None of those options are in general conducive to political stability or to any kind of state-citizen accountability. The more elaborate the existing taxation infrastructure – with officers, understood procedures, current information on the names, addresses, occupations, incomes, business turnover, wealth etc. of potential taxpayers – the more likely is it that a state can substitute in a non-coercive fashion for sudden shortfalls in major income sources. The implications of dependence on unearned aid revenues are less easy to summarize than the oil cases. The aid situations appear more complex and diverse, for three reasons :(i) First, state financial dependence on aid typically is less extreme than dependence on oil. It is rare to find the aid equivalents of Libya and some of the Gulf States, where oil accounts for virtually all state income. My best estimate, for the early 1990s, for the countries classified by the World Bank as ‘low income’, was that aid typically amounted to almost half of state income. The range is wide.(ii) Second, some of the malign political consequences of aid stem as much from the large number of (competing) aid donors as from the overall aid volume (see below).Here again there is diversity, although, unfortunately, most heavily-aided countries enjoy the attentions of a large number of separate official donor agencies.(iii) Third, aid dependence is fundamentally unlike oil dependence in that (most) aid donors have a mission to influence the governance of the recipient. ‘On the issue of governance, oil itself is silent. Aid donors would like to think they make music, but rarely achieve more than noise.’ With those provisos, we can make four general points about the implications of aid dependence for political development: Rwanda has in recent years been aid dependent to much the same magnitude. These estimates are very approximate, as one of the symptoms of political underdevelopment is lack of (reliable) public finance data .I am indebted to a participant in a World Bank seminar for this metaphor.
The early years of independence, governments typically practiced a dual budget system. The local (i.e. recipient) government financed the recurrent budget from local revenues. It made a ‘local contribution’ to the capital (or investment) budget, which was funded largely by aid donors, with the recent colonial power typically playing a significant role. The capital budget was prepared within the framework of national development plan. The 1970s and after were marked by economic and fiscal crisis, increased aid inflows and growth in the number of (official) aid donors. Major changes in budgeting practices resulted. With recipient governments unable to meet’ local contributions’, aid projects became 100% donor-funded. They began to be omitted from the formal government budgeting process because they did not require public funds. As public sector salaries declined, donors increasingly, through a range of ‘allowances’, paid the salaries of the government staff formally seconded to their projects, or working in closely related activities. Donor influence over the deployment of local public servants followed inevitably. As locally-generated revenue for recurrent expenditures declined further, donors began informally to assume wider financing responsibilities in sectors that appeared high priority to them, such as health. Aid ‘projects’ began to fund a mix of investment, rehabilitation and recurrent activities. Local public funds were concentrated on urgent local priorities that often included the military. On the one hand the donors, locked into situations where they cannot permit their projects openly to fail, appear to be behaving in amore intrusive fashion. On the other hand, their aid is to a large degree fungible: knowing that donors are committed to keeping health and education services on their feet, recipient governments can concentrate their limited funds on the military and other activities that they regard as priority.
First, basic infrastructure was allowed to get to near total decay, with electricity generation barely enough for one-fifth of the population. Secondly, there was also less focus on wealth creation which led to poor attention to investments in human capital. Thirdly, there was a culture of impunity by the leaders, occasioned by four decades of militarization of virtually all aspects of governance and disrespect for the Constitution. A fourth consequence was the excessive fiscal expansion occasioned by accommodating monetary policy, which fuelled inflationary expectations during the past decades, with inflation reaching an average of 28.5 per cent in the 1990s and an overvalued exchange rate, leading to great macroeconomic instability.
The beginning of lifting the curse for any resource rich (oil-producing) country is the realization that the revenue bonanza should not be used to increase current consumption but as a springboard to economic development through boosting real living standards, by financing a higher level of investments and core public goods like massive infrastructure. The starting point for managing oil wealth lies in a long-term national development strategy predicated on stimulating both public and private investment. Nigeria’s effort to break away from the manacles of the resource curse essentially began in 2003 with the unveiling of a home-grown reform agenda titled the National Economic Empowerment Development Strategy, NEEDS. Economic reforms refer to positive changes in economic policies aimed at achieving different objectives or same objectives at a faster rate. They focus on ways of doing things and on setting targets. Reforms become necessary either when existing policies fail to achieve set targets or when set targets are found to be unsustainable and so need to be changed. (Economic reforms introduced include macroeconomic, fiscal policy, budgetary, monetary policy, debt management, banking and financial sector and other sectoral reforms).
Another landmark achievement is in the area of pension reforms. This has brought resources that are channeled for long-term investment in the economy. The pension commission in Nigeria has an asset base of over $5 billion, as at 2006. To compliment all these reforms are the institutional reforms that were geared towards achieving efficiency and streamlining government operations for better service delivery. For example, the Federal Inland Revenue Service and Nigeria Customs Service, NCS, all point to the same direction. The tax structure is being overhauled to a simpler tax system that will improve revenue collection by the agency. Also, the NCS has adopted the common external tariff structure of the Economic Community of West African States, and this measure is expected to encourage imports through the Nigerian ports of entry, which otherwise were diverted to neighbouring countries. These measures are aimed at boosting non-oil revenue.
The national economic development aspiration has remained that of altering the structure of production and consumption activities so as to diversify the economic base and reduce dependence on oil revenue in the bid to return the economy to the path of self-sustaining growth and industrialization.
The Government’s resolve to eradicate poverty, improve the livelihood of the people and ensure sustainable development of the country for present and future generations led to the formulation of strategic policies and implementation of sustainable growth programmes, which are slowly, but-significantly making an impact. The Habitat Agenda, Agenda 21 and the MDGs remain the basic framework for action. The key strategies of urban development, provision of adequate shelter; poverty eradication; environmental management; economic development; governance and international cooperation for development, are examined in the following sections. Strategies for balanced development Strategic plans and regional planning are very important institutional supports to an integrated approach to the sustainability of cities. The balanced developments of human settlements in the country have been primarily achieved through increased states and local governments’ creation. The increase to 36 States and 774 Local Government Councils structure in 1996 has meant the establishment of more urban centers in the country. This development has helped to ensure the even spread of towns and cities across the country. Furthermore, the location of a new Federal Capital in the central region, and the establishment of universities and colleges in virtually every state capital have helped in bringing about balanced urban settlement and growth. However, despite the political re-structuring of the country, the widening disparities between the urban and rural areas in terms of the quality of life remains a major concern of sustainable development. To redress this problem, the 36 States have been regrouped into six geo-political zones based on linguistic affinity, contiguity and cultural affiliation. Political appointments, investment decisions and development projects for instance, are considered principally on the basis of geo-political balancing with the hope that it will bring about balanced development in the long-term. Urban development reforms.
The revision of the National Urban Development Policy in 2001 was another bold step towards ensuring sustainable human settlements in Nigeria. The Urban Development Policy has the goal of developing “”a dynamic system of urban settlements that will foster sustainable economic growth, promote efficient urban and regional development and ensure improved standard of living and well being for all Nigerians”. The direct involvement of the citizens in decision making is a priority for the success of the policy. Two factors identified for sustainable urban development are:(i) Participatory urban governance in which leadership of neighborhoods and wards as well as occupational groups, chambers of Commerce,womenorganizations,youths,othernon-governmentalorganizations are closely involved both for popular enlightenment and general consultations; and(ii)A more effective urban management information system based on the numbering of all houses, the naming of all streets, the demarcation of all neighborhoods and wards in the city. A necessary institutional framework has been established to ensure effective implementation of the policy by the creation in July 2003 of a Federal Ministry of Housing and Urban Development to implement the provisions of the policy. Future priorities for sustainable urban planning include.
Pursuing programmes of urban renewal and slum upgrading in decaying urban centres, Preparation of cadastral maps for all urban centres as a basis for efficient urban planning and development; Development of comprehensive master plans to ensure coordinated development, Establishment of a national urban information database for planning and raising citizens awareness and access to information, Implementation of community-based urban development projects in thirteen locations, Preparation of strategic regional development plans for the six geopolitical zones to reduce regional imbalances; Implementation of programmes directed at bridging the rural-urban divide; development of satellite towns to redirect growth to the hinterlands and Building capacities for improved management, urban development and Providing adequate shelter for all. The housing scenario in Nigeria is essentially one of inadequacy in quantity and quality. A widening gap exists between expectation and the capability of realization. The difficulty in mobilizing sufficient funds into the National Housing Fund has made it impossible to appreciably increase the housing stock. Other problems are poor access to land, secure tenure, no availability of cheap building materials, poorly developed local building materials base and absence of infrastructure on land for housing development. In response to these challenges and to promote sustainability, a new National Housing Policy of Government was developed in year 2001 which has the primary goal of ensuring that “All Nigerians own or have access to decent, safe and sanitary housing at affordable cost and with secure tenure”.
Years of poor governance eroded the rule of law and bred corruption. Nigerians are frequently unhappy with current political and economic conditions, but strong majorities support the broad democratic ideal and reject alternatives to a competitive, accountable democracy. However, public opinions clearly reflect the strains on the system, and the dangers of deep, persistent popular frustration with present governance. The April 2007 elections significantly affected the legitimacy of Nigeria’s fragile democracy. Since a highly flawed and unstable election exercise has discouraged voters and undermine the foundations of this democratic rule, I believe, a credible, peaceful electoral process would reinforce confidence in basic institutions and as well restore a measure of patience with this democratic system.