Vice President Yemi Osinbajo gave the 50th
convocation lecture at the University of Lagos (UNILAG) on Monday.
The lecture titled ‘Nigeria Rising…The Path to Prosperity’,
Osinbajo itemises what has been done to reposition the country and
what needs to be done. Excerpts:
I suspect that the choice of the subject of this lecture:
‘Nigeria Rising…The Path to Prosperity’ was informed by the
curiosity of the university about what to expect from the Buhari
administration in the next four years.
I will speak to this in several parts.
Perhaps I may begin by affirming the belief of the Buhari
Administration that Nigeria’s prosperity means a decent existence
for all. Second, that prosperity so defined will be attained
if we are able to address the issues of extreme poverty,
productivity, corruption, the rule of law and the deficiencies in
the quality of Human Resources caused by poor education and
healthcare ) . This last point is possibly the most
fundamental. How to ensure that we maximise the potential of
the abundant Human Resources that we have. This implies that we
must have a robust enough healthcare system that ensures that the
average person is in good health, an educational system that
guarantees education capable of preparing children for the
opportunities and challenges of a knowledge economy, a thriving
private sector-led economy supported by a business-friendly
environment , a system of wealth creation options and safety nets
capable of taking millions out of poverty and providing for those
who cannot work. The wealth creation options must include access to
cheap credit for smallholder farmers, traders and artisans. The
safety nets include government created job schemes for the
unemployed and cash transfers for the poorest and most
vulnerable.
In planning the path to prosperity we also took
into account the age-old weaknesses of the Nigerian economy , and
the illusion of prosperity that frequently distorts our
understanding of the actual fragility of our economy. First is the
focus on GDP growth figures, without a clear understanding of the
underlying dynamic. 60% of GDP growth is dependent on oil revenues.
How? While the oil sector contributes between 8-12percent, the
non-oil sector contributed between 88-92 percent of GDP. However,
between 50-53percent of the non-oil sector is also dependent on the
fortunes of the oil sector.
This means the economy rested on a tripod where two of the three
legs were dependent on highly volatile oil prices and
production.
This shaky economic structure enabled Nigeria to keep growing as
long as revenue from oil and foreign reserves were high
enough and of course we celebrated this fragile growth structure.
By the very nature of extractive industries high oil revenues
does not mean more jobs or better human development indices.
Jobs are only created where there is value added. A thriving
petrochemical industry would of course have created jobs directly
from the oil and gas industry . The economy had also been
running a consumption growth model which is only advantageous if
consumption is been met by domestic production of goods and
services. However our structure was based on consumption of large
portions of imports. As long as there was plenty of oil based
foreign exchange in the reserves to import and fuel consumption our
economy kept growing in GDP terms but few jobs were being created
and more people were going into poverty. The majority of the
affluent in this economic are the professionals, financial services
contractors and others able to plug into the rent seeking
opportunities that are created when the biggest business is
government owned. The productive sector, the real manufacturers,
the value adding businesses are relatively few. The main
source of the income coming to this class of individuals is oil
revenue. When oil revenues fall, not only does GDP growth fall
but this most affluent but unproductive sector suffers.
Also in understanding the problems of the Nigerian economy, the
place of corruption, especially grand corruption is crucial . The
same oil earnings meant to develop infrastructure, fund education
and healthcare end up in private pockets. The feeding frenzy is
worse in times of high earnings from oil. A combination of theft of
public revenues and the consequent failure to invest in
infrastructure as well as a largely rentier or rent seeking
business class is what accounts for Nigeria’s economic quagmire.
The other problem is that of extreme poverty. A problem that
for reasons already adduced increases even where oil earnings
are high.
It was clear to us that we needed to devise an economic plan
that prioritise:
- Building of infrastructure especially rail, roads, power and
ports. - Productivity as we diversified the economy from oil and
gas, - The fight against public sector corruption,
- Developing a new educational curriculum that emphasizes
Science, Technology, Engineering, Arts and Maths - A new approach to resourcing healthcare
- A Social Investment programme that deals with issues of extreme
poverty and unemployment. The Economic Recovery and Growth Plan
effectively addressed these issues.
So,how far have we gone and what is the next
level?
We believe that creating an environment for productivity
investment in hard and soft infrastructure is crucial. Soft
infrastructure covers the whole gamut of the regulatory environment
for business. For hard infrastructure we have focused on
economically strategic roads, rail, power and ports accross the
country. Roads and rail linking important commercial centres are
prioritised.
As of today in two budget cycles despite
earning over 60% less than the previous government we have invested
2.7trillion on capital the highest in the country. We have
recently commissioned the Lagos Abeokuta Ibadan end of the new
standard gauge Lagos Kano Rail. The rail originates from the Apapa
port which means that cargo will be moved by rail from the Apapa
port, this will significantly ameliorate the congestion of that
port. To expand port facilities generally we are currently dredging
the Warri Port. In Lagos work is going on in the private sector led
Lekki Port and the Badagry Port has also attracted significant
foreign capital and interest. In Abuja after almost fifteen years
we have completed and commissioned the Abuja light rail project
starting from the airport to the city Centre. Similarly we
completed and commissioned the Abuja Kaduna Railway. The Itakpe
Warri Railway has also been completed linking the iron ore deposits
to the Warri port. Here in the southwest of Nigeria, work is
ongoing on the Lagos-Ibadan Expressway, Lagos-Otta-Abeokuta
Expressway, the Ikorodu-Sagamu Road, and the Ogbomosho-Ilorin
Road. The contract for the Lagos-Badagry Expressway has been
awarded and work has already begun.
On Power, we have moved generation from 4000 to 8100 MW. But the
effect of this increase in generation has not translated
significantly to better service to the consumer. This is mainly
due to distribution challenges. Over 2000 MW of
power is not taken up by the discos for distribution to consumers
largely because of problems they experience in collection of
Tarrif , but one of the reasons for this is the fact that the
discos have not invested significantly in metering. We have now
embarked on a major metering Initiative The Metering Assets
Programme which involves private metering Assets
providers ,. In addition the Federal government has in
the past eighteen months taken on the deficiencies in
transmission head on through the TCN and the NDPHC we are
completing transmission projects all around the country. But the
more important strategy is to decentralize power production. So we
have adopted an off grid programme. Which means that we are
encouraging private investors to collaborate with government to
build IPPs and supply power to willing buyers. This was made
possible by what is called an eligible customer declaration
by the Ministry of power works and Housing. By this collaboration
we have been providing power, especially Solar Power to
economic clusters such as markets across the country including ,
Ariaria market in Aba, 31993 shops , Sabongari market in Kano
13,598 shops, Sura market in Lagos 1047. Isikan 493,
NEPA 256, Gbagi 8778, UMBC 2178, a total of 81691shops
servicing 320000 SMEs.In Lagos we recently commissioned
the Sura market solar project, the businesses there now have 24
hour power. From printers, commercial tailors to small chop
businesses, everyone is employing more and making more
profit.
The next level is to ensure completion of the major
infrastructure projects. The main drawback is funding. We have
established an infrastructure fund.
- The Presidential Infrastructure Development Fund
- Second Niger Bridge
- Lagos-Ibadan Expressway
- Mambilla Hydro Power Project
- Abuja-Kano Expressway
- East-West Road
If we stick to our agenda in the next two years we will see the
most significant improvements, in our power sector in
history. Industrial Infrastructure is a major component of
our economic transformation plan. Project MINE Made in Nigeria for
Export is the major plank of our industrial policy. The idea
is to build Special Economic Zones which accommodate industries for
local manufacture of goods for which Nigeria has a comparative
advantage. These include cotton, garments, leatherware etc. The
Nigerian EZ investment company, a public private partnership
company is the delivery vehicle for the project. The
objectives are to boost manufacturing share of GDP to 20% and
make Nigeria the leading regional manufacturing hub for Sub-Saharan
Africa, create 1.5 million new jobs in manufacturing,
generate $30bn in non-oil export earnings annually, improve
the utilization of Nigeria’s resources and comparative advantage
and whilst creating strong domestic value chains and create local
models of global best practice in industrial infrastructure and
enabling business environment. Already work has begun in three
locations.
The Enyimba Economic City in Aba covering over
9500 hectares outside Aba in Abia State. Master planning,
feasibility studies and detailed design have been completed for
phase 1. Three international anchor tenants have been secured for
phase 1. The city will be served by an existing IPP for power and
will create 625000 jobs when fully built. There is also the Lekki
Model Industrial Park in partnership with the Lagos State
Government. It is set on 1000 hectares in the NE cluster of Lekki
Free Zone. It has already attracted world class anchor tenants for
textile and garments, agri-processing and light industrial
manufacturing including the no 1 Chinese and No 9 global textile
and garment group. The proximity to petrochemical feedstock from
the Dangote refinery for,synthetic textile and garment
manufacturing makes the park irresistible for investors. The third
project in its early stages is the Funtua Cotton Cluster in Katsina
State. Funtua has the largest aggregation of cotton ginneries in
Nigeria. “The cluster will aggregate cotton from 800,000 farmers in
Northern Nigeria and become the largest integrated cotton ginning,
spinning and weaving complex in Sub Saharan Africa. It will
re-establish the cotton value chain from seed cotton to finished
fabric and provide feedstock for domestic and export oriented
garment manufacturing”( Okey Enelamah)
We believe that the future for job creation and
efficient and profitable businesses lies in innovation and
technology. We have partnered with local and international tech
companies and innovators, in the building of tech hubs, and
promoting innovation. Our aim is to completely democratise access
to innovation and cyber commerce and create jobs.
We have established hubs in collaboration with the WB and
LBS..the climate change innovation hub . In Yola, the North East
Humanitarian Hub. We have also in collaboration with Cicvic
Hub promoted technology and innovation in universities with the
Students innovation challenge in the six geopolitical zones, and
technology hubs in three.
Our technology agenda is premised on our new educational
curriculum which emphasizes STEAM. Science, Technology,
Engineering, Arts and Mathematics. We are currently
developing that curriculum with the support of global
players like MIT, Cisco, IBM and Oracle, a nationwide curriculum
that incorporates 21st century STEAM thinking: coding, design
skills, digital arts, robotics, machine learning, and so on.
The curriculum will cover primary to secondary education. The
Arts component of that vision is extremely important to us. Visual
arts, dance, music, film and theatre, comedy, literature –
these and many more are fields in which Nigeria is has proved to
the world that it is full of talent and originality and ambition.
At the highest levels of the government in Abuja, we are creating
opportunities to engage with artists to better understand how we
can, as a government, support you to succeed.
We believe that like technology entertainment and the arts
require active support, especially in the development of policies
as we engage uncharted territory in the coming years. Consequently
the President directed that we establish a technology and
creativity advisory group, to work on and formulate policies
in these very dynamic spaces. We have had about three meetings so
far.
Assembly Plants
At the top of the mechanisation chain are six
assembly plants to be activated and spread across the six
geo-political zones. The assembly plants will undertake the
assembly of tractors and processing equipment as well as light
manufacturing of parts which will be sent out to the Service
Centers closer to the farmers across the length and breadth of
Nigeria.
The first assembly plant, among a total of six (6) to operate,
to assemble tractors and implements, will be located in Bauchi
State in an already existing facility owned by a private
operator. It is projected that almost 5,000 tractors will be
assembled in Nigeria every year.
Service Centres
There will be a total of 780 Service Centers spread across all
the Local Government Areas in all the states and the Federal
Capital Territory.
Primarily, the Service Centre will offer a technological package
consisting of machinery and equipment services (agricultural
mechanisation- e.g. rental of tractors), quality inputs (improved
seeds varieties, fertilisers and pesticides), technical assistance
and training for small holder farmers in order to ensure consistent
results of productivity and quality of agriculture produce.
The Service Centre will also perform an important market
function of being able to aggregate primary produce for processing
and haulage to markets. This establishes a means for monetisation
and loan repayment based on a percentage of its own agricultural
production.
109 of these Service Centers will be located in the 109
senatorial districts in Nigeria and classified as “ Process Service
Center”. Process Service Centers will, in addition to the already
mentioned services, have processors which serve as a throughput
with which value can be added to agricultural produce brought in by
local farmers. Service Centers will be based on the comparative and
complementary advantage each location has and also along value
chain lines.
The value chain will cover Grains & Cereal, Livestock,
Poultry, Fruits, Roots & Tubers, Horticulture and other
areas.
Young technicians, from The N-Power Agro Programme will join the
technical staff of the Service Centres to provide agricultural
extension services and production planning, carried out jointly
with small holder producers and geared towards market demand.
Impact
Through the implementation of the Green Imperative, 5 million
people will be impacted, 100,000 technical personnel will be
trained, and 4,848 tractors will be assembled each year, resulting
in the ultimate injection of $12 Billion into the local economy
over 10 years.
Additionally, it will increase production and productivity,
leading to a reduction in food prices and the cost of living, a
drop in food imports, as well as improved food security while
boosting exports significantly. The Green Imperative is the next
level for Nigerian Agriculture.
The third is the Social investment Programme . The SIP is
the largest and most ambitious social protection programme in the
history of Nigeria. We provided N500b for it in both 2016 and
2017. But total spend on the programme is closer to 250
billion from both budgets. The programme has four components. The
Npower programme our graduate employment scheme is the largest
post-tertiary jobs project in Africa. 500,000 graduates have
been recruited as teachers, agricultural extension workers, and as
public health officials. Each of these volunteers is provided
with an electronic tablet containing relevant training materials
including some with which they are trained to provide the required
services on an on-going basis. The device also empowers them
to participate in the digital economy as data collectors and
analysts.
Under the scheme we are giving microcredits to 2 million petty
traders across the country. The scheme enables them to draw
further credit if they are able to pay back within six months. The
credit schemes also achieve major By giving them credit to
replenish and increase their inventories, we give them a stronger
chance, to earn more, while they also service the value chain that
they are a part of. But more importantly, we bring them into the
formal sector, where they have access to government and private
credit . GEEP has led to one of the most successful financial
inclusion outcomes, the opening of 349,000 new bank
accounts/wallets for beneficiaries and intending beneficiaries.
Nigeria took the decision to embark on a School Feeding
Programme as an important part of our Human Capital development
agenda, by tackling the broader issues of eradication of
poverty, food and nutrition security, increasing school
enrollment. The At a cost of $0.19 per child per day we are
able to provide a balanced meal for every one of the
children. 9,300,892 million pupils in 49,837
public primary schools in 26 states across Nigeria benefit
daily. .lThe programme employs 95,422
cooks, and over 100,000 small holder farmers linked to the
program supplying locally sourced ingredients. This translates to
594 cattle, 138,000 chickens, 6.8 million eggs, 83 metric tons of
fish that are procured, prepared, and distributed each week. As you
can imagine, the quantity of starch, and vegetables required for
this program on a weekly basis is equally impressive. Dietary
energy and nutrients with established links to cognition-
carbohydrates, protein, fat, iron and iodine as well as minerals
with public health importance–are targeted by the NHGSF. The
program aims to provide 50% of the Recommended Nutrient Intake
targets for protein and prioritised micronutrients (iron, iodine,
zinc, vitamin A, folate and vitamin C and 30% of energy because of
the high burden of undernutrition and micronutrient deficiencies in
Nigeria. There is also a deworming programme attached to the school
Feeding programme.
By the end of the year the number of new States joining will
increase, the NHGSFP is set to become the
largest school feeding programme in Africa.
Conclusion
We restored medium term planning with the Economic Recovery and
Growth Plan which served as a useful lodestone in improving
macroeconomic performance, boosting the real sector of the economy
and building infrastructure. The decline in growth which
started at the end of 2014 has been reversed, inflation has
stabilised at about 11% over the past six months and our current
account was in surplus at about 1.3% of GDP last year. Our
foreign reserves can cover at least 9 months of import of goods and
services and despite understandable concerns, our debt burden is
only about 22% of the size of our economy which is one of the
lowest ratios in the world.
We have very clear objectives. Clear plans. As you know the
problem of our country is not the planning…or in designing great
projects. It is in the actual implementation. We are fortunate that
Muhammadu Buhari is not an orator…he is a doer.
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