After the reading the full text speech of 2013
budget proposal to National House of Assemble by President Goodluck Jonathan,
recast my mined to 2012 budget criticism by Nasir Elrufa’I to which I have
strong believed on him by his constructive criticism. Here is another critic of
2012 budget implementations and the recent 2013 budget proposal.
by Nasir El-Rufai
Just
when you think President Goodluck Jonathan should have finished settling his
political debts to enable him focus on easing the hardships that most Nigerians
face simply to remain alive, the man decides that the welfare of Nigerians and
job creation are not his priorities. How else can one explain his plan to spend
a staggering N2.4 trillion to run government in 2013? Actually, the question
should be: Which government?
Broadly
speaking, the major functions of government include protecting the state from
external aggression, provision of stable legal and social frameworks, delivery
of public goods and services, redistributing incomes where needed and
stabilizing the economy. Going by that definition, one can safely conclude that
Nigeria has no government, despite planning to spend an outrageous N2.4
trillion – the equivalent of some $15bn on itself next year. This is against
the backdrop that this year’s budget has barely achieved 30% implementation. In
essence, Nigeria is spending 70% of its income on about one million government
officials that can only achieve 30% of annually-set budgetary targets.
The
absence of social infrastructure is particularly glaring, since this is an
aspect that can help create part of the three million new jobs that Nigeria
needs annually just to clear the backlog of the rising unemployment. And
nowhere is the absence of government more manifest than in the provision of
public goods and services, especially in housing and transportation. Thus, even
with the new minimum wage, house rents and transportation costs consume about
80 per cent or more of average household incomes in Nigeria.
Across
Nigeria, the massive shortage of housing and transport infrastructure mean that
in addition to rising food costs (which our government has denied), many
Nigerian families spend most of their income on accommodation and
transportation. What would be left for other essentials of life? What about
healthcare, education, clothing and other basic essentials? It is no wonder
that Nigeria remains in the list of top 15 places with the highest incidence of
poverty, with over 112 million out of our 162 million people living below the
absolute poverty threshold in 2011. It is sad that one of the top crude oil and
gas exporters is now ranked the 25th poorest country in the world.
Incidentally,
there is nothing new about these figures. What is painfully obvious is that
government does not have the right statistics of housing deficits in Nigeria,
nor a workable transport sector development strategy under implementation. For
example, the Federal Mortgage Bank of Nigeria, recently said the Federal
Government would require more than N56 trillion to provide 16 million housing
units to bridge the housing deficit in the country. However, assuming that each
household has an average of 6 residents, it means that 96 million Nigerians are
homeless. That does not sound intuitively accurate.
Another
related agency, the Federal Housing Authority of Nigeria (FHA) which has the
statutory responsibility of providing housing for Nigerians has only built
about 40, 000 houses nationwide since its inception in 1973. This, according to
the FHA, has resulted in a deficit of about 25 million houses in the national
housing scheme, suggesting that about 150 million Nigerians out of about 162
million in 2011, are homeless – even more far-fetched!. Which figures do we
work with, 16 or 25 million? The figures do not add up!
In
order to facilitate the sales of federal government houses in Abuja, we
initiated a pilot mortgage which enabled many public servants and other
citizens to buy houses. Unfortunately, the plan to mainstream the system
nationally was truncated by our successors-in-office. This is why today, the
only hope honest Nigerians have of owning homes is through the traditional and
tortuous method – self-purchase and direct labour from life savings which is
herculean since only a few people can own houses through legitimate sources.
Now that this year’s flooding has destroyed thousands of homes across Nigeria,
more Nigerians have been made homeless.
Apart
from the massive housing deficits and the exorbitant rents Nigerians are forced
to pay, rising costs of transportation occasioned by abysmal infrastructure in
the sector is also consuming significant portion of household and personal
incomes in the country.
Transportation
is critical for economic growth in every country, but due to our poor
transportation infrastructure, logistic costs for our goods and services are
now typically more than 20 per cent of sales from the global average of 2 per
cent. In Nigeria, transport costs alone can be as high as 15 per cent of the
costs of goods or services.
Statistics
indicate that for many growing economies, the value added by transportation to
the economy accounts for 3 to 8 per cent of GDP while employment in transport
sector ranges between 2.5 and 11.5 per cent of total paid employment. But in
this year’s budget, government earmarked only 6 per cent to the Works,
Transport and Aviation ministries combined, without any clear policy to get the
private sector incentivized to invest more in the sector. For a struggling
economy like Nigeria, intensified investment in transport will not only
increase disposable incomes for millions of Nigerians, but also create millions
of jobs and stimulate critical sectors of the economy.
In
addition, an effective transportation system can have direct and significant
effect on the daily lives of our people. Properly targeted and managed
investments in transport facilities will mean efficient travel that could save
time, fuel and reduce pollution. Lives will be saved and there will be fewer
delays and hassles for the average Nigerian.
Efficient
highways, rail systems, airlines, airports, harbors, and waterways will not
only provide the backbone to grow our economy by moving people and goods around
seamlessly, cheaply and safely, it can also employ millions of workers to
generate substantial share of economic output in the country. If well
exploited, transportation can actually contribute in excess of 10 per cent of
our total domestic product annually.
Most
Nigerians travel by road because we do not have a functional railway system and
air travel is beyond the reach of most (though the fear of our skies has also
driven more people back to our death traps on the ground). This has further
compounded an already appalling situation. The state of our roads is
distressing because of the level of deterioration, volume of traffic and the
countless number of fatalities every day. At the moment, only about 15% of our
roads are paved and of this, only about 28% can be easily used by motorists.
The
excessive number of federal roads which have overstretched available resources
and project management capacity of the government are largely responsible for
their long construction periods and poor maintenance of existing roads. Yet
every Wednesday, the Federal Executive Council awards more roads contracts that
cannot be completed, while the legislature introduces more and more federal
roads as ‘constituency projects’.
There
is certainly the compelling need to rehabilitate our road networks and invest
in road widening schemes to increase capacity through increased total lane
length. Compared to the Republic of South Africa which has a population density
of about 40 persons per square kilometre, with a total road network of about
754,000 kilometres that are well maintained, Nigeria with a population density
of about 150 per square kilometre has only 108,000 kilometres of poorly
maintained roads, most of which are unpaved. This year’s flooding has washed
away important roads, including major arteries, leaving tens of thousands of
travellers stranded and communities disconnected.
Why
is it that despite having about 8,600km of waterways, Nigeria has been unable
to put them to meaningful use? It is worth stating that effective inland water
transportation has the potential to make commerce more competitive and our
economy more vibrant.
Well
structured, the aviation sector can be a key growth engine for our economy. An
efficient and modernized aviation sector, with regulations and incentives for
the private sector to thrive can make air travel an essential form of
transportation, create jobs and economic growth. Nigeria needs to leverage on
transport infrastructure development urgently to eliminate the avoidable
logistic costs that are up to 50 per cent higher than what is normal for
operations in all spheres of our economy. Such a programme would create
millions of jobs and open up the entire country to rapid economic and social
development.
Government
must live up to its responsibility of developing and implementing policies that
would strengthen primary mortgage institutions while simultaneously embarking
on social housing projects across the length and breadth of Nigeria. It must
also invest heavily in public transportation systems like roads, railways,
aviation and inland waterways systems. That way, apart from providing urgently
needed social infrastructure, the processes involved would create millions of
jobs in Nigeria, promote house ownership for families and facilitate the
emergence of a middle class which would in turn form the basis of economic
development, security and political stability.
Why
is government yet to find creative solutions to develop this vital economic
artery? Why can’t we find ways to innovatively leverage the three trillion
naira pension funds sitting quietly in banks, the sovereign wealth fund and
whatever is left of the depleted excess crude account to address these critical
infrastructure deficits?.
For
now, it remains a tale of despair for majority of Nigerians who go to bed
thinking of landlords, estate agents and house rents, with the voice of rickety
bus conductors still ringing in their ears, “no change!” Paradoxically, what
most Nigerians want and deserve is just that: Change
