Viewpoint: President Muhammadu Buhari
Economic behaviour is cyclical. All countries face ups and downs. Our own recession has been brought about by a critical shortage of foreign exchange. Oil prices dropped from an average of $100 per barrel over the last decade to an average of $40 per barrel in 2016-17. Worse still, the damage perpetrated by Niger Delta criminals on pipelines has sometimes reduced Nigeria’s production to below 1m barrels per day (bpd) against the normal 2.2m bpd. Consequently, the naira was at its weakest, but the situation is stabilising.
But this situation is only temporary. Historically about half of our US dollar export earnings go to the importation of petroleum and food products. Nothing was saved for the rainy days during the periods of prosperity. We are now reaping the whirlwinds of corruption, recklessness and impunity. There are no easy solutions, but there are solutions nonetheless and the government is pursuing them in earnest. We are to repair our four refineries so that Nigeria can produce most of our petrol requirements locally, pending the coming on-stream of new refineries. This way we will save $10bn yearly in importing fuel. At the same time, the Federal Ministry of Agriculture and the Central Bank of Nigeria (CBN) have been mobilised to encourage the local production of rice, maize, sorghum, millet and soya beans.
Our target is to achieve domestic self-sufficiency in these staples by 2018. Already farmers in 13 out of 36 states are receiving credit support through the CBN’s Anchor Borrowers Programme. Kebbi State alone this year is expected to produce 1m tonnes of locally grown rice, thanks to a favourable harvest in 2017. As part of the 13 states, Lagos State and Ogun State are also starting this programme. Rice alone costs Nigeria $2bn to import. The country should be self-sufficient in basic staples by 2019. Foreign exchange thus saved can go to industrial revival requirements for retooling, essential raw materials and spare parts.
It is in recognition of the need to re-invigorate agriculture in our rural communities that we are introducing the Labour Intensive Family Enterprise programme. The government recognises that irrigation is central to modern agriculture: that is why the Ministries of Agriculture and Water Resources are embarking on a programme to develop lakes, earth dams and water-harvesting schemes to ensure that we are no longer dependent on rain-fed agriculture for our food requirements.
In addition, the government is introducing the Water Resources Bill – which also encompasses the National Water Resources Policy and the National Irrigation and Drainage Policy – to improve the management of water and irrigation development in the country.
We are reviving all the 12 River Basin Authorities. The intention is eventually to fully commercialise them to better support crop production, aquaculture and accelerated rural development.
This administration is committed to the revival of Lake Chad and an improvement of the hydrology and ecology of the basin. This will be in line with efforts to rehabilitate the 30m people affected by the Boko Haram insurgency in the Lake Chad basin countries.
The second plank in our economic revival strategy is centred on the Ministry of Power, Works and Housing (MoPWH). The MoPWH will lead and oversee the provision of critical infrastructure for power, road transport networks and housing development.
Power generation has steadily risen since our administration came to office, from 3324 MW in June 2015, rising to a peak of 5074 MW in February 2016. For the first time in our history the country was producing 5000 MW. However, renewed militancy and the destruction of gas pipelines caused an acute shortage of gas and constant drops in electricity output available on the grid. During the period from June 2015 to September 2016 there was a big improvement in transmission capacity from 5500 MW to the present 7300 MW. There were only two system collapses between June and December 2015, but due to vandalism by Niger Delta militants the overall system suffered 16 collapses between March and July 2016 alone. We are engaging with responsible leadership in the region to find lasting solutions to the genuine grievances of the area, but we will not allow a tiny minority of criminals to cripple the economy.
In the meantime, the government is going ahead with projects utilising alternate technologies such as hydro, wind and solar to contribute to our energy mix. In this respect, the Mambilla Hydro project, after many years of delay, is taking off this year. Contract negotiations are nearing completion with Chinese firms for technical and financial commitments. The project is to be jointly financed by Nigeria and the Chinese Export-Import Bank. In addition, 14 solar power projects have had their power-purchase agreements concluded. Hence the plan to produce 1200 MW of solar electricity for the country should be realised on schedule.
In line with the government objective to complete all abandoned projects across the country, the Rural Electrification Agency’s projects needing completion are provided for in the 2016 budget. Bringing electricity to rural areas will help farmers, small-scale and cottage industries to integrate with the national economy.
Road construction and rehabilitation has taken off. The sum of N12bn ($42.4m) was allocated to this sector in the 2015 budget; not enough even to pay interest on outstanding unpaid claims. Notwithstanding the budgetary constraints, the current budget allocated N240bn ($848.2m) for highway projects against N12bn ($42.4m) in 2015. Many contractors who have not been paid for three years have now returned to sites.
Some N720.5bn ($2.5bn) has so far been released in this budget year to capital projects. The MoPWH has received N197.5bn ($698m). Work on the following highways has now resumed: the dualisation of the Calabar-Itu Road in Cross River and Akwa Ibom States; dualisation of the Lokoja-Benin Road between Ehor and Benin City in Edo State; reconstruction of outstanding sections of the Benin-Shagamu Expressway in Edo and Ogun States; an expansion on the Lagos-Ibadan dual carriageway; and the rehabilitation of Onitsha-Enugu Expressway in Ogun and Oyo States. Other major highways are in the queue for rehabilitation or new construction. Contractors have recalled some 9000 workers laid off and we expect that several hundreds of thousands of workers will be re-engaged as our public works programme gains momentum.
On the railways, we have provided our counterpart funding to China for the building of our Lagos-Kano standard-gauge railway. Meanwhile, General Electric is investing $2.2bn in a concession to revamp, provide rolling stock and manage the existing lines, including the Port Harcourt-Maiduguri line. The Lagos-Calabar railway will also be on-stream soon.
We have initiated the National Housing Programme. In 2014 some N400m ($1.4m) was allocated for housing. In 2015 there was nothing. Our first budget in 2017 is devoting N35.6bn ($125.8m) to housing. Much of this house building will be led by the private sector, but the government is initiating a pilot housing scheme with 2838 units uniformly spread across the 36 states and the Federal Capital Territory. We expect these units to be completed within four to six months.
These experimental “Nigeria House” model units will be constructed using only “Made in Nigeria” building materials and components. This initiative is expected to reactivate the building materials manufacturing segment, generate massive employment opportunities and develop sector capacity and expertise.
The programmes I have outlined will revive the economy, restore the value of the naira and drive hunger from our land. This government intends to make the business environment more friendly because we cannot develop ourselves alone. Abroad, Nigeria’s standing has changed beyond belief in the last 18 months. All countries welcome foreign investments to their economy. This is the essence of globalisation and no country in the 21st century can be an island. Our reforms are therefore designed to prepare Nigeria for the 21st century.
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