Nigerians voted for change and to attain that change there is a need to do things differently, in the recognition that doing what we have always done will only result in more of the same. That change has started with the vital offensive against corruption, which has had a huge and adverse effect on our economy. Much of the debilitating under investment in our infrastructure that has handicapped our economic growth, has arisen because funds were diverted to enrich a few at the expense of the wider populace.At the lower levels, the waste, inefficiency and culture of non-performance have, like a financial cancer, eaten away at our core institutions. We are already beginning to see change. The slide towards self-destruction has slowed down but we must now work collectively to ensure that we exploit the upside from our situation.
Globally the
downturn has hit all nations,rich and poor alike. The manner in which
governments have intervened to protect their economies have been diverse and
innovative. What is abundantly clear is the fact that the previous consensus
about what is best for the global economy is rapidly changing. There is a
concerted move towards individualism rather than collectivism. The new normal
for the global economy is that there is no normal, each nation must
painstakingly work out the best path to follow.
For Nigeria,we
believe that the best path to follow is to invest in infrastructure that will
unlock the potential in the non oil sectors. We can transition from being a commodity
economy to an industrialised, regionally dominant one. Oil is important but
clearly, oil it not enough. Iran is a very recentand relevant example of living
without oil. The sanctions that embargoed Iran’s oil led to the development of robust
petrochemical and other export industries that enabled the country to survive. Iran
survived without oil, made tough decisions and is now being feted by investors
as the next growth story.
The focus of our economic policy is to
redress the infrastructure deficit, unlock the rich diversity in the economy with
a determined and focussed turnaround programme.For us it would be a tragedy
to have endured so much pain and not emerge better and stronger.The provision
of a spending stimulus to the economy is critical to releasing the upside in
the economy.Investing specifically in Power and Transportation will release the
opportunities in solid minerals, manufacturing and agriculture.
However, government
spending alone is insufficient to bridge the infrastructure gap and there is a
need to embrace private capital to provide additional impact.We are at an
advanced stage of reforming the process for Public Private Partnerships to
provide a seamless pathway to attracting much needed private, financial and
operational input to service delivery. Private capital brings more than financial
resources; it also brings discipline and best practice, creating a benchmark
against which the utilisation of public money can be measured.
It is important
to link the fiscal housekeeping initiatives that we have started with the wider
economic strategy. Specifically, questions around the focus on corruption and
the elimination of ghost workers, controlling inefficient spending and preventing
revenueleakages,need to be evaluated in the context of how it impacts our
ability to stimulate the economy. We have been increasing our level of
borrowing annually, and much of that is used to fund recurrent spending. Indeed
in 2015 just 10% of spending went to capital items. We spent more on travel,
training and stationery than on roads. No nation has ever developed with such consistent
underinvestment in capital.
Growing the
economy at a rate that will address the employment needs of our huge population
requires a fundamental change in how government collects its revenues and
spends. The 2016 budget is deficit financed; and the fiscal housekeeping which
is aggressively blocking revenue leakages and reducing costs is firmly aimed at
ensuring that the borrowed funds are channelled into capital projects, rather
than seepingthrough an inefficient financial management system. This is not
only prudent economics but it is a moral necessity, since these borrowings will
be repaid by future generations.Therefore, while we focus fully on the macroeconomic
indicators; we must and will continue to focus on the micro factors which
collectively shape and determine the larger picture.
The road map to
attaining our objectives is a tough one, and we may endure the financial pain
for longer than we would prefer, but the upside is that we have actually already
endured the worst part of the adjustment cycle.
The outlook for oil prices is looking more positive but we are
fundamentally determined to ignore oil. One word that will resonate across all
that we do in government is ‘Discipline’. Financial discipline is going to be a
game changer in shaping the future of Nigeria’s economy.
Our
focus will make sure that ‘every naira counts’ irrespective of its source. The
government is ready and determined to lead this crusade of financial
responsibility. The big questions are:
§ Is the populace ready to do
the right thing in their respective areas of operations?
§ Are we willing to be frugal
and conservative in expenditure?
§ Are we as custodians of the
nation’s wealth willing to manage the resources entrusted to us with care,
knowing that someday we will be called to account?
§ Are we willing to confront
those who mismanage our collective wealth regardless of the consequences?
§ Dare we look at what worked
successfully in the 50s and 60s, and thenmodernise and re-enact them?
§ Dare we look at global
trends, and courageously invest in our forecasted choices?
Nigeria
stands on the threshold, daring to move into previously uncharted territory
through identifying and embracing novel economic and fiscal policy stratagems
that will release our considerable upside. We are for innovation to create a
new workable path, courage,and discipline to implement and build a resilient
economy that is not controlled by the oil price.
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