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Optimism and Concerns for Nigeria in 2014

 

There has been endless deluge of bad news about governance in Nigeria from federal to local government level.  Some of the pessimism is well deserved but they appear to be some bright spots in Nigeria political and economic landscape. However more work is needed to accelerate this development.  Nigeria is a country endowed with abundant natural and human resources but has been so mismanaged that majority of the population live below poverty line.

 

On the economic front, Nigeria Gross Domestic Product expanded at 6.81 percent in the third quarter of 2013 and the projection for 2014 is expected to equal or exceed past year.  The only problem is that the economy is not growing fast enough to make substantial difference in people’s life or put a dent on high youth unemployment prevalent in various parts of the country.  Even though most Nigerians are yet to feel and experience this economic growth, which is one of the fastest in the world, it is nonetheless an achievement that deserves recognition and commendation.

 

The government of president Jonathan is making some fundamental changes that will reposition Nigeria economy for long- term growth.  One of the reforms is the privatization of Power Holding Company of Nigeria (PHCN) formerly National Electric Power Authority (NEPA) which generates and supplies electricity to the entire country.   PHCN was a massive bureaucracy riddled with corruption.  It is well known in Nigeria that NEPA engineers sometimes divert limited power to wealthy areas or people that pays more in bribe.  Privatizing the electric supply will help Nigeria become self sufficient in power generation and distribution in no distant future due to competition that will soon take root.  The only problem with PHCN privatization is that some state governments were allowed to purchase substantial shares of the privatized company.  They should have been limited to purchase no more than 10 percent. Some of these state governments are inefficient and could not even run state owned enterprises in their states.

 

Scheduled privatization of Port Harcourt and Kaduna refineries by the federal government in early 2014 will be another fundamental change and bright spot for Nigeria.  Nigeria is a major oil producer but over 90 percent of the oil produced in Nigeria is refined overseas.  The refined oil is re-imported back to Nigeria at the prevailing international market prize for local consumption.  Re-importation drains some of the profits from the oil revenue, which in turn drains Nigeria foreign reserve.  New owners should be able to source and inject needed cash to revitalize and expand the refining capacity of the plants.  Better management and competition will improve efficiency and reduce corruption.  It should be noted that former president, Obasanjo privatized these refineries before he left office.  Alhaji Dangote and Femi Otedola purchased either one or two of the refineries but late president Umaru Yar’Adua mandated them to hand the refineries back to the federal government and promised Nigerians that it will back to full operation in six months which never materialized.  Privatization of all government enterprises should be accelerated at federal, state and local level. It is not an accident that the successful sectors of the economy such as telecommunication and banking are all private enterprises.

 

There have been a number of vehicles manufacturing and assembly plants established in Nigeria within the past couple of years.  The most promising is Innoson Vehicle Manufacturing Company owned by a Nigerian.  The presidency is now trying to help local manufacturers by imposing 20 to 70 percent tariff on imported vehicles.  The tariff is meant to discourage foreign vehicle importation, which will in turn force Nigerians to patronize locally manufactured ones.  It is a good program in the short run since it will help local manufacturers get off the ground but this policy may boomerang in the long run because protectionism makes companies complacent and inefficient which may lead to future production of inferior vehicles.  The short-term negative impact of protectionism is that it may encourage smuggling.  Imported car dealers and smaller importers might resort to sending imported vehicles to neighboring countries which will then be smuggled into Nigeria from nearby foreign ports especially Cotonou port in Benin Republic.  Smuggling will result in loss of revenue to the federal treasury from loss import duties.  Federal government must review these tariffs from time to times so they can adjust or eliminates it all together when unintended consequences arises.

 

On the political sector, the emergence of strong opposition, All Progressive Congress (APC) is the best thing to happen in Nigeria political scene since the restoration of civil rule by military government in 1999.  Up till now, Nigeria opposition parties were too small, weak and fragmented to check mate the ruling party, People Democratic Party (PDP).  The result is that PDP became complacent, lost focus and failed to entrench internal party democracy.   Impunity also set in which usually happen when there is little or no political competition.  Emergence of APC and recent defection of PDP governors and legislatures was a shock to the party.

 

Political competition that is already underway will enhance governance by any party in power if they want to remain relevant in Nigeria political scene.  However, the jury is still out on APC, since their motive is still unclear.  Time will tell if their motive is just to wrest power from their nemesis or to improve life of Nigerians.  What is clear so far is that lately some strange bedfellows are flocking to APC.  Some of them are very divisive, some have questionable backgrounds and some have pending corruption cases before the court.  Real political competition can only happen if free and fair election is allowed to take place.  Recent Anambra state gubernatorial election conducted by Independent National Electoral Commission does not bode well for 2015 presidential election.  INEC need to weed out corrupt officials within their ranks in-order to ensure orderly, free and fair election.

 

More fundamental changes are urgently needed to help Nigeria develop much faster.  Corruption is one area the government must focus on.  War on Corruption is withering on the vine.  Not much has happened to the war on corruption since the unceremonious and forced retirement of the former chairman of the Economic and Financial Crime Commission (EFCC) Mallam Nuhu Ribadu by late president, Umaru Yar’Adua.  Nigeria has retrogressed in the fight against corruption ever since.  In 2012 Nigeria ranked 139 in Transparency International Corruption index compared to 144th in 2013.  Current federal government effort in the fight against corruption is demoralizing.  Nigeria cannot go far with the current level of corruption.  Elimination or reduction of corruption must be the top priority of the government in 2014.  EFCC should have presence at the state and local government level in order to make a dent on corruption.  A leader who will wage total war on corruption will endear him or herself to Nigerians who are already sick and tired of corruption.

 

More security is needed in Nigeria.  Establishment of State police, local government and township police forces is the only way left to improve security. Township police will be akin to city police in United States. Concern on the part of some Nigerians at the prospect of state and local police force is understandable considering the ethnic and religious make up of Nigeria. Some worry that it could lead to ethnic or religious war aided by proliferation of weapons.   The fear could be mitigated by giving the Nigeria Police Service Commission the power to excise jurisdiction over all police forces in the country with power to dismiss any police officer who misuses his or her power even though the state governors will establish, run and control the state police and local government chairmen and Townchairman will do the same at the local level.  Federal, state and local police could be banned from enforcing any religious law since Nigeria is a secular state.  Right now, Nigeria has federal police scattered all over Nigeria but local populations do not trust them.  Locals will be more familiar with local police force and will be willingly to give information on local criminals in their mist.  It is no coincidence that the federal forces battling Boko Haram started making substantial progress when local population turned against the sect and started giving information and in some cases arresting members of the sect and handing them over to Joint Task Force (JTF). Introduction of state, local and township police could be chaotic at first but it will all work out in the long run.  It is not a new concept since it has been successfully adopted in different countries.

 

More local government is needed in Nigeria.  Fourth tier of local government should be established in Nigeria.  All towns should be allowed to incorporate and have township chairman and council elected on non-partisan basis or remains under local government council control if they chose that option.  They should have the power to levy taxes for development of their towns.  When people are given control over their affairs, they will be more likely to use their resources more efficiently.  Local towns people will frown at any township officials who will misuse or embezzle their money.

Devolution of power will encourage more development and bring government closer to the people.  Local governance will succeed if it is back up with strong anti-corruption effort in-order to make sure that local funds are not misused or stolen.  Federal and state government are often to far from various towns to effectuate meaningful change.  Devolution and transfer of some powers to the local level is the way forward for Nigeria.  It is indisputable that creation of more states over the years and subsequent devolution of power to state governments brought government closer to the people and resulted in meaningful development at the state level.

 

 

 



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