Nigeria’s Economic Recession Is Real But Would Not Last, By Muhammadu Buhari

Temporary problems should not blind or divert us from the corrective course this government has charted for our nation. We have identified the country’s salient problems and we are working hard at lasting solutions.

Today, 1st of October is a day of celebration for us Nigerians. On this day, 56 years ago, our people achieved the most important of all human desires – freedom and independence. We should all therefore give thanks and pray to our founding fathers without whose efforts and toil we would not reap the bounties of today.

I know that uppermost in your minds today is the economic crisis. The recession for many individuals and families is real. For some it means not being able to pay school fees, for others it’s not being able to afford the high cost of food (rice and millet) or the high cost of local or international travel, and for many of our young people the recession means joblessness, sometimes after graduating from the university or polytechnic.

I know how difficult things are, and how rough business is. All my adult life I have always earned a salary and I know what it is like when your salary simply is not enough. In every part of our nation, people are making incredible sacrifices.

But let me say to all Nigerians today, I ran for office four times to make the point that we can rule this nation with honesty and transparency, that we can stop the stealing of Nigeria’s resources so that these could be used to provide jobs for our young people, security, infrastructure for commerce, education and healthcare.

I ran for office because I know that good government is the only way to ensure prosperity and abundance for all. I remain resolutely committed to this objective.

I believe that this recession will not last.

Temporary problems should not blind or divert us from the corrective course this government has charted for our nation. We have identified the country’s salient problems and we are working hard at lasting solutions.

To re-cap what I have been saying since the inception of this administration, our problems are security, corruption and the economy, especially unemployment and the alarming level of poverty.

On Security, we have made progress. Boko Haram was defeated by last December – only resorting to cowardly attacks on soft targets, killing innocent men, women and children.

Nigerians should thank our gallant men of the Armed Forces and Police for rescuing large areas of the country captured by insurgents. Now, residents in Borno, Yobe and Adamawa States, as well as several neighbouring states go about their daily businesses in relative safety. People can go to mosques, churches, market places in reasonable safety.

Commuters can travel between cities, towns and villages without fear. Credit for this remarkable turn-round should go to our Armed Forces, the Police, various sponsored and private vigilante groups, the local traditional leaders. Security is a top-to-bottom concern and responsibility.

Besides Boko Haram, we are confronting other long-running security issues, namely the clashes between herdsmen and farmers, cattle rustling, kidnappings. This Administration is firmly resolved to tackle these challenges and defeat them.

A new insurgency has reared up its head in the shape of the blowing up of gas and oil pipelines by groups of Niger Delta militants. This Administration will not allow these mindless groups to hold the country to ransom.

What sense is there in damaging a gas line, the result of which would put many towns and villages in the country, including those of the attackers, in darkness? What logic is there in blowing up an export pipeline, the result of which income to your state and local governments, and consequently their abilities to provide services to your own people, is reduced?

There are no easy solutions, but there are solutions nonetheless and government is pursuing them in earnest. We are to repair our four refineries so that Nigeria can produce most of our petrol requirements locally, pending the coming on stream of new refineries.

No group can unlawfully challenge the authority of the Federal Government and succeed. Our Administration is fully sympathetic to the plight of the good people of Niger Delta and we are in touch with the state governments and leaderships of the region. It is known that the clean-up of the Ogoniland has started. Infrastructural projects financed by the Federal Government and post amnesty programme financing will continue.

We have, however, continued to dialogue with all groups and leaders of thought in the region to bring lasting peace.

Corruption is a cancer which must be fought with all the weapons at our disposal. It corrodes the very fabric of government and destroys society. Fighting corruption is key, not only to restoring the moral health of the nation, but also to freeing our enormous resources for urgent socio-economic development.

In fighting corruption, however, the government would adhere strictly by the rule of law. Not for the first time I am appealing to the judiciary to join the fight against corruption.

The Third Plank in this Administration’s drive to CHANGE Nigeria is in re-structuring the economy. The behaviour of economies is cyclical. All countries face ups and downs. Our recession has been brought about by a critical shortage of foreign exchange. Oil price dropped from an average of one hundred USD ($100) per barrel over the last decade to an average of forty USD per barrel this year and last.

Worse still, the damage perpetrated by Niger Delta thugs on pipelines sometimes reduced Nigeria’s production to below one million barrels per day (1 million bpd) against the normal two point two million barrels per day (2.2 million bpd). Consequently, the naira is at its weakest, but the situation will stabilise.

But this is only temporary. Historically, about half our dollar export earnings go to the importation of petroleum and food products! Nothing was saved for the rainy days during the periods of prosperity. We are now reaping the whirlwinds of corruption, recklessness and impunity.

There are no easy solutions, but there are solutions nonetheless and government is pursuing them in earnest. We are to repair our four refineries so that Nigeria can produce most of our petrol requirements locally, pending the coming on stream of new refineries. That way we will save ten billion USD ($10bn) yearly in importing fuel.

At the same time, the Federal Ministry of Agriculture and the Central Bank have been mobilised to encourage the local production of rice, maize, sorghum, millet and soya beans. Our target is to achieve domestic self-sufficiency in these staples by 2018.

Already farmers in thirteen, out of thirty six states, are receiving credit support through the Central Bank of Nigeria’s Anchor Borrowers Programme. Kebbi State alone this year is expected to produce one million tonnes of locally grown rice, thanks to a favourable harvest this year. As part of the 13 states, Lagos and Ogun are also starting this programme. Rice alone, for example, costs Nigeria two billion USD ($2bn) to import.

The country should be self-sufficient in basic staples by 2019. Foreign exchange thus saved can go to industrial revival requirements for retooling, essential raw materials and spare parts. It is in recognition of the need to re-invigorate agriculture in our rural communities that we are introducing the LIFE programme.

Government recognises that irrigation is key to modern agriculture: that is why the Ministries of Agriculture and Water Resources are embarking on a huge programme of the development of lakes, earth dams and water harvesting schemes throughout the country to ensure that we are no longer dependent on rain-fed agriculture for our food requirements.

In addition, government is introducing a Water Resources Bill encompassing the National Water Resources Policy and National Irrigation and Drainage Policy to improve the management of water and irrigation development in the country. We are reviving all the twelve River Basin Authorities, namely;

I. Anambra-Imo
II. Benin-Owena
III. Chad Basin
IV. Cross River
V. Hadejia-Jama’are
VI. Lower Benue
VII. Lower Niger
VIII. Niger Delta
IX. Ogun-Osun
X. Sokoto-Rima
XI. Upper Benue
XII. Upper Niger

The intention is eventually to fully commercialise them to better support crop production, aquaculture and accelerated rural development.

This Administration is committed to the revival of Lake Chad and improvement of the hydrology and ecology of the basin. This will tune in with efforts to rehabilitate the thirty million people affected by the Boko Haram insurgency in the Lake Chad basin countries.

The second plank in our economic revival strategy is centred on the Ministry of Power, Works and Housing. The Ministry will lead and oversee the provision of critical infrastructure of power, road transport network and housing development.

Power generation has steadily risen since our Administration came on board from three thousand three hundred and twenty four megawatts (3324MWs) in June 2015, rising to a peak of five thousand and seventy four megawatts (5074MWs) in February 2016.

For the first time in our history, the country was producing five thousand megawatts. However, renewed militancy and the destruction of gas pipelines caused the acute shortage of gas and constant drop in electricity output available on the grid.

There has been, during the period June 2015 to September 2016, big improvement in transmission capacity from five thousand five hundred megawatts to the present seven thousand three hundred megawatts.

There were only two system collapses between June and December 2015, but due to vandalism by Niger Delta militants, the overall system suffered 16 system collapses between March and July 2016 alone. As I have said earlier, we are engaging with responsible leadership in the region to find lasting solutions to genuine grievances of the area but we will not allow a tiny minority of thugs to cripple the country’s economy.

Notwithstanding the budgetary constraints, the current budget allocated two hundred and forty billion naira (N240bn) for highway projects against twelve billion naira (N12bn) in 2015. Many contractors who have not been paid for three years have now remobilised to sites.

In the meantime, government is going ahead with projects utilising alternate technologies such as hydro, wind, and solar to contribute to our energy mix. In this respect, the Mambilla Hydro project, after many years of delay is taking off this year. Contract negotiations are nearing completion with Chinese firms for technical and financial commitments.

The project is to be jointly financed by Nigeria and the Chinese-Export-Import Bank. In addition, fourteen solar power projects have had their power purchase agreements concluded. Hence the plan to produce one thousand two hundred megawatts of solar electricity for the country would be realised on schedule.

And in line with the objective of government to complete all abandoned projects across the country, the Rural Electrification Agency’s projects needing completion are provided for in the 2016 Budget. Bringing electricity to rural areas will help farmers, small scale and cottage industries to integrate with the national economy.

Roads construction and rehabilitation have taken off. The sum of twelve billion naira was allocated to this sector in the 2015 Budget, not enough even to pay interests on outstanding unpaid claims.

Notwithstanding the budgetary constraints, the current budget allocated two hundred and forty billion naira (N240bn) for highway projects against twelve billion naira (N12bn) in 2015. Many contractors who have not been paid for three years have now remobilised to sites. Seven hundred and twenty point five billion naira (N720.5bn) has so far been released this budget year to capital projects.

The Ministry of Power, Works and Housing has received one hundred and ninety seven point five billion naira (N197.5 bn). Work on the following highways has now resumed:

1. Dualisation of Calabar – Itu Road in Cross River/Akwa Ibom States;

2. Dualisation of Lokoja – Benin Road, Ehor – Benin city, Edo State;

3. Re-construction of outstanding sections of Benin – Shagamu Express way, Edo/Ogun States;

4. Expansion works on Lagos – Ibadan Dual carriageway, Ogun/Oyo States;

5. Rehabilitation of Onitsha – Enugu Expressway, Anambra/Enugu States;

6. Rehabilitation and Reconstruction of Enugu – Port Harcourt Dual carriageway, Abia/Rivers States;

7. Rehabilitation of Hadejia – Nguru Road, Jigawa State;

8. Dualisation of Kano – Katsina Road, Kano State;

9. Dualisation of Kano – Maiduguri Road, Borno State;

10. Dualisation of Azare – Potiskum Road, Azare – Sharuri Road, Bauchi State;

11. Rehabilitation of Ilorin – Jebba – Mokwa – Birnin Gwari Road, Kwara State;

12. Construction of Oju/Lokoja – Oweto Bridge over River Benue, Benue State;

Other major highways are in the queue for rehabilitation or new construction;

Already contractors have recalled about nine thousand workers laid off and government expects that several hundreds of thousands of workers will be re-engaged in the next few months as our public works programme gains momentum;

On railways, we have provided our counterpart funding to China for the building of our standard gauge Lagos – Kano railway. Meanwhile, General Electric is investing two point two billion USD ($2.2bn) in a concession to revamp, provide rolling stock, and manage the existing lines, including the Port Harcourt-Maiduguri Line. The Lagos-Calabar railway will also be on stream soon;

…Nigeria’s standing has changed beyond belief in the last 18 months. We are no longer a pariah state. Wherever I go, I have been received with un-accustomed hospitality. Investors from all over the world are falling over themselves to come and do business in Nigeria.

We have initiated the National Housing Programme. In 2014 four hundred million naira (N400mn)was voted for Housing. In 2015 nothing. Our first budget this year is devoting thirty five point six billion naira (N35.6bn) to this programme. Much of the house building will be private-sector led but government is initiating a pilot housing scheme of two thousand eight hundred and thirty eight units uniformly spread across the 36 states and FCT;

We expect these units to be completed within four to six months. These experimental Nigeria House model Units will be constructed using only made in Nigeria building materials and components. This initiative is expected to reactivate the building materials manufacturing sector, generate massive employment opportunities and develop sector capacity and expertise;

The programmes I have outlined will revive the economy, restore the value of the naira and drive hunger from our land;

Abroad, Nigeria’s standing has changed beyond belief in the last 18 months. We are no longer a pariah state. Wherever I go, I have been received with un-accustomed hospitality. Investors from all over the world are falling over themselves to come and do business in Nigeria. This government intends to make the business environment more friendly because we can not develop ourselves alone;

All countries, no matter how advanced, welcome foreign investments to their economy. This is the essence of globalisation and no country in the 21st century can be an island. Our reforms are therefore designed to prepare Nigeria for the 21st century;

Finally, let me commend Nigerians for your patience, steadfastness and perseverance. You know that I am trying to do the right things for our country;

Thank you and may God bless our country.

Muhammadu Buhari (GCFR) is president of the Federal Republic of Nigeria.

This is the text of President Buhari’s October 1, Independence Day broadcast.

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