sector’s effort will range between feeble to nothing.”
Targeted Reforms, Tough Decisions Needed to Fix Economy, Says Ahmed
Meanwhile, in her opening remarks, the Minister of Finance, Budget and National Planning, Ahmed, said in order to seize advantage of population growth, the country would require targeted reforms, tough decisions as well as a radical shift in the current culture, particularly attitudes towards taxes and public finance.
“Just as the saying goes ‘no pain no gain’- I must say, the journey will be painstakingly tough and will require sacrifices on all sides, including government, the private sector, citizens and other stakeholders, she said.”
The minister noted that the future required huge financial investments on multi-faceted physical and social areas by both the federal, state and local governments to be able to provide quality, useful, accessible and affordable education, healthcare, transportation, housing, electricity and water.
She stressed the need to also provide digital connectivity and innovation, and rise above the tide of disruption that the Fourth Industrial Revolution will present.
On the proposed value added tax (VAT), Ahmed said the present administration remained committed to increasing finance for investment in health and education, to improve human capital development indices.
She said the objective was to further increase funding for capital expenditure so as to constitute at least 30 per cent of federal budgeted expenditures.
As a result, she explained, government had been compelled to review its fiscal policies, including the proposed VAT rate increase.
She said: “Nigeria’s VAT as a share of GDP in Nigeria has declined from 1 percent in 2010-2013 to 0.8 per cent in the last four years (2015 – 2018). This is significantly below the median of five per cent of GDP in other comparable African countries.
“Nigeria’s low VAT-to-GDP is attributable to the low nominal VAT rate, which at five per cent is the lowest in the African region (which averages at about 16 percent). Furthermore, the efficiency of VAT collection, at 0.2, is well below the African regional average of 0.33.”
She argued that the proposed VAT increase is likely to impact more on consumption by the urban communities and the wealthier sections of the population, than on the poor.
“The Ministry of Finance, Budget and National Planning plans to closely coordinate its fiscal policies with the central bank’s current tight monetary policy stance, to ensure that the appropriate outturns are achieved in terms of growth, consumption and inflation,” she said.
Ahmed added that the proposed VAT increase was in line with the recommendations of the Presidential Committee on the Funding Options for the minimum wage increase.
Nevertheless, the minister noted that the outputs of the summit are critical to the implementation of government’s 11 priority areas of its next generation of national plans.
She identified the areas to include, Economic and governance reforms, comprising macroeconomic stability through coordinated economic, monetary, fiscal and trade policies; fight corruption and improve governance; enhanced investments in physical infrastructure, human capital development to spur job creation and economic growth and improved health, education and productivity of Nigerians.
Other, include, ensure energy sufficiency (power); ensure energy sufficiency (petroleum products); improve transportation and other infrastructure and drive industrialization, focusing on macro, small and medium-sized enterprises among others.
According to her: “Shifting gears emphasise the imperatives for the country to move to a more robust competitive private sector economy with focus on the implications of the projected population of the country hitting over 400 million, making Nigeria the third most populous country in the world by 2050.
“The structure of this population that majority will be under the age of 35, representing a large percentage of Africa’s young working-age population. The opportunities are endless, as are the risks, however, if we do not accelerate our efforts towards sustainable and inclusive growth, and improved human capital.
“There is an urgent need to design policies that will not only address the rising population but ensure paradigm shift to a competitive private sector led economic growth and development. The Agenda for this summit is therefore, to provide strategic and innovative ways of getting the maximum benefits from the expected demographic dividends.”