New cabinet faces task of economic recovery
The unveiling of the ministerial nominees that will form the nation’s new executive cabinet was another highpoint of the fast-paced administration of President Bola Tinubu. With major economic reforms in the past two months setting a new path for the country, the formation of a full executive cabinet is expected to drive the momentum of governmental activities in a way that quickens the crystallization of the several thematic policies.
Over the past two months Tinubu, a globally renowned accountant and financial engineer, had directly headlined his administration with major monetary and fiscal policy reforms including the removal of the parasitic subsidy on petrol, abolition of the multiple foreign exchange (forex) rates, redirection of the Central Bank of Nigeria (CBN) to core mandates and rollout of a comprehensive food security and social welfare programme.
The policies have been well received so far. The Nigerian capital market has sustained a two-month rally with average equity return of about 30 per cent, the highest within advanced, emerging and frontier markets tracked by a consortium of foreign and local research firms.
In this report, The Nation’s Economic Intelligence Team provided insights into the challenges and stakeholders’ perspectives on the path to national economic recovery.
All analysts polled by The Nation were unanimous that the ministerial selections have further brightened the prospects of a national economic renaissance, although analysts remained cautious on the depth of reforms needed to achieve economic growth and development envisioned by the new administration.
Grappling with revenue shortage amidst mounting debts, high unemployment, insecurity, food shortage, poor infrastructure and worsening impoverishment, Nigeria is at a decisive point and there is much expectation on the new cabinet.
Managing Director, APT Securities and Funds, Mallam Kasimu Kurfi, said the nominations made so far showed a mix of generations and expertise that raised hopes on the future performance of the cabinet.
“It gives the impression and hopes that they are likely going to do better than the previous ones. We expect to see developmental economics at work. We still expect to see more capable hands in the next batch of nominees, in view of lack of infrastructures in the country; which is the key to Gross Domestic Products (GDP) growth and reduction of unemployment.
“The major issues that win confidence of foreign investors have already been done by the president through single exchange rate and moderating of taxes. Therefore, we expect that Finance Minister and Minister of Industry will promote the policies to win more foreign investors into the country,” Kurfi, a senior capital market expert said.
He said the new government should continue on the path of private-public partnership (PPP) by encouraging the participation of private investors in the development of major infrastructure such as roads, airports, and ports among others.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the emerging cabinet outlook appears to have a decent mix of technocrats and politicians.
According to him, the mixture of ‘new and old hands’ brings historical perspectives as well as fresh ideas needed to navigate the complexities of the Nigerian economy.
“So it seems to tick all the boxes. My hope is that they will be given the free hand to execute the vision of the president.
“The finance and economy team have their priorities clearly spelt out in the president’s inauguration speech, that is, achieve GDP growth rate of seven per cent annually, unify and strengthen our exchange rate, reduce interest rates, increase the flow of local and foreign investment and reduce unemployment significantly. What they need to do is design and implement appropriate policies and strategies to make these happen. The people that I see making up this team from the ministerial list should have the capability to make these happen. Besides I think the president has already set the stage for them with the few policies he has implemented so far,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS) said.
On getting the private sector on board, Amolegbe noted that in order to win the confidence of the private sector, the government must adhere strictly to terms of contracts, ensure the sanctity of property ownership as well as the rule of law.
“You simplify your tax code and make your environment investor friendly. If they can establish the rules that make for good investment environment, there is no reason why we shouldn’t see an increase in PPP in the coming years. We already have the population, weather and natural resources that would naturally attract investments .We just need to stop sabotaging ourselves,” Amolegbe said.
Managing Director, Highcap Securities, Mr. David Adonri, said those nominated have been identified as suitable to translate the president’s vision into reality, expressing optimism that they will live up to the expectations.
According to him, the economic team needs to guide the president in implementation of the 2021-2025 National Development Plan (NDP) and also carry out necessary adjustment.
“They need to help the president in balancing the budget and repayment of debt. They need to guide the president in formulating fiscal policies that will move the economy into self-reliance. It is the president that has the responsibility to win the confidence of enterprises and investors. He should be able to organise his cabinet and teams to generate ideas for him, formulate them into plans and ensure that the plans are implemented with the iron determination of a capable leader,” Adonri said.
Nigeria is currently grappling with a lot of economic challenges including debt crisis because of poor revenue streams. The incoming Finance Minister is expected to expand Nigeria’s income stream through the use of technology and promotion of accountability and efficiency in the management of national resources.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, disclosed that Nigeria has in recent years, spent most of its revenue on servicing its debt.
“In 2022, the Federal Government spent N96 out of every N100 it got as revenue. The fiscal sustainability scores are red for the sub-nationals and Federal Government. More so, interest rates will remain elevated globally in 2023, and this implies that the debt service burden will heighten further, capping the available fiscal headroom. With dwindling revenue amid maturing debt obligations, there is no doubt that the choices are hard and the options are few,” he said.
Rewane explained that while the debt-to-Gross Domestic Product (GDP) ratio is still below the self-imposed benchmark of 45 per cent, the inability to invest borrowed funds in productive projects has weakened the nation’s ability to repay its debt.
He said a high debt service-to revenue ratio, rather than debt-to-GDP, is a good indicator of economies that are caught up in the doldrums.
Other analysts said comprehensive approach is needed to reduce debt, increase transparency, and facilitate swifter restructuring—so economy can focus on spending that supports growth and reduces poverty. Without it, the economy may face a fiscal crisis with millions of people falling into poverty.
With what is on ground, the incoming Finance Minster is expected to take major steps to increase revenue.
Lagos-based financial analyst, Michael Abiodun, advised the incoming Finance minister to increase convenience and productivity and make revenue collection simple for individuals and businesses alike.
He said revenue collection should undergo some changes to disrupt the current status quo.
“Yesterday, we had nothing like the digital apps in use today, tomorrow we are certain of further disruption underlined by artificial intelligence, machine learning, robotics, big data analytics among others,” he said.
“To reposition in a competitive economy, the incoming finance mister must evaluate and understand the trends that would impact the economy finances now and into the future”.
Abiodun said the minster must also be clear on what is relevant to the economy, be clear on government revenue streams through taxes and increased productivity, and constantly evaluate their outcomes.
He said technology can be deployed to drive revenue collection and financial management.
He said there is also need to increase transparency in government ad recover huge funds that are proceeds of corruption.
For instance, the Federal High Court in Abuja on Monday sentenced a former chairperson of the defunct Pension Reform Task Team (PRTT), Abdulrasheed Maina, to eight years’ imprisonment for money laundering offences involving N2 billion in pension fund. He said more of such convictions are required save funds for the economy and channel such funds to productive uses.
He said there was also need to support the non-oil export through increased productivity that will help in driving more revenue through taxes.
He said the minster should work with the Central Bank of Nigeria (CBN) and look beyond monetary policy measures in its determination to address foreign exchange challenges facing the country and attract more capital from the non-oil sector.
He said many countries are turning to export earnings and proceeds repatriation as a veritable tool for bolstering foreign reserves, maintaining a robust balance of payments’position, and a stable source of foreign exchange inflows.
According to him, in Nigeria, developing the non-oil export sector is an imperative, given that this holds great potential for generating a significant amount of forex earnings.
Information and communication technology
The Information communication technology (ICT) sector has become the cash cow of the economy after it was liberalized over two decades ago.
According to Nigerian Communications Commission (NCC) and the National Bureau of Statistics (NBS), the telecom sector has been adding to the nation’s gross domestic product (GDP) on an incremental basis.
The Executive Vice Chairman and CEO, NCC, Prof Garba Danbatta said from an initial investment profile of $500 million as at 2001, when the sector was fully liberalized, it rose to $68 billion in 2018 and increased to $70.5 billion in 2019 and $72 billion in 2020. At the end of 2021, the figure rose to $75.6 billion.
The latest figure is the current official investment profile computed in the industry up from the initial $70 billion investment in the last few years.
The NBS said the telecoms sector contributed N10.126 trillion as an aggregate quarterly contribution to GDP in 2022.
“In the first quarter, the sector contributed 12.94 per cent equivalent to N2.246 trillion while the second quarter witnessed an all-time high GDP contribution by the telecom sector to the nation’s economy, standing at 15 per cent and valued at N2.593 trillion. The sector’s contribution to GDP in the third was 12.85 per cent and in the fourth quarter, it grew to 13.55 per cent, which are valued at N2.436 trillion and N2.851 trillion respectively.
“The growth trajectory continued this year as telecommunications and Information Services sector in Nigeria delivered a handsome N2. 508 trillion in terms of financial value contribution to the nation’s gross domestic product, GDP, representing 14.13per cent in the first quarter 2023,” he said.
The GDP has grown steadily. From 8.50 per cent in 2015, it grew to 9.13 per cent in 2016 and to 8.66 per cent in 2017. In the last quarter of 2018, telecoms contributed 9.85 per cent to national GDP while it added 10.60 per cent in the fourth quarter of 2019.
Also in the second quarter of 2010, it added 14.30 per cent to GDP; 14.42 per cent in the second quarter of 2021. The highest quarterly contribution to GDP by the sector to the economy was 15 per cent in the second quarter of 2022.
In terms of job creation, the sector has created millions of jobs in direct and indirect jobs to Nigerian youths. It has also helped to build a stock of skilled manpower that has been serving the industry across the sub-region.
Aside from the jobs it has created, its infrastructure has become so critical to national development by offering support to other sectors of the economy including banking, agric, security, insurance and many others.
Overall, Prof Danbatta said the sector has become a major enabler of economic development in Nigeria, as it continues to positively impact all the facets of the Nigerian economy.
The sector has also helped in breaking barriers in the area of digital illiteracy as well as conquering distance and enabling ease of business transaction. Today, e-commerce has taken a firm foothold in the country.
In spite of the enormous advantages the telecoms sector has brought to the national economy, it still beset with a myriad of challenges which would require urgent attention for the person that will eventually head the Ministry of Communications and Digital Economy.
As each country in the world moves to take control of what happens in the cyberspace, especially in an era that has witnessed the advent of cyberwarfare and crimes, the sector mujst not be handed over to someone who would be learning on the job.
“We don’t want a situation where our minister will openly admit that he doesn’t know anything about the ICT industry and be relying on people who equally don’t know the industry for policy formulation and implementation. Our minister must be conversant with emerging and disruptive technologies such as include Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), Blockchain Technology, Virtual Reality (VR), Augmented Reality (AR) and others,” an expert in the sector who craved anonymity said.
The issue of the unresolved debt between deposit money banks (DMBs) and mobile network operators (MNOs) must urgently be looked at with a view to settling the dispute amicably. The debt which arose from the use of the Unstructured Supplementary Service Data (USSD) is a communications protocol used in GSM networks for sending short text messages.
Another challenge would be to address the issue of Right of Way (RoW). The Chairman, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbenga Adebayo, said state governors must see telecom infrastructure as enablers of commerce and industry and stop charging punitively for RoW. Through the Ministry, NCC and Nigeria’s Governors Forum (NGF), a deal was brokered that pegged charges at N145 per linear metre. While some state governors are yet to comply with this, some states such as Ekiti, Kaduna, Imo have complied and even made it available to MNOs at zero charges.
The issue of multiple taxations is another that must be urgently addressed. At the last count, no fewer than about 43 taxes and levies are paid by MNOs to federal, states and local government authorities. Some of these taxes and levies are charged and collected by non-state actors, thus complicating the hostile business operating environment.
Willful vandalism and stealing of batteries at base transceiver stations (BTS) is another challenge that must be tackled headlong. With power supply from the national grid absolutely dismal, operators have had to rely heavily on diesel-powered generators to ensure that services are rendered to 227,179,946 subscribers with high quality. Forceful shutdowns of BTS by non-state actors must also be fought brutally.
Despite the overwhelming benefits of the telecoms sector, some state actors still refuse to grant approval to operators to expand infrastructure. For instance, the Federal Capital Development Authority (FCDA) has allegedly refused to grant approval for telecom infrastructure expansion since about a decade ago.
Another gap the minister will quickly move close in access to telephony services. According to the NCC, the 37 million access gaps identified in 2013 has been narrowed down to 27 million. The Ministry, working with the NCC, MNOs and Universal Service Provision Fund (USPF) must close ranks to deepen of rural telephony.
Agriculture
For stakeholders, scaling up climate resilience and increasing production are among key interventions that will have positive impacts on food security.
There is keen interest from leading agricultural experts and stakeholders on how best to harness the nation’s agricultural and food potential, they are calling for increasing efforts to turn plans into concrete action to transform s agriculture, strengthen its resilience in the face of climate change impacts and economic challenges. So far, the performance of the sector has not drawn positive scorecards. Nigeria relies on $10 billion of imports to meet its food and agricultural production shortfalls (mostly wheat, rice, poultry, fish, food services, and consumer-oriented foods). Up till now, agricultural programmes such as the Anchor Borrowers Programme (ABP) designed to diversify its economy away from oil and the National Agricultural Technology and Innovation Plan (NATIP) have not helped to lift the sector from shocks. The sector is still battling regular flooding, desertification of crop and grazing land, extremist insurgencies, and conflicts between herdsmen and local farmers.
There are wide-ranging price increases across items such as cereals, yam, meat, fish, and fruits
Stakeholders urge the government to adequately invest in food and nutrition security. As Nigeria becomes more visible on the global agricultural stage, they noted that the food system faces an uncertain future, if nothing is done to reposition the industry based on scientific knowledge to address the widening existing productivity gaps among different types of producers.
With a strong commitment from the government to promote agriculture and the growing involvement of the private sector in this field, Group Chief Executive, AFEX Commodities Exchange, Ayodeji Balogun noted that the prospects for the agricultural sector are promising.
He noted, however the sector still faces challenges contributing to the low competitiveness of agri-food value chains, adding that much has to be done to realize major gains in productivity and outputs and contributing to national goals related to food security, poverty reduction, social stability, and trade.
Hence forth, he said the goals should be achieving higher competitiveness of value chain, higher farmer income and sustainability.
He said there is a need to strengthen collective action to build competitive and inclusive staple food value chains. According to him, the growth of staple food production will increased food availability and assured security for the whole country. Although the food processing industry has experienced steady growth, he noted that there is still significant untapped potential to be realised.
The Fast Moving Consumer Goods (FMCG) product group, according to him, has undergone significant changes in recent years.
His words: “The trend has been up and down in the last five years as we see some new entrants. In the five years there have lot of impressive investments in food processing and a lot of consumer products, new brands coming to the people. We’ve seen a lot of those companies either stay in and struggling or some of them even shutting down or at below capacity utilization. We believe that will change, with the new administration’s focus on investments, and focus on more business friendly environment. We believe that will start to change, we believe there will be influx of capital come with the skills to run those brands. “
The food processing industry, he posited, was of enormous significance for Nigeria’s development.
To achieve the vision of the food security, he indicated that there is an opportunity for large investments in food processing.
Experts urged the government to produce relevant baseline database information and the identification of priority actions in the country.
Unless policy formulation and implementation in agriculture is driven by data, Indeed experts posited that the s quest food security may remain unattainable. They were of the opinion the implementation of the National Agricultural Sample Census (NASC) targeted at capturing farming households for proper planning is vital in this regard.
According to the recommendation of the Food and Agriculture Organisation (FAO), the sample census is supposed to be carried out every 10 years, to help government track development within the agricultural sector, but reports have it that it was last done 29 years ago.
Nigeria conducted the last round of the Agricultural Census in 1993/94. Since then, the agricultural data situation in the country has slid backward and can best be described as weak.
The nation database, they said would be key to leveraging investments. They said that the baseline information will help in accurate planning.
Head of Agro-statistics Division, National Bureau of Statistics, Abuja, Bishop Ohioma, explained that data collection has effect in the Nigeria’s quest to attain food sufficiency.
To this end, stakeholders want a count of the nation’s farms and ranches and the people who run them. This, they believe will provide a new outlook on the future of the nation’s agriculture.
Right now ,there is a controversy on the average age of producers ,while farmers retire without a successor in place.
Interestingly, also young people entering the sector face the challenge of prohibitive land prices, student lack of skilled farm labor, and limited health care options.
Farmers want increasing government efforts to boost maize and soybean production , as livestock producers face a feed crisis. They believe development of the maize, soya bean value chains will strengthen food and nutrition security.
Poultry Association of Nigerian (PAN) President, Ezekiel Ibrahim, said producers were still battling shortage of maize to meet feed requirements.
Managing Director, Chanan Elo’a Integrated Farm Limited, Udeme Etuk,’ s concern was that the Federal Government’s desire to ramp up agriculture, including boosting maize and soybeans production, is facing a great threat from widespread rampant attacks by bandits and armed herdsmen, who kill, maim and sack people in farming communities. He, therefore, suggested that the only solution to the insecurity facing farmers is for the Federal Government to provide protection within the maize and soybeans production belt affected by banditry activities. Otherwise, livestock farmers would continue to battle maize and soybeans shortages.
According to him, the plight of maize and soybeans farmers is no less heart-rending as herdsmen have prevented most of them from cultivating their farmlands. In some areas in the country, farmers employed hunters and adopted community policing to watch over their crops.With vast fertile land, Etuk, a dairy expert, believes Nigeria has the capacity to supply maize and soybeans needs of the nation. They want the government to take a look at sector exports, and some of the growth challenges moving forward. With the quality standards system for agricultural products still incomplete, Nigerian dry beans and other produce stay banned from entering Europe for failing to meet the quality requirements .
To encourage investment, stakeholders wan the government to offer considerable tax incentives to ,agribusiness with integrated projects and high added
To encourage investment, stakeholders wan the government to offer considerable tax incentives to ,agribusiness with integrated projects and high added value that will help Nigeria resolve the issue of dependency on imports for certain products
The current ratio of farmed land is two acres per person and frequent periods of drought threaten the country’s grain production. They want more land for farms as transforming the food systems provide healthy and nutritious diets and dignified jobs for farmers and producers.
The other issue is that failure to provide displaced farmers with seeds to plant crops could worsen food shortages. Across the country, farming output has fallen considerably as soldiers try to maintain a semblance of security in some parts of the country, while some rural areas remain vulnerable.
Oil and gas
Crude oil sales account for over 90 per cent of the country’s revenue earnings. Sadly, the gains from this produce have not been fully explored. This is because, for years now, Nigeria has not been able to meet up with its allocated OPEC production output quota due to inefficiencies and leakages within the system.
Besides, the revenue made from the sale of crude oil have also been lost to subsidy payments which in 2022 hit N6.3 trillion and N3.5 trillion in the first half of this year, until the present administration jettisoned the scheme. Interestingly, this seem to have paid off as in the first month of its stoppage, about N400 billion was saved by government.
Experts have canvassed that to gain maximally, the country needs to shore up its oil production capacity. To achieve this, they maintained that there is the urgent need to tackle the menace of crude oil theft that is almost bringing the sector to its knees.
Also urgently need is the need to tackle the inaccurate measurement in the Nigerian oil and gas industry which is responsible for about 40 percent of crude oil losses attributed to oil theft in the Niger Delta region. Last year, an estimated 200,000 barrels of oil was lost daily due to oil theft and pipeline vandalism. This is why experts have insisted that there is a need for the installation of meters on production well heads.
The refineries should also be made to function optimal before year end. Importantly, it is worthy of mention that the $1.5 billion rehabilitation of the Port Harcourt refinery awarded by former President Buhari which was due for completion last December should be looked into to ascertain the cause of the delay in delivery and also ensuring that it becomes fully operational this year.
This, if achieved, coupled with the cocking on stream of the Dangote Refinery, experts say, should to a large extent bring down the pump price of petrol locally since some costs would have been taken off the product.
Chief Executive, Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, submitted that the current reforms in the oil gas sector should be sustained. For instance, he noted the removal of the fuel subsidy was critical to the transformation of the downstream sector of the industry.
“The commitment of government to fixing the security issues in the oil producing areas should also be intensified.
“The Petroleum Industry Act should be fully implemented to incentivise investment in the oil and gas sector.
“We have more gas reserves than crude oil. Currently, there are incredible opportunities for investors in gas globally. We should fast rack the growth of investment in the gas sector,” he admonished.
Power
Power plays a critical role in berthing a vibrant economy. Therefore given its strategic position, Nigeria cannot afford not to properly position this sector in her march towards revamping and positioning the country among the leading global economy.
The sorry state of the country’s power sector cannot be over-emphasised. While it can be said that efforts are being made to up the ante in this area, several reports compiled by international agencies on this sector has further exposed the lack of accessibility to electricity by the citizens. Reports compiled by the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the United Nations (UN) and the World Health Organisation (WHO), puts Nigeria as the country with the largest number of people without access to electricity, with a staggering figure of 86 million people out of the country’s population ofover 200 million people. The Democratic Republic of Congo comes in as second with 76 million people and Ethiopia with 55 million people lacking access.
This report is a slap on the huge investment in the sector since the return of democracy in 1999. Specifically, between former President Obasanjo and former President Jonathan, over N2.4 trillion was spent on power, while the last administration is estimated to have spent over N1.6 trillion on the same sector.
The process of availability of electricity for the country begins with the 24 Generation Companies (Gencos). They are privately owned with minority shares owned by the Federal Government of Nigeria. These Gencos, connected to the national grid, have a combined capacity to generate 11,165.4 MW of electricity. Their generation capacity declined since the first quarter of 2021 when they hit 5,465.72MW and fell to 4,712.34MW in the first quarter of 2022- a far cry from the 40,000MW needed to sustain the basic needs of the population. However, last December, about 4, 000MW was added to the generation capacity, bringing the total to 22,000MW.
But the generation of this huge megawatts has not translated to anything meaningful because the Transmission Company of Nigeria (TCN), saddled with the responsibility of wheeling same to the Distribution Companies (DisCos), are challenged by ageing infrastructure to deliver the commodity.
It is more disheartening that former President Buhari invested over $7.5 billion in the transmission segment of electricity yet nothing concrete has been achieved.
The DisCos on their part have equally not helped matter because they also lack the capacity to absorb and distribute what the TCN sends out.
Government cannot afford to leave the power sector entirely to the private sector. The governments of Most developed and emerging economies undertake significant public investment in infrastructure. This is because of the role of infrastructure like power in promoting productivity, competitiveness, job creation and economic development.
Experts argues that What is appropriate for the economy to have a blend of public and private investment in the power sector.
“Our post privatisation power sector experience has thrown up critical questions as to whether we should leave the sector entirely in private sector domain. We need a model that works. This would involve public investment, private investment, decentralisation of the sector, and diversification of energy mix. Public and private sector roles should be clearly defined. Power is a critical developmental tool for the economy.
What is clear is that the typical Nigerian bureaucracy cannot manage any infrastructure facilities successfully.
“The presidential power initiative, including the Siemens power project should be more rigorously implemented.
“An audit of current private sector players in the distribution and generation companies should be undertaken to assess their delivery capabilities. Metering of all electricity consumers must be made mandatory before billing,” said the Chief Executive Officer of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf.
Maritimes
For an import-dependent economy like Nigeria’s, getting the seaports, major gateways to the country, to work efficiently is germane to its growth and development.
In a separate interviews with The Nation after President Asiwaju Bola Ahmed Tinubu submitted his ministerial list to the Senate, stakeholders outlined some of the hindrances to trade facilitation at the ports and urged the new Minister of Transportation on how to get the seaports to work more effectively and efficiently
Former President, Association of Nigerian Licensed Customs Agents (ANCLA), Prince Olayiwola Shittiu told The Nation at the weekend that the country “has the greatest potential with its maritime industry therefore, the new Minister of Transportation must come up with good policies that will assist the country in utilising its resources such as the 900 nautical miles of coastline, 572 inland waterways, 10,000km of navigable waterways and turning the Lekki Deep Sea Port to a transhipment hub.
Others, according to him, include “ fixing dilapidated port infrastructure, trade facilitation, implementation of 48hour cargo clearance policy from the port, d rect foreign investment policy that is workable, good trade tariff, promotion of Cabotage regime and green field development among others,” Shittu said
A maritime analyst, Mt Kayode Ogunsanu said, the efficiency of port operations has become a major driver of trade and economic activities across many countries. However, “over the years, their users and operators have faced persistent challenges with the attendant implications on the cost of doing business.
“Shippers are forced to pay high demurrage for delays not caused by them. There are also the issues of the duplication of responsibilities by the government agencies. Regulation of terminal operators with expired concession agreement is also a major issue. There are reports of corruption among security agencies and unregulated charges by private concessionaires who took over the ports since 2006, which the new Minister must look into.”
Other stakeholders who spoke with our correspondent raised concerns about weak regulatory framework by agencies for protecting port users. “There are reports of high charges by shippers and deals by officials. Therefore, the real economic issues and development are constrained. Here, the Minister has a very big job to do,” said, an importer, Albert Sunday.
When we are talking about port operation, stakeholders said, trade facilitation takes the centre stage.
“What we want in the maritime sector under the new Minister “is enhanced and effective port operations. We know Customs is out to generate revenue for the government and under the Ministry of Finance but most importantly, the new Ministers must collaborate so that the “Service would be driven by trade facilitation. Customs should have a unified duty payment system on homogeneous goods.They must embrace paperless transactions and concentrate more on trade facilitation rather that revenue generation to make our ports attractive for business,” said a maritime lawyer, Dr Dipo Alaka.
The new minister, he added, should promote policies that would enhance efficiency, cost effectiveness and speedy turnaround time of vessels and quick clearance of cargoes in accordance with the international best practices.
This policy, he said, should be directed towards making Nigeria, the hub of maritime in the West and Central African sub-region.
“The new Minister must promote transparency, accountability as well as eliminating impediments to greater economic performance in the ports. The 48-hour duration target for cargo clearance must be made realistic. All that the new Minister needs or requires is the support of the major stakeholders at the ports and genuine commitment to the implementation of the integrity plan,” said a maritime lawyer, Mr Muhammed Oluwaseyi.
He added that an important component of the project that would facilitate the patronage of the seaports is an anti-corruption policy.
“Heads of government agencies in the sector must come up with policies that will have inbuilt provisions to prevent leakages and remove impediments against trade and investment in our ports,” he said.
Oluwaseyi urged the new Minister to ensure that maritime agencies under the Ministry of Transportation and others working inside the ports promote transparency and integrity.
“The collaboration they did on paper between 2013 and 2023,” he said, “has yielded little or no effect. Now is the time for the government agencies to come up with anti-corruption policies and the desk where the stakeholders can obtain necessary information in order to reduce the time and cost of doing business in our ports.”
Also, an expert, Mr. Adefemi Adebiyi, listed lack of quality, transparency and poor infrastructure as factors hindering the efficiency of the ports and urged the in-coming government to tackle them.
Adebiyi emphasised the need for investment by the new Minster as a solution to the challenges in the sector.
“Trading in the port is a challenge. Customs is meant to be enablers of trade but the truth shows them almost as barriers and that needs to change by the new Minister.
He stated that with a Gross Domestic Product (GDP) of over $432.3 billion and a market of over 200 million people, Nigeria presents the largest trading potential in Africa.
Adebiyi listed impediments to Nigeria’s trade at the ports and Customs as import/export processes delays, analog operations, mistakes, corruption, traffic congestion, and poor access to the port which the new Minister must address to make the country a hub of maritime activities.
Infrastructure
IT is common knowledge that Nigerian roads are generally either in a state of disrepair, poorly maintained or altogether untarred. With Nigeria boasting of the largest road network in Africa, it is not surprising that only about 60,000km out of its estimated 195,000km or road network is paved.
Majority of the nation’s road network was constructed between the 80s and 90s, with a larger portion of them currently deteriorated because of poor maintenance. Even when the existing roads are constructed or supposedly maintained, it soon falls into disrepair due to the use of low-quality materials. Despite huge budgetary allocations been committed annually to infrastructural development projects, much yet remains to be seen on how the condition of the roads justifies their fiscal allocation.
The Nigerian road network is majorly classified into three. First is Trunk Road “A” which encompasses the framework of the national road grid and cuts across regional boundaries. The Federal Government of Nigeria, through the Federal Ministry of Works and Housing, is responsible for financing, constructing, and maintaining this class of roads. Second is the Trunk Road “B” which connects the major cities within states.
They are financed, constructed, and maintained by the state governments. Third, Trunk Road “C” falls under the category of roads constructed and maintained by local government authorities in Nigeria, and they are usually untarred.
Though the Trunk Road “A” falls under the exclusive purview of the Federal Government and, by that fact alone, is well deserving of being kept in pristine condition, it will be observed that they are veritable tools for bandits and kidnappers who take due advantage of the several potholes and poor surface conditions which forces commuters to slow down. In addition, commuting on any of the trunk roads is usually characterised by unduly protracted hold-ups caused by several factors including repair works or accidents resulting from bad roads.
Poor roads continue to be one of the causative factors for road accidents in Nigeria. According to the Quarter 2-2020 Road Transport Data report published by the National Bureau of Statistics in conjunction with the Federal Road Safety Corps, FRSC, 2,080 road crashes, many attributable to the bad conditions of the roads, occurred in Quarter 2-2020. While a total number of 5,353 Nigerians got injured in the road traffic accidents recorded, a total of 855 were killed. The total number of vehicles involved in accidents in Quarter 2-2020 was 3,334.
Recently, members of the Nigerian Union of Petroleum and Natural Gas Workers, NUPENG, threatened industrial action over poor roads in Nigeria which constantly causes tanker accidents and the resultant life and economic losses. The National President of the Union reportedly stated that:
“We wish to urgently draw the attention of the Federal Government to the harrowing experiences of the owners of petroleum trucks in the country. The only means of moving petroleum products across the country is by roads, using the trucks. We can confidently tell you that this means of distribution is presently endangered and require urgent Federal Government stimulus intervention fund to prevent it from total collapse.
“We are shocked at the lackadaisical attitude of local, states and Federal governments to the issues of addressing the degenerating state of Nigeria roads before the coming of the current raining season despite all our warnings for them to make necessary construction, repairs and maintenance of all our roads, which are now in a parlous state and becoming practically impassable.”
Though the strike was subsequently called off due to some intervention by the Federal Government, one cannot but agree with the motive behind NUPENG’s intended strike. There is no doubt that road usage accounts for the great percentage of transportation which means that the deplorable condition of the roads which cars, trucks, buses, and motorcycles are forced to ply together is bound to engender occasional crashes.
Practically every Nigerian and every sector of the Nigerian economy relies on one form of transportation or the other, with road being the most utilised means. This, therefore, connotes that a good road network where commuters arrive at their destination without any delay occurring from bad roads, or where goods are safely and timeously transported from one location to the other is bound to foster economic progress.
No doubt, good road infrastructure affects the flexibility and mobility of workforce from one point to the other, and it is indeed central to good governance and public welfare. Undoubtedly, a seamless road network and infrastructure lowers production costs and raises productivity particularly especially in the agricultural sector where the transportation of crops from the farm to the consumers is a major factor in the production chain.
Even in the industrial sector, a good road transportation network is required to bridge the gap between the place of production to the point of final consumption. Research has shown that there is a strong and positive relationship between road transportation and economic growth in Nigeria. It has equally been demonstrated that transportation infrastructure can improve the well-being of the citizens in Nigeria.
Road transportation contributes to Gross Domestic Product in any country and impacts its economic growth when goods and services are being able to be transported to the end user. This implies that a good transportation system is a powerful tool in bolstering productivity and effective distribution of goods and services and, at the long run, increase the economic growth in country.
However, against the backdrop of the nation’s deplorable transportation network, a study by the National Planning Commission, NPC, in 2018 concluded that the Nigeria’s current transport infrastructure is not aligned with the country’s aspiration to become one of the world’s 20 largest economies.
For the Group Managing Director, Paradox Food Groups, Victor Paul Nnandi, the bad roads spread across the South East give motorists a nightmare. According to him, Aba to Akwa Ibom Road is characterised with wide and deep potholes, worn-out parts which makes it difficult for motorists as well as pedestrians.There are spots along the road that deep enough to topple a two-wheeler falling into one of them. Another road of concern is Aba –Portharcourt road which some bitumen layers have weakened leading to the formation of craters. The stretch of the road is broken in several parts. Sometimes cars tend to avoid identified areas on the stretch as top bituminous coat have worn off in many places. The road has assumed a lot of importance as large industrial exporters and importers use the road.
Umuahia looks less like a road and more like a stretch of potholes. The road has been in such a condition for the last 20 years . By now people have resigned to the fact that they have to travel through the cratered road. Nnamdi has seen drivers take a detour, spending more time, just to avoid the road. The long stretch of road no longer boosts the smooth surface. It is filled with potholes and craters.
