The Minister of Finance presented a budget yesterday where she once again reminded Nigerians that due to the fall in oil prices we may have to brace up for a difficult 2015. This quite contrast to 2014 budget where they beat they rolled out a long list of things they hoped to accomplish. Back then, the budget was called a “Budget for Jobs and Inclusive Growth”. Well, we all know how that one went. The Budget produced as many jobs as it at lost as unemployment rate remained high at 23%. Our equities market lost over 23% and is on track to be the worst performing stock exchanges in the country. There was also little growth amongst companies as the insurgency in the country stifled businesses. I guess where we saw growth was in government reckless expenditure, corruption and more infrastructural decay. But just for the records, this was what they said last year.
THEME “A Budget for Jobs and Inclusive Growth”
“We need to grow even faster than 7% per annum and we need growth in sectors such as agriculture, housing, and services that create the most jobs. Our growth must bring shared prosperity. An economy whose growth leaves wealth in the hands of a few cannot achieve its full potential.” – PRESIDENT GOODLUCK JONATHAN IN BUDGET 2014 SPEECH
Continuation of prudent economic management in order to build on recent economic growth to support job creation and more infrastructure
AVOIDING GLOBAL PITFALLS
Because we are connected to a global economy that remains weak, we need to be prudent and proactive to avoid risks and dangers while creating more jobs and building more infrastructure.
PRIORITIES OF BUDGET 2014
- Continued focused implementation of Power Roadmap to consolidate the transformation of the power sector.
- Increased investments in transmission to ensure power generated is properly evacuated and distributed.
- Strengthen regulation of the sector, and closely monitor electricity delivery to increase this beyond 18 hours per day.
- Complete the privatization of the NIPP projects, accelerate work on our gas pipeline infrastructure and also continue to invest in hydro-electric power and clean energy as we monitor the effects of climate change on our economy.
- Considerable progress and completion of some major projects including:
- the East-West road
- dualization of the Abuja-Abaji-Lokoja road
- rehabilitation of the Ayingba-Otukpo road
- dualization of the Kano-Maiduguri road
- Increased pace of work on important roads such as:
- the Lagos-Ibadan expressway
- the Enugu-Port Harcourt expressway
- the second Niger Bridge, and the Loko-Oweto Bridge.
- Continuation of investment in upgrading air navigational and security systems to maintain safety in our skies. Complete work on the remodeling of 11 airport terminals across the country.
- Accelerate construction work on the five new airport terminals and 13 perishable air cargo terminals across the country.
COST OF GOVERNANCE
- In 2014, concrete steps will be taken to reduce cost of governance and stem the tide of corruption and leakages.
- To curb fraud in the administration of the pension system, a Pensions Transition Arrangement Department under a new Director-General was set up I 2013. In 2014, this department will now ensure pensioners still under the old scheme receive their pensions and gratuities, and are not subjected to fraud.
- Prosecution of all those involved in robbing our retired people will continue.
- In the Petroleum Sector, the Governor Uduaghan-led Committee is ready with its recommendations on how to stem oil theft and pipeline vandalism. We shall implement the various security and community measures in 2014.
- From 2014, all training for personnel of MDAs and parastatals must now take place in Nigeria. Foreign training programs will only be approved in truly exceptional cases, and will be based on guidelines to be developed by the Head of Service and the Director-General of the Budget Office.
- Foreign travel by government personnel will be further curtailed. This directive shall apply to all Ministries, Departments and Agencies of the Federal Government.
- The strategy to curb leakages increasingly relies on introducing the right technologies such as biometrics and digitizing government payments. In 2014, the deployment of the three electronic platforms – the Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS) – which are all geared towards improving efficiency and transparency in our public finances will be completed.
- Through these reforms, N126 billion in leaked funds has already been saved.
- To sustain Nigeria’s ongoing agricultural transformation, further investments in the sector are planned.
- Target: to provide input subsidies to 5 million farmers nationwide using the e-wallet system. Recently launched self-employment initiative under the Youth Employment in Agriculture Programme (YEAP), called the Nagropreneur programme will develop over 750,000 youth commercial farmers by 2015.
- Establish new agro-industrial clusters to complement the staple crop processing zones being developed across the country. In 2014, in partnership with the private sector, the Fund for Agricultural Finance in Nigeria (FAFIN), a private equity fund to invest in agribusinesses across the country will be launched.
- Nigeria has about 17 million registered SMEs which employ over 32 million Nigerians. To strengthen them and improve their job creation capacity in 2014, there will be a stronger focus on implementing the Nigeria Enterprise Development Programme (NEDEP) to address the needs of small businesses. This will include helping SMEs with access to affordable finance, business development services, and youth training.
- There will be stronger implementation of new CET policies to support our emerging industries. Intensification of investment promotion efforts abroad to ensure we bring the biggest and best companies from around the world to invest in Nigeria.
HOUSING AND CONSTRUCTION
- The housing and construction industry booms, it creates additional jobs for architects and masons, for electricians and plumbers, for painters and interior decorators, and for those in the cement and furniture industries. To reinvigorate the housing and construction sector, the Nigeria Mortgage Refinance Company (NMRC) will be launched in January 2014.
- NMRC increase liquidity in the housing sector, provide a secondary market for mortgages, and thereby increase the number of people able to purchase or build homes at an affordable price in the country.
- The programme will begin in 14 pilot states where the State Governors have agreed to provide fast-track land titles, foreclosure arrangements, and serviced plots.
- NMRC will help create over 200,000 mortgages over the next five years at affordable interest rates.
- To provide for those at the lower end of the economic ladder, there will be an expansion of mass housing schemes through a re-structured Federal Mortgage Bank and other institutions to provide rent-to-own and lease-to-own options.
- This will help ensure more hardworking Nigerian families will be able to realize their dream of owning a home.
- To support the film and creative arts industry, the Project Advancing Creativity and Technology (PACT) Nollywood, a ₦3 billion grant programme for Nollywood was set up in 2013.
- N1 billion of this Fund has gone to support capacity building and film production in the industry.
- In 2014 will witness accelerated implementation of this programme, with greatest focus on tackling intellectual property and distribution challenges faced in the industry.
- In the 2014 Budget, there will be continued implementation of the Saving One Million Lives initiative to strengthen primary health care services.
- This will involve scaled up interventions in reproductive, maternal, newborn and child health, nutrition, routine immunization, HIV/AIDS, malaria elimination, tuberculosis, neglected tropical diseases, and non-communicable diseases.
- Stronger focus on implementation of the provision of universal health coverage.
- Focused implementation of new initiatives such as the President’s comprehensive response plan for HIV/AIDS as President Goodluck Jonathan will Co-Chair the fourth replenishment of the Global Fund to fight AIDS, Tuberculosis and Malaria along with UN Secretary General, Ban Ki-moon and other selected world leaders.
- In 2014, there will be focus on revitalizing our tertiary institutions by increasing investments in infrastructure to upgrade hostels, laboratories, classrooms, and halls.
- As the 2015 deadline for the Millennium Development Goals approaches, there will be expanded access to basic education for all Nigerian children.
- Working with State Governments, the Federal Government shall decisively tackle the problem of the large numbers of out-of-school children in this country.
- Investment in technical and vocational education to promote skills development for our youth across the country.
ESTABLISHMENT OF A WHOLESALE DEVELOPMENT FINANCE INSTITUTION
- Lack of access to affordable medium to long term credit is one of the greatest problems facing Nigerian industrialists and entrepreneurs.
- To address this problem decisively, a new wholesale development finance institution will be established by end-2014 to provide medium-to long-term financing for Nigerian businesses.
- Government is working with partners such as the World Bank, the Africa Development Bank, the BNDES Bank in Brazil, and KfW in Germany, to realize this project.
- The existing Bank of Agriculture and Bank of Industry will be re-structured as specialized institutions to retail financing from this new wholesale development bank.
PEACE AND SECURITY
- The security challenges in the North East of our nation led to the introduction of a State of Emergency in Yobe, Borno and Adamawa states.
- Government’s strategy for a lasting solution is anchored on a firm security response, continued political dialogue, and a package of development assistance to enhance economic inclusion.
- Even prior to the recent insecurity in the region, the North Eastern part of our nation had some of the lowest human development indicators in the country. The recent Report of the Dialogue Committee recommended more investments in health and education in states in the North East. The Federal Government and development partners will work with the relevant State Governments and other stakeholders to establish a development programme for the North East starting with the three states of Yobe, Borno, and Adamawa.
- This program, to be known as the Federal Initiative for the North East (FINE), will rehabilitate local schools and health clinics as well as provide additional assistance for farmers in the region to help restore their livelihoods.
CONTINUED IMPLEMENTATION OF JOB CREATION PROGRAMMES
- Supporting creation of jobs by the private sector will continue to be a top priority in 2014. They will be supplemented by direct government programmes such as the Nagropreneurs, YouWiN, Graduate Internship Scheme, and the SURE-P Community Services programme.
ACHIEVEMENTS OF BUDGET 2013 IMPLEMENATATION
MORE JOBS CREATED…
- The National Bureau of Statistics estimates that 1.6 million jobs were created across the country in the past 12 months principally in the agricultural, oil & gas, manufacturing, housing & construction, and SME sectors.
- Jobs were also created through the special government intervention programmes such as YouWiN, SURE-P and the Graduate Internship Scheme.
- …BUT WE NEED MORE!: In spite of these jobs created, government is keenly aware that more jobs are needed to support our growing population. This is why the 2014 Budget is focused simply on “Jobs and Inclusive Growth!”
POWER PRIVATISATION = BETTER ELECTRICITY SUPPLY SOON
With privatization of PHCN almost completed, the Jonathan administration is closer to achieving its number one infrastructural priority: improving electricity supply to industries, businesses and homes across the country. This will create millions of direct and indirect jobs, revitalize our industries and improve the economy.
In 2013, 4 power generation companies and 10 power distribution companies were successfully privatized.
virtually all claims and entitlements of PHCN workers have been settled.
10 power plants under the National Integrated Power Projects (NIPP) are going through the privatization process.
Power transmission remains with the Federal Government, with the management outsourced to the Manitoba Hydro Company.
$1.5 billion in financing from various sources have been mobilized for investment and upgrade of the transmission network in 2014 and beyond.
To ensure clear and sustainable benefits to the country, relevant regulatory and financing institutions to encourage more private investments in the sector have been established and strengthened.
Also in 2013, the construction of the 700MW Zungeru Hydro-Power project was flagged off at a cost of N208 billion to improve power supply in clean energy.