Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed recently barred her mind on steps the Federal Government has put in place to revamp the nation’s economy. In this interview with BBC’s Zainab Badawi on HARDtalk, the Minister spoke on her plans to avert a financial meltdown, as well as ensure stability, among others in the country. Excerpts of the interview is reproduced By Tony Obiechina of our Abuja Bureau
We are hearing warnings of a third COVID-19 wave in Africa, where only about 1% of the population has been vaccinated. What is the situation like in Nigeria?
Thankfully for us, COVID-19 pandemic has been well contained. So far, what we’ve seen in terms of the numbers is that it is declining in Nigeria. In the past three months, the decline rate is about 23%. So, it’s a good story for us. We’re continuing the vigilance of trying to make sure that another variant that would be more devastating than the one we have had does not come into Nigeria. So, it’s well contained, and we’re hopeful that it will not escalate.
All right. Well, glad to hear that. Let’s look at the economic crisis, though, unleashed on the whole of the continent because of the global economic downturn as a result of the pandemic. So, here you are in Nigeria, food prices have gone up by nearly a quarter, we’ve seen the naira devalued by a third against the US dollar in the past year; half your population is living in poverty or vulnerable. We’ve seen economic growth has really been downgraded, very, very sluggish. Your country, frankly, is at breaking point economically.
There has been a lot of challenges occasioned by the COVID-19, and, in our case, also by the crash in the crude oil price. But we’ve done a lot as a government to contain the COVID-19 pandemic, to reduce the impact on the economy, as well as to provide alternative sources of revenue to the oil and gas industry. And we took, very early, a number of fiscal measures that helped to mitigate the impact on the Nigerian economy.
We reviewed our medium-term-plans, we reviewed the budget, scaled everything down. We had to increase borrowing, because we needed to invest more in the health-care sector, knowing very well that if the pandemic breaks out beyond controlled levels for Nigeria, it will have been more devastating for us. So, it was well controlled, and we have been able to rein in a number of measures that helped us rein in the slide in the economy. So, we did go into recession in the third quarter of 2020, but we exited recession in the fourth quarter.
We reported a positive growth in the fourth quarter. We also reported a positive growth in the first quarter of 2021. Our projection is that, by the end of 2021, Nigeria we will end up with a growth rate of 3%. Our target is to grow to a 7% growth rate in the medium-term basis, and we’re well on the way. Inflation has been increasing until about two months ago. For 19 months, it has been increasing, but we have seen it plateau. So, for two months now, it has begun to decline. The CPI also is on the decline. So the indicators, to us, are good.
There’s no doubt that you are taking these emergency measures and perhaps the narrative is being presented in such a way that you are, “Look, there’s this terrible crisis that all countries are experiencing.” But the fact of the matter is, this is a bit of a decoy. There were structural deficiencies in the Nigerian economy, long-standing, nothing to do with COVID-19, and your government has failed miserably so far to deliver. For example, Buhari, when he came to power, the president, in 2015 said, “Look, I’m going to deliver economic growth rates of 10% per year, I’m going to create 12 million jobs,” he said. We’ve seen unemployment quadruple. So, actually, his economic vision is not being delivered, is it?
Well, that is not true. The president came into power in 2015 and immediately, a couple of months after, we had a crash in the crude oil price. There was a time that the crude oil price went to as low as $28 per barrel. And this was following an administration that had put up a revenue that was up to $100 per barrel, averaging about $70 per barrel. So, Mr. President faced his first recession within the first year of his first term. Again, we now have a second recession in the second year of his term, this time around caused by the COVID-19 pandemic. We have to now reassess our plans and try to contain the slide in the economy so that it doesn’t go back. The first recession was about 12 months. We turned the economy around by reflating it, despite the low turnout. The investments that we have done in infrastructure and in social development supersedes. So, it is far greater than the investments that had been done by the last administration. So, we must give Mr. President that credit. At a time when we had little revenue, we were able to do much, much more.
OK, but that’s the point I’m making, the structural deficiencies which are long standing. You quite rightly say there’s drop in Brent crude oil prices, but you’re so dependent on oil; 80% of your export earnings and half of government revenues come from oil, because you are too dependent on oil. And that is why you suffer like this. And that, frankly, is something that you’ve known for a very long time and yet still fail to do anything about.
You’re right, the country depends on oil revenues for export and still does, but we have done a lot in terms of diversifying the country’s revenue base. Right now, we have a contribution of 55% revenue from the non-oil sector to oil sector’s 45%. Before, it used to range from 60-70% from the oil sector. So, we have other sectors of the economy that are growing and growing on a steady and consistent basis. So, we are looking at alternatives to export, because that is where we have the greatest problem. We are encouraging non-oil export, giving a lot of incentives for exports from agriculture and the mining sector. And there are several incentives that have been put in place to encourage exports, so that we can have an alternative source of foreign exchange to the oil industry. But in terms of diversification of the economy, the oil and gas sector today contributes 9% to Nigeria’s GDP, so the economy is well diversified. We just need to expand those other sectors, make sure that they are sustained.
Well, okay. So, agriculture is the biggest employer of people in Nigeria. Governments in Africa, including yours, pledged to spend 10% of the public accounts every year, the annual budget. What do you spend on agriculture in Nigeria? It’s nowhere near 10%, is it?
It’s not yet 10%, but it is significant enough to have made consistent improvement in the agricultural sector. Now, also we’re trying to move away from just government spending on agriculture and concentrating on providing incentives so that agriculture moves from subsistence agriculture to agribusiness, where a lot of processing is done…Sure, and manufacturing is enhanced, so that we are adding value to our products.
But the broad point I want to make here, and I quote Iseoluwa Akintunde, who’s an expert on Nigeria from the British think-tank Chatham House, “For decades, the mantra of economic diversification characterised attempts to reverse Nigeria’s dependence on oil with little real progress.” And he says that the decline in GDP from oil gives new urgency to this issue. So, are you really dealing with this issue with real urgency that it needs? because he’s right, we’ve heard about this for decades.
You are right, this has been said for decades. But, check the numbers. The contribution of revenue in the country today is largely from the non-oil sector, that is what has changed. If you look at our budget, if you look at the actual budget performance, you’ll find that the non-oil revenue is contributing 55%. It used to be 30%, 35%. So, things are changing not as fast as we want them to be, but we’re pushing to make sure that the investments in the Nigerian economy is both from the private sector as well as from the government, with government acting as an enabler for the private sector to invest where the private sector sees benefit.
All right. You know very well that investment needs stability, and that is something that Nigeria cannot offer -security. Since 2009 in the north-east, 3.5 million people displaced, 50,000 killed because of the activities of extremist groups like Boko Haram. In the north-west, kidnappings, ransoms, 11,000 killed. You’re seeing the group known as the Biafra secessionists in the south-east also creating a great deal of instability for the country. You know, whichever way you look, Nigeria’s got insecurity to have to deal with, and it’s getting out of hand.
It is a very difficult situation, a very challenging one of great concern to the president and all of us that are in government. But, we’ve also put in place a number of measures that is designed to turn things around. Very recently, Mr. President changed the service chiefs, and also more recently you will see some of the successes that the military is recording in terms of the fight against the insurgents. There are also efforts to begin to address in terms of engagements with other pockets of groups that have concerns regarding the Nigerian economy. There is a lot of discussions in the country about how we must stay together and work out our differences, rather than trying to cause chaos and fragmentation within the polity. Nobody is going to gain if Nigeria is fragmented, and government is not the only one that is in the forefront of this. There are a lot of very highly placed citizens as well as youths that are now speaking up. Yesterday, we had a youth conference in Abuja, and there was a lot of discussions around security and the youths, whose future it is that we are working and planning on, are also taking charge on leading the narrative. We cannot have the security crisis going out of hand in Nigeria.
All right, but let me tell you what Robert Rotberg, president of the World Peace Foundation in the US, and John Campbell, a former American ambassador to Nigeria, say, “The government is unable to keep its citizens safe and secure. Nigeria has become a fully failed state of critical geographical concern.” They’re not mincing their words, are they? They’re right.
They are wrong; we are not a failed state, There is a government at the centre, there are governments in each of our 36 states, the governments are in control of those states and regions, and the federal government is in full control. So, we have pockets of security crisis, like the insurgency in the north…northeast, like IPOB also trying to cause crisis in the southeastern part of the country. That doesn’t make us a failed state. Which country in the world or in Africa today is not having a security crisis? We have a security crisis, but this is a government that has come to a grip and has a strong hold on the security situation.
Yet this is another example of President Buhari over-promising and under-delivering. He said in 2015 that Boko Haram had been technically defeated. And now, look at what’s going on. You’ve still got all the kidnappings and ransoms and the killings going on in the north-east, because of Boko Haram.
Boko Haram is in the north-east. When the president took over, there were 23 local governments in the north-east that were threatened. So, many of them were completely taken over by the insurgents. There’s none right now that’s taken over by the insurgents. They come in from the bushes, they attack, they run away and hide. At that time, we had people who hoisted their flags in some of those local governments. There is none that the insurgents have taken over now. So, that is progress.
The president’s own party is angry about the security situation. Senator Smart Adeyemi from the ruling APC said in April this year, “Insecurity is threatening us. The nation is on fire. “The president must rise to the occasion and bring in people to save this country, or else we will be consumed. We cannot keep quiet any longer.” These are the president’s own party members saying this.
That is Adeyemi, one party member. Our country is not on fire. We have security challenges, but the government is in control of the situation. They are very unfortunate incidents that happened, but this has very much reduced and improved, and things are getting better, really getting better, if you just check what has been happening in the past three to four weeks.
So, you talked about the 36 states in Nigeria, but there was a meeting recently by governors from about 17 southern states, and they made proposals for restructuring, for greater decentralisation, to devolve, you know, some of the fund decision-making to the states. And let me tell you what Professor Wole Soyinka said, the celebrated literature laureate, Nobel Prize winner. He said, “If Nigeria fails to decentralise, and I mean to decentralise as fast as possible, manifestly and not as rhetoric, then Nigeria cannot stay together.” You’ve got to do something about the way the states are allowed to take decisions with security and how they spend their money and all the rest of it.
Nigeria is a democracy in every true sense of the word. We have a constitutional review process going on right now. There is an effort by the parliament going into every state of the federation. Every Nigerian is able to come to that process and give their views. At the end of the day, there will be maybe a referendum or some decision on how best to amend the constitution. That’s an ongoing process, and we should watch that process closely and see how it unfolds. If the majority of Nigerians want a devolution, like you give an example, then that is what will happen. Their parliaments at the state level will take that decision, and then the constitution can be amended. We’re implementing the constitution as it is, and we’re implementing it to follow the rule of law, because that’s one very clear suggestion that’s being made, a proposal to keep a lid on the kind of insecurity that we’ve been discussing which is affecting large parts of the country.
Yes, you are right. So, you are leading an initiative to try to bring greater safety to Nigeria’s schools. You have said that 62,000 schools are vulnerable to kidnappings and the kind of activities that we’ve seen with the Chibok girls a few years ago. So, this is the Safe Schools Initiative to counter the many kidnappings of young people. So, what exactly are you trying to do?
We have brought all the stakeholders in the country together, and we’re asking every state to give us its own statistics of where it has the most vulnerability. We have a general assessment, and also what they think is best in their environment. We need to do so to secure the schools. It’s an initiative that is meant to grow up a plan that shows the various segments of schools and also to raise financing on the back of that plan. The federal government will put its own resources, the states will put its own resources, and we hope we will be able to find partners and friends that will also support by electing to do any of the activities that is defined in that plan.
Talking of the abductions from schools and so on, we know that, in the north-east, Boko Haram have been behind a lot of these kidnappings. Can you confirm whether the Boko Haram leader, Abubakar Shekau, is indeed dead? Because there are reliable reports that say he is indeed no longer alive. Can you confirm that?
No, I will not want to do that. But, I can tell you that I’ve seen very reliable security reports that said Shekau is dead.
You’ve also had a bit of a political crisis. We’ve discussed the health, the social and the economic crisis, but when we saw what happened in October last year; when we saw young people protesting against police brutality, called the End SARS movement, and they’re talking about the Special Anti-Robbery Squad, around a dozen people killed. That really does show the disconnect, doesn’t it? between the youth of Nigeria and the government?
The youths rose at that time, they spoke, and they were heard. And I must say that I have not seen, as long as I can remember, any action by government as swift as that. Because the issues that they put on the table were addressed almost immediately by the president. Because there were concerns that some of the things that were reported to happen should not be happening and cannot happen, so that unit was immediately disbanded. There were engagements with these youths, and a number of youth engagement, employment, entrepreneurship programmes that have been put in place now to be able to support the youths that are not employed alternative sources of work or income that will help them to sustain themselves on a day-to-day basis. It was a very negative time, but it had its positive results, because it gave us an opportunity to reach respect and make some changes in the police force as well as engage the youth. But, there’s still a huge disaffection; a sense of disaffection amongst Nigeria’s youth.
I mean 125 million people in Nigeria are under the age of 25. One young activist, who’s 22 years of age, Rina Oduwale, says young people are just generally alienated from the government and old people are not willing to let go of power. I mean, the disaffection still runs quite widely.
I can imagine that, but you know what? We passed a law that is called Not Too Young To Run. And that’s a law that says that we can have a president that is from the age of 25 years old. You can contest elected office of either the state governor or the president, and also there’s a youths progressive forum that is under the ruling party. These is a call for the youths to be given a certain proportion of leadership positions, cutting across the states and the federal government ministries, departments and agencies. So, there are discussions going on. The youths are being heard. The dialogue that we’re having is making us understand more what the youths are expecting, what they need in terms of support, also that they can grow to leadership positions.
But you still have a president who’s well into his 70s, nevertheless. So, the principle may be there that you can be a young person and become president, but it’s not going to happen, it seems, for a long time.
But, what stops the electorates from putting in place a 30- or 35-year-old president in 2023? Nothing, because there’s a law that allows it now.
But President Buhari is out of touch. Let me just give you an example. In June, he said on Twitter, he gave a tweet talking about those behind the unrest in the south-east of the country. He said, “We will treat them in the language they understand.” Now, that triggered a huge problem. Twitter removed the tweet, because they said it violated its hate-speech policy. And what do the Nigerian authorities do? They impose a ban on Twitter. And this has led to widespread criticism, particularly amongst young people in the country and also abroad. He’s out of touch, isn’t he?
No, he is not. Those same youths complain when the IPOB leader is saying “Kill those policemen, bomb their stations across northern Nigeria as well.”
What about the Twitter ban? Because a lot of people said this was a bad move. The American embassy in Nigeria said the ban undermines Nigerians’ ability to exercise freedom of expression and sends a poor message to its citizens, investors and business. This looks bad.
We have other social media that are active in the country these days. There’s Facebook, there’s WhatsApp, and we are currently also in discussions with Twitter on how to come back to operate in Nigeria. We’re not taking them off completely. It was just to send a message that, whatever they do, if they had been removing tweets from the IPOB leader that is asking for policemen and soldiers to be killed, then there would have been a balance. But, they were not doing that.
Finally, Finance Minister, Nigeria’s population is currently about 214 million. It’s projected to increase to 400 million by 2050. Will Nigeria be a superpower then, or will it be so overcome by all the kind of challenges we’ve been discussing that it won’t be?
We have an opportunity to take advantage of our growing demography. The advantage that we have is that about 60% of our population is youth, and the Nigerian youth is vibrant. They’re innovative. They live in the IT world, in the new digital world that is the current reality of today. So, all we have to do is to support them and allow them to bring in their creative skills. Nigeria will grow, and we will be one of the countries in the world to be a contender in terms of IT. And also there are a lot of Nigerians in the IT space, in the digital space all over the world that are doing extremely well.
