Friday, January 13, 2012
NO MAGIC WAND!
Nigeria’s future is the subject of current sabre-rattling by the government and the people on two sides of the divide. With much tough-talking and misinformation on both sides, the real mission to secure Nigeria’s future and better our today is being relegated to the background. Gradually, more people are getting fixated on the price of petrol as the crux of the campaign. People are chanting “on 65 naira we stand”. The battle is not for the price of petroleum products. It is a battle for the rudder of the Nigerian ship, a wake-up call to the government, buckle up lest we sink!
Every casual supporter of the current people’s action against the government is likely to think this mass action is directed at Jonathan Goodluck’s government. Far from it, this pent-up anger is directed at the perennial recklessness of government and the impunity of asking the people of Nigeria to suffer more while a few opportunists in power acquire more booties of rulership. Because government is a continuum, an ongoing entity that inherits both assets and liabilities of its predecessors, Jonathan Goodluck must face the good luck of being the president of Nigeria at a time like this and facing the challenge. He must also think about it creatively, almost paternalistic in carving out solutions. He must see this not as an affront to his authority but as direct feedback from his constituents. He must harness this people power to undertake earth-shaking reforms he promised in the polity. He must enlist the people of Nigeria in fashioning out solutions to our collective challenges. The solutions must be owned by the people, signed off in a comprehensive charter and monitored by an independent body.
The solutions to Nigeria’s problems are multi-dimensional and require an eclectic mix ingenious solutions woven together into an integrated strategy to wean Nigeria off oil dependency, create an infrastructure paradise, diversify the economy, create employment and attack poverty. It is called the P.I.E.S strategy.
The P.I.E.S strategy stands for the four areas of implementation which will drive initiatives and tangible results to the people of Nigeria:
This plan is based on a phased withdrawal of the fuel subsidy over a twenty for month period during which the government must take pre-planned steps in the four areas of strategic importance. The plan starts by moving the price of petrol to eighty five naira immediately, one hundred naira in another six months, one hundred and twenty naira in eighteen months and one hundred and forty naira in the twenty-fourth month. This plan addresses the deficit balance of trust which the Nigerian government currently enjoys by allowing the people to see and evaluate the steps taken by the government before moving to the next level. It also allows the government to plan its revenue and phase its promises, rather than promise everything to everyone at the same time.
Why should we increase the price of petroleum products? It is clear to everyone that any form of subsidy compromises both both economic and fiscal success especially in a nation where corruption and inadequate monitoring allows a privileged few to corner the gains and enrich themselves. It is also clear that the economics of subsidy is not sustainable on the long run as it encourages inefficiencies and creates abracadabra econometrics. It allows people to feel at ease with our comatose refineries and import petroleum products for West Africa while Nigeria pays. The policy it too juicy to be transparent and has several points of failure and compromise.
It is also clear that the global economics of oil, the vicissitudes of the global financial system and the turbulence of the oil prices dictate that we must achieve internal price parity on the long run while ensuring that Nigerians get value for the volume of trade in this commodity. To achieve this, Jonathan Goodluck’s government must galvanise action in the following areas:
Nigeria’s political structure as it stands now is big, bogus and financially unsustainable. But it has constitutional backing! The constitution supports several duplicated functions and bodies. The government needs to consult widely and take action on the drain pipes of waste. The following questions are poignant:
· Do we really need a government this big ?
· Do we need really need a minimum of 36 Ministers ? Some of these portfolios are so narrow, they do not need a minister and some of them have two ministers. Water resources could be merged with Agriculture.
· Do we actually need 36 states? It is a touchy issue but I think we should explore the matter. Nigeria is just as big as one big state in America!
· Do we need all the ministries and parastatals ? We need to prune down the number of agencies. We have Nigeria Boundary Commission and a Nigeria Border Community Development Agency.
· Prune down the Budget! More than half of the 4.2 Trillion naira in the 2012 budget is pork, meant for needless, phantom expenses. I have looked at the budget provisions and it is appalling that we are spending close to two billion for food in the presidency. We are also buying furniture for the Vice President with over 300 Million naira. If we continue to budget like that, we will soon be bankrupt, even if we paid 500 naira for a liter of petrol. There is too much financial laxity in our budget and it cuts across every Ministry, Department and Agency.
· Reduce the perks of political office holders. It is an absurdity that our senators earn more than the American president. Let every political office holder take a 70 percent pay cut. Just to remind us, we are a borrower nation!
· We must limit the size of government cabinet at all levels.
· We must stop all frivolous foreign trips no matter the guise. We do not need to travel to get medical attention if we fixed our own hospitals.
· Create a fast-track court to try corruption cases and impose very stiff penalties combining jail time and forfeitures of illicit wealth.
· Can we have local government chair persons serve as members of the house(s) of assembly in each state, sitting on Mondays alone, without all the frills and thrills of the current theatre ?
· Create a special purpose account for the revenue accruing from the proceeds of the petroleum products and inaugurate an independent mix of technocrats, labour unions and international consulting firms.
· Implement the KPMG report on the NNPC. Privatise the NNPC through a joint venture agreement. Make the organization a lean and professional organization, able to compete with the oil majors.
The government must send a graduated constitutional amendment to the National Assembly and ensure that all of this in six months after the initial increase.
The sore point of Nigeria’s nationhood is her underdeveloped infrastructure base. The government must come up with a twenty four month infrastructure development plan that will change the current level of infrastructural decay. The government must prioritise the following projects into short term, medium term and long term objectives:
· Category One Roads Repairs: Federal Roads must get immediate attention. Six months from the implementation of the first phase of subsidy renewal, all category one roads must be repaired in their current state while we plan on expanding or building new ones within 24 months. The Lagos-Ibadan Expressway, the Sagamu-Benin Expressway, the Onitsha-Enugu-Port Harcourt and the Abuja-Kaduna-Kano expressway are in this category
· Our Airports and Seaports require urgent attention. They should be given to international firms to build, operate and transfer. We should have port capacity to serve the entire West African sub-region and make our airports aviation hubs in West Africa.
· We must expand our transportation options beyond roads. We must invest heavily in the rail sector and include safe marine travel in our transportation model. Each state should come up with a unique transportation model and draw funds from the “subsidy fund” to implement under supervision.
· Our petroleum jetties, stations and pipeline require urgent attention. They should be phased for attention. Some of them require expansion (Atlas Cove Jetty) while some of them require outright redevelopment (Mosimi Depot)
· Health and Emergency Services must be shored up immediately. Just like the PTF interventions, we must highlight primary, secondary and tertiary health institutions for immediate assistance. We must identify some specialist institutions for special capacity building and equipment support to become areas of competence in healthcare, capable of competing with renowned institutions in the world. Once this is achieved within twelve months, political office holder will not be allowed to travel out of Nigeria, even for health reasons. We must institute and implement a robust emergency management agency, capable of responding to minor road accidents and major natural disasters.
· Power projects must be prioritized and pursued for completion with vigour. The government will publish a list of power projects to be commissioned within a cycle of subsidy withdrawal. These will include all gas-powered turbines, dams and coal-powered power plants. As government has started deregulating the sector, a strong monitoring mechanism should be put in place to ensure that Nigeria and her citizens get the best value from investors in terms of investment and service quality.
· Education is an area of critical need. The government must create a comprehensive development plan for Nigerian universities with the aim of making at least six Nigerian universities to be the best in Africa in the next ten years. This requires a roadmap which must be properly articulated and implemented.
It is clear that the economy needs to be diversified to move away from the mono-economic lame duck that we currently have. The government needs to implement the following:
· Make it easier to start a company in Nigeria. We are currently one of the worst places to start a business.
· We must provide a mix of incentives for SME’s by providing low-interest loans for this sector
· We must provide adequate incentives for the agricultural sector with an understanding of the potential of the sector to become a very important mainstay of the economy.
· We must revisit the role of export promotion agencies and banks, providing access to loans for exporters and monitoring for actual implementation.
· We must create hubs for technological advancement, innovation and entrepreneurship.
The withdrawal of the subsidy will not be complete until the government targets specific programmes at the vulnerable poor and aim to alleviate the pains. The government must do the following:
· Provide fuel vouchers for indigent people who register with their state government.
· Provide transport vouchers for minors and senior citizen who are above 60 years of age
· Run campaigns for Nigerians to share transportation and use less fuel.
· Run campaigns to encourage Nigerians to use public transportation.
This plans takes into the Nigerian refineries into consideration as the government has signed agreements for their Turn Around Maintenance. When they come up and start refining again, it still possible that the price of petroleum products will fall due to the forces of demand and supply.
Just a plan to consider, because there is no magic wand!