Review of the Nigerian 2016 Change Agenda
As part of my bid to understand this crazy budget season that just passed (well, it's kind of still going on isn't it), I went ahead to read the 2016 Change Agenda: A Citizen's Guide To Understanding FGN Economic Policy & The 2016 Budget, prepared in April 2016 by the Federal Ministry of Budget and National Planning.
Imagine my disappointment.
My disappointment stemmed from two main issues - firstly, with the government talking so much about our glorious return to agriculture, I thought they would back up their talk with the Naira bills that actually show commitment. Not so. Secondly, with all we've continued to experience because of lack of power and honest to God zero production one fateful day earlier in the year, I thought they would allocate a lot more funds to power generation so we can address our energy emergency once and for all. Not so.
As you can imagine, I saw so many other items which were out of sync in this document that I truly wonder whether our leaders know where they want to steer Nigeria. It's disconcerting.
Now, here's what I noticed:
- I liked the emphasis on public private partnerships; this speaks to the spirit of collaboration that has skyrocketed this year, especially with the Sustainable Development Goals (SDGs) and the signing of the Paris Agreement.
- There's a disconnect between the six priority areas and the six strategies and six pillars that are supposed to underpin them. The pillars and strategies may have been more in sync if they were developed by grouping them according to the stated priorities.
- Lumping security with corruption as one budget priority or with policy and governance as a strategy almost makes security fade into the background. But security is a big enough threat to warrant it's own focus. What's more, among the actions for the strategy, digital identity management (critical for security) is not mentioned once.
- Power really deserves its own thematic area instead of being lumped with rail and roads.
- For actions related to roads, there is unfortunately no focus on opening rural access (or at least encouraging state governments to do so) which can facilitate transport of agricultural products. Likewise, for actions related to power, there is no explicit mention of supplementing fossil fuels with renewable energy (even though a specific relatively small amount of the budget is dedicated to renewables, which is good).
- Under diversifying the economy, there is no action targeted at small-holder farmers and artisans. But the bulk of our agricultural produce is from small-holder farmers, so this oversight is potentially detrimental. Still here, I would have loved to see some action, not only on 'high technology' but on low and appropriate technology.
- The focus on rail in key locations (like Kaduna-Abuja, Ajaokuta-Warri) is a welcome development as it would enable mass and cheaper transit of both people and goods.
- Under oil and gas reforms, there is no mention of removal of subsidies for multinationals in order to maximize proceeds from that sector (something ActionAid Nigeria has been campaigning about). But I do like that execution of a roadmap for gas development and flare elimination is explicitly stated.
- For Ease of Doing Business, I find the actions dedicated (only two) grossly inadequate. They missed so many issues - for example, increasing credit and low interest loans for SMEs (facilitated through policy), policy of tax breaks for newly registered SMEs, simplifying the process of registering businesses and registering for tax (e.g. one stop e-service portal), increased focus on grants/loans/competitions/etc. for SMEs and the informal sector, making it easy for foreign investors to get data and information, etc.
Now how about the budget itself?
- The key assumptions for the budget are mainly based on oil, but we are supposed to aim past this. How about estimates for tax collection rate, debt collection, Official Development Assistance, etc.? Unfortunately, the only assumption made that turned out to be slightly favorable was the oil price benchmark at $38pb where oil is now $47.15. Daily oil production was estimated at 2.2mbpd (max. capacity is 2.5mbpd so this is overly optimistic in the first place), but with the Niger Delta Avengers, this estimate has dropped significantly to about 1.4mbpd. What's more, exchange rate assumed at N197/$ is now floated to N282.75/$ and GDP was actually negative growth rate last year and an average of about 2.4% growth rate instead of 4.2% as assumed. You can see how much of a disadvantage our budget has already put us, so in reality, we have to expect that the funds released would be less than budgeted; bad for all round for the priority sectors.
- My final issue with this Change Agenda is that there is no indices to be measured and no definition of success. How would we then know when we have achieved a satisfactory state in any of the priority areas? We need to know this and know what to measure in order to assess progress.
I really do hope that more work will be put into clarifying and detailing this agenda, with its priority areas, strategies and pillars. I feel it requires some serious review and needs to really be focused - focused enough to be acted upon towards the actualization of a clear vision, and for these actions to be measurable.