Last year held so much hope for Nigerians. It was meant to be a walk to economic El Dorado. But the announcement of fuel subsidy removal in January 2012 turned out to be the beginning of many dashed hopes.
The 2012 budget speech by President Goodluck Jonathan will easily pass as a total package to bail out a nation in dire straits.
The President then spoke extensively on a number of programmes, which his administration intended to initiate to transform the economy. But not many of the promises were kept.
Few jobs were created
Job creation was a dominant feature of the speech. It was mentioned in at least five different places.
The President gave hope to the jobless and promised to promote “job creation and inclusive growth by investing in critical infrastructure, human capital development and security.”
Government had earlier offered to create one million jobs every year, beginning from 2012.
Apart from a number of initiatives listed for execution in 2012 to generate jobs, Jonathan said the Youth Enterprise With Innovation in Nigeria programme, which he inaugurated in October 2011, would provide 100,000 jobs.
Minister of Finance, Dr. Ngozi Okonjo-Iweala, in October 2012 raised the figure to create 320,000 jobs from next year and added that the proposal had already been built into the 2013 Appropriation.
But the figure remains a far cry from one million jobs promised annually by the government.
In October 2012, the Statistician-General of the Federation, Dr. Temi Kale, put the number of jobless Nigerians at 20.3 million. This represents 23.9 per cent of the total population.
Nigerian roads have for long been described as paths to hell. As it has become a tradition, there were a lot of promises to improve the state of the roads and huge sums of money were voted for different road repairs, construction and reconstruction.
For instance, The Federal Government signed an agreement for the construction of Ada-Okere-Ukoni-Amedkhian roads in Edo State at a cost of N2bn; it approved the reconstruction of outstanding sections of Benin-Ofosu-Ore-Ajebandele-Shagamu Expressway phase 111 at N65.223bn.
Several accidents were being recorded on the Lagos-Ibadan Expressway as government and Bi-Courtney Highway Services continued to dilly-dally on the reconstruction of the all-important road. It was only last month that the Federal Government new contractors, Julius Berger Plc and RCC Nigeria Limited, to take over the repairs of the road. Nothing much has changed on the road.
Lagos-Abeokuta Expressway was not any different. People spend agonising hours in avoidable traffic everyday as the road is riddled with potholes.
Domestic debt rises
The Federal Government made a promise to reduce domestic debt at the beginning of 2012 and inflation to a single digit.
Jonathan had said, in his 2012 budget speech to the National Assembly, “The Government is determined to pursue a programme of far-reaching fiscal consolidation so as to reduce our deficit and domestic borrowing to more manageable levels.”
But rather than a reduction in the debt profile, it rose from N5.623tn in December 2011 to N6.346tn in September 2012.
Latest reports also indicated that the inflation rate had reached 12.3 per cent.
The Debt Management Office said that at the end of June, 2012, the nation’s debt stock stood at the following: External — N941.2bn ( $6.035bn) and domestic — N6.152tn ( $39.456b).
It added that of the $6.035bn foreign debt commitment, the Federal Government’s owed $3.820bn, while the balance of $2.214bn was the portion being held by states, representing 63.30 per cent and 36.70 per cent, respectively.
Cost of doing business remains high
One aspect of the 2012 budget speech that gladdened the heart of importers then was the pledge to reduce the cost of doing business at the ports. There was a directive to the concerned regulatory authorities to work around 48 hours period of clearing goods at the ports.
The Nigeria Customs Service and other security personnel were also asked to commence 24 hours for this purpose. The number of security agencies at the ports was reduced from 14 to about eight.
Jonathan had said, “We have also embarked on reforming our ports and customs and we intend to continue vigorously on this path so as to reduce the cost of doing business for our private sector actors. No longer are we going to be contented for clearance of goods in our ports to take 3-4 weeks with attendant demurrage and costs while it takes 48 hours elsewhere.
“In this regard, I have set up a committee chaired by the Coordinating Minister for the Economy and Minister of Finance with a mandate to remove the bottlenecks at our ports and another committee made up of private sector users of the ports to monitor implementation. We also intend to work hard to improve the infrastructure at the ports.”
But findings by our correspondent on Monday showed that the 24-hour operation was not working.
Many offices connected with the clearing of goods, it was learnt, hardly operated beyond 5pm. And it was difficult for any importer or an agent to clear goods in one week. Some could take months, incurring demurrage.
“The cost of doing business at the ports is alarming; and it is the highest in the world,” President, National Council of Managing Directors of Licensed Customs Agents, Mr. Lucky Amiwero, said.
Some of the affected firms were said to have surreptitiously made their way back to the ports, operating under different guises.
PIB not passed
The President had also said that his administration was going to ensure the passage of the Petroleum Industry Bill.
“The Federal Government is conscious of the need to bring the Petroleum Industry Bill debate to conclusion so as to give investors the comfort and policy certainty that they require,” he had said.
The President, who said “my administration is determined to bring this matter to closure,” had sought the cooperation of the National Assembly members. But it was obvious he never got the required cooperation as the PIB has remained a bill as at the end of 2012, leaving the petroleum sector, which it was meant to sanitise and improve, in a big mess.
Cassava bread nowhere to be found
One sector, which also was highlighted by the President last year was agriculture. Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, was everywhere to talk about the planned transformation of the sector. The President also made a big show of the cassava bread expected to replace wheat import. He had ordered that thenceforth, cassava bread should be served in the Aso Rock Villa.
He said, “It is common wisdom that the best way we can grow our economy and create jobs for our people is for us to patronize Nigerian-made goods; this is why we are introducing enabling policies to drive this process. In this regard, we are introducing fiscal policy measures that will encourage the purchase and utilisation of locally produced commodities.”
He also said that as from July 1, 2012, wheat flour would attract a levy of 65 per cent to bring the duty to 100 per cent, while wheat grain would attract a 15 per cent levy bringing the duty to 20 per cent.
But six months later, the cassava bread could hardly be found in the market. Wheat bread is still being served in most Nigerian homes.
90% of food imported
Agriculture was one non-oil sector the government was looking up to as a major revenue earner.
The President had said, “The agricultural sector is being totally transformed to enable us move from traditional farming to modern agriculture as a business both for our small and large-scale farmers. Our objective is to ensure food security whilst also promoting exports in agriculture value chains where we have a comparative advantage. We intend to process and add value to different crops such as rice, cassava, sorghum, oil palm, cocoa, cotton, etc.”
The expectation, according to the President, is to unlock the potential in the agric sector.
He, therefore, announced that the Federal Government would guarantee by 70 per cent the principal of all loans made for the supply of seeds and fertilizer and get the inputs to farmers at subsidised rate.
He said, “We are subsidising the interest rate on these loans to bring it down from 15 per cent to seven per cent per annum.
“We are introducing further fiscal policy measures to support the development of the agricultural sector. In this respect, the duty on machinery and certain specified equipment for the sector will, effective January 31, 2012, attract zero duty.”
But a survey of food prices showed that they were still high. And compared to the rate obtainable last year, traders and consumers said the prices had gone up by between 40 per cent and 100 per cent.
Local rice production was well canvassed at the beginning of last year. This was meant to gradually replace imported rice.
Government had also announced plan to ban importation of rice by 2015, only three years away.
The President had said, “Effective December 31, 2012, all rice millers should move towards domestic production and milling of rice, as the levy of 50 per cent will be further raised to 100 per cent. Let me add here that no waivers or concessions will be entertained for rice and wheat importation.”
But no word on this issue came from government on Monday December 31, 2012.
The essence of the new measures, according to the President, is to ensure food security.
But the latest reports indicated that Nigeria still imports about 90 per cent of its food requirement.
Ineffective mortgage system
The government had hoped to energise the construction industry, especially the provision of adequate housing, with effective mortgage system.
The President said that government was working with some development partners to create an effective mortgage finance system to develop value chains in the building materials segment.
“This will give the necessary stimulant to the sector to accelerate its development and also help to reduce the cost of construction,” he said.
But a former President, Nigerian Institution of Estate Surveyors and Valuers, Mr. Bode Adediji, said the mortgage system in Nigeria worked on paper and added that the ineffective government’s policy had made many to lose hope in the mortgage system.
The housing deficit as at December was 17 million.