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You are here:Home>>Strategic Research & Analysis>>President Jonathan's Mid-Term Report - Any Cause for Celebration?
Tuesday, 11 June 2013 13:41

President Jonathan's Mid-Term Report - Any Cause for Celebration?

Written by Vincent Obia
President Jonathan President Jonathan Photo: AFP/GETTY IMAGES

 

Despite President Jonathan's claim of excellent performance in the regime's mid-term report, the unanswered question remains: are Nigerians better off today than they were when he came in? Vincent Obia writes

 

The last one week has seen a vigorous debate in the media on President Goodluck Jonathan's mid-term report on the execution of his "Transformation Agenda." Jonathan delivered the report on Democracy Day with a vibrant - almost haughty - tone that reflected the thinking within the government. But outside the government, especially, among the masses, it is virtually impossible to find anyone who will confess that they have witnessed changes that are anywhere near the bright picture the president had painted. The reason is obvious.

 

When Jonathan was inaugurated in 2011, he rolled out a transformation agenda he said was designed to tackle some core problems, including unemployment and poverty, rising debt profile - especially domestic debts, high recurrent over capital expenditure, over-dependence on oil, inflation, infrastructure and housing deficit, falling external reserves, and food insecurity. Two years on, those problems remain largely unresolved.

 

The country's annual budget is still markedly skewed in favour of recurrent expenditure. For instance, in the 2013 budget, nearly 70 percent of the total funds are earmarked for recurrent expenditure, against about 30 percent for capital expenditure.

 

Budget accountability remains a problem. The federal government has seemed to adopt a policy of keeping oil price benchmarks low to accommodate the vagaries of the international pricing system. But even though the feared shortfalls in prices have hardly occurred in recent years, leaving the country with huge excess crude oil revenues, the extra income has mainly been consumed in recurrent expenditure or used to cover deficits that experts say are needless. Last year, the federal government made borrowings to cover a deficit of between N700 billion and N800 billion in the budget, despite the fact that oil prices hovered between $90 and $115 per barrel, against the budgeted benchmark of $72.

 

The above situation has caused a needless accumulation of debts. Nigeria had risen to become the biggest recipient of disbursements from the International Development Association between 2009 and 2012. The country is also said to have the biggest outstanding IDA portfolio in Africa.

 

The IDA is an international financial institution under the World Bank Group that offers concessional loans and grants to the world's poorest developing countries. Though, Nigeria remains comfortably within the internationally accepted 40 per cent debt/Gross Domestic Product ratio and the 25 per cent country specific threshold for debt stock levels, experts doubt if the country really belongs to the class of countries the IDA funds are meant for, judging by its huge surplus earnings from oil.

 

The mid-term report stated that the government's annual borrowing had fallen from N852 billion in 2011 to N588 billion in 2013. This amount could double before the end of the year. But the unanswered question remains: are Nigerians better off today than they were when Jonathan took over?

 

Only last December, Governor of Central Bank of Nigeria, Lamido Sanusi, lamented that the country was borrowing too much and heaping up a heavy debt burden for future generations.

 

The national debt comprises mainly government bonds and treasury bills. The government makes these borrowings from banks at exorbitant rates, which creates a disincentive for lending to the real sector. Experts say economic productivity would hardly be encouraged at the present lending interest rate of between 15 and 20 percent.

 

In the power sector, which experts describe as the main engine of growth, with a population of nearly 200 million, Nigeria only managed to leap from about 2, 000 megawatts, when Jonathan came in 2011, to just over 4, 000 megawatts. This represents an improvement, but it is one that is too infinitesimal for a country that aspires to be among the world's 20 largest economies by 2020.

 

Besides, Nigeria's electricity production puts it far behind its closest competitors in Africa, like South Africa. With a population of about 50 million people, South Africa produces 34, 000 megawatts of electricity to meet current demands, and this production figure is said to increase every year.

 

The administration of former President Olusegun Obasanjo had laid the basic foundation for power transformation, which many had expected the Jonathan government to take beyond the present state.

 

Despite marginal improvements, quality and quantity of education remains in shortfall. The Minister of Education, Professor Ruqayyatu Rufa'I, disclosed in April that only 520,000 (30%) of the over 1.7 million candidates that wrote this year's Unified Tertiary Matriculation Examination (UTME) could gain admission into the country's universities, polytechnics, and Colleges of Education.

 

The plight of the education sector may not end soon, what with the 8.7 percent allocation to education in this year's budget - a paltry leap, but a far cry from the United Nations recommended rate of at least 26 percent for developing countries.

 

The fear in many circles is that things may not get any better in the next two years of the president's tenure, as governance looks set to take a backseat for politics ahead of the 2015 general election.

 

While no one would contest that that there have been flickers of hope here and there since the last two years, it is obvious that the rate of progress does not call for the kind of pass mark Jonathan awarded his administration in his mid-term report.

 

POLITICAL NOTES

 

The attempt to make the National Youth Council of Nigeria another battlefield for the 2015 politics is very unfortunate. The yoke of partisanship has made it impossible for the NYCN to elect a new leadership after two attempts in Akure and Makurdi. Reports allege that the ruling Peoples Democratic Party, working through the Minister of Youth Development, had imposed a candidate on the council even without an election.

 

While campaigning for the 2011 presidential election, President Goodluck Jonathan found it handy to use the NYCN to reach millions of young people across the country. But no one seemed to complain. However, the current attempt to hijack, corrupt, and reduce the otherwise non-partisan organisation to the crude partisanship that is the lot of Nigerian politics at the moment is evil, to say the least.

 

Rather than corrupt the youth of the country through undue infiltration of their ranks, the ruling party or, indeed, any serious political party should think of how to groom young people within its fold for future leadership. The African National Congress in South Africa is doing this, and it is the practice in every country in world where the political class is serious-minded.

 

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