By Atiku Abubakar
Being a paper presented by former Vice President, Federal Republic of Nigeria, and Presidential Candidate of the Peoples Democratic Party, at the 2022 Lagos Business School Alumni Conference, at Harbor Point, Victoria Island, Lagos
It is good to be back in Lagos and even better to be back with the business thinkers and fellow business people. I thank you immensely for taking time off your busy schedules to attend this event to exchange ideas about our country as we, again, approach crucial elections.
In thinking about this presentation, the recent security advisory from the US and other leading countries’ embassies to their nationals regarding our capital city, Abuja, came to my mind. Our economy is in dire crisis caused by gross and mindless mismanagement. It, therefore, needs investments in order to grow and provide jobs, incomes and wealth for our people. But investments can hardly flow to our country if we cannot even protect our national capital and seat of power. And we know that the security situation in the rest of the country is even worse.
We have extremely high rates of unemployment and inflation, with the naira losing its value on a daily basis. Hunger is more pervasive today than it has ever been in the history of our resource-rich country. The majority of the unemployed are young men and women, who are increasingly frustrated by the lack of opportunities and hope for the future. This poses serious economic and security challenges. Our educational and health care systems are in shambles. Our infrastructure is broken and grossly inadequate to help stimulate economic growth.
Even the oil and gas sector, the main source of government revenues and foreign exchange, has been declining for much of the period since 2014. Per capita income, a measure of citizens’ well-being, has progressively fallen since 2015 because of declining output in the face of continuing population growth. In short, more Nigerians are poorer and more miserable today than in 2015.
In addition, the APC-led government is pushing Nigeria into debt slavery with persistent budget deficits and excessive borrowing. For the first time in our history, the Federal Government paid more in debt service than it earned.
Policy incoherence and flip-flops have also continued to pose a significant risk to investment and thus output growth. Capital has taken a flight and we have lost our previous position as Africa’s preferred investment destination to smaller less endowed nations.
What I Would Do
The question is what to do about these and who is best qualified for the task? Can we trust the person who poisoned the patients to be the doctor that treats them? No, we must turn this ugly page, stop the rot and begin to recover and rebuild this country. We do not have four more years to waste. We need someone who has a national level experience of turning things around for the better under severe circumstances. That person is Atiku Abubakar.
As Vice President of the Federal Republic (1999-2017), I headed the economic team that implemented fundamental economic reforms, including the design and implementation of a private sector revival strategy. We focused on macro-economic stability and transforming critical areas such as banking, insurance, oil and gas, telecommunication, pension and the Civil Service. We created novel institutions that should lay the foundation for good governance and accountability such as the Bureau of Public Procurement, Economic and Financial Crimes Commission, and SERVICOM, whose Golden rule is “Serve others as you would like to be served.”
We also paid off nearly all of our foreign debt which was crippling the country, stabilized the exchange rate of the naira as well as interest rates, and reduced inflation. We developed a formal development agenda, the NEEDS, which also extended to galvanizing participation of state and local governments through SEEDS and LEEDS.
With my many years as a private businessman, I have a deep understanding of our economy – the challenges, the opportunities and what needs to be done to get it back on its feet.
I know what it takes, I can do it again. I am the only candidate that has a national record of experience in designing and implementing major reforms that have transformed our economy.
I have identified five priority areas to focus on in order to recover and rebuild this country: Re-unify the country; Improve security; Revive the economy and foster prosperity; Restructure our federal system; and Improve our human capital.
I was asked by the organizers to focus my presentation on “Creating an Enabling
Environment for Businesses in Nigeria.” In fact, nothing can be as enabling for businesses in Nigeria as the implementation of those five inter-connected priorities.
Businesses desire Security and stability; Functioning and well-maintained infrastructure; Skilled and healthy workforce and labour peace; Supportive Regulations; Policy clarity, coherence and consistency; Impartial judiciary to adjudicate disputes; Incentives that reduce their costs; Fiscal Responsibility by the State to avoid undue tax burden on businesses; Robust research and development with industry linkages.
The worst damage done by the current APC government is, perhaps, the actions and inactions that have eroded confidence in our economy and driven investors away. Nigerians, including those who returned in the past, have been running away from the country as fast as they can.
We can reverse the trend again. My economic and development agenda, which is a part of my Covenant with Nigerians, is designed to do just that. It seeks primarily to stimulate the growth of the economy. It envisions an economy that is modern, dynamic, competitive, and able to rank among the top 20 economies of the world. Specifically, we plan to build an economy that would remain the largest in Africa and become the 15th largest globally, with a GDP per capita raised from the current levels of approximately US$2,000 to US$5,000 by 2030.
Growth will come from our efforts to revitalize the real sectors, including agriculture, manufacturing and Micro, Small and Medium Enterprises. Production for export will be a top priority, with emphasis on manufactured goods.
My economic plan is anchored to three principles, namely Private Sector Leadership; Leveraging the Market to set Prices; and Ending Government Monopoly in key sectors.
So, firstly, a government that I lead will support the private sector to provide critical leadership and drive growth. In return the private sector will provide funds, create jobs and wealth and lift the poor out of poverty.
Our public sector accounts for less than 8 percent of national consumption expenditure while the private sector accounts for roughly 79 percent. Indeed, the private sector is expected to fund 85% of the investments in the Medium-Term National Development Plan 2021-2025.
The Nigeria Infrastructure Master Plan indicates that this country has an infrastructure financing deficit of approximately 3 trillion dollars over the next 30 years. That translates to a financing requirement of roughly 100 billion dollars per annum, which cannot be met by the public sector. We, therefore, desperately need a warm handshake with the private sector.
Secondly, we shall let the Market function to determine key prices in order to eliminate price distortions evident in the current interventionist exchange rate management policies. Government will only intervene judiciously and responsibly, where not doing so would be injurious to the economy.
Thirdly, the private sector will be encouraged to invest in areas hitherto exclusively or predominantly government-owned. We shall stop fiscal support for non-performing government enterprises and privatize those that cannot sustain themselves. That will create more opportunities for private businesses to invest and create jobs.
We will listen more, understand the private sector and secure their buy-in when policies are designed. Through regular dialogue with the private sector, we will build consensus, improve trust between us and make new reform initiatives easier to implement and sustain.
There will be more clarity, coherence, and consistency in policy rather than policy flip-flops and regulatory uncertainty that impede investment flows.
We shall make critical investments in infrastructure through the greater involvement of the private sector. You really cannot build a strong virile and sustainable economy without significant improvements in power supply, healthy and vast road and rail networks, functioning and efficient ports, and a knowledgeable, skilled workforce, kept healthy by improvements in health care, especially primary and preventive care.
We will establish an “Infrastructure Development Unit” in the Presidency, with a coordinating function and a specific mandate of working with the MDAs to fast track and drive the process of infrastructure development in the country.
Power sector reform will be a key component. We shall ensure that the generation, transmission and distribution companies make the required investments in infrastructure and operations necessary to ensure stable power at an affordable rate for businesses and homes. I will also work at ensuring a robust electricity market that recognizes measurable contributions (and sanctions underperformance) to the value chain and ensures system sustainability.
As happened in telecoms, the days of darkness will be over.
Mindful of the environment and a future where renewable energy is at the forefront, I will champion an energy mix (including solar, wind, biofuels) that is environmentally responsible, reflects pragmatic solutions and guarantees energy security.
As a short-term measure to ensure enhanced supply, within the first year of the new administration, I shall initiate and implement an emergency power programme that can deliver additional capacity in certain key areas.
Investments in additional generation capacity will be complemented by transmission and distribution infrastructure to wheel the additional energy. Both will require private sector support.
We shall incentivize private investors to invest in the development of multiple green-field mini-grid transmission systems to be looped into the super-grid in the medium to long term while allowing the Federal Government to focus on policy, regulation, and standardization.
Poverty reduction shall be the centrepiece of our economic development agenda and economic performance shall henceforth be measured by the number of jobs created and the number of people lifted out of poverty rather than by the quantum of government expenditure. Growth must clearly translate to improved quality of life for our people; it must be inclusive and experienced in order to have meaning.
I recognize that Nigerians continue to make sacrifices in the hope of a better tomorrow. That hope must start to materialize.
I will create an Economic Stimulus Fund with an initial investment capacity of approximately US$10 billion to prioritize support to MSMEs across all the economic sectors. I will undertake far reaching fiscal restructuring to improve liquidity as well as the management of our fiscal resources and our expenditures.
Firstly, we will undertake an immediate review of government spending with a view to eliminating all leakages including fuel subsidy payments.
Our fiscal reforms will also aggressively address issues related to high risk and cost of doing business. Working with states and local governments, through the Joint Tax Board, we will resolve the issue of multiple taxation and business disruption by tax agencies. I will also review our incentive structure to make them more supportive.
We will embark on far reaching process and institutional reforms. Government must do business better. Ministries, Departments and Agencies will be made stronger and more efficient, supportive and facilitating.
We will reduce the number of regulators by consolidating their operations and streamlining enforcement and compliance requirements. Working with the judiciary, we shall reform the judicial processes to speed up the resolution of cases and dispensation of justice.
We shall look at ways to improve business protection – for example, through robust bankruptcy protection law for businesses in difficult times. Additionally, my government will provide selective and time-bound protection to priority sectors/industries.
To address the current abysmally low Research and Development support, we shall strengthen the link between tertiary/research institutions and industry to prioritize projects that support industry.
Secondly, we will take steps to improve spending efficiency through a gradual reduction in government recurrent expenditures, ensuring that those expenditures reflect higher levels of service delivery. Over the medium term, recurrent expenditures should not exceed 45% of the budget.
Thirdly, we shall undertake a review of government procurement processes to ensure high levels of transparency, competitiveness and value-for-money and eliminate all leakages.
Finally, we shall focus more on non-debt financing by promoting private sector funding of our infrastructure projects. In this regard, we shall incentivize, with regulation and tax incentives, a consortium of private sector institutions to establish an Infrastructure Debt Fund with an initial carrying capacity of US$20 billion, for the financing and delivery of large infrastructure projects across all sectors of the economy.
As we promote more Public Private Partnerships in critical infrastructure funding and leverage more innovative financing options, our rate of debt accumulation will drastically reduce.
We shall review our current debt obligations with a view to finding ways to ease the immediate burden it places on our finances and place us in a more favourable position to meet our obligations and grow the economy. This should also help improve our credit rating and boost confidence in our economy.
When we do these, and WE WILL, and complement them with my other priorities including improving security, improving human capital development, devolution of powers to federating states and re-unifying the country to enthrone peace and political stability, our country will again become the prime investment destination for businesses.
We implemented complex economic reforms in the past with good results. Indeed, some you in this audience worked with me on a number of those initiatives. Support my campaign so we do it again.
Once more, I thank you for attending this event and for your attention.