This Blueprint is Problematic

Members of the National Economic Council [NEC] held a two-day retreat in Abuja early last week and adopted a blueprint for cooperation between Federal and state governments to pull the country out of its current economic doldrums. Vice President Yemi Osinbajo heads NEC which has as members the 36 state governors, some key ministers as […]

Members of the National Economic Council [NEC] held a two-day retreat in Abuja early last week and adopted a blueprint for cooperation between Federal and state governments to pull the country out of its current economic doldrums. Vice President Yemi Osinbajo heads NEC which has as members the 36 state governors, some key ministers as well as Governor of the Central Bank of Nigeria, CBN. The theme of the retreat was Nigerian States: Multiple Centres of Prosperity. It was declared open by President Muhammadu Buhari, who told the gathering to concentrate on the three areas which he said are the Federal Government’s priority areas.
The retreat was a welcome idea. Cooperation between the Federal and state governments in socio-economic policy, planning and project implementation can accelerate efforts to tackle the challenges that this country faces in the short and medium term. There is however a limit to which they can cooperate, since the 36 state governments and Federal Government are controlled by three different political parties. The president and each state governor were elected based on different campaign promises; hence they have different policy priorities.
At the end of the retreat, NEC issued what it called “retreat highlights” which comprised a general section and seven thematic areas. A cursory look at the communiqué indicates that many of the agreed goals were couched in terms so general as to be worthless. Other goals were buried in highly technical language while still others were mere bureaucratic items dressed up as policy goals. For example, under the general section, the communiqué spoke of “agreement reached for concerted and consistent efforts to diversify revenue sources” and “to focus on fiscal responsibility as a critical element in macro-economic balance.” These two have been governance goals in Nigeria for the last three decades at least. Other items were a bit more specific. They include to “expand compliance on VAT, adopting a gradual plan for rate increase,” “increase expenditure through borrowing,” “maintain a minimum level of capital expenditure of 30% in the budget” and “increase investment in infrastructure through public private partnership (PPP).”
The same applies to goals outlined in the seven thematic areas. Under agriculture, it was stated, “Federal Government to re-position Bank of Agriculture to enhance its capacity to finance agriculture.” This term ‘reposition’ is traditionally escapist and does not say what is to be done. The communiqué also said “single digit interest rate for agricultural loans should be considered while duties and taxes for agricultural products and equipment should be waived.” While the Federal Government can easily waive duties for agricultural equipment if it so wishes, commercial banks cannot be made to grant agricultural loans with single digit interest rates unless someone else is providing the money.
Another goal under agriculture is that each state should identify two crops in which it has comparative advantage for Federal intervention. This lofty idea was mooted by President Obasanjo 15 years ago and as he once said, only Cross River State came up with pineapple. We hope they show more seriousness this time around. NEC also set targets to achieve self-sufficiency in tomato paste this year, in rice by 2018 and in wheat by 2019. While the first two targets are attainable, even if not in the time frame provided, it is unlikely that we can ever achieve self sufficiency in wheat production, given the solid fact of climate. NEC also wants to reestablish “Commodity Exchanges for price regulation and avoidance of losses due to lack of markets” and also reestablish National Agricultural Land Development Authority, NALDA.” Nigerians deserve to know why Produce Marketing Boards were scrapped in the 1980s and why NALDA, set up in 1987, was scrapped years later.
The goals outlined under the solid minerals thematic area are mostly bureaucratic. They include “Ministry of Solid Minerals Development to complete and present the solid minerals development roadmap” by this week, “Federal government to engage with state governments on the roadmap and agree any amendment that may be required,” “Federal Government and States to set deadlines to achieve self-sufficiency in Bitumen/Asphalt and tiles (to discourage/stop importation)” and “make and communicate final decisions on operationalization of Ajaokuta steel plant by 30th June.”  Minister of Solid Minerals Development Dr. Kayode Fayemi is a brilliant and highly experienced former state governor and we urge him to put more concrete items on the NEC table.
 The thematic area of Investment, Industrialisation and Enabling Monetary Policies also opened with the opaque goal
“Ministry of Industry, Trade & Investment (MITI) to develop a matrix of actions to be taken by Federal and State Governments towards achieving the targeted improvements in Ease of Doing Business ranking by 30th April 2016.” Goals like these are likely to be forgotten until the next retreat. Yet another goal is that “Federal Government should work with the States and other stakeholders to create an enabling environment for trade and investment through the implementation of the Nigeria Industrial Revolution Plan (NIRP) to encourage industrialization.” We are not aware that an industrial revolution is going on in Nigeria.
NEC’s retreat decided that “State and Federal Governments must emphasize the patronage of Made in Nigeria products.” At least this is a very clear and very desirable goal and we expect its quick implementation with respect to vehicles, furniture, building materials, school textbooks, medicines etc.
The Federal Government also managed to convince the states to work collaboratively with it with respect to its school feeding and Teacher Corp program, under which it plans to recruit half a million teachers this year. Since NEC has set up an implementation steering committee headed by Vice President Osinbajo to realize these goals, we expect quick results, at least on the goals that are clear.