The state of a nation’s economy largely determines the quality of life enjoyed by its citizens. With high unemployment rate, rising poverty rate, epileptic power supply, huge infrastructure deficit, soaring cost of fuel subsidy and problematic foreign exchange rate management, Nigerians are desirous of a President who understands the workings of the economy and will be able to make the economy work for them. In the continuation of a series that has featured both Alhaji Atiku Abubakar and Senator Bola Ahmed Tinubu, presidential candidates of the People’s Democratic Party (PDP) and the All Progressives Congress (APC) respectively, SULAIMON OLANREWAJU x-rays the economic plans of Mr Peter Obi, the Labour Party’s presidential candidate, as expounded in presentations and press interviews.
Mr Peter Obi, the Labour Party’s presidential candidate is not just skilled in wealth creation and wealth multiplication; he is also a master of wealth management and conservation. As a businessman, he created wealth not just for himself but a whole lot of others. As the governor of Anambra State, he did not just manage the resources of the state; he also multiplied same and conserved it for future generation.
On his watch, Anambra State became the first sub-national in Nigeria to commence Sub-Sovereign Wealth savings. By the end of his tenure, he was said to have left the equivalent of $500million in investment in the state in both local and foreign currencies, including $156million in dollar-denominated bonds.
By creating an enabling environment, many local and international companies established their presence in the state. SABMiller, the second largest brewing company in the world, built its first Green Field facility in Anambra State. Obi’s administration was the first in Nigeria to do poverty mapping, as a guide for the effective implementation of its poverty-alleviation strategies.
The former Anambra State governor has promised to build on his accomplishments as a state governor to make Nigeria stronger economically if elected as president in the February 25, 2023 presidential election. He has promised to ensure that the nation’s resources are used to bring out the best in the citizens and prepare a great future for them. To achieve his idea of a better and more economically viable Nigeria, Mr Obi has identified some priority areas on which he will concentrate.
Power sector reform
At different fora, Obi has spoken about his plan for the power sector. While speaking at a programme organised by the Lagos Chamber of Commerce and Industries (LCCI) for presidential candidates, the LP candidate said, “Even though I am aware that power has been moved from exclusive list to the concurrent list, we will go beyond it; we will aggressively support the private sector to invest in the power chain through a multifaceted approach particularly the transmission infrastructure.
“As we all know, two components of the power sector, generation and distribution, have been privatised and liberalised leaving the most critical component, transmission, in the hands of government which is causing inefficiency and darkness.
“We will, therefore, vigorously pursue the liberalisation of the transmission infrastructure in addition to a robust power mix- embedded power and renewable energy.”
Obi, who stressed the importance of regular electricity supply to economic growth, added that his administration would support the existing companies in the distribution and generation arms by ensuring adequate gas supply to the companies.
He also said that “We will ensure that the generation, transmission and distribution are properly aligned. We will ensure clear certainty of policy and regulatory environment for them to operate. We will support them with access to funding that is attractive and deal with some tax incentives.”
Obi added that his administration would limit government involvement in the power sector to providing sovereign guarantees and policy clarity and certainty that would attract private sector investment.
He continued, “I am not saying that I am going to be a superman but I am going to bring the political will to follow the rule of law… I am offering the ability to do the right thing and ensure that it is done going forward from 2023.”
On petrol subsidy
The LP presidential candidate described the petrol subsidy as an organised crime and promised to bring it to an end by encouraging the setting up of privately owned refineries.
He said: “Petrol subsidy is an organised crime. I have said that 60 per cent of the subsidy is corruption. That will be dealt with decisively. Secondly, we will aggressively start to ensure the promotion of local refining that is private-sector driven and supply them crude oil in Naira to refine for domestic consumption.”
He added, “There are two elements of subsidy; the corruption component and the real subsidy component. The oil subsidy arrangement as it stands is fraught with criminality. It is unacceptable. For corruption, we will deal with it decisively which will reduce the subsidy cost by over 60 per cent. There will be weighted measures and counter-balance policies and programmes to cushion the impact of the removal of oil subsidy, if and when it is removed. The difference is that now, only some sacred and self-entitled few benefit from the oil subsidy. That narrative will change.
“We will support local refining for domestic use and priced strictly in Naira. Starting with all government vehicles, we will transition to gas-powered cars.”
On oil theft
Obi said the case of oil theft had increased in the country because there is collusion between some Nigerians and their foreign collaborators.
He said, “I believe in continuity in governance. But each extant policy must be considered and if need be, reviewed on its merit. The oil theft is not petty pilfering. It is an organized crime by a syndicate that involves a certain degree of sophisticated intelligence and logistical arrangement. We must admit that oil theft is happening because there is domestic and external collusion. The government and the people have the collective responsibility to protect national assets. On my watch, those responsibilities will be accorded high priority.”
On tackling unemployment
The former Anambra State governor promised to create jobs for unemployed Nigerians. He assured Nigerians that he would unlock the nation’s greatness and transform her from a consuming country to a producing one.
Underscoring the importance of job creation, he said, “Once jobs are created and youths are gainfully engaged and made productive, insecurity would be reduced to the barest minimum and will no longer be a lucrative business.
He said, “We are challenged by high youth unemployment, which stands at 33.3 per cent; 54 per cent for the youth; and 20 million out-of-school-children. We must give this country back to the Nigerian youths. Half of our 200 million people are below the age of 30.
“Harnessing our national youth strength and demographic dividends intelligently must start with curbing the high youth unemployment and creating funding access to enable our youths to become entrepreneurs and drivers of our Small and Medium Scale enterprises (SMEs).
“We will work to bring down the unemployment rate to lower than 20 per cent over the next four years if elected. Part of our objectives on the economy will be focused on supporting job creation given its impact on the economy as well as poverty alleviation.”
Another strategy Obi hopes to deploy to reduce unemployment is agriculture.
The presidential hopeful said, “We want to bring a transformative government. The greatest asset of Nigeria is in the north. The greatest asset of Nigeria is vast uncultivated land in the north but this land has been taken over by bandits. We are going to unlock Nigeria.
“We will bring Nigeria back to life. All banks will be shareholders in the Bank of Agriculture where our farmers can directly access loans.”
On turning Nigeria to production centre
On several occasions, Mr Obi has promised to transform Nigeria into a producing country. He explained that this would be accomplished by working to the strength of each state and zone.
Expatiating on how this would be handled should he win the 2023 presidential election, he said: “When I say we are not a producing country but a consuming one, it is true. For instance, Borno is a state situated on 70.9 square kilometres of land and today we are talking about Sambisa Forest. It is an asset for Nigeria. This is because Sambisa Forest is twice the size of Israel and it is an agricultural land that can give us food.
“If you go all over the northern part of Nigeria you will see that Nigeria is blessed with land that can give us food but we are waiting to share money from oil. How much do we generate from oil? Our total export as a country is $30 billion including oil, yet we live in a country of over 923,000 square metre, almost one million square kilometers.’’
The LP flag bearer said that Nigeria, when compared with Vietnam that lives on 331square kilometres of land and has a population of 100 million, is lagging behind because Vietnam’s export is $312 billion dollars yearly while Nigeria with almost three times the land space of Vietnam and twice its population could not do 10 per cent of Vietnam’s exports.
Obi added that Niger State is two-and-a-half the size of The Netherlands, yet the state could not feed itself or the country whereas The Netherlands’ agricultural export for 2021 was $120 billion.
He promised to work with states all over the country to identify materials that could be developed to boost the economy and make the state less dependent on allocation from the federal government.
On borrowing to fund infrastructure
Obi said though he would emplace a regime of fiscal discipline, he would not hesitate to borrow to fund infrastructure if found necessary.
He said: “There is nothing wrong in borrowing. The difference is that if you borrow for consumption you will have a problem. But if you borrow for investments your economy will grow. The reason things are not working here is that we are borrowing for consumption.
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“Debt is a component of development but it must be used efficiently and effectively for purposes that will bring value so that what we get from the investment will be enough to service the debt.”
On multiple exchange rate system
Obi said, “As part of our monetary policy, we will seek to reestablish the independence of the CBN; and commit to a credible and transparent plan to normalize the exchange rate and bring inflation to single digits.
“We will remove import and forex restrictions and insist on a single forex market. The current system penalizes exporters who bring in forex by forcing them to sell at a rate that they are unable to source for forex when they need to purchase forex. This multiple exchange rate regime encourages capital flight and deters investment, which has further worsened Nigeria’s forex situation.”
He added, “Despite the exigency and convenience which the two-tier foreign exchange regime offers, it has become an albatross. Hence that arrangement will be critically reviewed, adjusted or even eliminated. We will explore ways of cushioning the forex demands by mainstreaming those components of Diaspora remittances that remain opaque and informal. With proper policy and planning, we can expect to boost and leapfrog the current $20 billion in remittances to $40b to $60b annually. That will translate to about 14 per cent of our total GDP.
On arresting capital flight
Obi, who praised the nation’s techpreneurs who are attracting foreign funding, said that his administration would work towards creating an enabling environment for the businesses to flourish.
He said, “We will create an enabling environment for our startups to thrive. Beyond creating access to easy funding, we will enforce the legal framework protecting foreign investors and their indigenous partners. This is the only way to improve our business environment and temper capital flight.”
Mr Obi, being a businessman and a former governor, appears ready to hit the ground running if he wins the presidential election on February 25, 2023. However, some of his economic plans need further reflection. For instance, the candidate promises to reduce unemployment rate from the current 33 per cent to 20 per cent in four years, but he did not provide full explanation on how he hopes to achieve this apart from talking about providing funding for youths to go into entrepreneurship and agriculture. These strategies appear limiting, and reducing unemployment by 13 per cent in four years with these strategies looks overambitious.
Similarly, his plan to tackle multiple exchange rate appears unrealistic given the low level of productivity in Nigeria.
However, the economic plan appears good enough to take Nigeria out of the lderness even if it does not take it to the Promised Land.
source: Tribune
