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National Economic
Empowerment and Development Strategy (NEEDS) (II)
Contd. from last week
Strengthening the skill base
Nigeria’s future prosperity depends on producing children who are well
prepared to take their place in tomorrow’s society. The NEEDS strategy
therefore seeks to implement the Universal Basic Education law in order to
increase school enrolment and provide better schools and colleges and
better-trained teachers and trainers. Specifically NEEDS will ensure that
more funds are spent on:
• Providing courses that build vocational and entrepreneurial skills
• Building technical schools and buying equipment
• Improving training and exposure to information and communication
technology at all levels
• Making French compulsory from primary through secondary schools
• Providing special distance learning programmes for specific segments of
the population, including nomadic peoples.
NEEDS will promote strict adherence to the University Autonomy Act, which
permits universities to attract private-sector funding and institute new
mechanisms to cover their operating costs. The courses taught at
universities will be changed to reflect the priority demands of the economy.
Science and technology, particularly information and communications
technology, will be mainstreamed. Innovative approaches will be developed to
ensure that lecturers have access to continuing professional development so
that they remain at the cutting edge of their disciplines. Wages will be
linked to performance, and students will be exposed to mobilization and
reorientation campaigns that emphasize the critical importance of hard work,
discipline, and selfless service.
Protecting the vulnerable
In addition to these comprehensive measures, special attention must be paid
to particular vulnerable groups. NEEDS provides a safety net that will
prevent people from becoming poorer and poorer. Special programmes will
protect the rural and urban poor, people living with HIV/AIDS women, widows
and widowers and victims of ethnic violence, crime, unemployment or loss of
income.
Promoting peace and security
To promote peace and security a national action plan will:
* Reform the security sector.
* Re-orient police officers to offer more people friendly service.
* Establish an early warning and response system that will detect conflicts.
* Provide a fairer allocation of revenues and responsibilities between
federal and state governments.
* Mainstream conflict prevention by establishing structures and processes
that promotes a peaceful culture.
Promoting private enterprise
If the private sector is to become Nigeria’s engine of growth, its motor
needs to be primed. The government has to make certain fundamental changes
to create an environment in which business will thrive. In the language of
economists, it has to create a macroeconomic framework—a kind of
overarching, national housekeeping budget—that will ensure that Nigeria
makes the most of what it earns as a nation, that it spends only what it can
afford, and that all levels of government use the same budget.
NEEDS proposes that the government not spend more than it takes in, not pay
for unbudgeted programmes or projects, not purchase goods or services that
do not contribute to Nigeria’s development. It also suggests increasing tax
revenues to pay for basic services. Under NEEDS the government will try to
stabilize the value of the naira and create a system to ensure that it has
sufficient foreign exchange to buy the goods it needs from other countries.
Under NEEDS, the government will:
* Diversify the economy away from oil and solid minerals in order to
increase economic stability and generate jobs.
* Privatize, deregulate, and liberalize publicly owned industries to promote
competition, expand industries, generate employment, create wealth, and
receive value for money.
* Develop infrastructure, particularly power generation, transport and
telecommunications infrastructure, to stimulate growth of the private
sector.
NEEDS proposes the following strategies to stabilize and rationalize public
spending, increase domestic savings and private investments and address the
issue of public debt:
* Adopt a medium-term expenditure framework to ensure predictable and
sustainable public financing at all levels of government.
* Implement tax reforms to increase revenues.
* Enact a Fiscal responsibility pact to ensure the coordination of
government expenditure across all tiers of government.
* Adopt an oil price—based fiscal rule and a fund for excess revenues from
crude oil sales.
* Adopt a public expenditure rule that prohibits the deficit from exceeding
3 percent of GDP.
Many of Nigeria’s laws and regulations stifle private enterprise. NEEDS
seeks to simplify import and export procedures to make importing and
exporting a less daunting prospect and to increase the turnover of
businesses in the sector. The reform programme will also:
* Increase access to credit.
* Implement a coherent and consistent trade policy.
* Implement the comprehensive tax reform bill to eliminate multiple taxation
and remove barriers to the growth of a vibrant private sector.
* Hold regular dialogue with private sector operators and participate in
economic planning based on market principles.
* Grant land use rights and facilitate private sector development in the
area of social and environmental responsibility.
* Empower indigenous small and mediumsize enterprises by imposing minimum
quotas for local produce in tendering and procurement processes.
Improving infrastructure:
Reforms in the transport sector aim to complete the 3,000kilometre network
of roads and strengthen the Roads Maintenance Agency, which oversees the
repair and rehabilitation of some 500 roads. The government aims to develop
the county’s sea ports to handle modern shipping activities, upgrade the
railways, and achieve total radar coverage of Nigerian airspace.
Power alone accounts for 5 percent of new business start-up costs. Simply
providing more and more reliable power could triple the amount Nigerian
industries produce by 2007. Under NEEDS the National Electric Power
Authority, a government enterprise, will be unbundled into distinct business
units, which will eventually be privatized. The industry will be regulated
by a new regulatory agency, and a fund will be set up to increase access to
electric power in rural areas.
Many people in Nigeria spend one to three hours a day collecting water for
domestic use. Providing them with access to safe water can offer them the
chance to use those hours in more economically productive activities.
NEEDS aims to increase access to safe drinking water for at least 60 percent
of the population.
Promoting industry
NEEDS proposes developing industrial sector by relying more on local
resources and less on imports. It will be guided by a local research and
development strategy that seeks to promote science and technology-based
small and medium size enterprises. These enterprises will be developed in
science and technology parks and technology incubation centres. They will
focus on food processing, industrial chemicals, information and
communication technologies, biotechnology, electronics and spaces
technology, and energy, oil and gas.
A major policy thrust of NEEDS is the idea that Nigeria should stop
squandering the natural resources by selling them as crude products. The
more these products can be processed within Nigeria, the more jobs they will
create and the more export earnings they will generate”.
NEEDS sets ambitious targets for the sector: 7 percent annual growth, 70
percent capacity utilization, and 70 percent of investment made by the
private sector by 2007.
Improving agriculture
Agriculture is Nigeria’s second-largest source of national wealth, after
oil. NEEDS will promote the cultivation of improved, higher yielding crop
varieties and provide extra support to agricultural research and training.
NEEDS aims to encourage business interests to provide credit and supply and
distribute agricultural inputs, such as seeds, fertilizers, and machinery.
Silo complexes will be refurbished to increase the capacity of the food
reserve programme and move closer to food security.
Promoting other sectors
NEEDS will promote programmes that develop information and communication
technology, tourism, and entertainment and financial services. Proposed
trade policy reforms will aggressively promote exports and harmonize tariffs
with regional trade organizations while protecting local industries. The
plan also envisages developing a deep sea port free trade zones, and a
shipbuilding facility in order to boost coastal shipping, international
trade, and regional integration.
Changing the way the government does its work
NEEDS seeks to restore trust in government as a facilitator of development,
an institution that creates or maintains an environment that enables
Nigerians to implement livelihood strategies and achieve personal goals. The
government has to stop trying to run businesses and redirect its effort to
providing essential services. It must sell off the businesses currently
under its control in order to free up labour and funds that it can use to
improve basic services.
Changing the way the government works is a colossal task, but NEEDS will
build on processes that have already begun to make a difference. The
administration has already put several essential building blocks in place.
In privatization and liberalization, the government has auctioned licences
and begun the process of attracting private investment in areas such as
power generation and infrastructure development. To prevent nepotism,
favouritism, and corruption, the government has transformed the process by
which private companies bid for government contracts. It established the new
Budget Monitoring and Price Intelligence Unit, which reviews, oversees, and
certifies government contracts to ensure value tor money. Commonly known as
due process,” this mechanism has already saved the treasury hundreds of
millions of naira.
The government has also instituted massive anti-corruption campaigns and
established the Independent Corrupt Practices and Other Related Crimes
Commission (ICPC) and the Economic and Financial Crimes Commission, (EFCC)
which outlaw corrupt practices. The government is committed to the
Extractive industries Transparency Initiative, which encourages oil
companies to fully disclose revenues and costs of operations. The
government’s televised auction of digital mobile licences was hailed as one
of the most transparent licence auctions in the world.
Under NEEDS, the government will build on these efforts by:
* Strengthening and modernizing the anti-corruption organizations it has
established.
* Exposing unethical and illegal practices and punishing those who engage in
them.
* Encouraging organizations to adopt and publish formal codes of ethics.
* Establishing formal training in ethics and fostering leadership by
example.
* Enacting a Fiscal Responsibility Pact and a Right to Information Act. The
Fiscal Responsibility Pact will require government agencies to publish
annual audited accounts within six months of their financial year end and
set up a revenue stabilization fund into which windfall revenues will be
transferred. The Right to Information Act will promote openness and
feedback.
To reform the bureaucracy, the government has begun cutting civil service
benefits. The government has monetized benefits such as utility services,
domestic assistance, and drivers and reduced the incentive for corruption by
offering civil servants higher wages, bonuses, and improved working
conditions.
NEEDS policies will encourage all levels of government to adopt an annual
budget framework and guidelines. The guidelines will promote balanced
budgets implementation of priority programmes, budget discipline, cost
effectiveness, and the generation of internal revenues and savings. A peer
review mechanism will enable heads of government agencies to compare their
performances and nurture a common culture of excellence. The Joint Planning
Board, the Joint Tax Board and the National Economic Council will work
together to achieve a more effective system of economic management. The
NEEDS period should be characterized by the punctual release of annual
budgets. As participants in the plan for prosperity, the Nigerian people
will be kept informed of how well these measures are performing by the press
and by special reports.
How will NEEDS be implemented?
Effective implementation of policies and programmes is key to the success of
NEEDS. Implementation defines the process, institutional framework, and
instruments for translating aspirations goals and programmes into action and
concrete results. Critical to successful implementation is an effective
institutional framework, particularly a public service dedicated to
excellence and supportive of reforms. Equally important is adequate
infrastructure and an enabling environment for private investment. Others
critical factors are education, health care, and abiding commitment to
change.
As a necessary complement to NEEDS, state governments are developing State
Economic Empowerment and Development Strategies, (SEEDS). Local governments
are also being encouraged to develop medium-term development programmes,
specifying benchmarks, targets, deliverables committee and implementation
guides.
These plans will complement SEEDS and NEEDS. NEEDS recognizes that effective
local level planning is critical to reduce inefficient resource allocation
and to ensure integrated rural development and poverty reduction.
Institutional framework
The institutional framework for implementing NEEDS recognizes the importance
of coordination among the federal government (NEEDS), the states (SEEDS),
and local government levels for achieving the national development goals.
State governments (through the National Economic Council and the National
Council on Development Planning) constitute an integral part of the
implementation, monitoring, and evaluation framework. The system is cohesive
and provides for interaction with all stakeholders. At the apex are the
President, the Vice-President, and the National Assembly. The federal
Executive Council and National Economic Council consider all matters
pertaining to implementing NEEDS and SEEDS, presenting periodic reports to
the President and the National Assembly.
A key institution is the Independent Monitoring Committee. The
committee—chaired by the Secretary to the Government of the Federation and
composed of government officials, representatives of the private sector, the
press, and civil society—monitors and evaluates implementation of NEEDS and
SEEDS programmes and projects. It informs the National Assembly of its
findings and reports to the President and the National Economic Council for
appropriate action. The committee will post quarterly reports on performance
on the Nigerian economy web site (www. nigerianeconomy.com). A summary of
the findings will also be disseminated to the Nigerian people, through print
and electronic media. Members of the National Economic Council will use the
result of the monitoring and evaluation to fine-tune implementations in
their states. The reports of the National Economic Council review will also
be forwarded to the National Assembly and the President.
The secretariat of NEEDS is located at the National Planning Commission,
which will coordinate the implementation framework. Other critical agencies
are the Joint Planning Board, the National Council on Development Planning,
and the National Economic Council.
New forms of coordination and partnership
NEEDS envisions several new forms of coordination and partnership from
matching grants to a peer review mechanism and public-private partnerships.
Matching grants
An ad hoc committee will be set up to take a census of federal government
projects in the states and determine which can be passed on to communities,
local governments, or states or sold outright. This committee will also
identify the areas for direct intervention by the federal government and
areas for facilitation or coordination and application of matching grants.
Coordination among the tiers of government is important to avoid duplication
and waste in the delivery of services. Under a proposed financing scheme,
the federal government would provide matching grants to states and local
governments for programmes that are national priorities but are best handled
at the state or local level.
Peer review mechanism and public-private partnership
A peer review mechanism will be used at all levels of implementation -
within ministries and agencies among ministries and agencies at the federal
and state levels, at the federal, state and local government levels, between
the public sector on the one hand and the private sector and civil society
organisations on the other and within the framework of aid coordination.
NEEDS also intends to mainstream public-private partnership at all levels of
government for interaction with private sector, associations, NGOs and civil
society organisations.
Restructuring the National
Statistical System
NEEDS recognizes that Nigeria’s national statistical system is weak. The
current system is governed by the 1957 Statistics Act, which is obsolete.
Timely and reliable statistics are critical to effective planning,
monitoring, and evaluation. A new master plan has been developed for the
national statistics system, and the government has increased funding for the
Federal Office of Statistics.
Financing the plan
NEEDS targets minimum annual GDP growth rates of 5 percenf in 2004, 6
percent in 2005 and 2006, and 7 percent in 2007. While ambitious, it is the
minimum needed to achieve adequate per capita income and improve welfare. To
finance the programme, the government will increase the efficiency of
resource use by curbing wasteful expenditures (by plugging all leakages in
public expenditure and sources of revenue and reforming institutions),
selling assets, reforming the tax system, increasing the efficiency of
resource use, mobilizing domestic savings, and attracting foreign direct
investment and overseas development assistance. It will also seek debt
relief from creditors.
To be continued
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SUNDAY, NOVEMBER
26 2006