I offer my profound appreciation to the Alumni Association for the privilege given me to address this elite gathering. This Annual Lecture series has, through adroit organisation and innovation, become a reference point for elevated discourses on the Nigerian project.
- It is the joy and pride of every alumnus that through the Annual Lecture series, the University of Ibadan has maintained its front runner status not just as the premier university but as a main driver of thought, ideas and policy reforms in the country.
- I commend the Vice-Chancellor and the management of our great university, but especially the National Executive Council of the Alumni body, for their initiative, drive and dedication to building an association committed to best practices and robust articulation of ideas to move the university and the nation forward.
- The topic for today’s discourse is especially apt given the difficult trajectory of the country at the moment. No matter where you find yourself today – in the academia, corporate world, media, politics, and even on the street – the hot button topic among Nigerians, home and abroad, is that of leadership and good governance. And, needless to say, the verdict is damning. The lamentable state of our socio-economic development evidenced by corruption in all facets of our national life, weak public institutions, crumbling infrastructure, urban decay, loyalty to primordial interests, weak healthcare system, low literacy rate and widespread poverty is indicative of a governance deficit.
- The UNDP 2016 Human Development Index, which ranked Nigeria 152 out of 193 countries, noted that “economic growth in Nigeria has not been associated with poverty reduction and unemployment has not abated.” The report stressed that “the status of human development in Nigeria has not shown remarkable improvement in spite of the changes in the social and economic conditions in recent years.”
Continuing, the UNDP said: “Generally, demographic and health indicators such as access to water, sanitation, life expectancy at birth, infant mortality, under 5 mortality and incidence of poverty have shown improvement over the years but the harmful social conditions, specifically, terrorist attacks, religious and ethnic conflicts and related crimes pose threats to sustainability.”
- Regrettably, attempts by successive administrations at the Federal and State levels to reverse this troubling trend are yet to yield the desired results. The essence of this paper is to propose that good governance is imperative for the government to, not just alleviate poverty, but provide the enabling environment for the citizens to prosper in a fair, just and equitable manner, and achieve their dreams of success and happiness. That would necessitate a new approach to macroeconomic management and the forging of strategic partnerships with the private sector to stimulate and promote Micro, Small and Medium Scale Enterprises as the engines of growth and employment generation.
DEFINITIONS OF TERMS
- For the purpose of this paper, I align myself with the World Bank’s definition of governance which describes it as “a method through which power is exercised in the management of a country’s political, economic and social resources for development.”
- In its 1992 “Governance and Development Report,” the World Bank expanded the concept of governance to include the connotation, “good.” The global financial institution espoused that “good governance” provides an enabling political, legal and economic framework for development, ensures people’s participation in the political and decision making process, guarantees exchange and free flow of information and provides opportunities for inclusive economic growth and sustainable development. Hence, good governance goes beyond the executive arm of government. The legislature, judiciary, media, political parties, civil society and the private sector are all stakeholders in the process.
- The term “wealth” as used in this paper is to describe the process of financial inclusion, which enables the average citizen, particularly the poor, vulnerable and marginalised, to access government programmes and financial services that meet their needs and aspirations for improved living standards. The overarching goal of financial inclusion is shared prosperity. Financial exclusion has been the bane of our development. Available statistics indicate that Nigeria has had a consistently high economic growth rate averaging 4.8% between 2011 – 2015 (Nigeria ERGP 2017 – 2020) but, regrettably, this growth has not translated into better living standards and employment opportunities for the average citizen.
- The most commonly cited definition of Sustainable Development is that contained in the 1987 Brundtland Report by the World Commission on Environment and Development, which defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:
-the concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given;
-the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.
- The Millennium Development Goals (2000-2015) was the global response to addressing the problems of poverty, inequality, hunger, unemployment and ensuring that governance delivers tangible benefits to people. Although the 2016 UNDP Human Development Report on Nigeria states that there has been a 13.1% increase in human development over the last decade (2005-2015), poverty remains high at 62.6%.
- Aside from poverty and unemployment, the UNDP identified the “increasing rate of population growth, environmental challenges, as well as conflicts and insurgency in some parts of the country” as “constraining factors.” In view of this, the 2030 Agenda for Sustainable Development has prioritised the urgent need to address the root causes of poverty and the socio-economic conditions that give birth to violent conflicts, which adversely affect human development.
GOOD GOVERNANCE AND DEVELOPMENT
- I am of the considered view that good governance must stand on five major pillars.
-Participation – In a democratic setting, it is imperative that political, social and economic policies flow from a broad consensus of the people, including the poor, the vulnerable and the marginalised. All members of the society have the inalienable right to choose who represents or governs them. That also entails the opportunity to participate in the decision making process, either directly or indirectly, through their representatives. Bottom line is, if we agree that democracy is for the people and by the people, then the people should never be denied the right to participate, albeit constructively, in the decision making process.
-Accountability – Perhaps our greatest undoing as a people is the lack of accountability. It begins from the home where a father does not see the need to be accountable to his family or the small business owner who considers it an affront to give account even to legitimate state institutions. This attitude is often carried over into government, the private sector and not least of all public institutions such as universities. But it is an intrinsic part of good governance for those in authority to render regular accounts to the public and institutional stakeholders. Perhaps, we should be reminded of the Biblical injunction that to whom much is given, much is expected.
-Transparency – This is possible where there is exchange and free flow of information in the society. Nothing about the mechanisms and decisions of governance should be shrouded in secrecy so that citizens are able to access and process whatever information they need and, thereby, make informed choices and knowledgeable decisions. The principle of transparency enables monitoring of and feedback on government’s policies, programmes and activities.
Nigeria took a major step forward in this regard with the Freedom of Information Act (2011). Section 2 (1) of the law establishes “the right of any person to access or request information, whether or not contained in any written form, which is in the custody or possession of any public official, agency or institution, however described.” This right is guaranteed notwithstanding anything contained in any other Act, Law or Regulation.” The law goes on to say that public institutions/agencies are to grant such requests within a period of seven days. However, it is another matter entirely if Nigerians are taking advantage of this law.
-Rule of Law – Good governance places a premium on strong public institutions, as against strong personalities. Human beings come and go but institutions remain. Therefore, good governance requires the development and strengthening of independent state institutions like the security agencies, a functional legislature, free press, and a viable and independent judiciary. Every effort must be made to ensure that these institutions function properly and optimally with or without the human actor. Legal frameworks should be fair and enforced impartially. When these institutions are firmly established and devoid of political control and manipulation, they guarantee the regularity of human conduct and people can predict how the system will respond in any given situation.
-Equity – This is where the proverbial rubber meets the road. Ultimately, the goal of good governance is to improve the lot of the citizens and enhance their security and well-being. For this to happen, the people must be given equal access to the basic necessities of life i.e. food, potable water, shelter, education, and transport. There is equity in the polity when decision makers make judicious use of resources to meet and sustain the needs and aspirations of the people, in addition to providing social safety nets to accommodate special groups of people – the physically challenged, the poor, the vulnerable, and the minorities or marginalised.
- It is my submission that since the current democratic dispensation in 1999, the nation has made some meaningful progress in the above listed areas. Of course, there is still plenty of room for improvement. Large scale corruption in all facets of our national life, weak national institutions, loyalty to primordial interests, violent ethno-religious conflicts, infrastructure and urban decay, low literacy rate, insufficient housing, high infant mortality rate, inadequate healthcare delivery and low life expectancy, lack of potable water, and high rate of unemployment have remained major development concerns. While peer countries such as Malaysia, United Arab Emirates and Singapore have worked their way up the development ladder, Nigeria is still, painfully, languishing at the bottom rung nearly sixty years after independence from colonial rule.
- Poverty sticks out like a sore thumb amid reports of economic growth. It is stating the obvious to say that Nigeria sits on a ticking time bomb with over 62% of its citizens living in absolute poverty. As the Director-General of International Labour Organisation, Guy Ryder observed during the 2016 International Day for the Eradication of Poverty, “these figures, unacceptable as they are, do not relay the deep human cost of poverty which restricts access to the most fundamental of needs. It robs individuals of their dignity and increases vulnerability to hunger, physical and mental illness, human right abuses and exclusion.” Indeed, to quote the late Mahatma Gandhi. ”poverty is the worst form of violence.”
EXPERIENCES AND LESSONS
- As you all know, oil and gas have been – and will remain for some years to come – Nigeria’s most important non-renewable energy, contributing 95% of the country’s foreign exchange earnings. But this critical sector contributes approximately 10% of our GDP and employs only a handful of Nigerians. The national consensus is that for us to overcome the twin evils of poverty and underdevelopment, we need;
-focused and enduring policy options to generate employment and reduce poverty; and
-viable, strong, productive and profitable Micro, Small and Medium Scale Enterprises (MSMEs) as harbingers of economic growth and poverty reduction.
- There have been several public policy interventions by successive administrations in this regard, starting with Operation Feed the Nation (OFN) in 1976. In more recent times, we have had the National Poverty Eradication Programme (NAPEP), which was introduced in 1999 to eradicate absolute poverty in Nigeria. NAPEP is complemented by the National Poverty Eradication Council (NAPEC) that oversees all the relevant Ministries, Departments and Agencies established for the purpose of poverty eradication, notably; the Youth Empowerment Scheme (YES), Rural Infrastructure Development Scheme (RIDS), Social Welfare Service Scheme (SOWESS) and Natural Resources Development and Conservative Scheme (NRDCS). This list does not include other poverty reduction programmes embarked upon by the States.
- Among the recent initiatives in the fight against poverty is the Subsidy Reinvestment and Empowerment Programme (SURE-P), which came on stream in 2012 to invest government savings from oil subsidy removal on critical infrastructure and programmes with direct benefits to the people. It had other safety net components such as the Graduate Internship Scheme, which was designed to equip graduates with employability skills and give them short term employment.
- The Universal Basic Education, Free Maternal and Under 5 healthcare policies and sanitation programme underscore our commitment to the Millennium Development Goals. And as the UNDP acknowledged they have led to improved demographic and health indicators such as access to water, sanitation, life expectancy at birth, infant mortality, and Children Under-5 mortality.
- Even more significant is the various initiatives to stimulate and promote Micro, Small and Medium Scale Enterprises (MSMEs). MSMEs are engines of cost-effective employment generation, social inclusion, equitable development and self-reliant industrialization using local raw materials. MSMEs also enhance value chain development while facilitating the growth of non-oil exports.
- In recognition of these facts, successive administrations made strenuous attempts to address the infrastructure and funding gaps faced by MSMEs in the country through various Development Finance Initiatives (DFIs). These include the Nigeria Economic Reconstruction Fund (NERFUND), the Nigerian Export Import (NEXIM) Bank, Small and Medium Enterprises Equity Investment Scheme, Small and Medium Enterprises Credit Guarantee Scheme (SMECGS), the Small and Medium Enterprises Re-Financing and Re-structuring Scheme (SMERRF) and the Small and Medium Enterprises Development Agency (SMEDAN).
- In 2012, the National Financial Inclusion Strategy was introduced to further reduce the exclusion rate to 20% by 2020, while in 2013 the Micro, Small and Medium Enterprises Development Fund (MSMEDF) was established. Other CBN interventions include the Real Sector Support Fund (RSSF), Youth Enterprise Development Programme and Commercial Agricultural Credit Scheme (CACS). In 2015, the Anchor Borrowers Programme (ABP) was introduced to provide “farm inputs in kind and cash (for farm labour) to small holder farmers to boost production of these commodities, stabilize inputs supply to agro processors and address the country’s negative balance of payments on food” (CBN Report, Dec, 2016)
- It is fair to say that these initiatives have helped to boost macroeconomic growth and aid financial inclusion. Recently, the Central Bank through its Governor, Mr Godwin Emefiele, reported that the Bank’s SME Refinancing and Restructuring Facility (SMERRF) and SME Development Fund (MSMEDF) “have jointly created three million decent jobs directly,” adding that through both programmes the CBN has “financed about 700 projects across various sectors. Given the concessionary nature of credit pricing, they have recorded a combined total of nearly N100 billion in interest savings.”
- The success recorded so far can, at best, be termed modest against the background of persistent income inequality, rising unemployment and unabated poverty. It is obvious that poverty cannot be reduced or eradicated in Nigeria unless the present high level of unemployment/ underemployment is successfully tackled and we find a way of making MSMEs as productive and profitable as they are in other parts of the world including the advanced countries.
- Going forward, it is incumbent on current policy formulators, political leaders and decision-makers in government to avoid the pitfalls of previous intervention programmes. It is a fallacy to keep doing the same thing and expect a different result.
- Some of the past policies, initiatives and agencies failed as a result of the following:
-Poor Policy/Programme Execution Capacity – Most of the programmes have not yielded optimal results because of poor execution. The major implementing organ, the civil service, is often too apathetic towards these policies/programmes and, therefore, does not possess the passion and dedication required to execute them. The situation is worsened by inadequate coordination between government agencies and the various tiers of government.
-Duplication of Parastatals/Agencies – There are just too many organisations, agencies or bodies created to do the same thing. The multiplication of these agencies tends to give the impression that some of them are created for the purpose of political patronage, not to fight poverty. Their functions often overlap, inevitably leading to confusion, inter-agency rivalry, and dissipation of energy and resources.
-Lack of appropriate targeting – Although these programmes are designed to bridge the gap between the rich and the poor, it is doubtful if the resources reach the intended target. The inclusion processes are often ambiguous and fluid, giving room for nepotism, political godfatherism and cronyism to hold sway.
-Lack of Policy Continuity – We have a bad habit in this country of discontinuing policies and programmes of previous administrations. Until we understand that governance is a continuum, we will constantly find ourselves taking one step forward and two steps backwards.
-Lack of accountability and transparency – This often results in public scepticism, even cynicism, and reinforces the notion that some of these programmes are created for the purpose of political patronage.
-Inadequate Orientation of Public Policy Implementers to Results/Outcomes – More often than not, the emphasis is on policy inputs and processes rather than outcomes. For instance, there are no systematic means of tracking the effects of policies and programmes on poverty. We embarked on some of these programmes without stating in concrete terms what we wanted to achieve in the short, medium and long-term. This should be well documented in any poverty eradication or wealth creation agenda. We should, for instance, be able to project the number of persons we expect to come out of poverty in five years when designing a programme. In the absence of this, it is really difficult to measure the success or otherwise of a programme. The practice of measuring the success of a programme by the amount of money spent is, quite frankly, an exercise in futility.
- There is no doubt that Nigeria has human and natural resource endowment. However, its economy has largely been driven by consumption and high oil prices. With the Oil/Gas sector accounting for 10% of GDP, 95% of export earnings and 62% of government revenues (2011 – 2015), and a Foreign Direct Investment (FDI) dropping from USD 8.9 billion in 2011 to USD 3.1 billion in 2015, there is cause to worry.
- According to the Federal Government, “the Nigerian economy is characterized by structural challenges that limit its ability to sustain growth, create jobs and achieve real poverty reduction.” Human Development indicators paint a bleak picture of Nigeria’s education and health industry. With over 10 million children out of school, a school enrolment figure of 54% and being the 4th largest contributor to infant mortality worldwide, we need to begin to rebuild systems that are all inclusive and accountable, where the poor and vulnerable are supported and adequately planned for in a sustainable manner.
- We need to begin the process of building a globally competitive economy, investing in infrastructure, improving business environment and investing in our people. The World Economic Forum’s 2016 – 2017 Global Competitive Index ranks Nigeria 127 out of 138 Countries, while our infrastructure deficits remain very high.
To achieve recovery and growth in the economy, we need to:
-ensure energy sufficiency (power and petroleum products);
-improve transportation infrastructure (roads, rails, water and air);
-drive industrialization focusing genuinely on MSMEs;
-achieve agriculture and food security; and
-improve ease of doing business and stabilize the macro-economic environment.
- Investing in our people by improving access to good and affordable healthcare and education; promoting job creation; and protecting the environment in order to secure it for the future generation is all-important. As part of our wealth creation plan, we must begin to reposition our education sector to prepare our young people to cope with the changing technology and economic environment. There is obvious need to attend to our health infrastructure and services to deliver reasonable care to our citizenry at affordable rates.
- The slowdown of the economy in the last three years has reduced the number of existing jobs and slowed the rate of job creation, which has failed to keep pace with the ever increasing number of new entrants into the labour force. Unemployment has risen to high levels with an estimated 17.6% million in Q3, 2016. Unfortunately as our economic growth contracts, the population growth remains very high and the UN projects Nigeria will be among the World’s most populous four nations by year 2050 with a population well over 289 million.
- It is critical to have an effective population management strategy that will address the issue of high population growth. Without this, the growth in GDP will be unable to keep pace with the needs of the population that is expanding exponentially. It is, therefore, imperative that we fast track the review of our population policy, working closely with all relevant agencies and stakeholders.
- The Federal Government has, in the past year, started some job creation programmes notably;
-N-Power volunteer corp to provide temporary employment for 500,000 graduates in education, agriculture and health;
-A credit delivery programme that will enable the delivery of micro-credit to farmers, youth, women market traders; and
-Provision of housing starting with 2,700 housing units to create direct jobs.
- The Federal Government also intends to enforce the local content policy to promote job creation through procurement process. It is my prayer that these planned programmes will make the necessary impact on the citizenry. They must, however, be structured to create wealth/jobs in a manner that is sustainable. Poverty and inequality are not accidents of fate. They are products of policy decisions and power relationships that are discriminatory, exclusive and unjust. There is no doubt that good governance promotes the enabling environment for stability needed for investments, wealth creation and sustainable development.
- We must, therefore, ensure effective governance systems and institutions that are responsive to public needs, delivering essential services, promoting inclusive economic growth and political processes that ensure citizens can hold public officials to account. There is, of course, no ‘one-size-fits-all’ model of good governance but having inclusive political and economic institutions should be the primary consideration.
WEALTH CREATION FOR SUSTAINABLE DEVELOPMENT IN DELTA STATE
- In Delta State, we took all of these facts into consideration while designing our S.M.A.R.T agenda with the bold promise of prosperity for all Deltans.
S.M.A.R.T is an acronym for:
-Strategic wealth creation and employment generation;
-Meaningful peace building platforms for political and social stability;
-Agricultural reforms and accelerated industrialisation;
-Relevant Health and Education Policies; and
-Transformed environment through urban renewal.
- This vision has been encapsulated in the Delta State Medium Term Development Plan (2016-2019), a policy document that provides the roadmap to;
-Drive rapid infrastructural development;
-Ensure and sustain inclusive economic growth and sustainable development;
-Reduce the worrisome high level of youth unemployment and pervasive poverty; and
-Woo the private sector to explore and exploit the economic and business opportunities in Delta State.
- The first step we took to attain these goals is to tackle the monsters of unemployment and poverty head-on by deploying our energy and resources to people of high vulnerability and open up areas of low access. Towards this end, we created a Special Purpose Vehicle known as Job Creation Office. Through its flagship Skills Training and Entrepreneurship Programme (STEP) and Youth Agriculture Entrepreneurs Programme (YAGEP), we have made some progress in curbing unemployment and growing the private sector. As at today, we have trained and established over 2,300 unemployed youths in their choice enterprises, thereby nurturing and fostering the growth of MSMEs.
- Many of these STEPreneurs and YAGEPreneurs, as we call them, are not only doing well as you saw in the short video clip earlier, they have become employers of labour and are also training other people to become entrepreneurs. In addition, we have, since inception, generated over 42,000 private sector jobs by direct intervention of government through the programmes and activities of Ministries, Departments and Agencies. This was made possible because our policy approach requires MDAs to undertake projects only after they have determined the job creation content. A lot more private sector jobs have been indirectly created in the State through the enabling environment provided by our peace-building initiatives and ease-of-doing business.
- The success of our job creation programmes had a lot to do with their design, content, and appropriate targeting in the selection process. We chose a different strategy from the practice of handing out cash as empowerment because we considered it to be ineffective and unsustainable. We resolved that it was better and more enduring to put resources (skills, tools and complementary services) in the hands of the people and thereby empower them to become job and wealth creators. We have also established a Directorate of Monitoring and Mentoring to keep track of these budding entrepreneurs. The Directorate is mandated to follow them up and give them the necessary guidance and counsel to keep their business on the path of growth and lasting success.
- Let me hasten to add that appropriate targeting was also critical to the success of our Production and Processing Support Programme, which was introduced to resource existing crop, livestock and fish farmers with improved technologies, efficient inputs and marketing support to trigger high yields, ensure profitability and create jobs. We took great pains to deliver the subsidised packages to the recipients at their farm locations. That way we ensure that only genuine farmers got them and several thousands of farmers have benefitted from this programme.
- Indeed, our commitment to agriculture runs deep. From the onset of our administration, we were determined to grow the agriculture sector and make it a major growth driver in the State because of its capacity to generate employment and provide food security. The CBN Anchor Borrowers Programme with the potential to increase “capacity utilization of agricultural firms and create a new generation of farmers/entrepreneurs and employment” is fully functional in the State. We currently have over 4,000 participants in the scheme, and in commodities where we have comparative advantage, namely rice, aquaculture and cassava. We have also gone far in our agro-industrial park programme in partnership with foreign and local investors, and have continued to support the private sector to invest massively in the agricultural sector.
- The centrepiece of our educational policy is vocational and technical education, which empowers students with employability skills and equips them with the know-how and mind-set for business, trade, and commerce. Towards this end, six hitherto moribund technical colleges have been revamped and rehabilitated. To ensure that the poor are not excluded from the healthcare system, we have introduced Universal Health Coverage, which spares them the burden of paying for healthcare bills at the point of service. The establishment of the Delta State Contributory Health Commission is expected to increase health insurance coverage in Delta and thereby significantly increase the demand for health services, which will in turn require expansion of service delivery facilities/personnel and increase the need for standardization and enforcement of quality.
- Our attempts at infrastructural development and renewal are beginning to yield fruits in opening up the rural communities to participate in the global economy. In the last two years, we have embarked on the construction/rehabilitation of over 98 roads, with 45 of them already completed. We have also developed unique Public Private Partnerships with reputable local and foreign investors in the areas of housing, power, water and agriculture. As the various projects are successfully implemented, they will enhance social inclusion, thereby migrating more people from poverty to prosperity.
- There is no doubt that there are huge gaps and challenges in our quest to provide the enabling tools and environment for wealth creation and sustainable development. Some concrete actions we need continue to undertake for sustainable results include:-
-gender responsive planning;
-effective anti-corruption programmes;
-enhanced transparency in the financing of election campaigns;
-ensure people’s participation and equal opportunities for all;
-governments must be increasingly responsive to the needs and demands of the people;
-the people’s right to information and access to government data must be guaranteed; and
-monitoring and evaluation of programmes must involve non-state actors – communities, youth and women networks, civil society networks to hold government accountable.
- I begin my conclusion of this paper by noting that our modest gains in job and wealth creation are, in large part, due to a good governance template anchored on strict fiscal control measures to minimise deficit financing, while enabling judicious allocation of resources and economic diversification. We have kept a tight lid on government spending while continuing to cut unnecessary waste.
- I am convinced beyond any doubt that the most effective way to get out of this unemployment quagmire is to give people the requisite skills to succeed in life and business as we are doing with our job creation programmes. Even in our educational system in Delta State we are refocusing attention on skills acquisition, as against certificate acquisition. Our polytechnics and the state university are also doing same.
- Despite the progress we have made, the need remains huge. When we commenced our job creation scheme in 2015, we received over 70,000 applications from jobless youths. But we could only admit 1,329 trainees within the limits of available resources. In the second year, we trained an additional 929 STEPreneurs and YAGEPreneurs. We have also trained another 4,000 persons in our vocational skill acquisition centres.
- Going forward, we need strong partnerships in this area. Given the current economic challenges facing government at all levels, we are constantly exploring ways to partner with the private sector, World Bank and other privileged Nigerians in our quest to create wealth for sustainable development. This entails them investing in skills training programmes that would empower unemployed youths to start their businesses. This, I believe, will greatly mitigate the unemployment crisis, and move the nation on the path of wealth creation and sustainable development.
- It is on this note, distinguished alumni, ladies and gentlemen, that I rest my case.
- Thank you for your time and attention.
- God bless us all.
Office of the Governor