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| Dr. Ngozi Okonjo-Iweala |
CO-ORDINATING Minister of the Economy and the Minister of Finance, Dr. (Mrs.) Ngozi Okonjo-Iweala yesterday unveiled the retooling strategy of the Nigerian economy by the Economic Management Team, listing eight main priority areas that will receive major attention.
The areas include infrastructure, particularly on the completion of very key on-going projects; security, to guarantee safety of lives and property so as to attract investors; agriculture, to be assured of food security, rein in soaring prices and transform it to be a job creator by up-scaling production, processing, marketing and export of the products.
Other key areas are manufacturing; housing and construction, to introduce a regime of cheap and affordable housing through mortgage; entertainment; education and health; and investment in oil and gas.
The former World Bank Managing Director made the disclosure of the Economic Management Team’s plan on the day the African Development Bank (ADB)’s new Resident Representative in Nigeria, Dr. Ousmane Dore, also announced that the bank has approved a new credit line of $700 million to be disbursed to two Nigerian development finance institutions: NEXIM and the Bank of Industry (BoI) for on-lending to the small and medium enterprises as part of its assistance to Nigeria’s inclusive growth, aimed at wealth and job creation.
He also declared that the bank, which has begun its decentralisation plan to give the field offices the power to approve project financing was working on her to assist Nigeria in the financing of her infrastructure deficit in its 2012 to 2016 strategic plan, which is to be launched in October this year.
The minister said: “The President’s vision is to put the Nigerian economy back on track and this means that the Team has to execute the President’s agenda because he is the driver of this programme and we have to have ways and means of doing it. And like I said, the central theme is to create jobs and fix the critical infrastructure. At the end of the day, what we want to achieve is to make a difference in the lives of Nigerians. Now, let me quickly say that we cannot touch the problems of the economy overnight. We have to take them sector by sector and tackle the problems one by one. It will take us time to be able to resolve things. But throughout the lifetime of the administration, the President is determined to provide solutions to the problems focusing on the critical sectors.
“There are two or three things that we need to do to have a pro – job growth: One is, we need to maintain macro-economic stability. Under this, it means we need to manage our fiscal situation in a more prudent manner. We have to look at our spending and see how we have to rein in spending, we have already mentioned the issue of recurrent budget that we need to trim. It will take sometime to restructure, but we want to trim down the recurrent expenditure from the presently high 74 per cent to may be around 70 per cent. But as I have said, it is the structured pattern of the budget that we need to work on. Everybody is involved across the board: the Executive, Legislature, all the Arms of Government would have to look at how to contend spending. We have to look at serious fiscal consolidation.
“From the fiscal side, our commitment really is to try and maintain a fiscal deficit of three per cent of GDP. We have to get back to the fiscal rule as outline in the Fiscal Responsibility law. On the Monetary Policy side, we need to work together with the Central Bank of Nigeria (CBN) and we wish to see both the fiscal and monetary policies working together so that we can look at things like containing inflation, growing our reserves and maintaining macro-economic stability that we are talking about. The second thing we have to look at is investment climate to come. The number of bureaucratic hurdles in this economy, that prevent people who want to invest. We need to look at all those things and improve on these. We have to complete some other reforms in the economy that will enhance the investment climate, like privatisation and deregulation and liberalisation. I don’t want to go into details of those yet. We have to look at promoting transparency and fighting corruption as a cardinal point and making our procurement process competitive and transparent; making our public finances transparent so that Nigerians can know what is going on, trying to discourage the culture of impunity in terms of the way that finances are handled.
“The third element is once you have the enabling environment, then what are the key sectors that the President wants to focus on. First and foremost, we want to look at infrastructure. Infrastructure is a sector that creates jobs and an enabler, without which you won’t be able to do any of the things in terms of creating new jobs, because it is business that would create jobs. We would focus on infrastructure, power, roads and the like. We don’t want to belabour this point, but we are keen on completing important projects and try not to start many new ones that we cannot finish. We will take a look at prioritising the important projects. Security, because without security, you cannot have growth and development. Therefore, security is a priority sector for us. Agriculture, very important, agriculture in this context is very important because first and foremost, we must be assured of food security. You know that the world has experienced food crises, since 2007 when the price of food has been so high and alarming. We are lucky in this country that we have what to feed ourselves.
In addition, agriculture is a job creating sector. Minister of Agriculture is looking at value change. He has been looking at the various value change for this economy: From research to production to processing to marketing and where necessary export. So, we have to modernise those process. Manufacturing will be important, we have a strong base here, Kano, Aba, Onitsha, Lagos. We need to support our industries and already, several schemes have been launched by Mr. President where he encouraged these sectors. Housing and Construction, we need to look at the possibilities to develop a mortgage system that will support the housing and construction industry, supporting what the Federal Mortgage Bank is doing, but up-scaling it. The Entertainment Industry; this is also important because it creates value of about $250 million yearly. It is the third largest in the world now, Nollywood and about 200,000 direct jobs. A lot of our young people are employed in the industry and we need to support them. Education and health: These are very important because if you don’t build the skills and you don’t have the right education system, you won’t have the right manpower for the economy. And of course health, it is very necessary to promote the productivity of our health.
“The budget situation is not going to be an easy one. You have a tight budget coming, so you have to make choice. These are the priorities that we want to talk about. As you know, from observation, what Nigerians are interesting in are things that they can see with their eyes: power, roads, rails and air,” transport.”
The minister also disclosed that preparation for the 2012 budget has begun in earnest and assured Nigerians to expect improvement in the implementation level. She promised to work with the National Assembly members to ensure that the document when finally passed will be an implementable document, noting that padding of the budget by the Legislature has always made it difficult for the Executive to implement.
Commenting on the nation’s current debt stock of $39.7 billion, consisting of $5.3 billion, foreign and N5.2 trillion of domestic components, the minister said the profile was healthy because it represented only 20 per cent of GDP.
Her words: “Our debt level is okay for now because we have not reached the risky level of about 60 per cent to GDP. We cannot stop borrowing drastically, because this will shock our system. What we are doing is to put the trend on the downward path, that is why we want to reduce our budget deficit to reduce our level of borrowings.
SOURCE: The Nation Newspaper, 25 August 2011. http://www.thenationonlineng.net
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