September 7, 2020
It gives me great pleasure to welcome you all to the First Year Ministerial Performance Review Retreat. We are meeting a time that mankind is struggling to overcome the economic and social crisis caused by the COVID-19 pandemic, which has disrupted life as we knew it. The consequences of the pandemic will no doubt influence our deliberations at this gathering, especially as we will have to adjust our policy approaches and methods of working going forward.
I stressed at last year’s Retreat that the Nigerian people expect dedication and commitment by all of us in implementing policies, programmes and projects to improve the quality of their lives and to set Nigeria on the path of prosperity. I also reiterated the resolve of this Administration to set the stage for lifting 100 million Nigerians out of poverty in the next 10 years. Even today, these remain our overriding objectives.
The priorities we set for ourselves were around nine inter-related and inter-connected areas, which are: stabilizing the economy; achieving agriculture and food security; attaining energy sufficiency in power and petroleum products; improving transportation and other infrastructure; driving industrialization with a special focus on SMEs; expanding access to quality education, affordable healthcare and productivity of Nigerians; enhancing social inclusion by scaling up social investments; as well as building a system to fight corruption, improve governance and strengthen national security.
In the course of the past year, Ministers have rendered reports to the Federal Executive Council on their activities and outputs related to the achievement of these objectives. Some of the notable achievements include:
i. Economic recovery prior to the outbreak of COVID-19. The economy recovered from a recession and we witnessed eleven quarters of consecutive GDP growth since exiting recession. The GDP grew from 0.8% in 2017 to 2.2% in 2019, but declined in the first quarter of 2020, as a result of the downward trend in global economic activities caused by the COVID-19 pandemic.
ii. Implementation of a Willing Buyer, Willing Seller Policy for the power sector, has opened up opportunities for increased delivery of electricity to homes and industries. We are also executing some critical projects through the Transmission Rehabilitation and Expansion Programme, which will result in the transmission and distribution of a total of 11,000 Megawatts by 2023.
iii. On transportation, we are growing the stock and quality of our road, rail, air and water transport infrastructure. The Presidential Infrastructure Development Fund projects are also progressing very well. These include the 11.9 km Second Niger Bridge, 120 km Lagos-Ibadan Expressway, and 375 km Abuja – Kaduna – Zaria – Kano Expressway. At the same time, we are actively extending and upgrading our railway networks, as well as our airports which are being raised to international standard with the provision of necessary equipment, to guarantee world class safety standard.
iv. The Government has continued to support the Agricultural sector, the key to diversification of our economy, through schemes such as the CBN Anchor Borrowers Programme and the Presidential Fertilizer Initiative programme.
v. The work of the Presidential Enabling Business Environment Council (PEBEC) has resulted in Nigeria moving up 39 places on the World Bank’s ‘Ease of Doing Business’ ranking since 2015 and Nigeria is now rated as one of the top ten reforming countries. We are confident that the on-going ease of doing business reforms would result in further improvement of this rating.
vi. Nigeria’s Law Enforcement Agencies have significantly scaled up their footprint across the country. As part of the efforts towards strengthening our internal security architecture, the Ministry of Police Affairs was created. Amongst others, we have increased investments in arms, weapons and other necessary equipment, expanded the National Command and Control Centre to nineteen States of the Federation, and established a Nigerian Police Trust Fund, which will significantly improve funding for the Nigeria Police Force. We have also approved the sum of N13.3 billion for the take-off of the Community Policing initiative across the country, as part of measures adopted to consolidate efforts aimed at boosting security nationwide .
vii. Efforts are also being made to empower the youth and other vulnerable groups by enhancing investments in our Social Investment Programmes.
These accomplishments are a testament to the fact that all hands are on deck in establishing a solid foundation for even greater successes in future.
Distinguished participants, when we met one year ago, little did we know that the world would be in a serious economic, social and health crisis that had left even the major economies in disarray, due to the COVID-19 pandemic. Just as in other jurisdictions, the socio-economic landscape of Nigeria has experienced a severe shock. Nearly 55,000 of our people have been infected with the virus while we have recorded 1,054 deaths by 4th September. The economy contracted by -6.1 per cent in the second quarter of this year; normal schooling has been disrupted; businesses are struggling and in certain instances completely closed; many people have lost their jobs and earning a living has been difficult. It has been a trying time for all of us and particularly for those in the informal sector who make their living from daily earnings.
It has not been any easier for Governments, Federal and State alike. As a result of the poor fortunes of the oil sector, our revenues and foreign exchange earnings have fallen drastically. Our revenues have fallen by almost 60%. Yet we have had to sustain expenditures, especially on salaries and capital projects. We acted to mitigate the effect of the economic slowdown by adopting an Economic Sustainability Plan but we have also had to take some difficult decisions to stop unsustainable practices that were weighing the economy down.
The N2.3 Trillion Economic Sustainability Plan (ESP), consists of fiscal, monetary and sectoral measures to enhance local production, support businesses, retain and create jobs and provide succour to Nigerians, especially the most vulnerable. In addition to improving the health sector, the ESP lays emphasis on labour-intensive interventions in agriculture, light manufacturing, housing, and facilities management. It also complements on-going major infrastructural projects in power, road and rail by prioritising the building of rural roads, information and telecommunications technologies as well as providing solar power to homes which were not hitherto connected to the National Grid.
Alongside interventions in these critical areas, including agriculture and food security, affordable housing, technology, health, and providing jobs for youths and women post-COVID; the ESP will also provide different avenues whereby Government will support micro, small and medium enterprises (MSMEs) to enable them respond to the economic challenges of COVID-19. This includes safeguarding about 300,000 jobs in 100,000 MSMEs by guaranteeing off-take of priority products; and Survival Fund to support vulnerable SMEs in designated vulnerable sectors in meeting their payroll obligations and safeguarding jobs from the shock of COVID-19.
Under the ESP MSMEs component, both the Survival Fund (Payroll support), and the Guaranteed Off-take Scheme, GoS, are to impact about 1.7 million individuals within a three to five months timeline. Also, 45 per cent of total business beneficiaries will be female owned; and 5 per cent of total business beneficiaries will be dedicated to special needs business owners.
In addition, under the Survival Fund (payroll support) scheme; 250,000 new business names are to be registered at a discounted rate of N6,000 by the CAC, but this will be free for the MSMEs; while 330,000 transport workers and artisans will get one-time grants.
Following an MOU to be signed by BOI and the FG, the total beneficiaries for Survival Fund Scheme tracks are about 33,000 beneficiaries per State; with a minimum payroll support at N30,000 and maximum support is N50,000.
The COVID-19 pandemic, has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity to ..one of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown, was the deregulation of the price of premium motor spirit (PMS) such that the benefit of lower prices at that time was passed to consumers. This was welcome by all and sundry. The effect of deregulation though is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up.
There are several negative consequences if Government should even attempt to go back to the business of fixing or subsidizing PMS prices. First of all, it would mean a return to the costly subsidy regime. Today we have 60% less revenues, we just cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration. Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice. Nevertheless, I want to assure our compatriots that Government is extremely mindful of the pains that higher prices mean at this time, and we do not take the sacrifices that all Nigerians have to make for granted. We will continue to seek ways and means of cushioning pains especially for the most vulnerable in our midst. We will also remain alert to our responsibilities to ensure that marketers do not exploit citizens by raising pump price arbitrarily . This is the role that government must now play through the PPRA. This explains why the PPRA made the announcement a few days ago setting the range of price that must not be exceeded by marketers. The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will be keep coming down.
The recent service based tariff adjustment by the Discos has also been a source of concern for many of us. Let me say frankly that like many Nigerians I have been very unhappy about the quality of service given by the Discos, but there are many constraints including poor transmission capacity and distribution capacity. I have already signed off on the first phase of the Siemens project to address many of these issues. Because of the problems with the privatization exercise, government has had to keep supporting the largely privatized electricity industry. So far to keep the industry going we have spent almost 1.7 trillion, especially by way of supplementing tariffs shortfalls. We do not have the resources at this point to continue in this way and it will be grossly irresponsible to borrrow to subsidize a generation and distribution which are both privatized. But we also have a duty to ensure that the large majority of those who cannot afford to pay cost reflective tariffs are protected from increases. NERC, the industry regulator therefore approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service. Under this new arrangement, only customers who are guaranteed a minimum of 12hours of power and above can have their tariffs adjusted. Those who get less than 12 hours supply, or the Band D and E Customers MUST be maintained on lifeline tariffs, meaning that they will experience no increase. This is the largest group of customers. Government has also taken notice of the complaints about arbitrary estimated billing. Accordingly, a mass metering program is being undertaken to provide meters for over 5 million Nigerians, largely driven by preferred procurement from local manufacturers – creating thousands of jobs in the process. NERC has also committed to strictly enforcing the capping regulation which will ensure that unmetered customers are not charged beyond the metered customers in their neighbourhood. In other words no more estimated Billings.
In addressing the power problems we must not forget that most Nigerians are not even connected to electricity at all. So as part of the Economic Sustainability Plan, we are providing Sola r home systems to 5 million Nigerian households in the next 12 months. We have already begun the process of providing financing support through the CBN for manufacturers and retailers of Off Grid Solar Home Systems and Mini-Grids who are to provide the systems . The Five million systems under the ESP’s Solar Power Strategy will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation This means that more Nigerians will have access to electricity via a reliable and sustainable solar system.
The support to Solar Home System manufacturers and the bulk procurement of local meters will create over 300,000 local jobs while ensuring that we set Nigeria on a path to full electrification. The tariff review is not about the increase, which will only affect the top electricity consumers, but establishing a system which will definitely lead to improved service for all at a fair and reasonable price.
There has been some concern expressed about the timing of these two necessary adjustments. It is important to stress that this is coincidental in the sense that the deregulation of PMS prices happened quite some time ago, it was announced on 18 March 2020 and the price moderation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices. Similarly, the review of service-based electricity tariffs was scheduled to start at the beginning of July but was put on hold to enable further studies and proper arrangements to be made. This government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation, and we certainly will not inflict hardship on our people. But we are convinced that if we stay focused on our plans, a brighter and more prosperous days will come soon. Ministers and senior officials must accordingly ensure the vigorous and prompt implementation of the ESP & all of our programmes, which will give succour to Nigerians.
In this regard, the Central Bank of Nigeria (CBN) has created credit facilities (of up to N100B) for the Healthcare (N100 Billion) and Manufacturing (N1 Trillion) sectors. From January, 2020 to date, over N191.87B has already been disbursed for 76 real sectors projects under the N1TRN Real Sector Scheme; while 34 Healthcare projects have been funded to the tune of N37.159B under the Healthcare Sector Intervention Facility. The facilities are meant to address some of the infrastructural gap in the healthcare and manufacturing sector as a fall out to the COVID-19 pandemic and to facilitate the attainment of the Government’s 5-year strategic plan.
Distinguished participants, to address our current economic challenges, and consolidate on our achievements over the past year, this retreat has been designed to:
▪ Review the performance of each Minister in delivering the priority mandates, including programmes and projects assigned to them upon their appointment in 2019;
▪ Identify key impediments to implementation; and
▪ Re-strategize on how to accelerate delivery of results, given the current economic situation.
The retreat would also provide the opportunity to effectively evaluate the activities of the Ministries over the last twelve months with regard to the delivery of our agenda and promise to Nigerians.
The Ministers are urged to work closely with the Permanent Secretaries to ensure accelerated and effective delivery of the policies, programmes and projects in the priority areas. I have also directed the Secretary to the Government of the Federation to intensify efforts at deepening the work of the Delivery Unit under his coordination towards ensuring effective delivery of Government Policies, Programmes and Projects in the coming months. It is also my expectation that progress on performance of the implementation of the 9 priority areas will be reported on a regular basis.
In closing, I encourage optimal participation and contribution by all participants, while observing all the necessary safety protocols and compliance with COVID-19 guidelines.
On this note, it is my pleasure to formally declare this Retreat open. I look forward to a very fruitful session and stimulating exchange of views.
God bless the Federal Republic of Nigeria.