22 March 2016

Nigeria: Buhari Identifies Key Sectors to Revive Economy

Photo: Herald Zimbabwe
(file photo).

Abuja — President Muhammadu Buhari monday in Abuja identified five key sectors which the country must focus on to revive the economy.

In a welcome address he delivered at the opening of the two-day National Economic Council retreat holding in Abuja, Buhari said the challenges militating against development in agriculture, power, manufacturing, housing and the health care sectors must be squarely addressed to lift millions of Nigerians out of poverty.

The president expressed regret that despite huge oil revenues, the nation's health sector remained undeveloped, forcing Nigerians to spend $1 billion yearly to get medical treatment abroad.

He lamented the state of the health sector and said urgent measures must be put in place to improve health facilities in the country.

"In attacking the challenges of this sector, we could start with more funding for health centres to improve service delivery. The World Bank and World Health Organisation (WHO) could be persuaded to increase their assistance," he added.

The purpose of the retreat as outlined in the retreat concept notes is to generate immediate, medium and long-term viable policy solutions to the economic challenges facing the country at both the federal and state levels.

The president, who noted that inadequate power supply continues to undermine the country's capacity to develop in all sectors, said his government would generate 10,000MW of electricity in the next three years. "In 2016 alone, we intend to add 2,000MW to the national grid," he added.

Stressing that the incessant outages in the country were not a laughing matter, he said: "This sector has been privatised but has yet to show any improvement in the quality of service. Common public complaints are:

-Constant power cuts destroying economic activity and affecting the quality of life.

-High electricity bills despite power cuts.

-Low supply of gas to power plants due to vandalism by terrorists.

-Obsolete power distribution equipment such as transformers.

-Power fluctuations, which damage manufacturing equipment and household appliances.

-Low voltage which cannot run industrial machinery.

Buhari said insufficient electricity was the problem of past governments but will be properly looked into by his government, also promising to conclude the privatisation process started by his predecessor.

"These are some of the problems, which defied successive governments. In our determination to change, we must and will put a stop to power shortages.

"Key points to look at here are: privatisation - we are facing the classic dilemma of privatisation: public interest vs profit motive. Having started, we must complete the process.

"But the National Electricity Regulatory Commission (NERC), the regulatory authority, has a vital job to ensure consumers get value for money and the overall public interest is safe-guarded.

"Government is to fast-track the completion of pipelines from gas points to power stations and provide more security to protect gas and oil pipelines.

"Power companies should be encouraged to replace obsolete equipment and improve the quality of service and technicians," he said.

While expressing concern at the inability of manufacturers to access foreign exchange for their raw materials, goods and services, the president ordered a fresh campaign to patronise Made-in-Nigeria goods. On this, he said all uniforms in government-sponsored institutions should be sourced from local factories.

"From information at my disposal, if we aggregate public views from the grassroots, city dwellers, economic managers, consumer groups, the labour unions and other stakeholders of the economy, there is near unanimity about the ills of our economy. But naturally, there are divergent views about solutions.

"I am going to throw at this gathering, some random policy options filtered from across the spectrum of our stakeholders on four (4) selected sectors of our economy.

"These are: agriculture, power, manufacturing and housing. (The president eventually added health care as the fifth.)

"I have not touched education, science and technology pointedly because these related subjects require a whole retreat by themselves."

On agriculture, Buhari said that both peasant and mechanised farmers agreed with the general public that food production and self-sufficiency required urgent government action.

However, he noted that "for too long government policies on agriculture have been half-hearted, suffering from inconsistencies and discontinuities".

According to him, the country's real wealth is in farming, livestock, hatcheries, fishery, horticulture and forestry.

In order to address some of the challenges facing the agricultural sector which he said included rising food prices and the importation of subsidised food products, the president directed the Central Bank of Nigeria (CBN) to mobilise banks to make credits available to farmers.

Buhari said: "First we need to carry the public with us for the new initiatives. Accordingly the Federal Ministry of Agriculture in collaboration with the states should convene early meetings of stakeholders and identify issues with a view to addressing them.

"Inform the public in all print and electronic media on government efforts to increase local food production to dampen escalating food prices.

"Banks should be leaned upon to substantially increase their lending to the agricultural sector. Central Bank of Nigeria (CBN) should bear part of the risk of such loans as a matter of national policy."

On the manucaturing sector, the president said: "It grieves me that so many manufacturing industries in the country today are groaning and frustrated because of lack of foreign exchange to import raw materials and spare parts.

"Painful though this is, I believe it is a temporary phase which we shall try to overcome but there are deeper, more structural problems bedeviling local industries which this retreat should identify and proffer short and long-term answers to."

In order to address the problem associated with high cost of borrowing money, Buhari directed CBN to create more incentives and ease credit terms for lending to manufacturers.

He also said that the Infrastructure Development Fund be fast-tracked to unlock resources to address infrastructure deficiencies.

"There should be more fiscal incentives for small and medium enterprises (SMEs), which prove themselves capable of manufacturing quality products good enough for export," he added.

On housing, the president put Nigeria's housing deficit at about 16 million units.

He said: "In our successful campaign to win the general election last year our party, the APC, promised to build a million housing units a year. This will turn out to be a very tall order unless:

"The federal government builds 250,000 units and the 22 APC states together manage another 250,000 units; then we invite foreign investors together with local domiciled big construction companies to enter into commercial housing building to pick up the rest."

Buhari called for a review of the relevant laws to make the process of acquiring statutory rights of occupancy shorter, less cumbersome and less costly.

He further suggested: "Court procedures for mortgages cases should make enforcement more efficient. The Ministries of (Power) Works and Housing should upgrade its computerisation of title registration system for greater efficiency."

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