Buhari tables proposal for rescuing Nigeria’s troubled economy

As the National Economic Council begins a two-day retreat in Abuja, President Muhammadu Buhari has proposed ways of reinvigorating Nigeria’s wobbling economy.

The NEC is chaired by the Vice President, Yemi Osinbajo, and its membership include the 36 state governors and some Ministers and heads of relevant government agencies.

The President, who delivered the keynote address at the opening of the retreat said there is unanimity of opinion in Nigeria that the nation’s economy is in bad shape.

The president said based on the generality of opinion of Nigerians at his disposal, four key areas, namely agriculture, power, manufacturing and housing requires urgent attention to revive the economy.

He, however, said he was making no suggestions on “Education, Science and Technology pointedly because these related subjects require a whole retreat by themselves”.

He subsequently made some proposals to NEC to consider as the body seeks solution for the country’s ailing economy.

On Agriculture, Mr. Buhari said both peasant and mechanized farmers in Nigeria agree that food production and self-sufficiency require urgent government action.

“For too long government policies on agriculture have been half-hearted, suffering from inconsistencies and discontinuities,”he said.

The president said what was most worrying to Nigerians with regards to Agriculture was the rising food prices, lack of visible impact of government presence on the sector, lack of agricultural inputs at affordable prices, high cost of fertilizers, pesticide as well as labour.

He also said extension services were virtually absent in several states.

He identified the importation of subsidized food products such as rice and poultry and the wastage of locally grown foods, notably fruit and vegetables, which go bad due to lack of even moderate scale agro-processing factories and lack of feeder roads.

“These problems I have enumerated are by no means exhaustive and some of the solutions I am putting forward are not necessarily the final word on our agricultural reform objectives,” he said

The president thereafter, said the Nigerian government needed to carry the public along in the new initiatives being introduced.

He said the Federal Ministry of Agriculture, in collaboration with the States, should convene early meetings of relevant individuals and bodies to identify issues with a view to addressing them.

He also said there was need to “inform the public in all print and electronic media on government efforts to increase local food production to dampen escalating food prices”.

He also suggested that banks should be leaned upon to substantially increase their lending to the agricultural sector.

“(The) Central Bank of Nigeria (CBN) should bear part of the risk of such loans as a matter of national policy,” he said.

Mr. Buhari advised state governments to increase their financial support through community groups. He said the appropriate approach should be through leaders of community groups such as farmers cooperatives.

He also advised the governors to provide feeder roads to enable more effective evacuation of produce to markets and processing factories.

“ When I was a schoolboy in the 1950’s the country produced one million tons of groundnuts in two successive years,” Mr. Buhari recalled. “The country’s main foreign exchange earners were groundnut, cotton, cocoa, palm kernel, rubber and all agro/forest resources.

“Regional Banks and Development Corporations in all the three regions were financed from farm surpluses. In other words, our capital formation rode on the backs of our farmers. Why was farming so successful 60 years ago?”

The president said that was possible because there were small scale credits to farmers, while inputs such as fertilizers and herbicides were readily available, complemented by adequate extension services.

“Now we have better tools, better agricultural science and technology, and greater ability to process. With determination we can succeed,” he said.

With regards to the Power sector, Mr. Buhari admitted that “Nigerians’ favourite talking point and butt of jokes is the power situation in our country. But, ladies and gentlemen, it is no longer a laughing matter. We must and by the grace of God we will put things right.

“In the three years left for this administration we have given ourselves the target of ten thousand megawatts distributable power. In 2016 alone, we intend to add two tgousand megawatts to the national grid,” he said.

The president said the privatisation of the power sector was yet to translate into improvement in the quality of service.

He identified common public complaints on the sector to include constant power cuts, high electricity bills despite the cuts, low supply of gas to power plants due to vandalization by ‘terrorists’, obsolete power distribution equipment and low voltage he said could not industrial machinery.

Mr. Buhari said some of the problems had defied successive governments, adding however that his administration “must and will, insha Allah, put a stop to power shortages.”

He lamented that Nigeria was currently facing a dilemma of privatization which pitches public interest against profit motive.

“Having started, we must complete the process. But National Electricity Regulatory Commission (NERC), the regulatory authority, has a vital job to ensure consumers get value for money and over-all public interest is safe-guarded,” he said.

He also said the government would fast-track the completion of pipelines from Gas points to power stations and provide more security to protect gas and oil pipelines.

He added that “Power companies should be encouraged to replace obsolete equipment and improve the quality of service and technicians”.

In the manufacturing sector, Mr. Buhari said many manufacturing industries in the country were groaning and frustrated because of lack of foreign exchange to import raw materials and spare parts.

“Painful though this is, I believe it is a temporary phase which we shall try to overcome but there are deeper, more structural problems bedeviling local industries which this Retreat should identify short and long-term answers to,” he said.

He said NEC should look at the problems of inadequate infrastructure such as power, roads and security; high cost of borrowing money and lack of long term funding.

President Buhari said the Nigerian Capital Market had not completely recover from the 2008 worldwide crisis.

He said Banks’ funding sources remained short-term in nature due to sources of the liabilities.

The president also said there was need to protect workers from exploitation, adding that unions must cooperate with entrepreneurs to substantially improve productivity and quality of products if the nation is to move forward.

The president recommended that the infrastructure Development Fund should be fast-tracked to unlock resources so that infrastructural deficiencies could be addressed.

He also said there should be more fiscal incentives for Small and Medium Enterprises, SMEs, which prove themselves capable of manufacturing quality products good enough for export.

“(The) Central Bank of Nigeria (CBN) should create more incentives and ease credit terms for lending to manufacturers,” he said

He also said a fresh campaign to patronize Made-in-Nigeria goods should be launched. He suggested all uniforms in government-sponsored institutions should be sourced from local factories.

As for the Housing sector, President Buhari said some estimates put Nigeria’s housing deficit at about sixteen million units.

“In our successful campaign to win the general elections last year our party, the APC, promised to build a million housing units a year,” he said.

Mr. Buhari however, said that campaign promise might turn out a tall order unless government builds two hundred and fifty thousand units and the 22 APC States together manage another two hundred and fifty thousand units.

He also urged “foreign investors together with local domiciled big construction companies to enter into commercial housing building to pick up the rest”.

The President said the most frequent public concerns brought to his attention as regards the housing sector include severe shortage of housing, high rents and unaffordable prices for prospective buyers especially middle and low-income earners.

“In addition, red tape, corruption and plain public service inefficiency lead to long delays in obtaining ownership of title documents.

“Again, there are no long term funding sources for mortgage purposes.

“These hurdles are by no means easy to scale, but we must find solutions to the housing deficit. This Retreat might start by looking at the laws,” he said.

President Buhari said the relevant laws as regards Housing should be reviewed to make the process of acquiring statutory right of occupancy shorter, less cumbersome and less costly.
He said Court procedures for mortgages cases should make enforcement more efficient.

President Buhari also spoke about the health sector, lamenting that “Nigerians travel abroad, spending an estimated One Billion US Dollars annually to get medical treatment.”

“Despite huge oil revenues the nation’s health sector remains undeveloped,” he said

Mr. Buhari said in attacking the challenges in the health sector the government could start with more funding for health centres to improve service delivery. He also said the World Bank and World Health Organization, WHO, could be persuaded to increase their assistance.

He also advocated the strengthening of public health propaganda in primary prevention areas to intimate Nigerians in areas such as environmental sanitation, need to stop smoking, better dieting and exercising.

He also advocated a secondary prevention inputs such as the screening and early diagnosis of diseases.

He challenged NAFDAC to intensify efforts at reducing or stopping circulation of fake drugs in Nigeria, while the Ministry of Health should work closely with the Nigerian Medical Association to ensure that unqualified people are not allowed to practice.