Nigeria is a trove of human, mineral and cultural splendor with gaping opportunities in this globalized environment. As the most populous Africa space combined with vast reserves of mineral deposits chiefly oil and gas, Nigeria is taking a gradual lift from the challenges of nation- building; its emerging strong from a patchwork of ethnic cultures. With the last elections having been lauded by local and foreign observers as a dramatic improvement, Nigeria takes another foothold through enduring stability in its democratic process. Nigeria is poised to continue on its sustained economic growth it has enjoyed consistently over the last decade.
Nigeria has consistently maintained GDP growth in excess of 6% over the past decade with pockets of opportunities still abounding. According to Goldman Sachs Report, Nigeria stands in line as the next 11 economies with potential to bloom after the BRIC. Nigeria is also among the most populous African countries known as Africa-11 with huge demand potential and spending pattern. The Goldman Sachs report also clearly states that by 2050, Nigeria and other populous African peers can potentially aggregate to a G7 economy size.
Nigeria is a resource-based economy chiefly oil with vulnerability to world economic cycles, fluctuations in exchange rate and commodity prices. Since the boom of the oil and its sustained exploration, Nigeria has moved from its economic blanket of cash crops and has taken oil as the benchmark for its economic policy and planning. The key concern in the Nigerian economy is to seek is to shift away from the oil whose revenues are inadequate to meet the demands of a teeming population.
After crumbling a federal structure in the 1960’s, Nigerian states mainly depend on centralized oil revenues but as the societal demands are increasing annually,there is an urgent need to pursue expanding-the-pie solutions. A quick glance at the Nigerian budgets shows ballooning recurrent expenditure chiefly of salaries and overheard costs in a nation blighted with infrastructural challenges and rising unemployment.
Nigerian States can develop an agricultural, industrial, green economy, resource based, service sector or technologically based approach for a future that we truly desire.Based on the current state of the Nigeria, BudgIT believes the key levers of growth in the future will mainly depend on these factors:
Convergence of Public and Private Policies: There is need to to clearly define public policy matched with consistency for key opportunities with private sector interests hinged on valuing competition, societal development and sound legal framework. There has to be continuous robust discussion between both sides to develop a common purpose of creating shared wealth and expansion of the middle class with deep potential in the future.
Political Stability, Budget Discipline and Transparency: The Nigerian budget has a rising level of 69% recurrent expenditure in the last three years and such does not free up funds for capital projects which are engines of growth. The recurrent expenditure need to be restructured to prune unnecessary growing expenditure mostly especially in government overheard expenses, personnel cost and cost of subsidies.
Infrastructure Development: Nigeria’s infrastructure deficit stands at $200bn and as such will need massive scale of finance to plug the gaps. This requires FDI flows through Infrastructure financing and development of private and public partnership. Power is especially the net contributor to the huge deficit with a 3,500 megawatts which clearly explains why the manufacturing sector of a populous country contributes 4% to its GDP. Competitiveness will be key in the future and will only improve if clear policy direction, private sector support, legal framework and enabling environment is provided with the power sector reform. Railways, roads, agricultural assets access to market, enhanced distribution network and water supply needs to managed efficiently to scale the infrastructure hurdle.
Human capital Development: Nigeria presently has a competitive advantage in terms of an active labour force with represents over 70% of the population. A quick surgery needs to be done the curricula, educational infrastructure, getting trained personnel to develop next set of national champions. There has to be a development of industrial or technical based training that transfer our natural resources in finished products based right on our own soil. Nigeria needs to replicate global structures of education with a sectoral revamp and allow more import of scientific knowledge based increased exchange interaction and ploughing back skilled Diaspora into the economy.
Sound Trade policies: China and India in terms of GDP per capita and most of Asian countries dubbed workshops of the world are low cost economies with growing influence in the Nigerian economy. Nigeria needs to reinvent its own Mittlestand –the German network of small companies that form the bedrock of its growth. A clear trade policy that refine the Nigeria economic sector to tap into its uncultivated arable space, mining potentials, petrochemical and crippling agro-allied industry needs to be formulated. Nigeria needs to acquire massive know how, infrastructure development, promote incentives for home grown industries and accept imports of goods in places of scarcity in the Nigeria’s economy.
Another dynamic of Nigerian future to me is based on the glaring realities that presently constitute the Nigerian space on our population. The shifting patterns in the Nigeria stands around its Nigerian demographic statistics. Nigeria presently enjoys a youthful population which accounts for over 65% of its population. These immense opportunity shows that there are vast opportunities in Nigeria especially by tapping into youths’ creative energies and providing platforms for their entrepreneurial instincts. Funding the future of Nigeria cannot exclude these youths who also are inching to be part of an expanding middle class in Nigeria. The growth of ICT technologies and the boom in the telecomms sectors with over 130 million lines shows that there is untapped demand in the Nigerian market and with proper directional public policy, there is a booming future in sight.
Just as evil is perpetrated in darkness, so does secrecy in governance encourage ignoble acts in leadership. The emblem of autocratic regimes and corrupt democracies is to keep the populace in obscurity. Individuals, organizations and governments whose activities are shrouded in secrecy give room for corruption to thrive and often times are against the light of transparency. Democracy, a widely accepted form of governance, rests on the key pillars of justice, rule of law, equity and transparency. Information asymmetry in public governance and thick opaque shield looming around public funds in Nigeria needs to be removed to strengthen the social contract. President Goodluck Jonathan signed the Freedom of Information Bill into law on May 16th 2011. This remarkable action dongs loudly on the secrecy that hitherto surrounded issues of governance in Nigeria. Now citizens have to put this law to test.
The yearning for all Nigerians to understand the budget is highly known during the last Occupy Nigeria protests. A familiar slogan during the protests has been a fact that the State House has a meal bill of almost a billion Naira – an amount 95% of Nigerians might not gross in their life time. The amount on social media was quickly broken to N3m per day that quickly became a song on protesters lips. Citizens are quick to relate that Nigerian Universities get N450m as capital expenditure yet the Vice President who Nigerians seen as healthy has a medical supply budget of N300m. Digging deeper into the budget performance is to see that while recurrent expenditure over performed by 1.68% as at June 2011, capital expenditure riddled with several stages before expenses are made get 11.21% performance. It is of this narrative a staunch resolve of Nigerians emerged that government cannot be living on bloated expenses while the citizens feel anguish of fuel subsidy removal.
Every ministry in Nigeria has a meal allowance in millions, security votes and millions spent yearly on buying computers, buses, fuel, generator, office equipment and of most alarming is software acquisition that is over 3bn in 2012 budget. That Nigerians found out that the Vice President building costs N16bn according to 2011 Budget half year review seems alarming and that the same Vice President Office will use N45m to read newspapers in a year means 600 newspapers per day at the rate of N200. One wonders why can’t the National Assembly swap budgets with the Universal Basic Education Programme or why will Amnesty Programme budget will be four times larger than Universities capital expenditure? Even at an N400bn budget for education (exclusive of ETF projects) which 79% is of personnel cost, have we done enough to erect learning structures? Nigerian government overhead cost does not reflect market realities and a quick review of 2009-2012 shows the budget looks a template where the gaps are simply filled by Ministry Leads. An example of a project like the Dredging of Lower River Niger (Warri-Baro) has been in the budget from 2009. When will it finally get done?
With many Nigerians currently having web access through desktops and mobiles, putting the Nigerian budget in a creative content across all platforms would enable Nigerians become key actors in participatory governance. The niched knowledge of the budget to that of common understanding will initiate a more transparent and open society. This drive for open data must be driven down to states and local governments and I implore them to make their budgets to the finest details like the Federal Government’s budget to Nigerians.
The maze of thick document riddled with complex financial terms has made the budget a mere news item with little understanding to most Nigerian citizens. It is time to open it up for all. Gradually, a budget participatory model whereby few months before budget presentation, town hall meetings, referendum, social media meet-ups are constituted is another next step. In such forums, citizens can inform government of their pressing issues, hence improving service delivery and efficient allocation of government resources. Nigeria like other countries at all levels needs to embrace open data where public expenditure from government officials and ministries is made open. Government needs budget scrutiny by the citizens to adjust its expenses and free more funds for capital projects that impact on citizens. Citizens should be able to independently appraise the budgets by verifying every budget item performance. When no one has the privilege to withhold information about stage by stage flow of public funds, we would strengthen the social contract and deepen the trust between the electorate and the leaders.