Ayorinde Oluokun/Abuja President-elect Muhammadu Buhari will in addition to taking over the reins of Nigerian government Friday also inherit a lot of problems across all sectors. Here are the key problems and how the APC proposes to tackle them in its manifesto While speaking at the opening session of a two -day policy dialogue on the implementation of the agenda for change organized by the All Progressives Congress, APC last Tuesday, Professor Yemi Osinbajo, Nigeria Vice President- elect left no one in doubt the new government that will be led by Muhammadu Buhari fully appreciates the extent of the mess it will be inheriting when it finally takes over government on 29 May. Top among the inheritance of APC from the President Goodluck Jonathan-led Federal Government as enumerated by Osinbajo is a whopping $60 billion foreign and domestic debt, gargantuan national poverty with estimated 110 million Nigerians in the bracket, and a comatose economy in which the nation has to spend 21 per cent of its 2015 budget on debt servicing. He said two- thirds of the 36 states in the country couldn’t pay salaries while the Federal Government is also borrowing to fund recurrent expenditure. This magazine gathered that the policy dialogue is a confirmation of the intention of APC, which will assume reins of power this weekend to fully involve the party in the designs of policies unlike the situation with the outgoing government. [caption id="attachment_24631" align="aligncenter" width="300"] •Buhari, Osinbajo: Great tasks ahead[/caption] For most Nigerians battling with day to day grind of eking out a living in Nigeria which has been compounded in recent times by acute scarcity of Premium Motor Spirit, PMS otherwise known as petrol, the handover date cannot come early enough. The hope of most Nigerians who spoke to this magazine last week was that the petroleum scarcity problem will be one of the immediate concerns of the new President on assumption of office, especially since the outgoing President seemed indifferent about the matter. Though an oil producing nation, Nigeria has over the years relied on imported products, subsidized by government to keep the price low to meet its domestic needs as a result of the non- functioning of its four refineries. Billions of dollars spent on Turn Around Maintenance, TAM of the four refineries by successive governments have so far failed to enhance the country’s refining capacity as the contracts were awarded to cronies of government. Analysts however said for the new government, solving the fuel problem will be tantamount to walking a tight rope. This is because key to solving the problems of intermittent scarcity of petroleum products lies in solving the knotty riddle of subsidy which has not only become a major drain on the national treasury, but a major source of corruption. The current scarcity that has grounded social and economic activities in most parts of the country for instance is fuelled by controversies over the amount of subsidy to be paid to marketers by the Federal Government. Dr. Ngozi Okonjo Iweala, the Minister of Finance, said early May that the government had paid the sum of N500bn as fuel subsidy to oil marketers within the last five months while they are still being owed a balance of N98billion. The amount is already far above the N145.2 billion provision for payment of subsidy on petrol and kerosene in the 2015 budget. Yet, the marketers, under the aegis of the Major Oil Marketers Association of Nigeria and the Depot and Petroleum Products Marketers Association are insisting that the Federal Government still owed them not less than N200 billion, a figure that has been disputed by the Finance Minister. The marketers, who lamented that the Federal Government had not called for a meeting with them over the disputed debt have vowed to stop importation of petroleum products into the country until the controversies over the debt is resolved. This has raised fears that the increasingly worsening situation that has resulted into Nigerians paying as much as N300 for a litre of fuel, which ordinarily is N87, may continue until the new government takes over power this week. Indeed, it was reported that the marketers had written to the President-elect, seeking audience with him over the issue without any success. Analysts are worried that if the current trend continues, the country may end up spending over a trillion naira on the payment of petroleum subsidy like it did in 2011 when about N2 trillion, more than one third of the national budget was paid to the marketers. A probe of the payments by the House of Representatives and a Committee set up by the Federal Government later revealed that most of the payments were fraudulent as the beneficiaries either did not import products for which they were paid or over estimated their imports. A probe of the accounts of Nigeria National Petroleum Corporation, NNPC by PWC, revealed how the Corporation which imports over 50 per cent of the products consumed in the country paid itself over $18.5 billion partly as petrol and kerosene subsidies in 2012 alone. Analysts have argued that with the huge web of fraud around the subsidy of petroleum products in recent years, the country may not have an option, but to deregulate the whole process by allowing marketers to bring in products and sell at their own price, under the close scrutiny of government. Apart from making funds available for spending on more beneficial projects, ending the subsidy on petroleum products, analysts argue will lead to more investments in the downstream sector of the industry. Tony Blair, former British Prime Minister said last week: “For a country that has extraordinary resources of oil and has this amazing privilege of source of energy, yet power generation was not as good as it should. People having to wait for hours queuing to get fuel and end up buying it elsewhere. I think the resources voted for this subsidy can be better used for other things. I think we need to recapture this oil resource and the revenues put to good use so that it can be invested for the long term good of the country, in infrastructure, human capital development, education system and skill acquisition that people need to work with in the future.” [caption id="attachment_24632" align="aligncenter" width="300"] •Jonathan: Hands over[/caption] The ex-British prime minister was represented by Peter Benjamin Mandelson, a former Secretary of State for Trade and Industry at the two-day APC Policy Dialogue in Abuja. Also, the APC said in its manifesto that it would ensure the speedy passage of Petroleum Industry Bill, PIB that has as one of the key points, complete liberalization of the downstream sector of the oil industry. This, the party said in the manifesto will be part of its plans to make the Nigeria oil and gas industry the leading /cutting edge centers for clean oil and gas technologists, scientists, mega structure installation, drilling, processing, production engineers supported with best services and research facilities. The party added that it will modernise the NNPC and make it the national energy champion and consider the breaking up of the monolithic entity into more efficient, commercially driven units and strip it of its regulatory powers and enable it tap into international capital market. The APC also said it will fully develop the oil sector’s capacity to absorb more of the nation’s new graduates in the labour market so that it can produce more home-grown world class engineers and scientists, a move which many believe can only be accomplished with attraction of new investments into the sector through complete deregulation of the industry. Power Supply The problems created by scarcity of petrol have been compounded for Nigerians in the past few weeks by worsening electricity supply. The PDP led Federal Government has struggled in the past 16 years to tackle the problem of ensuring that Nigerians have access to reliable power supply. But despite the estimated $30 billion spent in the sector in the past 16 years, the country has barely achieved 5000 megawatts of electricity generation. The Jonathan administration’s privatization of the sector in 2013 seemed to have worsened rather than improve electricity supply to Nigerians. Most of the new owners of the generation and distribution companies have been giving various excuses on why they have not been able to improve power supply over a year after taking over the assets in the sector. Some analysts have advocated that the Buhari administration must revisit the privatization of the power sector over allegations that the companies were sold to cronies who lacked technical competence and financial muscle to turn the sector around. Indeed, it has been complaints galore from the distribution, generation and the transmission companies carved out of the defunct Power Holding Company of Nigeria. The distribution companies have been complaining of inadequate allocation of power from the generation companies while the generation companies are in turn complaining of lack of gas to fuel their power stations. On the other hand, the Transmission Company has been complaining of the weak grid, which can barely wheel 3000 megawatts to homes and business premises across the country. The Federal Government said the National Integrated Power Projects (NIPPs) is capable of injecting up to 4,700 megawatts to the national grid while the country can generate up to 6,000MW which will give every part of the country about 22 hours light if there is gas to power the plants. “We got up to 4,500MW at the beginning of April but today, we are operating at 2,200MW. If we get gas, we can generate 6,000MW and every part of the country will have about 22 hours of light, because we discovered that when we hit 4,500MW, many places were having 18 hours supply,” Professor Nedu Nebo, the Minister of Power who added that rampant vandalisation of gas pipelines is also starving the optimised plants of gas fuel said last Tuesday. Also, Abiodun Ajifowobaje, the Chief Executive Officer of Ikeja Electricity Company lamented that the Egbin Power Station, which has the capacity of generating over 1, 200 megawatts, generates about 300 megawatts due to inadequate gas supply. The solutions to the country’s electricity problems therefore have to encompass all aspects from generation to distribution, transmission and also address the problems of gas supply. Also, there is need for urgent diversification of the sources of power with the development of hydro and renewable energy sources. The APC realized this in its manifesto as it noted that all other indices of development anchor on power and energy and that failure to make power supply efficient has impacted negatively on the economy. But the party said it would continue with the privatization of the sector by devolving much of power and energy to the private sector. [caption id="attachment_24634" align="aligncenter" width="300"] •Prof. Chinedu Nebo- Gas pipelines[/caption] But this magazine gathered that the party would change the approach to the issue of privatization by privatizing, deregulating and regionalizing power transmission with more serious efforts to tackle the issues of gas supply to the generation companies. While noting that lack of reliable power supply has made the cost of production and business high and has invariably raised the cost of agricultural produce and other finished goods and services thereby thwarting the growth of the economy, the party promised to generate, transmit and distribute from current 5,000 – 6,000 MW to at least 20,000 MW of electricity within four years. It promised to increase Nigeria power generation to 50,000 MW with a view to achieving uninterrupted power supply within 10 years, whilst simultaneously ensuring development of sustainable/renewable energy; exploiting renewable energy sources, such as coal, solar, hydro, wind and biomass for domestic and industrial use, where possible. Also, the APC said it will enforce the government master plan for oil companies to end flaring and ensure that they sell at least half of their gas production within Nigeria; a policy which many said will also help the power stations to overcome their power supply problems. One area that public sector employees, especially civil servants across the country will also expect a swift action from the Buhari administration is in the area of the economy. The economy Another challenge that the new administration of APC will also need to move in to tackle swiftly is in the area of the economy. With the fall in the price of oil, which provides over 80 per cent of Nigeria foreign earnings, Nigerian economy has been in dire straits with dwindling allocations to states from the centre. For instance, Nigeria’s foreign reserves have gone down to $29.79bn while average crude price is about $62. In the same vein, demand for the crude by the major importers is declining while Nigeria oil production is not increasing. About 2/3 of Nigeria 36 States are defaulting in payment of monthly wages to their workers while the Minister of Finance recently revealed that the Federal Government has been borrowing to pay its workers. As a result, most states and local governments which depends on the centre for over 70 per cent of their recurrent and capital expenditure have been unable to meet their obligations in terms of salaries and allowances to their workers as well as to contractors. This has resulted in mass retrenchment in construction companies and strikes across the states. In the same vein, the depletion of Nigeria’s external reserves and the fast decline in the value of the naira have put pressure on businesses and the stock market. The Federal Government had year in, year out continued to allocate the bigger percentage of the national budget to recurrent expenditure to the detriment of capital spending. An analysis of President Jonathan’s budgets revealed that the share of recurrent expenditure as a percentage of the total budget was 74.43 per cent in 2011, but dropped to 71.47 per cent and 67.49 per cent in 2012 and 2013, respectively. However, in the 2014 budget, the share of recurrent expenditure rose up to 74 per cent. [caption id="attachment_24633" align="aligncenter" width="300"] •Okonjo-Iweala: Disputed oil marketers claim[/caption] Analysis of the new budget signed by the president last week revealed that recurrent expenditure summed up to N3.97trillion or 91 per cent of the entire 2015 proposal. Indeed, the economy has been so mismanaged in the past four years that the President- elect recently lamented that he will virtually inherit an empty treasury when he assumes office. “You can imagine what is happening in the high seas where up to 400,000 barrels of crude oil which we rely on is stolen everyday with the full cooperation of those who are supposed to protect it. The price of oil has gone down and 90 per cent of the foreign exchange we rely on comes from that. So, you have to convince your constituencies that we have virtually arrived at the wrong time and that they have to temper their expectation with some justice towards the leadership,” Buhari recently told a delegation from the Northern part of the country, while emphasizing that the situation may affect the promise of his administration in terms of provision of security to the populace, employment for the youth and provision of infrastructure. Nigeria Bureau of Statistics two weeks ago indicated that the country’s real Gross Domestic Product, GD) growth rate further declined to 3.86 per cent in the first quarter of 2015 compared to 5.94 per cent the previous quarter. NBS also indicated that the Consumer Price Index (CPI) which measures inflation rose further to 8.7 per cent in April compared to 8.5 percent in March while the country’s GDP growth rate was lower by 2.25 per cent points from the preceding quarter and by 1.98 per cent from the corresponding quarter of 2014. Investment on Infrastructure Yet, analysts insisted that the envisaged growth in the economy couldn’t be achieved without massive investments in infrastructure by the Buhari administration. Facilities such as ports, the airports, roads and rail infrastructure are still far from cutting edge despite the claims of achievements of the Jonathan administration in this sector. The reforms of the ports systems is yet to yield the desire gains in terms of removing the bottlenecks which have made Nigerians ports one of the most inefficient and expensive in the West African sub region. Analysts said apart from power, Nigeria still needs massive investments in roads and rail, to irrigation systems and water pipelines, and IT infrastructure to further boost its economy, which is now the biggest economy with estimated $510 billion GDP. According to the African Development Bank, AfDB Nigeria’s core stock of infrastructure is estimated at only 20-25 per cent of GDP while the level for middle income countries of this size should be around 70 percent. In 2013, AfDB in a report tagged “An Infrastructure Action Plan for Nigeria”, revealed that the country’s infrastructure was broken down and needed urgent fixing. It was noted in the report that only 18 per cent of Nigeria’s 197,000km road system is paved, according to the report. “It is estimated that 40 per cent of the federal primary road network is in poor condition or worse, and therefore in need of rehabilitation; 30 per cent is in fair condition and in need of periodic maintenance; and about 27 per cent is in good condition.” The bank also noted in the report that Nigeria’s rail network is over 100 years old while air safety has improved only slightly in Nigeria and navigational aids and air traffic control facilities only became adequate after a major upgrade in 2006. To tackle the challenges, President Jonathan had in 2014 launched the National Integrated Infrastructure Master Plan, NIIMP, and a blueprint for infrastructure development devised by the National Planning Commission. It was estimated that about $3trilloon will be required in the next 30 years to build and maintain adequate infrastructure supplies in the country as stated in the plan. With the current budgetary provision for capital expenditure, Nigeria cannot fund infrastructure projects without massive investment by the private sector. In its manifesto, the APC said it would tackle Nigeria infrastructure problems by encouraging Public Private Partnership through appropriate legislation and creation of a National Infrastructural Development Bank to provide loans at nominal interest rates exclusively for the sector. Specifically, the party said it will ensure that it will embark on a National Infrastructural Development Programme as a PPP that will ensure the (a) construction of 3,000km of Superhighway including service trunks and (b) building of up to 4,800km of modern railway lines – one third to be completed by 2019 as well as providing incentives to accelerate public and private sector investment in seaports, railways and inland waterways. The party said it will ensure that that at least one functioning airport is available in each of the 36 states. The APC said in its manifesto that it would take urgent action to reflate the economy. The party said it would make Nigerian economy one of the fastest growing emerging economies in the world achieving a real GDP growth averaging 10 per cent annually by instituting a series of reforms while it will embark on vocational training, entrepreneurial and skill acquisition scheme for graduates along with the creation of small Business Loan Guarantee Scheme to create at least 1million new jobs every year, for the foreseeable future. Diversification of the economy Specifically, APC said it will diversify the economy by making Information Technology, Manufacturing, Agriculture and Entertainment key drivers of our economy; balance the economy across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness as well as instituting a N300bn regional growth fund (average of N50bn in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and support to help places currently reliant on the public sector. The party said it would also integrate the informal economy into the mainstream and prioritize the full implementation of the National Identification Scheme to generate the relevant data. To diversify the economy, the party said it would embark on export and production diversification including investment in infrastructure; promote manufacturing through agro-based industries and expand sub-regional trade through ECOWAS and African Union. The party added that it will amend the Constitution and the Land Use Act to create freehold/leasehold interests in land along with matching grants for states to create a nationwide electronic land title register on a state-by-state basis. In addition, APC said it would re-energise the economy through massive investments in housing by creating additional middle-class of at least 2 million new home owners in its first year in government and 1 million annually thereafter by enacting a national mortgage system that will lend at single digit interest rates for purchase of owner occupier houses. APC said it will achieve this by ensuring sound macro-economic policy environment, efficiency in government and preservation of the independence of the Central Bank while it will restore and strengthen financial confidence by putting in place a more robust monitoring, supervision and regulation of all financial institutions. Agriculture The party also said it will energise the economy through policies targeted at agriculture and industrialization of the country. APC said in its manifesto that it will introduce measures that will lead to modernization of agriculture sector and change Nigeria from being a country of self-subsistence farmers to that of a medium/commercial scale farming nation/producer; inject extra N30bn to the Agricultural sector to create more agro-allied jobs by way of loans at nominal interest rates for capital investment on medium and commercial scale cash crops and introduction of guarantee minimum price for selected crops and facilitate storage of agricultural products as and when necessary. The party added that it will also encourage the diversification of the economy through policies that will encourage shift from export of primary materials to value added goods through supporting the establishment of a solid industrial base. It will also ensure that key agricultural products such as cocoa and rubber go through value addition as opposed to exporting raw materials for industries in other countries. Social Security While the States, working together with their workers will eventually need to increase their internally generated revenue so as to ensure regular payment of salaries and allowances, the APC promise a more equitable distribution of national revenue to the sub national governments and this is expected to lead to funneling of more funds to help the lower level of governance meet their obligations. The re-organisation of the taxation system and ending of the bleeding of the national treasury by ending indiscriminate granting of waivers is also expected to enhance revenue available for distribution to the sub national governments from the central purse. APC also said it will tackle the challenge of extreme poverty as identified by the Vice President elect by putting the welfare of the people as at the core of its development policy. In this vein, the party said in its manifesto that it would follow the examples of Brazil and India by introducing a system of direct social security payments to the poor. The party said it would do this by ending the colossal loss of funds to being lost to corruption and reprioritizing government spending. The party therefore promised to create a phased Social Insurance Scheme to assist certain groups in the population with social welfare payments through a phased programme that will start with young people under 30 and the unemployed, senior citizens over 70, the disabled and armed service veterans. The party also said it will end the woes of pensioners many of who continue to queue up and carry out protests across the country over unpaid pensions and gratuities. APC said in it manifesto that it will ensure that retirees receive their gratuities on the effective date of their retirement and that thereafter pensions are paid as and when due. The Party also promised to end discrimination against the disabled through the appointment of a Federal Ombudsman for People with Disabilities to combat discrimination against the disabled. Anti-corruption Apart from economy and unemployment, one of the cardinal issues the APC campaigned on for election into office was the issue of corruption. One area that many Nigerians, including supporters of the outgoing President agreed that he did very poorly was in tackling corruption. Analysts argued that corruption festered and nearly assumed the status of state policy under President Goodluck Jonathan with rampant stealing of state funds under various guises. Trillions of naira were lost to frauds committed in the guise of subsidy payments, unremitted funds by the NNPC, lavish spending by the President favored Ministers on charter of private jets and purchase of exotic cars and unexecuted contracts. Thus, the APC rightly recognized in its manifesto that it might not be able to accomplish any of its cardinal programmes if the looting of the national patrimony was allowed to continue. Buhari had also noted that corruption is an “evil that is even worse than terrorism” because it “creates a class of unjustly-enriched people,” through redirection of funds that should have been used for the benefit of the public good to private pockets. Such an illegal yet powerful force soon comes to undermine democracy because its conspirators have amassed so much money that they believe they can buy government. While noting that corruption constituted a threat to Nigeria’s economic development and democratic survival, the President elect had vowed that corruption will not be tolerated by this administration. As rightly noted by the APC, mustering the political will to tackle the problems of corruption is essential given the downturn in the global oil industry. The party said in its manifesto that its plans to tackle corruption will be predicated on strengthening and making the EFCC, ICPC and other anti-graft agencies more independent, embarking on public sensitisation campaign and civic education against corruption in schools and town halls, encouraging civil society organisations, advocacy groups and whistle-blowers in the anti-graft vanguard, establishment of special courts for corruption, after due and thorough review of the Penal Code and preventing abuse of executive, legislative and public offices through greater accountability, transparency and strict enforcement of anti-corruption laws. The party also said it would amend the constitution to remove immunity from prosecution for elected officers in criminal cases while ensuring full implementation of the Freedom of Information Act so that government held data sets can be requested and used by the media and the public at large and then published on regular basis. Insecurity Buhari rightly recognized that one of the major messes it will be inheriting from the Goodluck Jonathan administration was insecurity. Indeed, the party had also pledged to voters that it would end the spate of insecurity in the country if elected into office during its campaigns. And there can be no arguments that the biggest security scare confronting the country at the moment is the Boko Haram insurgency, which has virtually grinded social and economic activities, especially in the Northeast geopolitical zone. Though the Nigerian military working with the armies of the neighbouring countries had in the past two months recorded considerable success in the battle against Boko Haram, the battle, it appears is far from being won. While the army has liberated most communities occupied by members of Boko Haram across Borno, Yobe and Adamawa States and are presently dismantling the camps of the insurgents in their Sambisa forest which they have made their fortress, members of the deadly group have continued to launch isolated gun and suicide bomb attacks on different communities. Thus, the country has continued to lose lives and limbs in scores to the insurgents. While receiving his certificate after he was declared the president-elect, Buhari re-affirmed his commitment to tackle the various security challenge facing the country, chief of which is the Boko Haram insurgency: “But I assure you that Boko Haram will soon know the strength of our collective will and commitment to rid this nation of terror, and bring back peace and normalcy to all the affected areas. We shall spare no effort until we defeat terrorism,” he said in an audacious vow to crush the insurgent group whose deadly activities have, according to some estimates resulted in the loss of over 20,000 lives, disruptions of social and economic activities in the vast North East Nigeria among others. Most Nigerians will also expect quick action from the new government in the area of the rescue of the over 200 Chibok girls kidnapped by the insurgents over a year ago who are still missing. Though the military has rescued hundreds of women and children from the gulag of the insurgents in the course of its ongoing operations in Sambisa forest, there has been no news on the Chibok girls. To tackle the problems of Boko Haram and other security issues confronting the country such as armed robbery, communal clashes, attacks by herdsmen, kidnapping, vandalisation of oil and gas pipelines, stealing of crude oil among others, the APC will need to carry out a reform of the security agencies, especially the Police and the Armed forces. The reforms, according to analysts, will involve increased funding, re-training, and instilling greater professionalism in the institutions. There is also the need for devolution of powers in the security sector to allow the States to have their own police force in tune with Nigeria’s federal arrangement. But this should not be difficult for APC since the party has already recognized this in its manifesto. The party had promised in its manifesto that it would urgently address the problems of capacity building of law enforcement agents in terms of quantity and quality as this is critical in safeguarding the sanctity of lives and property once it is elected into power to tackle the problems of terrorism, kidnapping, armed robbery, militancy, ethno-religious and communal clashes nationwide. In addition, the party also said it would embark on widespread consultations to amend the constitution to decentralise the police, expand local content by including community policing, push for more support in the security and economic stability of the sub-region (ECOWAS) and AU as a whole and maintain a strong, close and frank relationship with the international community in addition to measures to secure Nigeria borders. Also, as stated in its manifesto, APC said it would establish a Conflict Resolution Commission to help prevent, mitigate and resolve civil conflicts to bring permanent peace and solution to the Niger Delta and other conflict prone areas such as Plateau, Taraba, Bauchi, Borno and Abia in order to engender national unity and social harmony.