Permit a digression. The recent hike in price of electricity was actually unnecessary because there has not been any significant and sustainable improvement in electricity distribution since electricity distribution was sold out and despite federal government grants to the DISCOs in 2013. One can infer that these DISCOs are part of the drain pipe on the nation. Nowhere else in the world has a government privatised businesses and re-financed such businesses. The DISCOs can only distribute electricity that is supplied, therefore, the government should rather promote electricity production than support price hike by distributors.
The governments or consumers should not be subsidising electricity distribution firms. Also, the ban on importation of small generators(a.k.a I beta pass my neighbour) on the grounds of creating environmental hazard was not well -thought off because present owners of such generators will rather use them for longer period with greater hazards than throw them away to buy new ones.
Such generators, apart from being used for economic survival by owners of micro businesses, assist greatly when used in homes, in promoting social and educational enlightenment. Indirectly or unnoticeably, it acts as birth control measure, as it keeps poor families, who are baby manufacturers, awake most part of the night watching films on various channels of their television sets. Government should rather encourage the producers of this category of generators to establish production outfits in Nigeria which invariably will generate some employment and reduce importation, consequently lowering pressures on foreign exchange.
The issue of electricity takes us to employment generation through revival of the country’s manufacturing sector. Data from the National Bureau of Statistics and the Manufacturing Association of Nigeria have shown that contributions of manufacturing sector to the GDP had declined precariously since the 1980s and capacity utilisation of manufacturing firms that exist today are constantly below 50 per cent with high cost of production due mainly to absence of power. The absence of viable manufacturing sector is responsible for high rate of unemployment in Nigeria.
The manufacturing sector generates employment through forward and backward linkages. As the sector grows, it draws along the raw material subsector, particularly the agricultural sector and pushes on the ancillary services unit (banking, shipping, insurance, accounting, etc.) and commercial sector which sells the outputs.
President Muhammadu Buhari, in the budget, said, “Nigeria’s job creation drive will be private sector-led to be encouraged by reduction in tax rates for small businesses as well as subsidised funding for priority sectors such as agriculture and solid minerals.” Any budget or development plan that intends to promote employment but does not make provision for growth in the manufacturing sector is deficient in a major ingredient of employment generation. If we recall that a number of large manufacturing firms moved out of Nigeria to Ghana for example, in order to benefit from improved power supply in that country, then Nigeria must not only improve electricity supply today but over a long term period. Measures to generate employment through other sectors, be it in education, mining, service/commercial or even agriculture and small/medium scale enterprises can only be complementary to the industrial sector. That is why Lagos State, regarded as the most industrialised, is able to generate more employment, income and government taxes than other states in Nigeria.
This brings us to the issue of provision of food for pupils in schools and employing half-a-million teachers in the budget. The need to employ more teachers is not in doubt but the category of teachers to employ is more important. Most public primary schools, if we are to judge by what one observes in the South-West Nigeria, have few students per class than in private primary schools while most public secondary schools are over-crowded, since many parents cannot afford the cost of good quality private secondary schools. Can food supply return the students to public primary schools? Some of the major reasons for fall in enrolment in primary schools have to do with low quality teaching and poor learning environment, not food. The low quality teaching can be attributed to low or irregular payments of salaries to quality teachers (many of them attended teacher training schools or even have NCE certificates) who, in order to live well and pay school fees of their children attending quality private schools, engage in moon lighting. Thus, there is lack of dedication on the part of the teachers.
I suspect that it is only in Nigeria, among countries with our level of income, that teachers use chalk board to teach rather than white marker boards. The quality of such chalks can cause cancer! The funds for free food in 2016 budget should go for renovation of schools to provide conducive environment for teaching and learning. In order to fulfil campaign promises, which to me is very important, free food can come later, in another two or more years, when our agricultural sector can produce food crops and fruits that should be served in these schools. On no account should Nigeria serve imported food and fruits in primary and secondary schools. If schoolchildren are going to be involved in gardening and agriculture becomes a major subject in General Studies in tertiary institutions to achieve goal of self-sufficiency in food production, so be it. It should be business unusual in all spheres of endeavour, for the country to move forward.
More importantly, appropriate ministries must work out long term cost implications of all welfare schemes, including free food and payment of N5,000 to unemployed youths, to avoid a premature death of the programmes. Rushing to implement these programmes could therefore be disastrous for the economy and the government.
One is happy to note from the statement of the Minister of Finance, Mrs. Kemi Adeosun, that “borrowings in 2016 will be primarily channelled to fund capital projects” but my understanding is that such borrowings will largely be non-cash based. That is, some projects will be carried out by foreign firms, under bilateral or multilateral agreements, on credit basis. Actually, no business expands without some forms of credits and that it is why most small and medium scale enterprises remain at low production level for over 20 or more years, as they continue to groan under heavy weight of scarcity of credit or oppressive interest rates on loans. By the same token, loans are necessary for expansionary fiscal policy that is required when an economy is in depression, as it were presently. That is, we need loans.
Misapplication, misappropriation and outright stealing of domestic and foreign loans in the past continue to give Nigerians concerns about demand for and accumulation of loans. So, there is justification for the apprehension and this government, in spite of seeming acceptability of some level of trust, still needs to demonstrate high level of accountability and transparency. One way of doing this is to make sure that people found guilty of corruption, either in the opposition parties or those who have scaled the fence to join the ruling party or even its bona fide members of the ruling party are given adequate sentences without plea bargain. Such a situation will arise in the course of running the 2016 budget since the cases are still evolving. It is therefore imperative for the government to note public apprehension about cash-based loans and adopt project-based credits.
By and large, there is a need for some ministers and their ministries to work together to achieve the expected goals of the 2016 budget. Fortunately, there is no Super Minister or Coordinating Minister of the Economy, such that all ministers operate at the same level and the need to share loads and ideas become compelling. In this connection, continuous interactions must take place in the budget implementation period primarily between and among such ministries as Finance, Budget and Planning, Agriculture, PW&H, Transportation and Employment. By the same token, the CBN, NBS, Securities and Exchange Commission, MAN, Nigeria Labour Congress, Nigerian Association of Chambers of Commerce Industry, Mines and Agriculture and other private sector agencies must be ready to supply data and share ideas with the legislature at this budget authorisation stage and with the ministries at the implementation stage, for the desirable economic change that we all hope for.
- Concluded
- PUNCH
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