Where are the Big Policy Ideas for 2023?
POSTSCRIPT By Waziri Adio
Postscript by Waziri Adio
As expected, the political space has crackled to life. Campaign posters and political messages, from the inspired to the threadbare, are everywhere. Consultations and other barely disguised political events are undertaken both to seek support and to telegraph strength. Almost daily, someone new enters the fray for the highest office in the land or is rumoured to be getting ready. It is a crowded field already, and the field is likely to get more crowded, and hopefully become livelier, as we get closer to the primaries. It is the season.
However, one thing has been sorely missing from this ongoing festival of declarations and hyper-politics: the audacious but specific and implementable ideas for addressing Nigeria’s current challenges. Yes, there have been some general and woolly statements, some decent repartees even. Yes, campaigns thrive on sticky slogans, and political crowds get fired up by memorable soundbites. But we are at an unusual and desperate patch as a country. Nigeria faces urgent and pressing issues that need more than strident denunciations and clever turns of phrases. What we need this campaign season is a different approach, one that should be grounded in policy specifics.
This is yet to happen. The campaign so far has been largely dominated by talks of zoning, and about the health, age, wealth, antecedents and reach of aspirants. These are very important considerations, especially given the peculiar reality of our polity and our very recent experience. But they should not be the only things to discuss in such a significant election.
Elections and transition periods offer an opportunity to do more than just pick someone among the motley crowd of those presenting themselves for office. They also provide a great chance for extracting firm commitments from the aspirants and the candidates, for putting the feet of those who want to be in charge of the commonwealth to the fire, for harvesting workable solutions to society’s most pressing problems. We didn’t maximise these opportunities in the past. It will be unfortunate if we do same this season.
And we shouldn’t just be content with glib talks or surrender in awe to those who can make fine speeches. It should not be enough for aspirants to say they are going to do XYZ if elected—they need to show their workings. We need to demand and critically interrogate the specifics of their proposals. These are some of the questions we should be asking: are the plans viable, realistic; how much will the plans cost and where will the money come from; do the numbers add up; are there trade-offs and are those reasonable; what is the timeline for implementation etc?
I am aware that campaigns are always waged in poetry. But the assumption that the poetry of campaigns provides an intimation of the laborious and messy prose of governance has been vain at best. Experience has shown that this approach has not served us well. We need to push the aspirants and the eventual candidates harder this time around. While you can’t stop them from minting and spewing slogans, you can dig into the nitty-gritty of what they plan to do in office, ask them tough questions and use your impression of their plans as one of the grounds for coming to an informed decision.
And we need to hear directly from the aspirants and the eventual candidates, not from their advisers and not from commissioned and colourful manifestoes and policy papers that can easily be denied. While it is conceded that the person eventually elected will have experts to work with, the president is the captain of the ship. We need to hear directly from him or her about his or her plans on how to take Nigeria out of stormy waters and critically assess his or her readiness for the top job at this critical moment in our voyage.
There is no sugar-coating this: whoever takes over next year will inherit a country with serious economic, physical and human insecurities and will need to take some tough and quick decisions. If we continue with the usual way of politicking and campaigning and hope for a different outcome, then the joke is on all of us.
To start with, our public finance is currently hobbled by the enervating trifecta of low revenues, mounting debts and growing petrol subsidy. There is hardly a miracle that can reverse this overnight or a soundbite that can poetically make them vanish from 29th May 2023.
According to the Federal Ministry of Finance, Budget and National Planning, the aggregate revenue of the Federal Government (FG) from January to November 2021 was N5.5 trillion while FG’s retained revenue was N4.3 trillion. For the period, budget deficit was N7.05 trillion, out of which N6.68 trillion (or 95% of the deficit) was new borrowings.
But it gets drearier: N4.2 trillion was used to service debts. This means that 76% (or N76 out of every N100) of FG’s aggregate revenue of N5.5 trillion and 97% (N97 out of every N100) of FG’s retained revenue of N4.3 trillion was used to service debt from January to November 2021.
Nigeria, clearly, has a dual revenue and debt problem. The FG is using almost all its revenue to service debt, and clearly taking on new debts to meet other obligations like personnel and capital. And it is not just an FG problem. Most times, the picture is worse at the subnational level, especially because the other tiers of government do not have the wriggle room that the FG has.
The extrapolated total revenue by all tiers of government in 2021 amounted to about 8% of the nominal GDP of N176 trillion. We not only have one of the lowest revenue-to-GDP ratios in the world but we also underperform the rest of Africa where the average revenue-to-GDP ratio is 18%. We are definitely not generating enough revenue for our need as a country and not adequately leveraging the size of our economy for tax purposes.
While it can be argued that our debt-to-GDP ratio is still within reasonable limits, it should be a cause for concern. According to the Debt Management Office, our total public debt now stands at N39.5 trillion, which is 22% of GDP and compares favourably with the 59% for Ghana, the 107% for the USA and the 237% for Japan. The issue though is that debts are serviced and paid from government revenue, not from or with GDP, and at the moment we are using almost all government revenue just to service debts.
Then there is the issue of the unceasing haemorrhage that is petrol subsidy. In 2021, we expended N1.43 trillion on petrol subsidy alone. The total amount earned by the FG from the oil sector from January to November that year was N1.47 trillion (made up of N970.33 billion from crude oil, N117.31 billion from FG’s share of NLNG dividends, and N381.27 billion from signature bonus and early renewals). From this we can extrapolate that for the whole year, FG earned about N1.6 trillion from the sector. This will mean petrol subsidy accounted for 89% of FG’s total revenue from the sector (even though petrol subsidy is paid for by the three tiers of government).
The National Assembly has just passed a N4 trillion budget for petrol subsidy for 2022. That is two and a half times more than FG’s total N1.47 trillion earnings from the oil sector in 2021. According to an insightful infographic by The Cable Index, the 2022 subsidy budget is higher than the N3.97 trillion collected by FIRS as both Value Added Tax (VAT) and Company Income Tax (CIT) in 2021. It is equally numbing that the N4 trillion petrol subsidy tag represents 73% of FG’s aggregate revenue and 93% of its retained revenue for 2021. It is also worth noting that the 2022 subsidy budget alone is almost of a quarter of the revised N17.3 trillion budget for the FG in 2022 and amounts to 2.3% of Nigeria’s GDP.
Most of the aspirants will definitely regale us with these data and more. But the really important conversation to have will be their specific plans for addressing Nigeria’s now obvious challenges in these three areas. What they should be telling us and what we should be asking them is what they plan to do about increasing revenue, about reducing public debts, and about eliminating petrol subsidy. It should not be enough for them to simply and glibly say I will do all of these, but to also show us their detailed plans that include the how, the trade-offs, the mitigation plans, and the when.
How to tackle the widespread menace of insecurity is another major issue. The recent attack on the Abuja-Kaduna train (with dozens still held hostage) and the gruesome killing of scores of people in Plateau State within the week are grim reminders of how pervasive insecurity has become. We are now dealing with generalised insecurity, with Boko Haram not totally eliminated in the North East, newly designated terrorists running riot in the North West, oil thieves having a free rein in the South-South, separatists killing and maiming with reckless abandon in the South East, the herder-farmer conflict still roiling the North Central and ritual killers and kidnappers terrorising the South West. What specific things do the aspirants plan to do improve security of live and property, how and when?
There are so many other issues that need urgent attention because of the unflattering indicators that negatively impact growth and development. One is electricity which has also been in the spotlight of late on account of the frequent collapse of the national grid. According to the World Bank, Nigeria has the highest energy access deficit in the world: 43% of its population is not connected to the grid and estimated $26.2 billion is lost yearly to inadequate electricity supply. Another is jobs: according to the National Bureau of Statistics, 33% of the working population can’t find jobs, 22.8% of them are underemployed, and youth unemployment is 42.5%. Then there is poverty: 40% of the population lives below the poverty level and another 25% is vulnerable.
It will be important to know the specific policy interventions that the aspirants plan to deploy to address the challenges of electricity, unemployment and poverty as well their planned interventions on how to tackle inflation (especially food inflation), their views and plans on trade, oil savings, exchange rate, health, education (including funding and running of public higher education), optimisation of oil and gas sector vis-à-vis energy transition, and on even the increasing less fashionable area of anti-corruption etc.
Next year represents a major landmark in our democratic journey: seventh electoral cycle in a row, second time an incumbent will be term-barred, and 24 years of unbroken civil rule, by far the longest and more than four times the previous record. But a major marker of the maturity of our democracy will be when we begin to put a high value on, devote considerable time to and decide on who to entrust with public office on account of reasoned policy alternatives. Hopefully, we can switch to that deliberate path in this electoral cycle, an election season which also coincides with a period of pressing national challenges.
