President Nigeria Muhammadu BUHARI

Fossil fuels play a strategic role in providing the finances required to fund national and sub-national economic plans and programmes.

Muhammadu BUHARI President Federal Republic of Nigeria

In Nigeria, economic strength in diversification

August 24, 2021

Muhammadu Buhari, president of the Federal Republic of Nigeria, talks to The Energy Year about key initiatives for fostering Nigeria’s economic advancement, the importance fossil fuels will retain and government support for the industry, and the expected gains and impact of the African Continental Free Trade Area (AfCFTA).

For exclusive interviews and articles read: The Energy Year Nigeria 2021.

What key areas and initiatives is the government focusing on to successfully navigate the post-pandemic era and foster economic advancement?
The government has introduced the Economic Sustainability Plan (ESP) as a response to the Covid-19 pandemic. Our policies and programmes in the ESP have contributed to stabilising the economy, which has now rebounded from two consecutive quarters of contraction in 2020. The ESP has 16 key sectoral interventions aimed at: preventing deep recession; retaining and creating jobs; ensuring food security; improving road, rail and power infrastructure; and building the resilience of our healthcare system. Here, we have a set of key economic areas and initiatives:
The mass agricultural programme aims to create millions of job opportunities, directly and indirectly across the 36 states and the FCT [Federal Capital Territory]. The Agriculture for Jobs and Food (AFJF) aspect of the ESP aims to create between 5 million and 10 million jobs through agribusiness clusters, out-grower schemes and support related value chain activities.
Infrastructure development – roads, rail and power – is a key area. An NGN 1-trillion [USD 2.43-billion] infrastructure company (InfraCo) has been established to finance public sector asset development, rehabilitation and reconstruction, as well as to invest in roads, rail, power and other key sectors, with significant multiplier effects on economic growth and job creation. In addition to budgetary capital expenditure for road construction, alternative funding of road projects through the sukuk bonds and the Presidential Infrastructure Development Fund (PIDF) is sourced to create more jobs and increase economic activities in host communities.
The Extensive Public Works Program includes both major and rural road construction and rehabilitation with emphasis on the use of locally available materials like limestone, cement and granite. There is also the Special Public Works Program, which created direct jobs for 774,000 persons across the 774 LGAs [local government areas] in the country. Parallel to this, we have the mass housing programme, which aims to deliver up to 300,000 homes annually under the National Housing Program nationwide. It will create significant direct employment on construction sites and fabrication of construction inputs through domestic manufacturing.
Job creation for youth and women is targeted for achievement through the Digital literacy and skills acquisition, Entrepreneurship, Employment and Leadership and mentoring (DEEL) initiative. Furthermore, we are also making sure to give support to micro, small and medium-sized enterprises (MSMEs). So far, 307,173 employees have benefitted from the payroll support scheme across all 36 states and the FCT. Under the Artisan and Transport Scheme, 114,557 out of a target of 166,500 artisans have received a one-off NGN 30,000 [USD 72.78] grant. The transport track is at 88% completion with 146,811 self-employed transport workers having received the NGN 30,000 one-off grant. Also, 162,117 businesses have been formally registered or incorporated by the Corporate Affairs Commission at no cost as part of the Formalization Support Scheme.
Building a resilient healthcare system, including the release of NGN 1 billion [USD 2.43 million] of funding to the pharmaceutical sector to support the procurement of raw materials and equipment, required boosting of local drug production; removing tariffs on health-related imports (i.e. machineries and consumables) to improve access to drugs and other medical services; developing and executing an incentive package for frontline healthcare workers; and upgrading of diagnostic centres, intensive care units and equipment of isolation centres in the 36 states and FCT.
Strengthening the social safety net has also been a priority, and has been achieved through an increase in the number of cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The pre-existing conditional cash transfer has been extended to cover urban poor who have become further impoverished by the Covid-19 restrictions. The government has expanded the Social Register from 2.6 million to 3.6 million.
Lastly, the installation of solar home systems is another new initiative. It aims to cover up to 5 million households, serving about 25 million Nigerians who are currently not connected to the national grid. Other measures include a bailout support to the aviation sector rolled out to support local airlines, ground handlers and related businesses. These among many other measures have been implemented to support the Nigerian economy across the 36 states.

 

What role and importance will fossil fuels retain, and what government support is the industry receiving?
Our energy industry indeed holds significant potential to support economic growth and socio-economic wellbeing of Nigerians. Fossil fuels in particular are the mainstay of the economy, accounting for about 90% of foreign exchange earnings and more than 60% of the revenue stream to the government. Evidently, fossil fuels play a strategic role in providing the finances required to fund national and sub-national economic plans and programmes.
The low oil price regime occasioned by the advent of the Covid-19 pandemic necessitated a renewed focus on fiscal policy interventions economy-wide to minimise the adverse effects of loss of lives and livelihood of the citizens, and ensure preservation of employment and businesses for corporate entities. Given the international nature of the fossil fuel industry, we have focused on an international coalition mechanism that would restore stability in the global oil market as a first important policy intervention.
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