External loans and need for growth in agriculture, power, infrastructure, others
Smugglers of food items, most especially rice, have been having sleepless nights in Nigeria. From indications, the conscious plans by the Federal Government to crash the price of rice and wheat by the end of the year is threatening to send them out of business. Smugglers don’t give up easily. Reports said they are fighting […]
Smugglers of food items, most especially rice, have been having sleepless nights in Nigeria. From indications, the conscious plans by the Federal Government to crash the price of rice and wheat by the end of the year is threatening to send them out of business. Smugglers don’t give up easily. Reports said they are fighting back by mopping-up in tons, the rice being mass-produced currently across the federation, warehousing the product by mischief, just to befuddle and belie every plan by the government to make rice affordable for Nigerians.
Indeed, the resilience by the government in closing the supply gap on agricultural products both locally and externally will in the long run, help to neutralise the antics of hoarders and smugglers. Nigerian farmers are to reap from the emerging window of opportunities in the agriculture sector to become wealthy like never before. In succinct terms, the emphasis on the sector by the government, which underpins its agenda on diversification, is already on the threshold of success. Nigeria now looks as good as emerging as a true African giant in agriculture with the prospect of earning foreign exchange from exporting products, soonest.
As outlined, the plan on diversification by the government is to leverage on the growing fortune of agriculture to revive the country’s ailing industrial sector. At the moment, some Chinese and Italian portfolio investors are seeking cooperation with the government of Nigeria to set up agro-allied industries to process, preserve and export finished agric products from the country.
All things being equal, Nigeria faces a brighter economic future amid a shift in paradigm likely to place the control of the economy in the hands of the private sector rather than the government in the immediate future. By implication, Nigeria is getting more creative on how to beat poverty, as the process of natural growth of the economy has started taking off.
The international Monetary Fund (IMF) seems to have this in mind when some few days ago; it predicted a rise in the economic fortune of Nigeria and the possibility of its emergence as Africa’s largest before the end of 2017. The measures being put in place by the government of President Muhammadu Buhari at the moment seems to have lent credence to the prediction by the IMF.
So far, the government has been addressing the problems in the power sector, improving on infrastructure, transportation system, reducing wastes, and promoting accountability through the war on corruption and zero-budgeting. It has also reduced the ratio of recurrent expedition for capital by 30:70, while all the same, widening the revenue base of Nigeria through earnings from taxation, customs and the oil sector. The government, nonetheless, seems to be in a dilemma occasioned by the complications trailing the management of recession.
The complications have well been amplified by the on-going war on Boko Haram, the government’s extra spending on Internally Displaced Persons (IDPs) numbering more than 2 million, reduction in the oil output through sustained attacks by militants on oil facilities in the Niger Delta and above all, the cynicism and lack of cooperation by a section of Nigerians with set agenda to revive the economy.
In the face of challenges, a quick fix of the ailing economy by the government becomes germane. This explains the reason the Buhari’s government initially addressed its mind to an immediate intervention approach anchored on external borrowing of $29.9 billion to partly regenerate the economy. Break down of how the loan would be spent shows that the Federal Government will take $25.8 billion, leaving $4.1 for the states. Nigerian had also parleyed India on a loan deal of $15 billion, using oil as mortgage. The hope of obtaining the loans totalling $45 billion is to cushion the Fiscal Strategy by the government for 2017 to 2019 as reflected in the Medium Term Expenditure framework (MTEF) it forwarded recently to the National Assembly.
On determination to improve the power sector, the federal government voted the sum of $4.8 billion for the Mambila Hydro Electric Power Project. In the same vein, the Abuja Mass transit rail will gulp the sum of $1.6 billion dollars.
While the Federal Government voted the sum of $3.5 billion for the completion of the Railway Modernisation Coastal Project from Calabar to Port Harcourt-Onne Deep Sea Port segment, it voted $2.4 billion dollars for the Lagos-Kano railway modernisation project; and $1.3 billion for the Lagos-Ibadan segment. Also, the sum of $1.1 billion dollars will go to the Kano-Kaduna segment of the rail project.
According to reports, education and health are also to benefit from the loan with a $2.2 billion vote. Similarly, $1.2 billion dollars is set aside for agriculture projects at both the federal and state levels.
Critics have been consistent in tearing down the motive by the government to obtain loans to tackle the challenges of recession. The worries they expressed are that the loans if obtained would not only be mismanaged as usual, but would also bloat the debt profile of the country. Others contend that some parts of the federation, mostly the southeast had been short-changed in the plans for the loan.
What is more soul lifting and worthy to note is that the Government of President Buhari is not flippant on monetary issue. Its zero tolerance to corruption is infectious and impactful. It has since the past few months demonstrated frugality in economic management that has kept Nigeria this far in the face of challenges. Nigerians should, therefore, be positive in approach to the plans by President Buhari to regenerate the economy while according it the necessary cooperation it needs to succeed. Indeed, every part of Nigeria is captured in the infrastructural development process, which the loans are to consider.
All the same the government should examine the import of criticisms of the loan as a tip for ensuring proper management and accountability at the nick of time.
Samuel, journalist and public affairs analyst, writes from Abuja