Nigeria Matters

Getting Nigeria on Track!

Governmentality is proving stubborn in Nigeria, before if not now. Our campaign on good governance in Nigeria; since the advent of nigeria4betterrule forum is yet far from fruition as hearing the peoples’ voice is no-government agenda; yearn for accountability becomes official insult. Can this government create political stability for us to give the country a human face? We deserve a nation that lacks violence, a government that is highly effective, we will welcome unique regulatory that befit the quality of intellects Nigeria has produced internationally, a rule of law devoid of political-fingering, and integrity in control of corruption.

We need economic efficiency and equity. President Goodluck Jonathan’s invitation of Mrs Ngozi Okonjo-Iweala in a move to build a national economic team is a welcome but puzzle development. The question is should government wholesomely propagate a national economy alone? And to what extent its role should be. In order to do so, microeconomic theory is utilized to assess whether the private market is likely to provide efficient outcomes in the absence of governmental interference. Inherently, this study involves the analysis of government taxation and expenditures. This subject encompasses a host of topics including market failures, externalities, and the creation and implementation of government policy. Public economics builds on the theory of welfare economics (not crowding out) and is ultimately used as a tool to improve social welfare.

Until last year, we passed through one of the most critical years for our economy due to President Umaru Yar’Adua’s sickness and death, coupled with power shift, outside energy and food crises in the international market, political restlessness, and rampant corruption. This resulted in the inability to fulfill many commitments made by government during those fiscal years. The confidence of the business community has been only partly restored, inflation has not been contained, and there is no visible improvement in the power sector. Poverty level has gone up and economic growth has gone down.

Some analysts regard the proposed budget of 2011-12 as too ambitious. It is true that Nigeria needs a big budget, because a sizeable part of the allocation will have to be invested in the neglected sectors (e.g. subsidies on petrol, scientific research (Nigeria Science Institute) and extension, extending social responsibility from the Nigeria sovereign wealth fund.).

Common people are more worried about management of budgetary resources than its size. We should see whether the budget can improve our well-being or not. The broad objectives of the proposed budget of 2011-12 are maintaining macro-economic stability, accelerating growth, and reducing poverty. Priority has been given to maintaining the price level of essentials within tolerable limits, generating employment, widening and deepening social responsibility from the Nigeria sovereign wealth fund, reducing regional disparity, increasing agricultural production, ensuring food security, increasing power generation, and accelerating the overall development of the communication network, including information technology.

Nigerian must mean business when we talk about democratic governance and human rights. Many Nigerian cities do not have up-to-date city development strategies due to the lack of capacity and resources to plan, ineffective development control and inadequate institutional and legal frameworks for promoting good urban governance. The concept of fiscal federalism is not to be associated with fiscal decentralization in officially declared federations only; it is applicable even to non-federal states (having no formal federal constitutional arrangement) in the sense that they encompass different levels of government which have defacto decision making authority.

With the general election now months old, the political climate is heating up every day as politicians begin jockeying for positions, heightening the rivalry. In notoriously corrupt Nigeria, money reigns supreme in everyday life, and politics is no exception. There is nothing secret about the ways the (politically and financially) powerful use their money to buy everything from votes to loyalty and “justice”. Lately, Nigeria has been witnessing politicians exploiting religious issues such as Boko Haram and secessionist movement for personal and political gain.

Keeping in mind that the increasingly well-informed public will only vote for parties that truly defend their interests, we hope that political parties, be they old or brand new, only strive for the interests of the people through democratic means.

Yet lobbyists from party-front, godfathers, and state governors spend money to influence ministerial posts, federal appointment, and the governing process. Do they know the job really? Nigeria cannot afford to trade her wellbeing for political appeasement. Lobbyists can also work on political action .They have strong incentives for lobbying the government to implement specific policies that would benefit them, potentially at the expense of the general public. While some regime choose to decline money from lobbyists, so far in the 2011 election, the number of registered lobbyists raising money for presidential candidates is already nearing the total for the entire 2007 campaign.

The challenge is complicated by Nigeria’s unfinished federal system of government based on the administrative tolerant of local governments, States and the Federal Government: there is currently no provision for municipal administrations. Can it be termed public choice principal of economics or majority rule? This arrangement makes it particularly difficult to governing our citizens. This arrangement makes joint planning and management of government affairs difficult if not impossible and compounds the problem of collecting, aggregating and analyzing data on a city-by-city basis.

There are problems of rising urban poverty, housing shortages, inadequate economic infrastructure, poor basic social services, and crime and insecurity. To take just a few cases in point, between 52% and 70% of the urban population are living in poverty using nationally defined poverty lines whilst a staggering 70% lives in slum conditions. The implications are profound not just for the people living in cities and towns but more broadly for Nigerian economy and, indeed, for the peaceful development of its young democracy. Cities in Nigeria, as elsewhere, are major engines of growth and centres of political activity. The challenge of urban governance is, therefore, central to the political economy of Nigeria.

See challenges like overcrowding, inadequate sanitation, polluted air and water, inefficient liquid and solid waste management, lack of recreational facilities and poor health are partly caused by rapid urbanization. A second factor responsible for these problems is the inability of local authorities to provide basic social services and facilities needed for an adequate human existence. This can be improved by building the cities capacities to develop structure, plans and design urban management strategies.

Allocation for ADP has been determined on the basis of national priorities and availability of resources. Greater attention has been given to selection of quality projects and their speedy execution. The size of ADP has been kept small due to low utilizations (about 80%) during the last few years.

The agriculture sector will receive an allocation of 29.7%, power and energy sector 15.7%, education sector 12.8%, transportation sector 12.7% and health sector 8.9% of the proposed ADP outlay. By increasing allocation against the projects being implemented in Power sector, Nigeria Roads rehabilitations, cement, kerosene and petrol availability, the government has shown its commitment toward ensuring regional parity.

To provide social security to the poor and the lower-middle class, the government has planned to widen and deepen s

ocial safety-net programs by increasing the total number of beneficiaries and increasing the rate of subventions, spending N16, 392 billion (2.8% of GDP) in the next fiscal year. The amount is 48% higher than the revised allocation of N11, 467 billion(2.1% of GDP).

To should be proposed for the next fiscal year. To generate 50,000 jobs annually in 4,926 unions, a program known as Rural Employment and Road Maintenance Program (RERMP), with an estimated cost of N943 billion, should be launched from next year. Other programs, such as Rural Employment Opportunities for Public Assets (REOPA), Maternal Health Voucher Scheme (MHVS), and Community Nutrition Programs (CNP) should be adopted.

The proposal for a 38% increase in non-development expenditure and 21% in revenue expenditure is due to huge increase in subsidy. Because the budget is expansionary, revenue target has been pushed up to N69,362 billion

For a large deficit of N30,580 billion, the government should source for about N13,498 billion from the accrued system. This may, it is apprehended, squeeze out the private sector from the credit market. It may affect bank interest rates and hamper normal growth in the industrial sector.

According to our analysis at the end of the June 2011 “nigeria4betterrule” forum, the recent federal government budget responds to a situation of widespread national security and an environment of political and economic uncertainty. Part of the budget is economic populism, but the rest of it needs to be based on objective assessment and relative social benefits arising from the subsidies and development spending in different sectors. Our budget management largely lacks the capability of such an analytical approach to determining the actual trade-offs involved.

Given the uncertain environment surrounding implementation of the proposed budget, it would be vital to rethink many aspects of the fiscal policy on the basis of evolving circumstances. That budget, in brief, is ambitious, if not over-ambitious. Its successful implementation appears to be uncertain. In analyzing the budget, a participant Prof. Jude Udokwu, physician and political thinker, rightly pointed out certain lapses. They are:

* Such committee will remain in office for only the first half of the life of the budget and the next half will be implemented by an elected government;

* Very little of the Annual Development Program may be utilized during first half of the budget;

* Change or reshuffle of ministers during the budget and attendant political uncertainties normally inhibit development activity; and

* No consultation was held with political parties before presentation of the budget. Discussions with only economists and businessmen are not enough.

In his efforts, the finance minister may have committed lapses here and there. There is still time left for this government to discuss with analysts about how the positive components of the budget can be carried forward .Broadly speaking, President Jonathan should tried to accommodate the demands of various groups and sectors as much as possible. We commend his effort for presenting a pro-people and investment friendly budget.

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