Nigeria’s Federal Executive Council last week approved the National Poverty Reduction with Growth Strategy (NPRGS), a scheme they say will accelerate the reduction in poverty through economic growth, social protection programs, and others.
The FEC also announced the establishment of a Nigeria Investment and Growth Fund to invest in commercially viable projects in priority sectors that will promote growth and innovation, enhance local value addition, and create employment.
The NPRGS was necessitated by the rise in poverty and inflation which has caused hardships for Nigerians. In a document released by the Presidential Economic Advisory Council (PEAC) a month before the FEC approved the plan, the FG outlined the process needed to implement and achieve their plans.
The four pillars
According to the report, the 4 pillars on which the NPRGS is based include:
a. Macroeconomic stabilization policies to improve the capacity of the economy to absorb shocks and avoid disruptive adjustment.
b. Industrialization for Economic Growth and Transformation of the economy from commodity-dependent growth path to a diversified, industrialized, knowledge-intensive, and job-creating economy.
c. Structural Policies and Institutional Reforms to engender efficiency in service delivery, promote transparency and accountability in the management of fiscal resources, bridge the infrastructure gap, improve private sector development.
d. Redistributive Policies and Programmes to reduce levels of risk, vulnerability, shocks, and deprivation. The latter includes programmes aimed at enhancing incomes, job opportunities, and wealth creation through vocational skills training, micro-credit and micro-enterprise development, and livelihood diversification in the agricultural sector.
The report added that over the 10-year programme period (2021-2031), the total cost of the execution/implementation of the policies and programmes underpinning this strategy is estimated at US$1.6 trillion, giving an annual average of about US$161 billion. “This estimated cost covers the dual objective of lifting 100 million Nigerians out of poverty as well as of achieving all the country’s development objectives in line with the Sustainable Development Goals 2030. As a middle-income country, around 50-60% ($80b – $97b) of financing needs are expected to be covered by the government,” they said.
Strategy for Implementation
1) Macroeconomic Stabilization Policies
The FG stated that achievement of the desired outcomes of the programme rests crucially on the implementation of sound macroeconomic policies, citing that consistent implementation of macroeconomic policies would reduce the risks of economic disruption while providing an environment for the smoother transmission of economic policies. Also, it will be seen as a catalyst to incentivize private sector investment and consumption.
The Presidential Economic Advisory Council urged the implementation of:
- A unified and competitive exchange rate;
- Inflation maintained at single-digit;
- Market-determined interest rates;
- Gradual phase-out of subsidies resulting in prices that reflect market conditions; and
- Public debt kept at a sustainable level, especially with respect to the government’s debt service capacity.
2) Economic Growth, Industrialization, Diversification and Trade
The report stated that the new industrialization policy will come in 4 phases which would focus on a radical transformation of Nigeria’s economy, to bring the size and complexity of the economy in line with Nigeria’s peers, the largest 30 economies in the world. The phases are:
Phase I (2021-2022): Implement first-round reforms, increase productivity and job creation in select sectors, capture larger shares of the domestic market.
Phase II (2021-2023): Continue to expand the domestic market, mitigate impediments to trade, and commence increased access to bilateral and regional markets where trade protocols already exist. Examples are ECOWAS regional market and US AGOA trade preference arrangements.
Phase III (2022-2025): Increase productivity in more sectors, move up the value chain to more complex products like large household goods. Build competitiveness and promote access to global markets.
Phase IV: (2026 and beyond): Leverage innovation, science, and technology to create a knowledge economy that enjoys self-propelled growth.
They added that a growth strategy focused on both satisfying domestic demand and exports can deliver double-digit annual economic growth of above 10 percent.
“More than $1,500 billion of exports and 160 million jobs are moving away from China and other rapidly growing economies in search of the new location. Many African countries, including Ethiopia, Kenya, Mauritius, and Lesotho have created the enabling environment to take advantage of these opportunities because most of these jobs are in extremely low skill areas, with only minimal capital intensity, and low lead time,” the report said.
3) Reforms to Support Industrial Deepening, Diversification and Trade
The area cited institutional economic reform in areas including:
- Public procurement and local content guidelines;
- Standards and technical infrastructure;
- Special Economic Zones (SEZ);
- Industrial Incentives;
- Innovation and Technology;
- Access to finance;
- Targeted interventions to reduce skills gap;
- Investment policy and financial and capital market integration and Trade Policy; and
- Regional and Continental integration.
“As the new strategy moves to Phase II, obstacles to imports and exports of both goods and services would need to be reduced. Nigeria has been heavily involved in integration efforts both at the regional level, via ECOWAS, and the Africa Continental FTA. In addition, the country has various bilateral trade agreements with many countries. However, Nigeria has not taken advantage of these trade relationships to grow its exports,” the report said.
4) Redistributive Policies and Programmes
PEAC added that the key elements for a comprehensive redistributive programme aimed at reducing the poverty headcount by 15 million by 2023 are:
- Reforming and expanding social protection programmes to provide income and other support for families without livelihoods through Conditional Cash Transfer, Homegrown School Feeding, and other income subsidy programmes.
- Enhancing youth access to economic opportunities through vocational skills and entrepreneurship training and supporting their transition to gainful self-employment or wage jobs with partner private sector or government organizations. The Programme will target the ultra-marginalized (the poorest and most vulnerable) populations which are under-served by market systems.
- Enhancing access to economic opportunities through MSMEs support. This programme will target support for both survival-oriented activities often undertaken by poor women and growth-oriented micro and small entrepreneurs wishing to set up new businesses or expand existing ones.
- Reforming and increasing investment in health and education sectors, key determinants of poverty outcomes, to enhance access by the poor and vulnerable in society and to improve quality and efficiency in delivery.
- Implementing policies that support better outcomes in the agriculture sector and rural development, where most of the rural poor are concentrated as detailed in Part V.
- Introducing institutional and policy reforms aimed at transforming social protection from a federal to a national programme while improving the organizational framework.
PEAC says the NPRGS emphasizes the principle of shared responsibility between the stakeholders that include the three tiers of government, the private sector, the civil society organisations, and development partners. “Such mutual ownership and the resulting collaboration in the design, resourcing, implementation, and monitoring of the programme will ensure effectiveness, efficiency, and dynamism in poverty reduction,” they said.
FG places high profile Nigerians under security watch for terrorism financing
The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.
The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.
This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).
This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.
What the Attorney General of the Federation is saying
The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.
Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).
That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.
I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.
In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.
However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.
“As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.
It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”
Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.
What you should know
It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.
ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.
Top States in Nigeria with highest IGR per population in 2020
Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population.
Nigeria’s states generated a sum of N1.31 trillion internally in 2020, representing a marginal decline compared to N1.33 trillion recorded in 2019, and an increase compared to N1.17 trillion in 2018.
The downturn is attributable to reduced state revenue as a result of disruptions caused by the covid-induced lockdown, while the crash in crude oil prices also hampered economic growth.
Internally generated revenue is regarded as income generated by various states in the country, independent of their share of the revenue from the Federation Account. However, apart from the clear exception of Lagos State, all others depend largely on statutory allocations to run their state affairs.
Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population, taking into account the estimated population size of each state as at 2016 and 5% growth rate between 2016 and 2020.
In terms of IGR per population for the six geo-political zones in Nigeria, South West takes the lead with an average of N13,966, having generated a sum of N561.01 billion and an estimated population of 40.17 million people. The South-South region followed with an average of N8,694 and a total aggregate IGR of N263.17 billion.
On the flip side, the North-Eastern region, which houses states like Bauchi, Borno, Yobe, etc. recorded the lowest IGR per population of N2,061 closely followed by North West with an average of N2,855.
Here are the top 5 states with the highest IGR per population in 2020.
Lagos State – N31,794
Lagos State, regarded as the economic hub of the nation, with a total estimated population of 13.18 million people as of 2020, generated a sum of N418.99 billion as IGR in 2020. This represents an increase of 5.1% compared to N398.73 billion recorded in 2019.
- In terms of IGR per capita, Lagos State generated an average of N31,794 from each member of the population in 2020, as against N30,257 generated in the previous year.
- It is no surprise that Lagos State tops the rank, being a major epicentre for economic activities in the country. Lagos State is the largest city in Africa in terms of GDP, and the State is widely known for its large industries, with most corporations in the country headquartered within the state.
- It also houses major seaports in the country as well as the State Government’s aggressive taxation policies. These, amongst others, ensure the state makes more revenue internally compared to other states of the Federation.
- According to data obtained from the National Bureau of Statistics, Lagos State received a total of N115.93 billion as Federal allocation in the year 2020, representing 21.67% of the total revenue available to the state in the year.
- This shows the exceptional ability of the state to run its affairs, using its internally generated revenue with little or no support from the Federal purse.
Abuja – N24,600
The Federal Capital Territory generated a sum of N92.06 billion in 2020, the third-highest state IGR in the year. However, based on IGR per population Abuja seats in second position with an average of N24,600.
- This represents a 23.5% increase when compared to N19,925 recorded in 2019.
- Abuja is the capital territory of Nigeria, with a total estimated population of 3.74 million people across a 7,315km square area.
- The state houses a lot of Federal ministries, having been made the country’s capital in 1991. Abuja is also a major conference centre in the country, as it hosts various meetings and summits annually.
- A cursory look at the data showed that the state’s IGR only accounted for 57.85% of the total available revenue, indicating that 42.15% of its revenue was gotten from the Federation account.
Rivers State – N15,281
Rivers State, being a major oil-producing state in the country, generated a sum of N117.19 billion as internally generated revenue in 2020.
- However, with an estimated population of 7.7 million people, its IGR per population stood at N15,281 in 2020, representing a decline of 16.5% when compared to N18,307 recorded in 2019.
- Rivers State is in the Niger Delta region of the country with much of the businesses in the state being oil exploration companies.
- Evident from the data obtained from the NBS, Rivers State relies heavily on statutory allocations from the Federal Government as well as their share of the 13% oil derivatives as it received a total of N141.19 billion from FAAC, representing 54.64% of the total available revenue in the review period.
Delta State – N10,045
Delta state, another state in the Niger Delta region of the country, with an estimated population of 5.9 million, generated a sum of N59.73 billion as IGR, and an average of N10,045 as IGR per population.
- Delta State is a major oil-producing state and ranks second to Rivers State. The State supplies about 35% of Nigeria’s crude oil and some considerable amount of natural gas.
- Delta State in the period received a sum of N186.83 billion as statutory allocation in 2020, thereby taking a huge part (75.8%) of the total revenue available to the state.
- Its IGR only accounted for 24.2% of the available revenue in the period, while N46.11 billion was generated as PAYE.
Ogun State – N9,263
Ogun State, a neighbouring State of Lagos State, generated a sum of N50.75 billion. In terms of IGR per population, the State generated a sum of N9,263.
- The State’s average income per population decreased by 28.4% compared to N12,945 recorded in 2019.
- The State is strategically located, bordered to the East by Ondo State, to the North by Oyo and Osun States, to the South by Lagos State and the Atlantic Ocean, and to the West by the Republic of Benin.
- Ogun State also joins the list of states that are much dependent on FAAC allocations as statutory payments stood at N37.7 billion, representing 42.61% of the total revenue.
Katsina – N1,386
Jigawa – N1,416
Benue – N1,736
Niger – N1,804
Bauchi – N1,821
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