19 June 2017

Nigeria: What Buhari Has Done Right?

Earlier this month, we considered some of the policies introduced by the administration of President Muhammadu Buhari which helped neither his government nor the people. Tobi Soniyi now considers his government's noteworthy efforts

Although, there are a lot of issues the present administration has failed to handle properly, there are areas in which it has done well and deserved commendations. We have identified twelve of such lofty deeds of the administration.

1. The Problem is Corruption, not Restructuring

President Muhammadu Buhari is correct in his diagnosis that the problem with Nigeria is corruption and not restructuring. Although, many disagreed with this diagnosis, the president in our view, is right in disregard. The agitation for restructuring became widespread and loud following the failures of successive governments to deliver on their promises. ‎The irony of the call for restructuring is that those who participated in looting the country are today joining the restructuring call. Buhari rightly, in our view, made the fight against corruption one of the main priorities of his administration. The president is right to do so because Nigerians agreed that corruption remained endemic and has continued to hamper the development of the country.

The United Kingdom based Chatham House, the Royal Institute of International Affairs‎ in a recent publication titled, 'Collective Action on Corruption in Nigeria, a Social Norms Approach to Connecting Society and Institutions' stated that close to $400 billion was stolen from Nigeria's public accounts from 1960 to 1999 and that between 2015 and 2014 some $182 billion was lost through illicit financial flows from the country.

The report said: "This stolen common wealth in effect represents the investment gap in building and equipping modern hospitals to reduce Nigeria's exceptionally high maternal mortality rates-estimated at two out of every 10 global maternal deaths in 2015, expanding and upgrading an education system that is currently failing millions of children; and procuring vaccinations to prevent regular outbreaks of preventable diseases."

One may disagreed with his approach, but you can not fault him for making the fight against corruption a priority. If all the monies stolen from the country had been spent on the projects for which they were budgeted, perhaps no one will be calling for restructuring today.

In view of this high level of corruption in the country, many supported Buhari because he promised to be tough on graft compared to his opponent who believed that petty stealing, and not corruption was in vogue. True to his words, the president did not disappoint. ‎Many arrests were made. Prosecution is ongoing in many courts while some have voluntarily returned money they stole. All this reinforced the position of the president.

2. Fixing the Oil industry

The government has had a mixed bag of accomplishments in the oil and gas industry of the country since it took over.

On one hand, it has done quite well in rectifying and fixing prevalent industry ill practices such as corrupt subsidy on domestic consumption of petrol which had eaten deep into the country's purse, but failed on the other hand to leverage the huge goodwill it initially got from the country's populace to deregulate the downstream petroleum sector and allow the market forces determine the real pump prices of petrol at service stations.

Instead, it opted for what it called 'price modulation' which was another term for fixing pump prices and now appear to have backfired on it as most of the oil marketers in the country have left the practice of petrol importation for the Nigerian National Petroleum Corporation (NNPC) alone to bear, a burden Minister Kachikwu said was beginning to weigh in on the corporation.

Also, the government negotiated and got a $1.7 billion discount on arrears of cash call it owed international oil companies (IOCs) who are into joint venture (JV) operations with it in crude oil production.

The cash call debt was subsequently reviewed downwards to $5.1 billion from $6.6 billion, and parts of it would be paid back on the basis of incremental production volumes from new oil fields, while an exit agreement was signed by the NNPC and the IOCs.

Under the new arrangement which came into effect following the signing of the agreement between the NNPC and the IOCs JV partners, the entire NNPC equity oil and gas revenues would now to be paid directly into the Federation Account.

Hitherto, competition from other appropriated items of expenditure in the federal government's budget has always limited the deduction of technical cost required to fund the cash calls on monthly basis.

It is then expected that execution of this agreement would end the long standing cash call challenges that have impacted the Nigerian oil and gas industry over the years.

With this arrangement, the federal government will continue to receive royalties, taxes and profit from its equity share of JV oil and gas production while the cost of operation is deducted upfront.

The agreement also provides that the outstanding cash call arrears will be repaid within a period of five years through incremental production revenues without impacting the established based production revenue.

Further reforms in the business processes of the NNPC have also taken place with the corporation now pushed to regularly open its operational and financial books every month for stakeholders to review and track its operations.

The government has also set a target to exit importation of petroleum products and has set in motion processes to revamp NNPC's derelict refineries in Port Harcourt, Kaduna, and Warri, through a mix of equity finance for repairs, and use of Original Refineries Builders (ORB), and co-location of greenfield refineries alongside the existing ones.‎

3. Power Sector Reform

Asides the recent initiation of a recovery plan - the Power Sector Recovery Programme, with the World Bank which would also invest millions of dollars in the electricity market, and the approval of a N701 billion loan to the Nigerian Bulk Electricity Trading Plc, to guarantee payment for power produced by generation companies (Gencos), the government has done very little to improve the lots of the country's privatised electricity market.

It recently opted to declare the 'eligible market' regime, a legal framework that would allow Gencos sell their stranded power to any willing consumer in the market.

Though the move has been rather controversial especially on the basis of arguments by distribution companies (Discos) that the market had not attained the level of competition needed to sustain the eligible market regime, Gencos have welcomed it as the necessary tonic to help the market pivot and engender competition for improved efficiency.

4. Addressing Security Challenges

Before Buhari was elected president, Boko Haram had taken over some states in the north-east and hoisted its flag in the states. Governors of the affected states were administering their states from other states. Today, the governors are back in their states. In case we have forgotten, while Dr Goodluck Jonathan was president, the Federal Capital Territory became so unsafe. No one knew where the next bomb would explode and people became very apprehensive. Security agencies including the Nigerian Army had to erect concrete wall to protect themselves.

But today, such concrete barriers had given way. Residents of FCT are no longer looking over their shoulders. This is to the credit of the present administration. No one should underestimate the importance of security in a country like ours or any country for that matter. The president has done very well in this regard. If there is any issue both supporters and adversaries of the present administration agreed on, it is that it has done well in tackling the security challenges.

5. The Agriculture Promotion Policy (2016-2020) of the government if implemented strictly promises to reduce dependency on importation and save foreign exchange. Previous governments paid lip services to diversifying the economy and reduce the country's dependence on oil. However, only the Buhari's administration has shown enough commitment to following through on this. The Anchor Borrowers Programme" (ABP) for rice farmers has already yielded promising results. The program was designed to assist small scale farmers to increase the production and supply of feed stock to agro-processors. The programme which was launched in November 2016, initially targeted 14 states of Kebbi, Sokoto, Niger, Kaduna, Katsina, Jigawa, Kano, Zamfara, Admawa, Plateau, Lagos, Ogun, Cross-Rivers and Ebonyi for rice and wheat farmers to advance their status from small holder farmers to commercial or large growers. The underlying principle is to diversify the economy by addressing local production of agricultural products. Speaking at the launching of the new agric policy, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh said in the vision was to revive agric sector to boost food production in the country. According to him, the policy will serve as the new fulcrum for economic diversification inclusive growth and sustainable development in the sector.

Besides, contribution of agriculture to the economy has been on the increase since the president took over power.

6. Introduction of Treasury Single Account

Although the Treasury Single Account (TSA), was not the idea of the president, his commitment to its implementation helped the government to block a lot of loopholes. Despite the devastating poverty past governments were unable to block wastes. A full TSA regime ensured that not less than N3 trillion which would have disappeared without trace was saved. The closure of all multiple accounts in ministries, departments and agencies of government helped in blocking wastes.

7. Retaining Good Policies

One of the developmental challenges the country has consistently failed is lack of continuity in implementation of government policies. One of the mistakes of the Umaru Musa Yar'adua administration was to revoke some of the policy directions initiated by the administration of Olusegun Obasanjo. As stated earlier, the TSA was not Buhari's idea but he implemented it religiously because he was convinced that it was good for the country. He did not only retain the deregulation of parts of the power sector, he also sustained it because he believed that it was the proper direction to follow. In agriculture, some of the policies put in place by the Jonathan's administration were sustained. An example is the e-wallet system for fertilisers allocation and distribution. Continuing with good policies inherited from past administrations is a good policy option that investors like to see.

8. Infrastructures Development

The administration of Buhari has shown serious determination to invest in infrastructural development.

A whopping N1.2 trillion had been released for capital expenditure in the 2016 budget the single largest of such budgetary allocation in the history of the country. This explains while many of the road projects abandoned by previous government were resuscitated and are now ongoing. The government has shown uncommon zeal in reviving railway in the country. In this wise, it has continued with the 3500 kilometres network narrow-gauged railway project. The Abuja-Kaduna railway line is another example.

9. Introduction of the Whistle blowing Policy.

Although this is yet to have a legal backing, the policy has already yielded results with recovery of huge sums of money hidden across the country. The policy isn't perfect yet but observers believe that it is a right step in the right direction. It also proves that government isn't not just paying lip service to openness and transparency. The administration should push the National Assembly to enact the policy into a law.

10. Dumping Confrontation for Dialogue in the Niger Delta

Another sensible policy was the decision to abandon military option for dialogue in the resolution of the Niger Delta crisis. It appeared the government came into office with a view that it could use military to solve every political problem. There was an apparent militarisation of the system. But, when it appeared that force alone would not solve the problem, the government changed tactics. Apart achieving a relative peace in the Niger Delta, all Chiboks Secondary School Girls recorded so far were the direct result of negotiation and not force. In view of the success recorded so far with dialogue, the present administration will be well advised to engage those seeking their own republic. It is not a sign of weakness to negotiate, rather it shows that the government is one that listens.

11 Ease of Doing Business

Too many regulations, multiple taxation among others remain impediments to investments in Nigeria. But for the first time, the government is serious about addressing the problem and the private sector is beginning to take note. The president in August 2016 inaugurated the Presidential Enabling Business Environment Council with the vice president as chairman. The council has successfully introduced measures that promised to make doing business a lot faster, if consistently implemented. Notable among these measures are: Intending business owners can now search for company names on the website of the Corporate Affairs Commission (CAC); they can now upload their registration documents directly to the website of the CAC; reduced the role of lawyers in business registration documents; and the introduction of a single form for company incorporation to save time and reduce cost.

Other reforms are also being put in place to make it easier for business men and women to get Nigerian visa while the process of clearing of goods at ports is also being simplified. Goernment's agencies that inspect products and goods have been mandated to reduce the number of days needed to carry out the inspection.

12. Social Investment Programme

The Buhari administration introduced a Social Investment Programme (SIP) with four components. Although, the programme isn't far reaching enough, it is a good straying point. have now taken off. The government described it as the "largest and most ambitious social safety net programme in the history of Nigeria".

Details released by the government, which have not been independently verified so far show that more than 1 million beneficiaries have been recorded so far -- 200,000 N-Power beneficiaries (160,000 of them have had their details validated and are now receiving the monthly N30,000 stipend, while the rest are undergoing verification.

3,162,451 people belonging to 26, 924 registered cooperatives have been registered for the Government Enterprise and Empowerment (GEEP) Scheme. 57,234 interest-free (except a one-time low administrative fee) loans have been issued, across 28 States and the FCT. 56% of loans so far disbursed has gone to female beneficiaries.

1,051,000 Primary School Pupils are currently benefiting from the Homegrown School Feeding Programme (HGSFP), in 8,587 schools across seven States. More than 11,000 cooks have been employed for the HGSFP.

Government also claims that "under the Conditional Cash Transfer (CCT) Programme, 26, 942 beneficiaries are now receiving the monthly N5,000 stipend in 9 States and 84 Local Government Areas. The States are Borno, Cross River, Niger, Kwara, Ekiti, Kogi, Oyo, Osun and Bauchi."

If targeted at the right people, the SIP offers a lot of hope in poverty alleviation. However, to have the desired impact, the federal government should encourage states to key into it

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