‘I am uniquely positioned to understand what we must do to get our economy growing’

Being the text of presentation by Atiku Abubakar, a former vice president, and presidential candidate of the Peoples Democratic Party (PDP), at the Nigeria Economic Summit Group (NESG) Presidential Dialogue on the Economy, at the Summit House, Ikoyi, Lagos, Monday, January 16, 2023.

Protocol

I sincerely thank the Nigeria Economic Summit Group, in particular the Chief Executive Officer, ’Laoye Jaiyeola, for inviting me to speak about my plans for reviving and growing our economy if Nigerians, in the coming elections, choose me to lead this country.

Many of the challenges facing our dear country are connected to poor economic performance and its consequences for our people. It is critical, therefore, that we get the economy right.

I have been a private business man for a long time and have also been a public servant at the highest level of decision-making and implementation. Thus, I feel comfortable among captains of industry and public sector economists and practitioners. And I am uniquely positioned to understand the economic challenges facing the country and what we must do to get our economy growing, provide jobs, incomes and wealth for our people and thereby reducing hunger, unemployment and related social problems, including insecurity.

When we create economic opportunities for our people it will have significant positive impact on social cohesion and national security.

Increased jobs and income opportunities will reduce the likelihood of our youth being involved in crime, violence and conflict motivated by the manipulation of religious or ethnic differences.

Our country is in transition as the APC leaves the stage and, with your support and goodwill, the PDP takes over in May this year. Therefore, you have a responsibility to take stock of the assets (if there are any) and liabilities (which will be massive) of the APC administration.

You also have a solemn responsibility to interrogate those who aspire to govern this country. You must assess their understanding of the environment, their policy priorities, and their strategies for dealing with a plethora of local and national issues.

We can only proffer accurate and workable solutions if we start with proper diagnosis. Elegant slogans, social media insults and misleading statistics are not a substitute for sober diagnosis and analysis of where we are, how we got here and what we must do to get our country back on its feet and take our rightful place in the comity of nations.

This is election season. So, you will see and hear from snake-oil salespeople, false prophets and purveyors of false hope and misleading statistics. There is, therefore, need for caution.

We must also remember that we cannot trust the doctor that poisoned and continues to poison the patient to be the one who provides the curative treatment. The stakes are too high, so we must get it right. This may well be our last chance to do so.

The Nigerian economy is barely growing. Per capita income, a measure of citizens’ well-being, has progressively fallen since 2015 because of declining output and a fast-growing population. Our people are worse-off today than they were in 2015.

The oil and gas sector, which is the country’s main foreign exchange earner has declined for most of the period since 2014. For many economic sectors and for the ordinary citizens it still feels like we are in a recession.

Under the current administration our people are not working. More than 23 million people are out of jobs. In just 5 years between 2015 and 2020, the number of fully employed people dropped by 54%, from 68 million to 31 million people. This is frightening in a country of 200 million people.

And the majority of the unemployed are young men and women, who lack not only the means to survive but any hope for the future. The number of unemployed youths increased by 9 million from 4 million in 2015 to 13 million in 2020.

High youth unemployment and limited employment opportunities pose serious economic and security challenges. It is, therefore, an urgent matter to ensure that there are enough jobs for Nigeria’s youth.

More Nigerians are poorer and more miserable today than in 2015.

Basic commodities are now beyond the reach of the average Nigerian. A price of a loaf of bread has risen by more 100percent since 2020. Farmers now pay more than 200percent more for a bag of fertilizer – if they see it – than they did in 2020.

Figures from the National Bureau of Statistics show that the public sector accounts for less than 8percent and the private sector nearly 79 percent of national consumption expenditure. Indeed, 85percent of the investments in the Medium-Term National Development Plan 2021-2025 are envisaged to be funded by the private sector.

Also the Nigeria Infrastructure Master Plan shows that Nigeria has an infrastructure financing deficit of approximately $3 trillion over the next 30 years. This means a financing requirement of approximately $100 billion per annum which, we know, cannot be met by the public sector alone.

A warm handshake with the private sector is therefore needed for any economic policy or programme to succeed. Indeed, private sector leadership in driving growth is the first of the three key principles of my economic growth and development agenda.

The APC-led government is dressing Nigeria in borrowed robes!

A household that is borrowing money in order to feed would be considered broke. In that sense Nigeria is broke. Nigeria under the APC-led government has consistently run budget deficits since it came to power in 2015. These budget deficits are often above the 3percent threshold permissible under the Fiscal Responsibility Law.

For the first time in Nigeria’s history, the FGN paid more in debt service than it earned. By spending more than 100percent of its revenue for debt service, the government is breaching one of the applicable debt-sustainability thresholds.

Capital has taken a flight. Policy incoherence and flip-flops combined with internal insecurity continue to pose a significant risk to investment and thus output growth. We have lost our esteemed position as Africa’s preferred investment destination to less endowed nations.

The failure of leadership by the APC-led government is staring every Nigerian in the face as the country’s economic, social, political and security challenges persist and assume frightening dimensions.

Nigeria has the potential to double its GDP by 2030 and achieve a per capita income of approximately US$5,000.

So what would I do?

I have carefully outlined five priority areas to focus on in order to rescue and reposition this country for sustained economic growth, improved welfare, peace and security for our people – Unify the country; revive the Economy, improve Security, improve Infrastructure, and develop Human Capital.

These priority areas are connected to one another and cannot be treated in isolation. And they would have the most impact on all other aspects of our national life. They are also intended to give my government a focus rather than us scratching at everything and doing nothing well. In this brief presentation, however, I will focus on my economic plan.

My economic growth and development agenda is aimed primarily at stimulating the growth of the economy. It envisions an economy that is modern, dynamic, and competitive, capable of joining the top 20 economies of the world.

We anticipate growth from our policies that seek to revitalise the real sectors including agriculture, manufacturing and Micro, Small and Medium Enterprises (MSMEs).

We will re-build our infrastructure and reduce infrastructure deficit in order to enhance the carrying capacity of the economy and unleash growth and wealth creation.

Production for export and the promotion export of manufactured goods will be a top policy and long-term investment priority of my administration.

In order to deliver on these lofty goals we will have a warm handshake with the private sector. We will support the private sector to drive growth. We will establish strong partnership with the private sector in investing in infrastructure, creating jobs, income and in the fight against poverty.

My government will create a suitable investment environment for the private sector to thrive. Thus, we will listen to the private sector more, understand its needs and challenges and secure it buy-in when policies are designed. Through regular dialogue with the private sector, we will build consensus, improve trust between us and make new reform initiatives easier to implement and sustain.

There will be more clarity, coherence, and consistency in policy. Policy flip-flops create uncertainty and threaten investment flows.

Conflicts and insecurity scare investors away. Thus, we will take tough and difficult decisions on security matters without fear or favour. We shall put more boots on the ground and ensure that the security forces are well equipped, well trained and well paid. Those who confront deadly criminals everyday must have the resources needed to do their job and be well-rewarded for doing so. In the medium to long term I shall work with National Assembly and State governments towards allowing state police for the states that so desire.

My government will tackle the deficit in infrastructure financing head-on. We will establish an “Infrastructure Development Unit” in the Presidency, with a coordinating function and a specific mandate of working with the MDAs to fast track and drive the process of infrastructure development in the country.

As a short-term measure to ensure enhanced power supply I shall, within the first year of the new administration, initiate and implement an emergency power programme (EPPs) that can deliver additional capacity in certain key areas.

Over the medium term, I will propose legislation for the removal of the entire electricity value chain from the exclusive list and give states the power to generate, transmit and distribute electricity for themselves.

It is counter-productive and injurious to let an industrial dispute with the Federal Government in Abuja to affect an industry in Lagos or a factory in Aba or Kano or even an average Nigerian who simply desires to get home, watch the news and sleep under a ceiling fan.

Investments in additional generation capacity will be accompanied by complementary investments in transmission and distribution infrastructure to wheel the additional energy. These would be done with private sector support and investments.

We shall incentivise private investor to invest in the entire electricity value chain while the Federal Government focuses on policy, regulation, and standardisation. A tariff structure for operators, which reflects costs, will be one of such incentives.

We will stimulate growth to create jobs and wage war against hunger. The economy must grow for economic opportunities to abound.

Poverty reduction shall be the centrepiece of our economic development agenda and economic performance shall henceforth be measured by the number of jobs created and the number of people lifted out of poverty rather than by the amount of money spent.

Early in our administration, we will create an Economic Stimulus Fund with an initial investment capacity of approximately $10 billion to prioritize support to MSMEs across all the economic sectors.

I will undertake far reaching fiscal restructuring to improve liquidity as well as the management of our fiscal resources. We shall attract investments in the oil and gas sector, enhance revenues, including through reduction of oil theft. We shall also take steps to increase non-oil revenues.

In that regard, we will undertake an immediate review of government spending with a view to eliminating all leakages arising from subsidy payments, especially subsidy on petroleum products.

We will also stop all fiscal support to ailing State-owned enterprises.

We will improve spending efficiency by gradually reducing government recurrent expenditures. Over the medium term, recurrent expenditures should not exceed 45percent of the budget.

We will also review government procurement processes to ensure value-for-money and eliminate all leakages. As Vice President, I championed the enactment of the public procurement law, which gave rise to the “Due Process” office.

And we shall focus on non-debt financing by promoting a private sector-led infrastructure development fund for the financing and delivery of key infrastructure projects.

We will further reduce the rate of debt accumulation by promoting more Public Private Partnerships in critical infrastructure funding and identifying more innovative funding options.

We will review the country’s debt strategy by focusing on concessional and semi-concessional sources with lower interest rates and relatively long-term maturity. The government must reduce the issuance of short-dated debt instruments.

It is patently misleading to compare Nigeria’s borrowing binge with that of developed countries such as Japan and the United states, as one of my opponents in the coming elections did here a few days ago. Those countries export huge amounts of high value manufactured goods while Nigeria exports very little, mostly raw materials. And theirs are safe-haven currencies.

It also shows an absolute ignorance of development economics to state, as he did, that budgeting under him would be based on projected spending levels needed to achieve growth rate above 10%. A family whose budgeting is based on its spending desires rather than its income would be considered extremely irresponsible. A country’s budget must take into account its projected revenues and its ability to service its debts.

Our economy is bleak and our challenges daunting. Restoring confidence in the future of Nigeria as a dynamic economy and stable democracy is a daunting challenge. No one should downplay the enormity of the tasks ahead.

I have a good understanding of the challenges facing Nigeria. I know that many of these challenges are self-inflicted and can be reversed if we are determined. AND WE ARE DETERMINED!

I will come prepared. It is not in my character to be caught off guard both as a businessman and as a public officer. My policy document contains the right policies that will be delivered in a timely manner.

I am experienced in economic reforms and economic management matters. I have a history of economic reform and economic transformation.

As head of the economic management team, while I was Vice President, I was instrumental in the design of a private sector revival strategy and advocated for the opening of the economy for private sector investments in a number of sectors. And we made huge progress.

I’m sure you still remember the good old days of rapid economic growth with stable interest and exchange rates, low inflation, low rates of unemployment and low poverty headcount. We paid off nearly all of our foreign debt which was crippling the country.

We created novel institutions to lay the foundation for good governance and accountability, including the Bureau of Public Procurement, Economic and Financial Crimes Commission, and SERVICOM, whose Golden rule is “Serve others as you would like to be served.” We developed a formal development agenda, the NEEDS, which also extended to galvanising participation of state and local governments through SEEDS and LEEDS.

In fact, some of you in this audience worked with me on those reform initiatives.

Experience is important and we must avoid the mistakes of the recent past. It is too risky for Nigerians to hand over their future to a green horn or to the National Leader of the very party that brought us to this sorry pass.

Once more, I thank you for this opportunity to interact with you today.