Nigeria Vision 2020

8/6/2019 Nigeria Vision 2020

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VISION 20-2020 AND NIGERIAS POVERTYERADICATION STRATEGY: RE-ENERGISING THE

POLICY AGENDA

Centre for Democ rac y and Developm ent

Europea n Union


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While Copyright in this volume is vested in the Ce ntre fo r Democ rac yand Develop ment, no sec tion o f the p ublic a tion may b e rep rinted inwhole o r part w ithout the e xpress permission in writing o f the

publisherCo pyright CDD2008

A Public a tion o f the Centre for Democ rac y andDevelopment

With fund ing from the

European Union


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Table of Contents

About

CDD..................................................................................................................................4Ac kno wledgement ......................................................................................................................5

Introduc tion................................................................................................................................7

The Age ofRefo rm.....................................................................................................................9

The Nationa l Ec ono mic Emp ow erment and Deve lop mentStrategy.........................................10

Pove rty and the M illenium Deve lop mentGoa ls........................................................................11

Pub lic Budgeting and thePoor...................................................................................................13

The need to Re-Foc us on Ag ricu lture a s the Eng ineforGrowth.................................................17

Vision20:2020.............................................................................................................................21

ReclaimingLostG round ...............................................................................................................22

Ca ll for a new Policy

Thrust.........................................................................................................23The w ay forward on Polic y

Agend a..............................................................................................25


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Abo ut CDD

The Ce ntre for Demo c rac y and Developme nt (CDD) is a non-governmenta lorganisation with a clear response to West Africas continuing need fordemocratic solutions and consolidation, which are fundamental to politicalstab ility and ec ono mic p rog ress in the reg ion. The Centre wa s prom pted by theneed to mobilise globa l opinion for de moc ratic developm ent in Africa , to reflec tcritically on the unique challenges to democratisation and development inAfrica, and to generate dialogue on alternative routes to good governance,which a re c ontext spec ific and sensitive. Sinc e its ince p tion in 1997, CDD ha sgrown into a leading intellectual resource centre, with offices in Abuja,Lagosand Lond on, and projec t p artners in Afric a , Asia , Americ a and Europ e

Hea d Offic e/ Sieg eCentre for Democ rac y and Develop ment4, Kikuyu Close, Off Na irob i Stree t,Off Am inu Kano Cresc ent, Wuse 2AbujaP.O. Box 14343, AbujaPho ne : + 234-9-671-6454


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Website: cddwestwestafrica.orgEma il:c ddabv@c ddwe sta fric a .org

Lagos Offic e/ Burea u de Lagos2, Olab od e C lose,Illup eju Esta te , Lagos Sta teP.O.Box 15700, Ikeja, Lagos StatePhone : + 234 1 8043221, 4730705Fax: + 234 1 5556812

International Office/BureauUnit 2L Leroy House436, Essex RoadLond on N1 3QP, UK

Phone: +44 (0) 20 7359 7775Fax: +44 (0) 20 7359 2221Ema il: c dd@c dd .org .uk

Acknowledgement

We a re g ra teful to Dr Obad iah Ma ila fia , Professor Od e O jow u and Profe ssorMike Kwa nashie fo r their tec hnic a l papers and the (GC AP/ Ma ke our MoneyWork for Us Ca mp a ign fo r their input)


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VISION 20-2020 AND NIGERIAS POVERTY

ERADICATION STRATEGY: RE-ENERGISING THE POLICY

AGENDA

Memorandum to the Federal Government by Civil Soc iety

Organisations for the Dialogue on Nigerias Current Development


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Challenges organised by the CENTRE FOR DEMOCRACY &

DEVELOPMENT, Rockview Hotel, 22nd May 2008

Introduction

In 2004, the administration of President Olusegun Obasanjo developed a

strategic blueprint towards addressing the nations development challenges the Na tiona l Ec onom ic Emp ow erment and Deve lop me nt Stra tegy (NEEDS).NEEDS was an a ttemp t a t a c om prehensive refo rm stra tegy add ressingec ono mic and soc ia l, po litic a l and institutiona l issues a t the same time and in amulti-fac ete d wa y. NEEDS p rom ised to imp lem ent a p riority ac tion p lan ofwe a lth c rea tion, c rea te seven million new job s, alleviate pove rty and eliminatecorruption during its first four year implementation cycle (2004 2007). It failed inac hieving these b asic ob jec tives.


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The administra tion of President Uma ru Musa Yaradua ha s prop osed to p rov idelan for our deve lop ment p roc ess by setting the ta rge t of c a tapulting Nigeria tobec om e one o f the top 20 ec onomies in the world by the yea r 2020. They ha vetagged this ambitious long term perspective plan Vision 20-2020. Recently, thePresident inaugurated the Nationa l Counc il and the Nationa l Stee ringCo mm ittee on Vision 20-2020. Civil soc iety is c onc erned tha t d uring the first yearof the administration, there has been virtually no civil society engagement bythe Yar Adua Administration on its poverty eradication programme andeconomic policy direction. We recall that in his campaign manifesto entitled,End Poverty, Develop Nigeria, President Umaru Musa YarAdua promisedNigerians that the United Nations Millennium Development Goals is our guideand c ommits himself to c onfront p overty and develop Nige ria if elec ted intooffic e. He a rtic ula tes a seve n point ag end a to d o this by pursuing:

i. Energy Eme rgenc yii. Ag riculture and Foo d Sec urityiii. Wealth Crea tion and Pove rty Alleviationiv. Land Refo rmv. Sec urity o f Lives and Propertyvi. Human Capital Development including compulsory Education for

Childrenvii. Transport Revolution inc luding improved Ma ss Transit

Nigerians are about to mark the one year anniversary of the presentadministration and they are yet to feel the pulse of the economic agenda ofthe g ove rnment. There is the urge nt need to move beyond p lans and polic ies totaking prac tic a l step s tow ard ac hieving d eve lop menta l ga ins. In this reg a rd , webelieve that the collaboration between governments and civil society is crucialin creating the necessary synergy to ensure that we achieve the MillenniumDevelopment Goals (MDGs) over the next seven years and define economicpriorities and strategies in a way that works for the majority of our citizens. It is inthis context that we in civil society address this memorandum to theGovernment.

Nigeria has a population of over 140 million people, which makes the countrythe b igg est ma rket in Africa . The h isto ry of ec onomic c risis and reforms in Nigeriadates bac k to 1982 when the c ivilian a dministra tion o f President Shehu Shagariintroduced Austerity Measures aimed at reducing public and privateexpend itures and stab ilizing the b a lanc e o f pa yments position. Averag e g row thof GDP between 1980 and 1985 was 1.7%. An attempt to reverse the negativetrend in economic behaviour through the stabilization policies and austerity


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measures in the early 1980s could not stem the secular tendency towardsdec line a nd sta gna tion. The Struc tural Adjustment Prog ramm e (SAP) attem ptedto address these imb a lanc es based on m arket d irec ted princip les. Und er SAP,the liberalization of the foreign exchange market was also undertaken,espec ially with respec t to the Sec ond Tier Foreign Exchange Market (SFEM) a ndshifts in trade reg ime s. The fixed offic ial exc hange rate w as rep lac ed with afloating, market determined exchange rate system. As a result, the exchangera te o f the Na ira dep rec ia ted from N1: US$1 a t the beg inning o f 1986 to N63.2:US$1 by the e nd of the yea r. The p olic y of imp ort and export licensing wereabolished as mo st p ric es within the ec ono my were de reg ula ted .

The imm ed iate effec ts of the se reforms were the restora tion of inc ent ives toexport, reduction of the incentive to import, and increase in the profitability ofagriculture. While oil prices remained low during most of this period, the non-oil

sector especially the agricultural sector recorded positive growth. With a shift inrelative p ric es in favour of the rura l sec tor, p rod uc tion of trad itiona l foo d c rop sand cash crops increased, and agricultural outputs grew at an annual rate of3.5 percent d uring 1987-1992 periods (CBN Sta tistics, 1995), with rea l GDP growthra te a veraging 5.3 percent . The sha re o f ag ric ulture to GDP increa sed andaveraged 37 percent during this period and that of domestic manufacturesdec lined to a bout 5.6 perc ent in the same period . The SAP fa iled to m ob ilizesufficient savings due to the unfriendly investment climate, as the ratio ofDomestic investment to GDP dropped from 15.3 percent in 1983-1986 to anaverage of 9.9 percent during 1986-1992. However, the savings-to-income ratio

imp roved a s the average inc rea sed from 7.9 percent in the prec ed ing p eriod to12.7 percent

But the move to partially relax some of the prescription of the structuraladjustment program in the early 1990s could not reverse the negativeperformance of the macro economy in an environment of weak institutions,ma de wo rse by a ra pac ious milita ry a dministration. It w as thus not surprising tha tthe negative trend in economic performance could not be reversed asevidenc ed by an a verage g row th ra te o f GDP of 1.3% betw een 1994 and 1996,

which w as far less tha n the a verage fo r sub -Saharan Africa . Suc h neg ativeperformance was as bad for the overall GDP as it was for its key components:negative private investment performance was not less alarming whenconsidered in contest of its GDP contribution, which fell from 10.9% in 1992 to5.72% in 1998 without p rejud ice to an inc rea se to 11.61% in 1994.


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In terms of soc io-ec onomic ind ic es, the fa c t is we ll doc ume nted tha t the SAPled to massive welfare losses for the vast majority of Nigerians. Unemploymentreached unprecedented proportions, thanks to the secular trends towards de-industrialization occasioned by the closure of factories and the decline of themanufacturing sector. Given the significant reduction in social expenditures, theincidence of rural as well as urban poverty increased dramatically. Clearly,therefo re, the SAP projec t, from a poverty allev ia tion point of view , wa s a fa ilure.

The Age of Reform

It is clear that the macroeconomic environment in Nigeria, prior to thec om menc ement o f democ ra tic go vernanc e in 1999, wa s la rge ly unstab le. Thegrowth in real gross domestic product was sluggish; it averaged 2.9 per centbetwe en 1991 and 1999. This was signific antly low er than the average of 5.1percent for developing countries in the same period. Inflation was also volatileand remained high at double digit, averaging 33.2 per cent in the ten-yearperiod . The o verall ba lanc e o f pa yments wa s in defic it for mo st of the period ,

while the country accumulated debt service arrears in order to build externalreserves. In a dd ition, the financ ia l sec tor was c ha rac terised by insta bility; moneybanks were undercapitalized and distressed for a number of reasons, whichincluded issues on overtrading, insider abuses and large non-performingportfolio.

In the post SAP period of g uided deregulation, many of the po lic ies tha tcontributed to growth were reversed. Consequently, the economy againstarted to decline. Real GDP growth rates fluctuated between 2.3 percent in1992; 0.2 percent in 2004; 4.4 perc ent in 1996 and 0.4 percent in 1999. The sha reof agriculture to GDP declined to 35 percent and that of the manufacture

eq ua lly fell to 4.5 perce nt. In 1994, the g ove rnme nt introd uc ed a new budget o fguided deregulation and began reversing some of the previous policies thathad contributed to stagnation, high inflation and reduction in income. As aresult of the policy reversals, Gross fixed capital investment as a percentage ofGDP further declined to 7.4 percent, while, gross savings income ratio stood at8.2 percent. This reflec ts dec rea sed p rop ensity to save as infla tion rose muc hhigher tha n the rea l inte rest ra te.


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The National Economic Empowerment and Development Strategy

Nat iona l Ec onom ic Emp ow erment and Deve lop me nt Stra teg y (NEEDS) co veringthe period 20032007 has been anchored on wealth creation, employmentgenera tion, p ove rty red uc tion and va lue reo rienta tion. The three ma in p illa rs orstra teg ies of NEEDS are: emp ow ering peo p le, p romo ting priva te enterprises and

c hang ing the wa y government d oe s business. NEEDS is a me d ium te rm stra teg y(2003-2007) sharing the countrys long term goals of poverty reduction, wealthc rea tion, em p loyment ge neration and va lue orienta tion. The vision wa s toc onsolida te o n the ac hievements in 1999-2003 and build a solid founda tion forthe a tta inment on Nige ria as the la rgest and strongest Africa n c ountry. Toac hieve suc c ess in the refo rm proc ess, ce rta in stra teg ies were a dop ted . Theseinclude:

Refo rming the way g overnment w orks and its institutions;

Growing the priva te sec tor; Imp lementing a soc ia l c ha rter for the peop le and Re-orienta tion of the peop le w ith a n enduring African va lue system .

Under this p rog ramm e, government p riva tized ma jor c om panies inc lud ing NITELand the dow n-strea m oil sub -sec tor. NEPA has a lso be en unbund led inrea d iness for its p rivat iza tion. The key elements of NEEDS inc lud e but a re no tlimited to the follow ing:

(a) Stab le, p red ic tab le and sustainab le ma c roec onom ic environme nt;(b) Non-infla tiona ry, non-oil GDP grow th (for poverty red uc tion);(c ) Low and stab le p ric e level;

(d) A stab le a nd c ompetitive excha nge rate reg ime ; and(f) Sound mo neta ry and fisc a l polic y reg ime s.

Throug h the NEEDS age nda , adverse m ac roe c ono mic effec ts of o il dom inanc eare being better addressed, the efficiency of public spending is beingenhanced, and several other distortions that constrained the economys


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c om petitiveness and p rod uc tivity a re be ing tac kled . The de bt burden on theec onom y has be en red uced through the deb t de al with the Paris Club a nd thec ountry has rec eived its first Sovereign Deb t ra ting a t a respec ta b le BB-. Nigeriais in a good position to break with its past history of economic stagnation andleve rage its c onsiderab le oil resources and the ong oing o il boo m effec tively tocreate the foundations of a competitive, diversified and rapidly growingeconomy.

In terms of p rice stab ility, althoug h the ac hievem ent of sing le d igit infla tion is yetto be a ttained , the inflationary p ressures in the ec onom y have be en m ana ge d

in suc h a wa y tha t w ill ultima tely ac hieve the ta rge t. For instanc e, desp ite foodshortages in neighbouring countries that peaked non-core inflation at 38% inAugust 2005, by November, headline inflation was brought down to anestimated 15.1% while c ore infla tion averaged 6.8 pe rc ent . Follow ing the refo rmprogram me, exc hang e rate stab ility wa s ma intained around the p red eterminedband of p lus/ minus 3%. In fac t, exc hange rate of the Na ira apprec ia ted by 3.1%in 2004 and 3% in 2005. This goe s further to reinforce the c onfidenc e o f investorsin the ec onom y. Sound ec onom ic refo rm under NEEDS and its suc c essfulimp lementa tion led to the exte rna l deb t relief o f US$18 billion. The NEEDSdocument and commitment to its implementation formed the bedrock upon

which the Paris Club group of creditors assessed Nigeria for debt relief. As atFebruary 2008, external reserve s stood a t ove r US56 b illion, rep resenting 28mo nths of imp ort cove r, the highest in Afric a . As a c om plement to p rice stab ility,interest rates have also moderated, reflecting the impact of effectivec oo rd ina tion of m one tary and fisc a l polic ies. The imp ac t o f these p olic ies onpolic y a llev ia tion has howeve r been limited . Indee d, the key issue is tha t NEEDShas not succeeded in alleviating poverty and placing Nigeria on the path toac hieving the M DGs.

Poverty and the Millennium Development Goals

In the year 2000, the Nigerian government and 188 other governments acrossthe world made the millennium declaration containing the MillenniumDevelopment Goals (MDGs) committing to eradicating poverty and injustice in


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the world. One major failure in the economic reform agenda is making animpact on poverty alleviation. Government at all levels in Nigeria have notproperly addressed the issue of poverty and thereby condemning the majorityof Nigerians to a life o f misery. Less tha n m id way into the MDGs time frame , thisis wha t the situation is in Nigeria:

i. 54% of Nigerians live b elow $1 (N120) a d ayii. More than 6.8m Nigerian child ren of prima ry sc hoo l age a re out of

schooliii. Net enrolment for girls in primary and secondary school in the north is

34% and 10% respectivelyiv. 197 out o f eve ry 1000 Nigerian b ab ies d ie b efo re they are 5 yea rs oldv. An e stima ted 800 Nigerian w om en d ie for eve ry 100,000 live b irthsvi. There were 300,000 deaths rela ted to HIV in 2003/ 4. It is estima ted tha t

70m Nigerians have one ep isod e of m a laria annua lly

vii.It is estimated that Nigeria is currently losing about 350sq km to desertencroachment annually

viii.Globally there is a challenge of fair trade especially between thedeveloped countries and the emerging economies, mostly poorcountries.

It is estimated tha t in order to ac hieve the MDGs in Nigeria by the yea r 2015, $5b illion to $7 b illion m ust be c hannelled to MDG prog ramm es per annum . Thegovernment is presently allocating about $1billion annually out of which $750million is by the Federal Government and about $250 million by state

gove rnme nts. The num bers do no t matc h and it is c lea r tha t the p ub licexpend iture leve ls by the three tiers of g ove rnme nt a re not suffic ient to me et theMDGs as dem onstra ted in the Nigeria MDG rep ort 2006. The rep ort shows tha t a tthe p resent rate, the only MDGs we have the pote ntia l to m ee t by 2015 are:

i. Ac hieving universa l prima ry educ a tionii. Comb ating HIV/AIDSiii. Ensuring environmenta l sta b ilityiv. Develop ing a g lob a l partnership for deve lop me nt

Even these four are highly problematic. Enrolment in primary education iscertainly growing at a high rate. However, the quality of teachers is notimproving significantly, especially in the North and the schools are not wellequipped. Indeed, in some Northern states, growing enrolment is proceedingwith g row ing illiteracy.


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The admission in the 2006 Rep ort tha t we might mee t four of the MDGs isdisturbing. It means that we are not on course to meet the key MDGs that arethe m ost c ritica l:

1) Erad ic a ting extreme p ove rty and hunge r in sp ite o f the fa c t tha t 69 millionNigerians a re a ffec ted

2) Achieving gender equality in our primary schools and empoweringwomen

3) Reducing child mortality with under-5 mortality for 2005 being 197 forevery 1,000 live births

4) Improving maternal healthcare given our mortality rate of 800 for every100,000 live b irths

We c lea rly need a ma jor polic y summe rsault to get us bac k on the road ma p toachieving the MDGs by 2015. We need a policy shift that would prioritise and

significantly increase social expenditure and include the poor in publicbudgeting.

Public budgeting and the Poor

Seve ra l issues a rise in a n a ttemp t to assess the imp ac t o f pub lic b ud gets on thepoor. In Nigeria, four sectors have been identified as critical to making theNEEDS framework mo re effe c tive. These are agriculture, infrastruc ture,education and health. Analysis of budgets in the last four years shows that

rec urrent expe nd iture ha s mo re tha n doub led investments. The hug e rec urrentexpenditure in education is understandable, but does not explain theincomparably low capital expansion in the sector in view of low educationoutc ome, and for that ma tter in view very low ac c ess to ed ucation by the lowerincome categories of the population. It shows inadequate concern for thesec tor and for prog rammes articulated in the NEEDS like the UBE. A simila rsitua tion c an be inferred loo king a t the hea lth sec tor expend itures. The rea lity of


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our pub lic budgeting is tha t it is c harac terised by the d om inanc e o f expend itureon administra tion ove r other functiona l ca teg ories.

The fisc a l po lic y introd uc ed by President Ob asanjo is based on the oil p rice rulewhich was introduced in 2004. Each year, the government sets a pre-determined pric e for pe troleum a t a level that w ould be c ertainly lower than thema rket pric e. The g ove rnment then saves the d ifferenc e b etween the p re-determined price and the actual price to build foreign reserves and createconfidence in the economy. Based on this criterion of fiscal prudence, theInte rnationa l Mo ne ta ry Fund (IMF) autho rised its Polic y Sup port Instrument (PSI)for Nigeria in Oc tob er 2005. The a gree me nt w ith the IMF on fisc a l polic y wa sdone surrep titiously and Parliame nt w as not c onsulted . The Ob asanjo reg imetherefore made commitments on significant cuts to public expenditure withoutthe ac c ord o f the Nige rian p eop le.

A policy shift that will bring the poor into public budgeting concerns is thereforenec essary. The World Banks Poverty Task Forc e ha s ide ntified the following a sthe m ain c auses of p ove rty:

i. Inad eq uate ac c ess to em ployment op po rtunitiesii. Inadeq uate physic a l assets (land, ca p ita l, cred it)iii. Inadeq ua te support for rura l deve lop ment in po or reg ionsiv. Inad eq uate ac c ess to ma rkets

v. Low investment in huma n cap ita lvi. Destruction of natural resources (environmental degradation andred uced produc tivity)

vii. Inad eq uate assistanc e to women a nd vulnerable g roup sviii.Lac k of inclusive p articipa tion

Several fac tors expla in why desp ite a ll the e fforts and pub lic expend itures,pove rty a lleviation p rog ramm es do not seem to wo rk. These fac tors inc lude:

1. Prog ramm es we re mo stly not designed to a lleviate pove rty2. Lack of clearly defined policy frameworks with proper guidelines for

pove rty a lleviation.3. Politic a l instab ility, and ma c roe c onomic d isloc a tions4. Polic y inc onsistenc y and lac k of c ont inuity5. Corruption and the p olitics of c ap ture6. Lack of m onitoring and eva luation7. Absenc e of ac c ountab ility


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8. Ineffec tive burea uc rac y a nd institutiona l failures

In seeking a wa y forward , the fo llow ing c onsiderations are imp ortant:

1) Excessive fiscal prudence has reduced our capacity to address issues ofpoverty in our society and we need to improve expenditure in the socialsector.

2) There is a goa l c onflic t be twe en the foc us on m ac roec ono mic stab ility;single d ig it infla tion a nd stab le e xc hange ra te o b jec tives based on fisc a lrestra int a nd me et ing the ob jec tives of the soc ial cha rter of NEEDS

3) The ta c tic of Go vernment o n foc using on m ac roec onom ic stab ility hasbeen executed through less-than-full implementation of budgets duringthe NEEDS period . Bud gets are laws tha t governments ha ve a n ob liga tionto o bey a s enunc ia ted in the p rinc ip les of the rule o f law.

4) The d ue p roc ess requirement c urrently enshrined in the Pub licProcurement Act has slowed the pace of budget implementation andwe need to implement both the due process mechanism and thebudget.

To ma ke budge ting wo rk for the p oo r, there is need to re-foc us pub lic polic y ona number of key priorities. First, focus must be on the social services andinfrastruc ture a s enunc iated in NEEDS. A key c onc lusion from our rev iew showsthat both pattern and trends in public expenditure did not change significantly

to reflec t NEEDS priorities. Go ing forward , it will be he lpful to ensure tha texpenditures truly reflect key priorities with sectoral budget benchmarks clearlyspec ified in NEEDS II so as to c onstrain d isc retion, and suffic ient ly flexible toallow reasonable manoeuvres in the event of a shock. A range target could bec onsidered for key sec tor only.

Sec ond ly, there is need for to foc us on human cap ita l. One w ay to red uc e theincidence of poverty is to increase public investment in education and health.The ma in ec ono mic a rgument for the investment in ed uc ation is tha t not onlythat it increases labour productivity; it also raises the productivity of otherworkers as they co-operate with one another. In other words, raising the

educational level of the society increases the productivity of the economy.Investment in education leads to improved efficiency in management and inmore rapid technological and organizational change, and thus more rapideconomic growth and higher per capita real incomes. Should ed ucat ion b eavailable only in the market place, it may not be accessible to the poor. Thepoor may have access to non-formal education that is unlikely to includeliterac y and skill develop me nt. Thus, ec ono mic grow th, which m ay arise from this


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situa tion, will be of little bene fit to the poo r. So far the sta tistics do no suggestpriority in terms of the distribution of public expenditure was accorded bothsec to rs. This is abnorma l and needs to be addressed in NEEDS II.

Third ly, there is need for the refo rm of the pub lic expend iture proc ess itself.During the period under review, quite a number of public expenditure reformswere brought on stream Procurement reforms (Due process), Medium-termexpe nd iture framework (M-TEF), Fisc a l responsibility b ill, etc . These reforms needto be deepened at the federal level and extended to the states where asignific ant p ub lic resource lea kage wa s a lso taking p lac e. More imp ortantly, thereforms need to a dd ress the more funda me nta l issue o f capac ity at the leve l ofthe imp lem ente rs and d emand fo r ac c ounta b ility at the level of the c itizenry.

Fourthly, there is need to increase the scope and quality of monitoring and

eva lua tion. Very ma ny a c tivities fa ll in this c a teg ory. Our empha sis how ever is onthe need to institutionalize expenditure tracking at both private and officiallevels. At the officia l level there is no ga in saying tha t the re is need to streng thenaud it mec hanism, espec ia lly a t the sta te leve l. But b eyond tha t reviews suc h a sthis are very helpful but limited in terms of revelation for the simple fact that weare d ea ling w ith sec ondary sta tistics. A pub lic e xpend iture t rac king survey (PETS)would definitely reveal more as it involving collection of direct information forthe ta rge t g roup , in this c ase low inc om e o f po or househo lds. Both go vernmentand not-for-p rofit organiza tions should spea rhead this. The key issue no nethe lessis tha t the c ountry needs more of either PERs or PETS or some kind pub lic

expenditure benefit incidence analysis as a way of making public spendingmore effective in poverty reduction. Most of the methods, except incidenceanalysis, are capable of exposing fiscal leakage and PEM weaknesses that callfor urgent redress. Incidence analysis seeks to identify who gets the benefits ofpublic expenditure management and it is a very useful tool in designing pro-poo r fisc a l polic y ma nage ment. The a dop tion o f pub lic expend iture trac kingmethods in the country will go a long way in blocking fiscal leakage's andc ontribute to go od governanc e and sustainab le fisc al ma nag ement.

With regard to poverty in general, Nigeria can learn from the lessons ofinternationa l best p rac tic e w hic h indica te the follow ing as nec essa ry ingred ientsto a n effec tive a nti-pove rty stra teg y:

1. Rura l development fo r foo d sec urity


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2. Increased investments to enhance rural access to transport,informa tion and c om munic a tions

3. Safe d rinking wa ter, sanitation & ene rgy4. Urba n renew a l and job c rea tion5. Supporting poo r peop le s ow n efforts to b uild dec ent new ho using6. Imp rov ing universa l ac c ess to hea lth system s7. Improving the quality of education, and human capital (universal

prima ry, expand ed post-prima ry, and expande d highe r ed uca tion)8. Promoting g end er equa lity9. Environme nta l co nservation10.Build ing na tiona l c apac ities in Sc ienc e, tec hnology, and innova tion

Streng the ning pub lic institutions is c learly a c ritic a l ing red ient fo r suc c essfuldevelopment in general and for effective policy alleviation strategies in

particular. Institutions are broadly defined as the rules of the game thatgovern the protection of property rights and that also underpin the rule of lawand the sanctity of contracts. It is important that the institutions that currentlyexist be made to work, especially those relating to the judiciary and anti-corruption, in particular, the EFCC and the ICPC. It is also imperative to ensuretha t reg ula tory agenc ies suc h as the CBN, SEC a nd others ac tua lly perform theirfunctions effectively without government interference or rent-seeking by theirincumbent operatives.

The Need to Re-Foc us on Agriculture as the Engine for

Growth


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Nigeria is blessed with a wide expense of land and water resources covering an

area of roughly 98.321million ha. Present land use pattern comprise 9.83 millionha of forest reserves, 34.22 million ha und er arab le and perma nent c rop s, 39.82million ha that could be brought under cultivation and 14.45 million ha ofpermanent pastures built up areas and uncultivable waste lands. Agriculture isthe d om ina nt sec tor of the Nigerian ec ono my. It ac c ounts for 35% - 40% of theGDP and e mp loys two thirds of the Nigerian labour force. Nigeria ha s highlydiversified agro-ecological conditions could allow production of a wide rangeof a gric ultura l prod uc ts inc luding both trop ic al and more temp era te p rod uc ts.Three ma in typ es of p rod uc tion systems c an b e d istinguished :

(i) Medium a nd high potentia l mixed system s in the humid south (d om inatedby c assava , yam, ma ize, and tree c rop s);(ii) Medium and high potential mixed systems in the semi-arid middle belt

(dom inated by m a ize a nd sorghum); and

(iii)Low potential livestock-based systems in the arid north (dominated bylivestock, millet, and sorghum).

Production of crops dominates other agricultural sub-sectors contributing about85 percent to agric ultura l GDP, livestoc k produc tion ac tivities about 10 percent,fisheries about 4 p ercent, and forestry p rod uc tion a bout 1 p ercent.

Before the oil boom of the 1970s and 80s, Nigeria had a vibrant agriculturalsec tor. The c ountry was foo d self suffic ient and a key exporter of severalagricultural commodities notably cocoa, oil palm, rubber, groundnuts. Excessiverea l exchange rate ap p rec iation and overvaluation follow ing the o il booms andother distortions introduced by implementation of an import-substitutionindustrialization policy reduced agricultural competitiveness and incentives forinvestme nt in ag ric ulture. Large c om me rc ia l priva te esta tes tha t made Nige ria ama jor expo rter of trop ic a l c ommodities dec lined in imp ortanc e a nd large foo dmanufacturers who used to grow a proportion of their own raw material needswithdrew from farming. As agriculture declined, Nigeria became a significant

food imp orter and agric ultura l expo rts a ll but d isappea red .

Nigerian agriculture is predominantly small holder, subsistence based andweather dependent. Most farmers produce mainly food crops using traditionalextensive c ultiva tion me thod s, ma king limited use of m od ern tec hnolog ies andpurc hased inputs. The c apac ity o f the agric ultura l resea rc h, extension and inputd istribution system s a re w ea k and whe re a va ilab le, mod ern technology cannotrea c h fa rme rs. The country s va st irriga tion potentia l rem a ins la rgely


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unexploited : less tha n 1 percent o f cultivate d a rea is und er irriga tion. Ac tivity inthe sector is also characterised by significant post harvest losses due todifficulties in reaching markets and the high cost of transporting produce tomarkets.

Productivity has declined for both commercial and food crops in Nigeria overthe last twenty years. For commercial crops production levels have fallen aswell. In contrast, production levels of food crops have increased substantiallyand Nige ria has ove rc om e its extrem e imp ort dep end enc e. How eve r, thisgrowth has been driven by steady and substantial increase in the areacultivated and harvested and crop land expansion is increasingly taking placeon marginal land where yields are lower. Productivity as measured by yields perhectare have therefore declined whilst internationally, yields have been rising.In the c ase of roots and tubers for examp le, a fourfold increase in a rea p lantedsinc e the m id 1980s has been a c c om panied by a dec line in yields in exc ess of

40 per cent. Simila r, but less d rama tic outc om es a re o bserved for ce rea ls, bea nsand ground nuts. Thus the c urrent stra teg y o f ta rge ting outp ut increase based onarea expansion is unsusta ina b le o ver the long term.

The p oo r c onstitute the dom inant p rop ortion o f Nigeria s pop ula tion a nd asub sta ntial p roportion o f currenc y outside bank vaults is in the rura l a reas. To thisextent, the importance of the rural and informal sectors in economicdevelopm ent ca nnot be underestima ted . Despite past attemp ts a t gettingfinanc ia l servic es delivered to the rura l pop ulac e, low ac c ess to b ank cred it andothe r financ ia l servic es to the ac tive p oo r have continued to c onstitute a seriousc ha lleng e. The evolving m ic rofinanc e sub-sec tor in the c ountry is a a nothe r

attempt at widening the horizon of the dynamic poor in the rural areas to haveunfettered access to credit and other financial services in order to stimulategrowth and de velop ment of the rura l ec onom y and, by extension, the nationalec ono my. It is in rec og nition o f this tha t the Fed eral Government launc hed theMicrofinanc e Policy, Reg ulato ry a nd Supervisory Frame wo rk for Nigeria onDec em ber 15, 2005.

Hitherto, microfinance was reckoned with more as a fringe activity associatedwith non-profit orga niza tions. But the United Nations red efined tha t percep tion in2005 when it dec la red the ye a r as the Inte rna tiona l Yea r of Mic ro C red it (IYMC),

thus ma king mic rofinanc e as the in-thing in the first d ec ade of the 21st centuryand a lso to highlight its imp ortanc e a s a veritab le to ol to fight extrem e p ove rtyin the world. In February 2007 President Umaru Musa YarAdua launched a 50billion Naira Microfinance Development Fund. Clearly, microfinance isconsidered the key policy instrument of Government to achieve therevitalisation of the rural sector and to achieving the Millennium DevelopmentGoals (MDGs), which governments worldwide have committed themselves toac hieving b y 2015.


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In response to these challenges, the Federal Government of Nigeria hasidentified seven core areas of focus which define the government strategicvision fo r grow th a nd develop me nt. These c ore a rea s of foc us are in line w ithNEEDS II. Ag ricu ltura l sec tor is c entral to Preside nt Umaru YarAd ua s agendasince four of the core areas identified aim to revitalize the sector in order toattain food security, increase production and productivity, generateem ployment, expand the export ba se a nd red uc e foo d imp orts. This hasbecome even more urgent in light of the growing food crisis both within andoutside the country. Recognizing the importance of agriculture as well as thechallenges manifested by weak economic linkages and a disconnect amongstakeholders, weak policy environment and poor service delivery, theadministration is embarking upon the process of developing a comprehensiveagricultura l development stra teg y tha t a ims to transform the agric ultura l sec torand a c hieve its ta rge ts and polic y ob jec tives. Som e o f the polic y ob jec tives

inc luded in his agend a which are in line with the vision a nd polic y thrust in NEEDSII inc lude :

a) Ensuring food sec urity for the Nigerian p eo p le;b) Generation of employment in the agricultural sector, especially for the

growing number of the unem ployed youths;c) Promotion of investment in large scale agricultural production and

transformation of subsistence agriculture to modern commercialagriculture;

d) Increase production and productivity in crop, livestock and fisheriessector;

e) Prom otion of susta inab le land use a nd m anage ment;f) Promotion of export-led and market oriented production for strategic

c ommo dities such a s c oc oa , co ffee, cotto n, rubber, g round nuts, fish a ndpoultry p rod uc ts.

g) Undertake land policy reform to secure land rights and enhanceagricultureproductivity.

While significant work and strategic vision have gone into defining areas ofintervention to achieve agricultural growth and development, the FederalMinistry of Ag riculture a nd Wate r Resourc es will need to design evidenc e b ased

agricultural policy and development strategy that will define priority areas forpolic y ac tion a nd investment. The c ha lleng e in deve lop ing a c om prehensiveagricultural development strategy as an effective road map to realize thec ountry s agric ultura l po lic y ob jec tives inc lude:

i. Determining and sequencing the right mix of priority actions andinvestments to drive both sectoral and growth priorities that would


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generate wealth and employment, ensure food security, and achievedesired pove rty red uc tion ta rgets;

ii. Mobilizing the required resources and investment (both public andprivate), not only resources in the agricultural sector, but also broadinvestments tha t sup port ag ric ultural grow th;

iii. Efficient allocation of resources among sub sectors and among differentlevels of autho rity a t Fed eral, Sta te and Loc a l levels;

iv. Improving efficiency in the use of these public resources by improvingloc a l gove rnanc e and institutions, and

v. Build ing the long term c ountry ca pac ity in supporting the fo rmulation andimplementation of policies and development strategies for long-termsustainability.

Nigerias ability to realize its vision of becoming one of the twenty largesteconomies in the world by the year 2020, is hugely dependent on the capacity

to jump sta rt its ec ono mic and industria l ba se. Ag ric ulture is the basis of Nigeria ssustainable economy, however it is characterised with low productivity due tolow technology employed, inadequate information or modern knowledge.Improving the productivity of all agricultural units from their abysmal low level ofyields and poor quality of products to commercial beneficial levels could onlybe achieve through the dissemination, application and utilisation of up-to-dateknowledge and information on modern production technologies along itssupp ly and va lue c ha ins.

Information delivery globally has been digitalised and business is conducted at

the speed of thought. Nigeria agriculture cannot therefore afford to deliverinforma tion a t the p ac e o f wa lking o r a t be st a t the spe ed of mo tor-c ycle. To beamong the top twenty economies of the world, Nigerias economic base willhave to comply with the global standards, i.e. doing business at the speed ofthoug ht throug h the informa tion super highw ay. Ind ia has a lrea dy sta rted doingthis with the ir rural c ommunities!

Formulating and implementing an effective development strategy foragricultural transformation in Nigeria requires long-term commitment andextensive consultations. Moreover, the strategy must remain flexible anddynamic so as to accommodate refinements in its design and objectives over

time as socioeconomic and political conditions change. In addition, buildingthe countrys long-term capacity in supporting development strategies willensure sustainable success in achieving the development goals of thesestrategies.


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Typ ica lly, an agricu ltural-led Industria lisa tion strategy should foc us on improvedagricultural packages, proper use of land and water resources, access toimproved rural finance, better functioning, markets and better roads and otherinfrastruc tures. The overa ll ob jec tive is to enha nc e p rod uc tivity of the ec onom yand development of high value products for world markets anchored on aphilosop hy of struc tura l transforma tion a nd outward -oriented deve lop ment.

Vision 20-2020

We in c ivil soc iety welcom e the initia tive o f Vision 2020 which a ims to put Nigeriaam ong the 20 most develope d ec onom ies by the yea r 2020. But we note that

the Vision is yet to be backed by a comprehensive strategy with a detailedroadmap. This is a c ritic a l role fo r the Nationa l Planning Commission to p lay. Inpursuing Vision 2020 we b elieve tha t we ha ve a lot to lea rn from the Asia Pac ificexperience.

The spec tac ula r g row th ra te e xperienc ed by the m any ec ono mies of East Asia ,especially with respect to the most successful economies of Hong Kong, Korea,


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Singa pore, Ta iwa n a nd Ma laysia puzzled ma ny d eve lop menta l econo mists.While many people have appreciated the growth achievements in thesec ountries, there is no agreeme nt on the sing le m ost impo rtant fac tor that led tothe tremendous growth rate experienced by these Asian countries. However,there is no doubt that the implementations of sequential and coordinatedgovernment policies had helped jump-start and sustain the growth process foras long as they lasted . The East Asian ec onomies ac c umulated both physic a land human c ap ital muc h mo re rap id ly and c onsistently than o ther de velop ingec onom ies. They enc ourag ed investment b y putting in p lac e a deq uateinfrastructure to complement private investment. Also, they created aninvestment friendly climate through a combination of legal, tax and othermeasures that lowered the relative prices of capital goods by maintaining lowtariffs on imported capital goods. While savings were increased by ensuringpositive interest rates and deposits, lower lending rates subsidized investmentsand p rod uc tion c osts of c orpora tion. Nigeria needs to do likewise.

Rec laiming Lost Ground

After one year in power, it would not be unfair to say that the currentgovernments economic strategy has been at best unclear. In a rapidlyemerging economy, the absence of a clear policy direction sends not only thewrong signals; it gives the impression of intellectual as well as operationallaziness. Suc h a situation is c om p lete ly unte na b le.

The outgoing reg ime of President O luseg un Ob asanjo c ould b e a c c used ofmany faults. But one thing its critics cannot hold against it is the lack of policy.

The Ec onom ic Tea m set very clea r p riorities and the pub lic was left in no d oubtas to whe re they w ere hea d ing. They show ed vigo ur, energy and passion inpursuing wha t they believed in. Tod ay, unfortunately, muc h o f the pub lic is a t aloss as to whe re the c ountry is hea d ing ec ono mica lly.

There a re several ec onom ic sc hem es c om peting for at tention. There is Vision2020, whic h a ims to p ut Nige ria am ong the twenty most d eveloped ec onom iesby the year 2020. There is a lso the Financ ial Sec tor Strate gy for the yea r 2020


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(FSS2020) which the Central Bank promulgated last year that a ims to ma keNige ria the financ ia l hub of the Afric an c ontinent b y the yea r 2020. In a dd ition,we have the Millennium Deve lop me nt Goa ls (MDGs), an interna tiona lly a gree ddevelopment programme that aims to halve the number of our citizens thatc urrently live below the poverty line by 2015. There is a lso the Na tiona l PovertyEradication Programme (NAPEP) which is supposed to be doing exactly thesame thing. More rec ently, we have the Sta te Emp ow erment a nd Ec onomicDeve lop me nt Stra teg ies (SEEDS) a nd its loc a l government c ounterpa rt, theCo mm unity Emp ow erment and Ec onom ic Deve lop me nt Stra tegies (CEEDS)ad ded to the National Emp owerment and Ec onom ic Develop ment Stra tegy(NEEDS). This c ac op hony of p rog ramm es and agenc ies need to b e rationa lisedinto a c omprehensive p rog ram me with a c lea r strate gy foc us and roa dma p.

Call for a New Policy Thrust

Nigeria needs to define an economic philosophy underpinning a rationalplanning framework. Given that the vast majority of our people live in the ruralareas, we cannot escape the question of agriculture and rural development.But that alone will not guarantee national transformation. Agriculture must belinked to a comprehensive industrial strategy so as to create jobs for theteem ing millions of o ur unemp loyed youth. Nigeria s future lies in a n a griculture-

led industrialisation strategy, in which enhanced productivity in rural agricultureleads to industries that create new products that are higher up in the valuechain and that aim at capturing international niche markets. We haveopportunities to leapfrog our development by tapping into the potentials ofsusta inab le energy system s and using ICT tec hno log ies to e nha nc e p rod uc tivityand we lfare.


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The go vernment of President Ya rAd ua has ta lked about transforma tion ra therthan mere reform. It needs to translate this rhetoric into a clear and workableprog ramm e with c lea r milestone s and a roa dma p . It must move w ith speed andavoid tenta tiveness and p reva ric a tion. The ec ono mic team nee ds to be re-invigorated. Economic actors, local as well as international, need clear signalsthat government is committed to forging ahead, not merely concerned aboutc orrec ting p ast mista kes. This is the only way to gua rantee p olic y c red ib ility andsuc c ess in the yea rs ahead .

If the government wants to make a real difference it must strengthen thetec hnoc ratic c ap ac ity for po lic y ma king and imp lementa tion. Theadministration needs an injection of new talent that enhance its vigour andenergy. In add ition, it is imp erative tha t the Ec onom ic Tea m a pproa c hes its taskmore vigorously and that the public are continually informed of the keyinitiatives government is und ertaking . The b ane o f Nigeria s ec onom ic

administration rests on the sticky issue of policy imp lementa tion. This exp lainswhy the power and infrastructures sector are in such a mess. Government mustfind a new w ay of do ing this; inde ed a be tter and more effective way of gettingthings done is the mo st c ritic a l cha lleng e in the yea rs ahea d.

Macroeconomic reform in Nigeria has certainly brought significant benefits interms of struc tural stab ility of the ec onom y, a lthough the welfare benefits rem a inunsa tisfac tory. There is ma ss d isenc ha ntment w ith the ma nner the reforms havebe en implemented , whic h seem s to ha ve a bias in favour of the ba nking andfinancial industry rather than the needs of the majority of workers and peasants.

Rightly or wrong ly, there is the general pe rc ep tion tha t the b ene fits of reform areac c ruing d isprop ortiona tely to the w ea lthy. The c ha lleng e a hea d is therefore topromote growth with equity and to translate the dividends of democracy andrefo rm into mea surab le benefits for ordinary c itizen.

The imp lementa tion o f the NEEDS ha s a lso thrown up a num ber of issues tha tmight need more diligenc e in po lic y formulation. For instanc e, observers pointout (constructively), that while the current reform agenda has resulted in highergrowth (measured in real GDP), the employment content of these growths arenot as g laring . The Nigerian Sta tistica l Fac t Sheets on Ec onomic a nd Soc ialDevelop ment ga ve the rate o f unemp loyment in the c ountry as 11.8 per c ent in

2007, up from its leve l of 10.8 pe rc ent in 2003. This is a ma jor source of worry if wejuxtapose this figure with the GDP growth rate of 7.1 per cent achieved in 2005.It is therefore appropriate to mainstream employment as a driving force forsec tora l grow th in the Post-NEEDS Ag enda .

Furthermore, despite progress recorded in the growth of real GDP in the pastfew years, the issue of poverty alleviation is critical and still remains unresolved.


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Ranking 158 (out of 177 developing countries in the report), with a HumanDevelopment Index, (HDI) of 0.453, and Human Poverty Index, (HPI-1) of 38.8%Nigeria remains one of the poorest Nations of the world. Income distribution ishighly skewed as the richest 20% of the population controls 55.7% of NationalIncome while the poorest 20% of the population has a paltry share of 4.4%.(Human Development Report, 2005: 272). It is therefore pertinent that the issue ofpoverty alleviation, especially income distribution is addressed with more vigourtha n hitherto o b ta ined. Ag enda fo r post-NEEDS develop me nt stra teg y shouldtherefore focus on poverty and income distribution if a meaningful result shouldbe expec ted.

It is a lso hoped the post-NEEDS agenda should add mo re vigour to the issue ofc orrup tion and institutiona l reforms. This will ce rta inly improve service delivery inthe economy. While the current efforts in this direction by the presentadministration are commendable, it is worth mentioning here that much still

needs to be done. Attitudes and beliefs must change for Nigeria to make aqua ntum lea p out our p resent c ond ition.

There is no doubt tha t the institutiona liza tion o f the banking refo rm is posing ama jor c ha lleng e to a ll the stakeho lders, espec ially the reg ula tors. There a re anumb er of Bills pend ing before b oth the Nationa l Assem bly and the Exec utive toensure tha t the refo rms are c a rried throug h w ith the lea st hindranc e. Theseinclude the Central Bank of Nigeria Act, the BOFIA and Asset ManagementCo rporat ion of Nigeria Bill. It is hoped tha t the ena c tment of these Bills into lawswill fina lly a dd ress som e of the grey area s in the refo rms. The imp lem enta tion o f

the bank consolidation programme has been generally adjudged to be asuc c ess. It has d rama tica lly changed the Nigerian ba nking land sc ape for goo d .We now have 25 strong banks, some of which have recently received veryfavourable international ratings.

The Ob asanjo ec ono mic reforms have c rea ted a c ontrad ic tory leg ac y. Therehas been some success in macro-economic stability but the poor have notbenefited from it and the strategy is based on a market driven model thatma kes it imp ossib le to ac hieve the nob le a ims of the NEEDS soc ia l cha rter. A suc c essful ec ono mic reform tha t lea ves the majority of the p eo p le b ehind is afailure.

The Way Forward on the Policy Agenda


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1) The Nigerian p eo p le w ill benefit from the pursuit of an a gric ulture-ledind ustria l stra teg y tha t ha rnesses natura l resourc es into c rea tion o f lab our-intensive increasingly high value industrial products geared to bothdomestic and foreign markets. Current macroeconomic reforms, thoughstill not adequate, provide some progress along the road towardssuc c essful ind ustria lisa tion.

2) In p ursuing a stra tegy o f a gric ulture-led industria lisa tion, Nigeria c an lea rnfrom the Asia Pac ific experienc e. The key to Asian suc c ess c an beattributed to sound economic fundamentals. Macroeconomicperformance was usually stable, providing the necessary framework forp riva te investment. Polic ies to inc rea se the integ rity o f the banking systemand make them more accessible to non-traditional savers increased theleve ls of fina nc ial savings.

3) Under the administration of Alhaji Umaru Musa YarAdua, theGovernment is aspiring to reach a growth rate of 13% annually, a ratethat is considerably higher than the historical trend of lower than 4percent . This will req uire raising the prod uc tivity of the e c onom y andimproving the capacity of domestic firms to compete effectively indom estic and eventua lly in reg iona l and internationa l ma rkets.

4) The Ad ministra tion must therefore vigorously d eve lop me asures for a wa ragainst poverty and hunger in Nigeria. A new development modelanc hored on agric ulture-lea d industria liza tion, inclusive deve lop me nt a nd

eq uity would have to be d esigne d . Linked to this is the need to emp ow erwo men, youth and o ther vulnerab le group s.

5) Combating poverty and achieving the MDGs must be a key componentof the kic k sta rting prog ramm e. It is estima ted tha t in order to a c hieve theMDGs in Nigeria by the year 2015, $5 billion to $7 billion must bec hannelled to MDG p rog ramm es per annum. The go vernment is p resentlyallocating about $1billion annually out of which $750 million is by theFed eral Gove rnment a nd about $250 million by sta te gove rnments.

6) Combating poverty and achieving the MDGs cannot progress without

reviewing the Obasanjo policy of excessive fiscal prudence immortalisedin the International Monetary Fund (IMF) which authorised its PolicySup port Instrument (PSI) for Nigeria approved in Oc tober 2005. TheObasanjo regime therefore made commitments on significant cuts topublic expend iture w ithout the a c c ord of the Nige rian pe op le. The w ayforward therefore requires considerable increase in public spending forpow er genera tion, infrastruc ture, hea lth and e duc ation.


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7) Raising pub lic expend iture is not easy. Two m a in c ha lleng es are p osed .The first is ra ising the a bsorp tive c apac ity of MDAs. The rec ent rep ort o fthe monitoring and evaluation (M&E) of the Debt Relief Gains spent onthe MDGs in 2006 a lrea dy revea l tha t MDAs have b een unab le to expenda significant p ortion of the mo nies a lloc a ted . The sec ond c ha lleng e is thepossibility of inflationa ry t rend s.

8) Governments in Nigeria have lost the capacity of monitoring andeva lua tion o f programme imp lementa tion. Only the MDG a nd the Ministryof Health currently have function M&E units. It is imperative that theGovernment prioritises M&E. In so doing, a participatory process thatinvolves c ivil soc iety a nd the leg islature is essentia l.

9) To a c hieve the ta rgets set fo r 2020, the q uestion of a bsorpt ive c apac ity is

a larger one. It relates to the capacity of institutions to perform theirfunc tions effic iently. This mea ns the reform o f pub lic administrat ion mustbe pursued vigorously to improve the capacity if the state to deliverpublic goods. At the same time, human capital development is a vitalaspe c t of the c ond itions for ec onom ic take-off.

10)Educ ation is the eng ine of g row th. The c ountries tha t ha ve ind ustria lised inthe recent past have done so on the basis of promoting primary andsec ond ary ed uc ation. The proc ess ge nerated rap id inc rea ses in labourforce skills. Agricultural policies stressed productivity change and

adaptation of technologies that enhance production of value-addedprod uc ts for world ma rkets. Suc h p olic ies a lso d id no t ta x the rura lec onom y excessively. These ec onom ies kep t p rice d istortions withinreasonable bounds and were open to foreign ideas and technology.Nigeria should learn lessons from this. Current indications are that the YarAdua Administration is unclear on how it wants to reform the reform ofthe education sector. As the crisis of the education sector deepens, thetime has come to declare a state of emergency in the educationalsector.

11)Growth is sustainable if it is based to research and development of

technology. No country that has not made significant investment in itsuniversities and research institutions has been able to sustain growth. Forpoverty to b e signific antly red uced overall grow th has to b e value-ad de dand produc tivity d riven. Inc rea sing the tec hnolog y c ontent o f p rod uc tionwhile reduc ing d ep end enc e on na ture is a key fac tor. So fa r, imp rove dperformance of the agricultural sector in Nigeria was made possible by


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favourable weather in addition to the support provided by governmentthrough the Spec ia l Initia tives.

12) In Nigeria, the manufacturing sector that holds the key to incomegenera tion and pove rty red uc tion has rema ined sma ll in te rms of share ofGDP. This sec tor has not rec orde d imp roved grow th performa nc e d uringthe NEEDS period and its c ontribution in terms of emp loym ent and to GDPha s bee n quite low g iven its size o f ab out 4 per ce nt of GDP.

13)The p oo r sta te o f infrastruc ture ha s been a m ajor c ontributo r to thedec line of ma nufac turing. Ma ssive investme nts in the pow er and transportsec tors a re nec essa ry to c over last g round .

14)Clea rly, rec ent ec onom ic reforms have resulted in som e g a ins in te rms ofimp roved ma c roe c onom ic c ond itions. But there is still a lot tha t rem a ins to

be done especially in terms of deepening the reforms, enhancingcompetitiveness and building solid institutions that can drive growth andlong-term structural transformation. Re-focusing on agriculture and on itslinkages to industrial development opens a window of opportunity thatwo uld a bsorb a b ourgeo ning labour ma rket into p rod uc tive a c tivities tha tenhance c rea tion of value ad de d p rod uc ts that enha nce livelihood s andboost national output. Nigeria has the potentials and the capability togrow its economy to heights that would equal those of the best of EastAsia. It is hoped that the current leadership will commit to building on thefoundations that have been laid, and reengineer a new prosperity that

will enha nc e welfa re for all and he lp to c rea te a n industria l-tec hnologica lsta te o f the first rank among the na tions.

Documents

Nigeria Vision 2020