On Economic Reforms and Development Plans in Nigeria

culled from DAILY TIMES of AUGUST 30, 2003

 

With Commentaries By

 

Bolaji Aluko

alukome@aol.com


 




August 30, 2003
Daily Times


1. Appraising Nigeria's economic reforms
    By Ayo Oyoze Baje


2. A Daily Times Editorial
    Okonjo-Iweala's 10-year economic recovery plan


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Appraising Nigeria's economic reforms
By Ayo Oyoze Baje

 


The major parameter of assessing the success of any administration is the
level of the economic growth, vis-a-vis its impact on the citizenry. Nigeria
cannot be an exception. The situation on ground is however, anything but cheering.
Successive leaders have propounded several economic policies, some ambitious,
others out of tune with reality, yet none has been able to get us out of the
woods. Visionless and corrupt leadership have been the bane of our economic
development.

If the pre-colonial development plans could be excused because it was hatched
by the colonialists, those of post-colonial Nigeria fared no better. Between
1962 and 1985, Nigeria had a surfeit of four national development plans. The
first was between 1962 and 1968, the second between 1970 and 1974, the third
between 1975 and 1980 while the fourth came between 1981 and 1985.

The main plank of the first post-colonial National Development Plan was on
the use of resources to enhance production and economic growth. It even
envisaged a capital expenditure of N2.2 billion. Its failure was predicated on the
fact that social and regional development received only 24.4 per cent while the
economic sector got 67.8 per cent. That was during the Tafawa Balewa and Nnamdi
Azikiwe parliamentary administration.

The Second Development Plan was launched soon after the civil war, and
therefore focused on both reconstruction and rehabilitation. It was aimed at
creating a just and egalitarian society by reducing inequality it the distribution
of income wealth. Out of the N3.2 billion envisaged capital expenditure, 53.1
per cent was allocated to the economic sector with 26.6 per cent going for
social and regional development.

The Yakubu Gowon-led administration made some modest impact on the economy
but lacked the foresight to industrialise the country during the oil-boom era.

Of course, the Third Development Plan was more ambitious and grand in concept
and scope. The plan made serious effort to use revenue from oil exports to
achieve radical economic transformation. In fact, the expected estimate of N30
billion was later raised to N53.6 billion. And it also laid much emphasis on
those sectors which affected the lives of ordinary Nigerians such as housing,
healthcare delivery, water supply, education, rural electrification and
community development.

Why then did this plan, which raised the people's expectations tremendously,
fail again? The expected GDP of 9 per cent crashed to 5 per cent because the
revenue earnings from oil exports dropped. There was increase in the number of
states from 12 to 19 in 1976. Like the first national plan, this one failed
because it did not encourage private investment and it neglected the grassroots.
The level of agricultural and industrial productivity dropped significantly
all due to over-dependence on government contracts and political patronage.
Simply put, there was no emphasis placed on increased productivity. That was
during the Murtala Mohammed and Olusegun Obasanjo's regimes.

The Fourth Development Plan (1981-84) was not much different from the
third. The failure of all the aforementioned plans to meet the people's aspirations
could be traced to several factors. These include frequent revisions in
projected expenditure, overemphasis on public investment, distortions in plan
implementation, official corruption, poor coordination, inconsistencies and
over-dependence on oil.

In retrospect back in 1984, Nigeria's income per capita was over one thousand
dollars but this plunged to below three hundred dollars by 1994. Then the
percentage of Nigerians who lived below poverty level stood at 35. Today, years
after, it has doubled to 70 per cent. Can Ngozi Okojo-Iweala's conceptualised
National Economic Empowerment and Development Strategy (NEEDS) meet our yawning
needs? That is the billion-dollar question.


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A Daily Times Editorial:
Okonjo-Iweala's 10-year economic recovery plan


 


Finance Minister, Mrs. Ngozi Okonjo-Iweala's sombre forecast that the nation
has 10 years sobering wait ahead to attain full economic recovery calls for
serious concern efforts. According to her, the new economic policy tagged
National Economic Empowerment and Development Strategy (NEEDS), is predicated on a
five per cent gross domestic product (GDP) yearly growth rate.

The thrust of the Okonjo-Iweala sponsored policy include the attainment of
macro-economic stability, such as stable inflation, interest and foreign
exchange rates, the intensification of the fight against HIV/AIDS, the completion of
all abandoned projects, strict budget discipline as well as public sector
reforms.

On the surface, the strategy looks practicable; 10-year development plan
capable of leading to economic recovery. There is, however, the worrying concern
that successive governments in the country have a penchant for throwing
overboard, development plans and projects inherited from their predecessors. For
instance, the much glorified Vision 2010 midwived by the late General Sani Abacha
military regime was jettisoned. There's no guarantee that the Okonjo-Iweala
10-year plan would not suffer the same fate. The plan would mature by 2013, six
years after President Olusegun Obasanjo's second term in office shall have
ended in 2007. The continuation of the plan-policy after Obasanjo’s regime,
therefore, would depend solely on the good fortune of a radical departure from the
existing practice of letting worthy plans exit with their originators.

If complaints by the Nigeria Association of Chambers of Commerce, Industry,
Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN) and
other stakeholders are anything to go by, the gloomy picture painted
currently of the economy gives little hope of ever meeting the five per cent (GDP) as
the capability utilisation has continued to slide down by as much as 35 per
cent. If the policy is to make any meaningful impact, certain economic
motivating infrastructure must be put in place.

The current road network, with the terrible road surfaces and bridges does
not encourage agriculture and rural development. Farm products remain perished
at the production source in farms in the rural areas as farmers hope endlessly
for the transportation of their products to the urban centres. Even as these
over populated urban areas cry for scarcity of food, many frustrated farmers
abandon the land and migrated to urban centres in search of unavailable job
opportunities.

The non-existence of an effective railway network must be addressed. The
current near-parallel North-coast railway line compete unfavourable with, instead
of complementing the North-South axil roads. The ineffective three-feet gauge
railway lines remain as glorified relics of the transportation system that
made British economic colonisation of Nigeria successful.

There is, for example, no justifiable reason why Nigeria's capital, Abuja,
cannot boast of a fast comfortable and reliable railway link with Lagos, the
economic nerve-centre. Such a fast modern rail-link will boost economic
activities and save commuters the ordeal of travelling by air or unsafe roads which
have almost been taken taken over by armed bandits.

Furthermore, no foreigner would wish to invest here when local investment is
not encouraged. For example, the importation, by the organisers of the October
All Africa Games in Abuja, Committee d'Organisation Jeux Africains (COJA), of
banned turkey, chicken from abroad when the birds can readily be obtained
locally can only discourage the development of the local poultry industry. In
addition, we may also ask why does the Amos Adamu-led COJA prefer imported BMW
cars to Nigerian assembled Peugeot cars from Peugeot Assembly (Nigeria) which
was on Tuesday shut over workers' violent protest - a direct result of COJA's
action.

Also the outrageous cost of procuring gas for domestic and industrial energy
generation, relative to cost of gas elsewhere in the sub-region is a potent
disincentive for the domestic and industrial needs for economic activities. Ghana
and Nigeria import gas from about the same source. There is no justifiable
reason why gas should be costlier in Nigeria than in Ghana.

We believe that the standard of living of the people is a legitimate
criterion for measuring economic indexes. If the activities of the people are to
affect their standard of living, the human component of the factors of production
must take pre-eminence. Nigerians are rich in ideas, no doubt. These ideas are
only begging to be tapped.

If the economic road map to full recovery is to be a reality, economic
infrastructure, hitherto neglected, must be provided and Nigerians themselves must
be encouraged to participate in economic activities. It seems from all
indication that, much carefully planning, technical and professional detailed in put
did not go into the so-called economic plan. It is banal, meretricious and
escapist. It could have been produced by anybody on the street. What Nigeria needs
now is concrete plan of action on how to revamp and not playing with statistic
that are of no value to the ordinary man on the street. Therefore, those
saddled with the responsibility of tendering the Nigerian economy must go back to
the drawing board and come out with a more pragmatic and people-oriented
programme that will truly make Nigeria great again.

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ALUKO COMMENTARY
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Until and unless all levels of government focus like a laser beam on how best
each can create a favorable environment for:


1. increased access to STABLE electric power (which bears direct access to
increased access to water for agriculture, health and hygiene, and industrial
needs);

2. communication links (particularly rail, and information technology);

3. personal security and legal reforms (an effective police force and
judicial regime);

4. a re-focus away from oil monoculture to agriculture (with
mechanization) for staple food production;

5. a MANAGED and stable foreign exchange regime;


then the failure of NEEDS for the country to attain "a five per cent gross
domestic product (GDP) yearly growth rate" is almost guaranteed.



Bolaji Aluko