The Federal Ministry of Finance would always and has always thumped
its chest as having made good strides in the management of the economy,
especially since the 2013 budget. But that position is highly disputable
among watchers, who argue that implementation was poor, below the mark,
and should not be celebrated.Ministry sources have started looking away from the 2013 fiscal instrument to focus on what the current year holds for the nation’s economy; and that is exactly what the office is working to make known.
From some breakdown and highlights of the 2014 Budget already before the National Assembly, the ministry holds that even if the implementation of last year’s budget was not perfect, it would ensure that the execution of that of 2014 is a different story.
Aware of main problem
The ministry is not unaware of the shortcomings of the nation’s economy. So as the National Assembly (NASS) would expectedly commence debate on the document at resumption this week, the ministry would be tidying up its acts to be sure whatever is approved by the legislature gets properly implemented. It is already looking forward to a positive outcome of the budget before the legislature and has outlined means of actualising the best use of budget.
For instance, a source at the ministry confided in Daily Sun: “In 2014, concrete steps would be taken to reduce cost of governance and stem the tide of corruption and leakages. To curb fraud in the administration of the pension system, a Pensions Transition Arrangement Department, under a new Director-General, was set up in 2013. In 2014, this department will ensure pensioners still under the old scheme receive their pensions and gratuities, and are not subjected to fraud. Prosecution of all those involved in robbing our retired people will continue.”
It also revealed that: “In the Petroleum Sector, the Governor Emmanuel Uduaghan-led committee is ready with its recommendations on how to stem oil theft and pipeline vandalism. We shall implement the various security and community measures this year.
Enhancing manpower, saving cost
“From 2014, all training for personnel of MDAs and parastatals must take place in Nigeria. Foreign training programmes will only be approved in truly exceptional cases, and will be based on guidelines to be developed by the Head of Service and the Director-General of the Budget Office.
Foreign travel by government personnel will be further curtailed. This directive shall apply to all Ministries, Departments and Agencies of the Federal Government.
The strategy to curb leakages increasingly relies on introducing the right technologies, such as biometrics and digitising government payments. In 2014, the deployment of the three electronic platforms – the Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS) – which are all geared towards improving efficiency and transparency in public finances would be completed. Through these reforms, the ministry assured that the N126 billion in leaked fund has already been saved.
Job creation channels
According to the nation’s economic data, Nigeria has about 17 million registered SMEs, which employ over 32 million Nigerians. To make them more beneficial to the nation and improve their job creation capacity in 2014, there will be better and more articulate focus on the implementation of the Nigeria Enterprise Development Programme (NEDEP) to address the needs of small businesses. This will include helping SMEs with access to affordable finance, business development services, and youth training.
The real sector boost
There will be stronger implementation of new CET policies to support our emerging industries. “Intensification of investment promotion efforts abroad to ensure we bring the biggest and best companies from around the world to invest in Nigeria stand a major priority in the economy this year and that is captured in the present budget,” our source revealed.
When the housing and construction industry booms, it creates additional jobs for architects and masons, for electricians and plumbers, for painters and interior decorators, and for those in the cement and furniture industries. To reinvigorate the housing and construction sector, the Nigeria Mortgage Refinance Company (NMRC) was launched last week.
NMRC increase liquidity in the housing sector, provide a secondary market for mortgages, and thereby increase the number of people able to purchase or build homes at affordable rates in the country.
“Supporting the creation of jobs by the private sector will continue to be a top priority in 2014. They will be supplemented by direct government programmes, such as the Nagropreneurs, YouWiN, Graduate Internship Scheme, and the SURE-P Community Services programme,” a director in the finance ministry informed Daily Sun.
The programme will begin in 14 pilot states, where the state governors have agreed to provide fast-track land titles, foreclosure arrangements, and serviced plots.
NMRC will help create over 200,000 mortgages over the next five years at affordable interest rates.
To provide for those at the lower end of the economic ladder, there will be an expansion of mass housing schemes through a re-structured Federal Mortgage Bank and other institutions to provide rent-to-own and lease-to-own options. This will help ensure more hardworking Nigerian families will be able to realize their dream of owning homes.
Lack of access to affordable medium to long term credit is one of the greatest problems facing Nigerian industrialists and entrepreneurs.
To address this problem decisively, a new wholesale development finance institution will be established by end the year to provide medium-to-long-term financing for Nigerian businesses.
Government has also announced working with partners such as the World Bank, the Africa Development Bank, the BNDES Bank in Brazil, and KfW in Germany, to realize this project.
The existing Bank of Agriculture and Bank of Industry will be re-structured as specialized institutions to retail financing from this new wholesale development bank.
Security
The security challenges in the North East of Nigeria led to the introduction of a state of emergency in Yobe, Borno and Adamawa states. Government’s strategy for a lasting solution is anchored on a firm security response, continued political dialogue, and a package of development assistance to enhance economic inclusion.
“Even prior to the recent insecurity in the region, the North eastern part of our nation had some of the lowest human development indicators in the country. The recent report of the Dialogue Committee recommended more investments in health and education in states in the North East. The Federal Government and development partners will work with the relevant State Governments and other stakeholders to establish a development programme for the North East starting with the three states of Yobe, Borno, and Adamawa,” a recent publication on the economy noted
This programme, to be known as the Federal Initiative for the North East (FINE), will rehabilitate local schools and health clinics as well as provide additional assistance for farmers in the region to help restore their livelihoods.
Targeting more growth
Analysing the financial document, Daily Sun found that President Goodluck Jonathan, in his speech to the National Assembly, had noted: “We need to grow even faster than seven per cent per annum and we need growth in the sectors, such as agriculture, housing, power and services that create most jobs. Our growth must bring shared prosperity. An economy whose growth leaves wealth in the hands of a few cannot achieve its full potential.”
The fiscal document also has, as its main targets, the “continued and focused implementation of the power roadmap to consolidate the transformation of the power sector, increase investments in transmission to ensure power generated is properly evacuated and distributed.”
In addition to the lofty plans for power generation and distribution improvement, it would further “complete the privatisation of the NIPP projects, accelerate work on our gas pipeline infrastructure and also continue to invest in hydro-electric power and clean energy as we monitor the effects of climate change on our economy.”
Roads
Another factor of development the budget intends to get right is access roads, especially the completion of the East-West road and complete the dualisation of the Abuja-Abaji-Lokoja expressway.
From the 2013 budget, the Federal Government had accomplished about 80 per cent of the dualisation that stopped at the Kotun Karfe from Giri Junction end of the road in the Federal Capital Territory (FCT), and promise to take it to total completion within the regulation time of the contract.
The 2014 fiscal plan will also handle the total rehabilitation of the Ayingba-Otukpo road and finally the actualisation of the Kano-Maiduguri expressway, one of the longest federal highways in the nation.
Prudence
Because the government hasn’t the pleasure of enough cash to handle the projects and further the nation in the track of development, it outlines measures of checking waste and illegal spending.
“One of the major ways of making sure these plans come true is cutting down on the cost of governance. Waste does not represent sound management. Therefore, the government has built into the year’s budget those pragmatic means of conserving money and making sure only the pressing needs in both capital and recurrent spending receive adequate attention,” a source told Daily Sun.
continuing, it stated; “In 2014, only concrete steps will be taken to reduce cost of governance and stem the tide of corruption and leakages. The budget will also curb fraud in the administration of the pension system. A Pensions Transition Arrangement Department under a new Director-General was set up in 2013. In 2014, this department will ensure pensioners still under the old scheme receive their pensions and gratuities, and are not subjected to fraud.”
The budget will also ensure that all public officers involved “in robbing our retired people will not continue.”
In the petroleum sector, the budget would take care of the oil production and distribution chain, especially with “the Governor Uduaghan-led committee that is ready with its recommendations on how stem oil theft and pipeline vandalism, and further adopt various security measures and community measures.”
2013 budget landmarks
The National Bureau of Statistics estimates that 1.6 million jobs were created across the country in the past 12 months principally in the agricultural, oil & gas, manufacturing, housing and construction, and SME sectors. Jobs were also created through the special government intervention programmes, such as YouWiN, SURE-P and the Graduate Internship Scheme.
In spite of these jobs created, government is keenly aware that more jobs are needed to support our growing population. This is why the 2014 Budget is focused simply on “Jobs and Inclusive Growth!”
Better electricity
With privatisation of PHCN almost completed, the Jonathan administration is closer to achieving its number one infrastructural priority: improving electricity supply to industries, businesses and homes across the country. This will create millions of direct and indirect jobs, revitalize our industries and improve the economy.
In 2013, four power generation companies and 10 power distribution companies were successfully privatised virtually all claims and entitlements of PHCN workers have been settled. Ten power plants under the National Integrated Power Projects (NIPP) are going through the privatisation process. Power transmission remains with the Federal Government, with the management outsourced to the Manitoba Hydro Company.
Also, $1.5 billion in financing from various sources has been mobilised for investment and upgrade of the transmission network in 2014 and beyond.
To ensure clear and sustainable benefits to the country, relevant regulatory and financing institutions to encourage more private investments in the sector have been established and strengthened.
Also in 2013, the construction of the 700MW Zungeru Hydro-Power project was flagged off at a cost of N208 billion to improve power supply in clean energy.
2013 budget investments
Key investments completed include construction of the 136km gas pipeline from Oben to Geregu and the 31km pipeline from Itoki to Olorunshogo.
Also completed: acquisition of 250 square kilometers of 3D-seismic data for the Chad basin
Initiation of Ogidigben Gas Industrialisation Project designed to host a petrochemicals complex in Delta State.
More Nigerian companies empowered by local content policies: an indigenous company operates the Ebok Terminal facility, while Nigerian firms now own crude oil transportation tankers which fly the Nigerian flag.
Industrialisation
In 2013, implementation of the National Industrial Revolution Plan (NIRP), which aims at industrialising Nigeria and diversifying our economy into sectors, such as agro-processing, light manufacturing, and petrochemicals commenced.
Also, Nigeria negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners to protect our strategic industries where necessary.
Implementation of backward integration policies has increased national cement production from two million metric tonnes of cement in 2002 to 28.5 million metric tonnes in 2013. For the first time in our history, we have moved from being a net importer of cement to a net exporter.
Foreign direct investment into Nigeria has also been strong. In fact, for the second year running, the UN Conference on Trade and Development has named Nigeria as the number 1 destination for investments in Africa.
From IKENNA EMEWU, ABUJA