Wednesday, January 4, 2017

Pulling Nigeria out of recession


It’s a brand new year. Congratulations to compatriots and readers across the globe on the successful crossover into 2017. The fad is for individuals to set resolutions and for corporate bodies and governments to have plan for every New Year. As is well known, Nigeria is in economic recession and pulling the country out of that quagmire remains a daunting challenge. I have been reflecting on how this beloved country can overcome this Herculean task. Fair enough, the federal government has set out details of what it wants to do to revamp the economy in its N7.3tn budget estimates for 2017 which is currently before the National Assembly. However, even if the FG gets everything right, without a corresponding unflinching support from other tiers of government, the country will not get out of her economic doldrums.

In my estimation, there are about three things that need to happen before Nigerians will start to experience better life. The first is the imperative of cooperation among the three arms of government viz. the executive, the legislature and the judiciary. The second is a more coordinated and effective inter-governmental relations among the three tiers of government viz. federal, states and Local Governments while the third solution is the effective private sector participation in economic governance. 

Starting with the first. President Muhammadu Buhari came to power 20 months ago on the mantra of ‘change’. The president won a pan-Nigeria mandate because of the social capital he has amassed in the course of his previous public service as a soldier, Military Administrator, Minister of Petroleum Resources, Head of State, and Chairman of Petroleum Trust Fund. He has built a reputation as an incorruptible and an upright public officer.  Among the masses of Northern Nigeria, his nickname is ‘Mai Gaskiya’ which means one who says the truth. The point is, coming to power as a civilian president; can we say that the president’s lieutenants have the same integrity quotient? If no, can a tree make a forest? For there to be positive change, all the president’s cabinet ministers, aides and heads of government agencies and institutions must have a shared vision with the president and buy into his change agenda. The current controversies surrounding some of the key presidential aides and heads of institutions do not inspire confidence.

The Nigerian constitution has spelt out the roles and responsibilities of each arms of government. Failure of the three arms to work in synergy will be counterproductive to our economic recovery plan. Take for instance some very vital bills such as the  constitutional amendment bill,  Petroleum Industry Bill, Nigeria Railway reform bill, Tax reform bill and several others which ought to have been speedily passed by the National Assembly but on which the legislature is filibustering. Even delay in confirmation of key government appointees is unhelpful. If the judiciary also decides to be the cog in the wheel through delayed justice and  miscarriage of justice all the efforts of other arms of government to impact positively on governance will come to naught. It is heartwarming that the presidency has decided to weed out corrupt judges and lawyers from the bench and the bar. What am saying invariably is that the president or the presidency alone cannot revive the economy without the support of the other organs of government.

The second solution lies in inter-governmental relations among the three tiers of government. Many a time most public commentators beam their searchlight on federal government while being non-challant to events at the state and local government levels. It is true that the chunk of federation resources goes to the federal government which at present receives about 56 percent while state government and the local government councils get 24 and 20 percent respectively. It is noteworthy that the FG is also saddled with greater responsibilities than other tiers of government. A case of the adage that ‘the bigger the head, the bigger the headache’. Be that as it may, the impunity that takes place at sub-national level is mind-boggling. Imagine the current situations where governors operate as Emperors. Many states budgets are not available to the public for scrutiny. The state Houses of Assembly who ordinarily should act as checks on the excesses of the executives are in many cases mere rubber-stamp institutions whose members kowtow to the whims and caprices of the governors. The state judiciary too does not fare any better given the undue influence of the executive governors on its members.

Being a federal system, albeit a warped one, the FG needs the support of the other tiers of government before any meaningful national development can be achieved. For instance; the land use act has vested all lands in the state government to be held in trust for the people. This power is being serially abused by state governors. Getting them to approve land titles especially, Certificate of Occupancy is a nightmare in many states. This impacts negatively on ‘Ease of Doing Business’ as many investors who wants land for their businesses are facing daunting challenges.  States and local government needs to complement the FG in the provision of infrastructures such as good road network, schools, health centres, sporting facilities, pipe born water, electricity and other amenities. Even in terms of job creation, these tiers of government have greater responsibilities than the federal government. The current situation where states and local governments owe months of salary arrears has put any meaningful economic recovery plan in jeopardy. 

The present effort at diversification of the country’s revenue base to non-oil sector needs the buy-in of the states and local governments. For example, in the ‘Green Alternatives’ launched last year as the roadmap for the country in the agricultural sector, states and local governments have a big role to play. The strategic partnership between Lagos and Kebbi State which has led to the production of LAKE Rice is a pointer in this direction. Furthermore, the N500bn federal government social intervention scheme which has been rolled into the 2017 budget has carved huge responsibilities for the states and local councils. For instance, the school feeding programme needs the collaboration of the states to succeed. It is unfortunate that the 774 local governments has been severely emasculated by the imperial attitude of the governors who through the infamous joint state and local government account have been usurping the roles and responsibilities of these local councils who are dependent on the governors for lifeline. Economic and political independence of local government are very necessary to pulling the country out of its current economic morass. 

On a final note, the private sector needs to be incentized to play complementary role to that of the three tiers of government if we are ever going to get out of recession. There is need for private sector support especially through the small and medium scale enterprises. The SMEs are the engine of economic growth. They are the largest employers of labour and all levels of government must partner with them. Government needs private sector funding and expertise in order to turn the economic fortunes around. What is needful for the government is to provide the enabling environment for businesses to thrive. There is need for business friendly policies such as low interest rate, access to land, low taxes, security and efficient and effective adjudicatory systems for resolution of industrial disputes.

 In essence, getting Nigeria out of recession needs a multi-prong, multi-stakeholder approach.

Follow me on twitter @jideojong