Policies should address inequality, enhance welfare –Shamsuddeen Usman

 
Mon Jan 21st, 2019 - Abia
 

In his presentations, the former Minister of National Planning and Chairman of the 2019 Vanguard Economic Discourse, Dr. Shamsudeen Usman, emphasised the need for government to make policies that will address inequality and enhance welfare of the people.

Shamsuddeen Usman

He stated: “From the practical point of view, let me tell you some of the intellectual and other resource that we have to use to address some of these issues. Yes I was Minister of Finance when we were reporting six percent, eight percent growth and setting target of double digit GDP growth. One always faced the embarrassment particularly from the media at that time; that you guys are talking of all these your figures but the average Nigerian is not feeling it.

“So when I was moved from Finance to National Planning one of the three targets I set for myself was: I am going to address that issue. So how did we start? We started by working with other people, colleagues and particularly with the National Bureau of Statistics, to say we must generate numbers that will guide policy so that when government is doing something objectives are very clear and specific and results measurable.

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“So we started, first of all, with the measurement of GDP itself in Nigeria. Intellectually from the economic point of view the difference between economic growth and economic development has been dealt with and has been mentioned already. Even the way we were measuring GDP, there are two fundamental problems: One was that a large sector of our economy is actually excluded in the measurement, that is, the informal economy. What we call the black economy which is a huge percentage of Nigeria’s population, so we are even under-measuring the GDP itself.

The second one was that the data base that was being used was in the 1990s, the time that we didn’t have GSM; look at how GSM has transformed this economy. Now you are measuring that economy using base data that even did not exist. So we did embark on the issue of rebasing the GDP to bring it to a more recent period where it is more reflective. If you are measuring and comparing, then you are doing it on a more reasonable basis.

Gross national income

“Then, there were issues with Gross National Income, GNI; so what did we focus on? Essentially, the Sustainable Development Goals, SDGs and Human Development Index, HDI, and I think, for people to understand, I think the keynote speaker mentioned this, but there are three basic ways in which the HDI is measured: basic needs, a long and healthy life; access to knowledge, a decent standard of living. So you can now see that we bring it down to the things that are measureable, imaginable. Now these are the things every Nigerian should be entitled to.

“Then, we also have to look at the issue of inequalities, and there is what we call HDI or IAHDI Inequality Adjusted Human Development Index. “There is also gender inequality; we worked on the gender inequality. Now the issue of poverty was also a typical measure that was being used. Until then they say any person that is earning not more than two dollars per day is having the problem of extreme poverty, so the person is extremely poor.

“Now again, from a practical point of view of making policy, addressing the problem of that poverty, that measurement is completely inadequate. “So what did we do? We started working on something that is called multi-dimensional poverty index. Now, the multi-dimensional poverty index addresses different causes of poverty and the point is that poverty is more than the lack of income, sometimes you can actually be poor if you are living in an area that you have money but there is no power. So you are actually a poor man as far as power is concerned.

“If you are living somewhere and there is no health facility there, you may be the richest man in that village but you should be counted as poor in terms of health facilities. Now the development of this poverty index was helpful and this has been, to a point, helpful. Let me give you some of the measures that we used to address the standard of living index that we developed, about six to seven of them:

Lighting – we did household service across the whole country, to villages, to rural areas, to try to find average household. The first item we asked, do they have electricity? What kind of lighting system are they using? Is it electricity or not?

Water – do they have access to safe drinking water?; Sanitation – did they have improved or standard sanitation or not?; Housing – The type of housing, even to the type floor that they have in their house – is it a tied floor, a sand floor?

Cooking fuel – What system? Are they using dung, wood or charcoal, or modern cooking system?

Assets – Then on assets we had another definition; if you have less than two of the following assets then you are designated as poor: car, radio, television, motorbike, bicycle, refrigerator are some of the assets.

“Unemployment – if you have an adult in the household, between 15 and 64 years that is looking for work and didn’t find it, then that household is designated as being unemployment poor.

“Child mortality – if a family has lost some one of less than five years old in the last several years, then it is at poverty dimension again; because it is the inability to get medical care to take care of the children. We also have children out of school; so school attendance etc is a problem too.

“So these are different dimensions of poverty. So you can see how we had to bring it down to practical measures. “And then of course we worked on gender inequality index. There are figures to this. If you check the National Bureau of Statistics, then if you look at the poverty measured by GDP, it is very clear, the North-West and the North-East are the most poverty-stricken part in this country. “But if you use some of these other indices that we have developed and worked on, you will find some interesting differences, for example, states like Ebonyi, Gombe, Jigawa, Katsina, Kano, Ondo, Plateau, Rivers, Zamfara, FCT, are much better than some others that you thought will be better than them, like Abia, Bayelsa, Cross-river, Delta, Edo, Ekiti, Enugu, Imo, Kaduna and Kwara.

“So the differences show. Now the advantage of doing this is that you are able to actually identify what are the issues in different parts of the country and then set economic policies with very clear targets. I remember when we started the performance-based measurement system where I had to sit every minister in a panel, the first question I asked each minister is; ‘what is the purpose of your ministry?’

“Because the objective of government is to improve the welfare of the citizens, some of them were lost when I asked them, ‘what is the purpose of your ministry?’ I said, ‘well, let’s start from the basic; that the overall objective of the government is to improve the welfare of the citizens’.

Lack of continuity

This is how we worked on development for each ministry, for each minister, each department. We started a system where at every federal executive council, a minister will come with a report of his ministry activities on quarterly basis, and showing how he achieved his development targets.

“But unfortunately, the biggest problem of Nigeria is lack of continuity. Are they concerned about these issues? From my own assessment unfortunately they are not aware. We try to make as many people aware as possible. Since leaving government, I have set up my own consultancy and I have worked for, at least, two state governments. I’m working for other, particularly in the development communities. But for Lagos and Bauchi state governments, we did a similar exercise where we developed the framework for their Ministry and Department (M&D); so that you actually track these performance indicators one by one on a practical basis”.

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source: Vanguard