Pursuing diversification with growth, well-being in mind

Nigeria’s finance minister Kemi Adeosun PHOTO: NAN

The nation’s economy is in dire need of streams of income. That is the more need for diversification and the period of rhetoric about the subject matter should be over. By the template in government’s Economic Recovery and Growth Plan (ERGP), agriculture, power and transport are strategic sectors, but in 2017 budget, they still have elements of insincerity.

For example, while the power sector proposed budget has been cut by the lawmakers in the process of its appropriation oversight, causing ripples and doubts over its performance, the agriculture component is reeling under assessed low capital votes at two per cent of the entire budget. The transport sector, on the other hand is filled with unfinished projects, as well as the uncertainties of effective transportation system and its concomitant effects on the topical issues of climate change.

The development is now raising concerns on what becomes the outcome of 2017 budget, with recurring record of failures over the years in terms of implementation levels, verifiable physical features, growth numbers and the declining standard of living among the citizenry.

A coalition of civil society organisations, community-based organizations, professionals and faith-based organisations recently advocated improved budgetary allocations in 2018, with particular attention to three drivers of the diversification agenda- agriculture, power and transport.

The groups, under the aegis of Citizens Wealth Platform, in Abuja, at the 2018 Pre-Budget Memo, organized by the Centre for Social Justice (CSJ), in conjunction with Heinrich Boll Foundation, called for end to lip service and prioritise projects according to their order of importance and impact.

The call became necessary just as the government has prioritized diversification of the economy, which agriculture in particular is a major pillar, warning that the period of lip service to the nation’s economic emancipation should be over, to give way to the realisation of the country’s potential.

Fidelis Onyejegbu of Public Finance Management at CSJ, identified several subsisting policies that projects need to be aligned to give a positive outcome, rather than duplicating projects and realizing non, as well as contribute the high level carbon emissions that would be damaging to human existence.

According to him, there is the National Renewable Energy and Energy Efficiency Policy; National Energy Efficiency Action Plan; Intended Nationally Determined Contributions and (INDCs); Nationally Determined Contributions (NDCs); and ERGP.

He said government must stick to the path to fulfilling its NDCs and move away from projects that will hamper the achievement of set objectives, as this is critical to attaining the goal of reducing carbon footprints, while questionable projects like the setting up of nuclear power plant should be jettisoned, considering costs, management and disaster control capacity.

“The presence of strong institutions, which can oversee high-impact initiatives is a prerequisite for effective use of climate finance. For developing countries such as Nigeria to get direct access to finance, they must show that they have strong institutions that can effectively deploy funds and oversee the implementation of funded initiatives.

“Initiatives like the Sovereign Green Bonds of the FGN and projects of this kind should be encouraged. The CBN, the Bank of Industry (BOI) should take the lead and set up similar initiatives with single digit interest rates to ramp up sustainable energy generation in the country.

“This will not only increase the proportion of Nigerians that have access to power but will also create jobs, stimulate the economy and can lead the economy out of recession on onto a sustainable development path,” he said.

Faulting agriculture sector allocations in 2017, at about two per cent, which is against 10 per cent ratified by the country, the groups said they expect nothing less than five per cent of the overall budget in 2018, which is half of Nigeria’s commitment under the Maputo Declaration.

The Lead Director of CSJ and spokesperson of the group, Eze Onyekpere, noted that the bulk of the increase should go to capital expenditure, as a reverse to what is in the budget now, noting that agriculture contributes more than 25 per cent of our extant growth numbers and provides jobs to about 30 per cent of the population.

“Even though it is mainly a private sector activity, government ought to invest more resources in that sector that contributes and employs the greatest number of Nigerians,” said.

“Government should stop the sequestration of a huge part of capital funds in the headquarters of the Ministry and send them to agencies and parastatals that need them. Procurement of goods and services is best done at the level of the agency or institution that needs them.

“Renewable energy utilisation in agriculture, including solar boreholes, solar lighting, drying, development of automated solar powered agriculture machines and planters and harvesters should be invested on. This is cheaper in terms of fuelling in the long run and the whole life cycle costs will also be cheaper.’’

“The idea of putting money in the budget for erosion control without the sites promotes corruption, embezzlement and stealing of the money. It does not promote accountability and transparency in the budgeting process,” he said.

The Programme Officer at CSJ, Martins Eke, said the National Transport Policy should be fully implemented, with focus being at upgrading roads in city centers to reduce congestion, increase fuel efficiency and incentivize use of public transport.

Although a modal shift in passenger travel from roads to high-speed rail, focusing on the busiest routes where immediate uptake and substantial savings in travel time can be achieved, after several investments, it is still in the pipeline.

He noted that investment in rail infrastructure can reduce costs of food and create new markets for agriculture produce.He however, called government to implement, as soon as the economy recovers from recession, fiscal incentives such as fuel and vehicle taxes, which will discourage the growth of private motorised traffic and thus reduce emission.

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