Nigeria signed a major deal with China this week as President Buhari made an important trip to visit its leader, Xi Ji Ping. Nigeria’s Foreign Minister, Godfrey Onyema, who accompanied Buhari on the trip to China, announced that the orient nation had offered a $6 billion loan to Nigeria to fund infrastructure projects, one of the key areas Buhari promised to address with Nigeria’s 2016 Budget. This came as a good news to many Nigerians as it now appears that Buhari has a clear economic policy. On the other hand, some Nigerians have expressed their reservations concerning this new development, claiming China was “scamming” Nigeria, a phrase that became an hashtag on social media this morning. However, what Nigerians can do is look at precedents i.e. China’s similar investment in other African countries, particularly Ethiopia.

Ethiopia has recently gained continent-wide fame for its development and achievements in the past few years. The country is one of the world’s fastest growing economies now, Africa’s fastest growing economy, thanks to government spending (tax driven) and Chinese investment. Ethiopia launched the first light rail system, in Sub-Saharan Africa in 2015 which links its capital, Addis-Ababa, to the neighbouring country, Djibouti. Africa’s current biggest economy and second biggest, Nigeria and South Africa respectively, cannot boast of one.

The responsibility for this light rail, which cost $3bn to build, was taken up by China after the World Bank and other Western donors had shown a reluctance to fund the project, to the surprise of Getachew Betru, the head of Ethiopia’s Railway Corporation. China not only constructed it, but provided most of the funding for it. The train, which was initially built to counter the challenges that Ethiopia’s drought this year would pose, has received an expanded vision. It has now acquired a Pan-African vision; it will expand to run through South Sudan, Sudan, Kenya and other East African countries. This move will surely see Ethiopia emerge as an economic hub in East Africa.

Nigeria seems to be taking a cue from Ethiopia and China. It plans to build a similar one which will run from its southern states to Lagos, its commercial hub. This project is going to be financed by China and is set to help the economic development of the country’s marginalised southern region greatly. However, projects like this need to be supplied with adequate power, something Nigeria does not yet have, but this is not so for Ethiopia. It recently announced that it made $123 million dollars as profit from the sale of electricity both at home and abroad to Djibouti, Kenya and Sudan, while also establishing links to five other East African countries. These have been done all through the help of Chinese electrical transformers.

Ethiopia also recently announced that its Grand Ethiopian Renaissance Dam will be completed in 2017. This dam will supply 6,000 megawatts of electricity, even larger than the whole of Nigeria’s present power capacity of about 5,000 megawatts. That number would make the dam Africa’s largest hydroelectric project and Nigeria could surely do with something like this.

Buhari, during his visit, promised China that all projects started by Nigeria’s former administrations will be completed under his tenure. Though this deal could see the influx of Chinese expatriates into the nation, it seems there is no cause for alarm about China ‘stealing Nigerian jobs.’ According to China’s ambassador to Ethiopia and the African Union, La Yifan, in 2015, “the best way to contribute to human rights is creating jobs and alleviating poverty,” The rate of Chinese expatriates to jobs created for Ethiopians is 1 to 20. And this has seen unemployment rate in the country decrease from 20.4 percent in 2009 to 16.8 percent in 2015, and is set to further reduce with the job potentials of the completed rail system and electricity grid.

Though, Nigeria’s inclusion of the Chinese Yuan in its foreign exchange currencies may not “crash the dollar” as some Nigerian media houses have reported, it would go a long way in creating a path for Chinese-built infrastructure in Nigeria, without the cumbersomeness of dollar rates. Ethiopia is Africa’s second largest population and land-locked too. Nigeria which has the highest population and is not land locked should definitely not be doing worse than Ethiopia if it wants to live up to its title as “Africa’s largest economy.” If Nigeria wants to truly diversify its economy, building its infrastructures is essential and it seems China is the best to partner with

so soon? wonder loan

The truth is dat this Buhari govt actually had d most well defined economic policy in d last 10years. A good acronym to define and sumarise Buhari economic policy is DOTE ( Diversification Of The Economy)

The economy policy is so clear. Yet many people just shout for nothing because they dont understand the meaning of economic policy. Budget is d major part of economic policy. And this 2016 Budget is d most well defined economic policy in d last 10 years that try to integrate every strata of d country.

Below are d economic policy of Buhari govt:
Note: These are not Campaign promise. These are things already in d aprroved Budget by NASS.

1. Job creation through massive infrastructural projects worth over 1.5trillion naira. This is d first time in Nigeria history infrastructure will be more than 1 trillion naira.
These include massive spending on rail, road, power, housing and airport.

2. Poverty reduction through social intervention. This includde 23000 to 25000 naira per month for 500,000 graduate volunteer teachers. 50000 naira each to 1 million market women. etc

3. Extreme poverty management and social integration and intervention through 5000 naira stipend to 1million Extreme poor widow and age. Feeding of over 4Millions pupil one meal a day from primary 1 to 3.

4.Diversification through Agriculture and solid minerals. The govt has already sign alot of MOU with many countries on these regard. This is one of d reason d president have b travelling alot. This is aim at import substitution which will help to save foreign exchange and boost naira stability.

5. On d monetary policy, d govt monetary police is saving Forex for essential commodities. Thus dual exchange rate. 199 for essential goods and 325 for non essential goods. This policy is well defined and deliberate by d govt. Usually all over the world, monetary policy are dynamic and not static. Expecially in d aspect of money supply. Most times, monetary policy is reactive rather than proactive all over the world. so monetary policy could be changing per quarter in Minor details. But the main Objective is stable for atleast 6 months. The main Objective of dis govt foreign exchange policy is saving foreign exchange for critical and real sector of d economy.


Below is definition of Economy policy

Economic Policy
An economic policy is a course of action that is intended to influence or control the behavior of the economy. Economic policies are typically implemented and administered by the government. Examples of economic policies include decisions made about government spending and taxation, about the redistribution of income from rich to poor, and about the supply of money.

http://www.cliffsnotes.com/study-guides/economics/introduction/economic-policy

From the definition above it is clear d govt have economic policy clearly defined.

1. Spending and Taxation: The govt spending plan is clearly defined by d Budget. A deficit budget with about 1.5 trillion on Insfracstructure. In terms of Taxation, the govt have clearly make thier priority the increasing of tax base to more companies, persons and product. This has clearly be shown with d plan recruitment of 1250 professional staff by FIRS.

2. Distrubution of income from Rich to the poor: This part of economic policy, is clearly shown in d budget with the 500 billion social intervention fund. This will be used for 500,000 vokunteer graduate teachers, 1million exreme poor widow and aged, 1 million market women with 50k granr each and d 370,000 training of artisans.

3.Supply of Money. This means monetary policy including forex. This govt have deliberate choose to use dual exchange exchange as a way of preventing rapid decline of foreign reserves. Thus by so doing, d future is protected. It is an indirect saving technique.

Below is Well defined Medium term Economic plan of this govt.

Highlights of the NEC Retreat, according to a communique issued at the end of the session, included agreement reached for concerted and consistent efforts to diversify revenue sources.
"Injection of 350bn naira into the economy mostly in infrastructure in the next quarter to stimulate job and employments"

“Expand compliance on VAT, adopting a gradual plan for rate increase. Increase expenditure through borrowing, which should be invested in infrastructure.

“Federal and state governments to focus on fiscal responsibility as a critical element in macro-economic balance. Increase investment in infrastructure through public private partnership (PPP). Develop financial inclusion strategies to cater for the poor and vulnerable population. Maintain a minimum level of capital expenditure of 30% in the budget.

On agriculture, the retreat resolved that the Federal Government should re-position the Bank of Agriculture to enhance its capacity to finance agriculture.

“Funding for agricultural sector is considered critical and sources of intervention funding from the Central Bank of Nigeria should be considered. A single digit interest rate for agricultural loans should be considered while duties and taxes for agricultural products and equipment should be waived.

“Develop strategic partnerships between Federal and state governments. Each state should make specific commitments to crops in which it has comparative advantage and request Federal Government intervention.

It was also resolved that national targets for self-sufficiency should be set for identified crops, which should be monitored including tomato paste – 2016, rice – 2018, and wheat – 2019.

“The Federal and State governments should roll out agricultural extension services nationwide. Commodity Exchanges should be established for price regulation and avoidance of losses due to lack of markets. The Abuja Commodity Exchange should be revitalised.

“The National Agricultural Land Development Authority (NALDA) should be re-established. The Federal Government should develop an Agriculture Implementation plan whereby state governments are encouraged to identify at least two crops in which they have comparative advantage

“States should open up rural/feeder roads to facilitate transportation of agricultural produce to be supported by the Federal Government

“The Federal and state governments should establish minimum price guarantee for farm produce.

“The Federal Government should provide immediate funding to upscale efforts of Agricultural Institutes of Research and Development across Nigeria.”

The retreat also resolved that state governments should also be encouraged to fund research and development in agriculture through technical colleges, universities and research institutions.

For solid minerals, the retreat resolved that the Ministry of Solid Minerals Development should complete and present the solid minerals development roadmap.

“This framework should address issues of illegal miner, licences, taxes and royalties by 31st March 2016. Federal Government to engage state government on the roadmap and agree any amendment that may be required by 30th June 2016

“Initiate relevant legislative changes that maybe necessitated by the agreed roadmap by 31stJuly 2016. Conclude the revalidation/recertification of all mining leases by 30th September 2016

“Agree with states and local government on respective responsibilities for developing feeder roads and other critical infrastructure for solid minerals development

“Federal Government and states to set deadlines to achieve self-sufficiency in bitumen/asphalt and tiles (to discourage/stop importation)

“Make and communicate final decisions on operationalisation of Ajaokuta Steel Plant by 30th June 2016. Establishment of joint committee to address issues of data on quantity and quality of minerals exploited and exported

Setting up of mining cadastral zonal offices for proximity to states for the purpose of issuing licenses and easy monitoring by states was also resolved by the retreat.

“Discourage use of wood for cooking by promoting use of coal briquettes. Guarantee access to finance solid minerals development via intervention funds and private sector capital.

“Block revenue leakages in the sector through effective monitoring of activities in the mining sector. Organise artisanal/small-scale miners as a mechanism for reducing illegal mining and Establish Mines Surveillance Taskforce by September 2016

On Investment, industrialisation and enabling monetary policies, it was resolved that the Ministry of Industry, Trade & Investment (MITI) to develop a matrix of actions to be taken by Federal and State Governments towards achieving the targeted improvements in Ease of Doing Business ranking by 30th April 2016.

“Present an incentive scheme for states taking actions towards improvement of the investment climate in their states, including grants, by 30th September 2016

“Forge strong links between the Nigeria Investment Promotion Commission (NIPC) and the State Investment Promotion Agencies. States to collaborate more actively on regional basis on investments and industrialization.

“The Federal Government should work with the states and other stakeholders to create an enabling environment for trade and investment through the implementation of the Nigerian Industrial Revolution Plan (NIRP) to encourage industrialisation.

“Make environment conducive for the Micro, Small & Medium Enterprises to create jobs for the unemployed and undertake deliberate policies to create access to funds.”

State and Federal governments have also been urged to emphasise the patronage of “Made in Nigeria” products.

“Import competition” rather than “import substitution” should be emphasised.

Governors are to set up task forces to monitor implementation of trade/ investment policies and strengthen planning institutions by linking federal and sub-national planning; in this regard, a monthly meeting between the Minister of Budget & National Planning and State Commissioners for planning will be institutionalised.

States are also to set up one-stop shop for investors where they do not exist to attract investment and improve on IGR.

“Promote regional cooperation on investment and industrialisation. Implement institutional and structural reforms as a way of improving the efficacy of monetary policy, including greater consultation with the National Economic Council.

It also harped on the need for predictability and consistency of the Central Bank of Nigeria’s communication to key stakeholders to manage expectations.

“The Central Bank of Nigeria should carry the states along in some of their reforms in areas of SMEs and agricultural funding initiatives. Long-term development goals should anchor policy decisions

“Effective regulation and supervision to improve confidence in the soundness and stability of the banking system.

For infrastructure and services, the retreat resolved development of infrastructure delivery plan, considering current financial capabilities driven principally by the goal of improvement of the quality of life for the populace

“Develop financing model for infrastructure projects. Integrate training and job creation components in infrastructure projects. Implement empowerment and entrepreneurship policies to foster inclusive growth.”

The Federal and State Governments are also to work collaboratively to ensure sustainability of the school feeding and other social protection programmes.

“Cooperation from the States’ Ministries of Education and State Universal Basic Education Board (SUBEBs) for the Teacher Corp programme.

“Provide logistics support on the proposed upgrade of 75 existing National Directorate of Employment (NDE) facilities (across the various states) to Empowerment Centres

“Cooperation and coordination with the states on their specific job creation efforts. State government support on identified needs such as infrastructure and/or space for innovation hubs.

“State government support for artisan training, scoping and support for existing artisan cultures, use of existing training facilities.

“Institutionalise a single register as a platform for targeting the authentic poorest and vulnerable for safety net programmes; for government, donor agency, organisations or individuals.

“Creating a delivery mechanism that ensures efficient, consistent timely and direct payments in the remotest parts of the country. Boost productivity and financial inclusion for the poorest and most vulnerable.”

The retreat raised two committees: The Implementation Steering Committee is headed by

Vice President Yemi Osinbajo, who is the chairman of NEC.

Other members of the committee are Abdulaziz Y. Abubakar, Chairman, Nigeria Governors Forum and Governor of Zamfara State, Adams Oshiomhole, Governor of Edo State, Abdulfatah Ahmed,

Governor of Kwara State, Rauf Aregbesola, Governor of Osun State, David Umahi, Governor of Ebonyi State.

Others are Badaru Abubakar, Governor of Jigawa State, Mohammed Abubakar, Governor of Bauchi State, Udoma Udo Udoma, Minister of Budget and National Planning, Kemi Adeosun, Minister of Finance, Okechukwu Enelama, Minister of Industry, Trade and Investment, Audu Ogbe, Minister of Agriculture, Kayode Fayemi, Minister of Solid Minerals, Babatunde Fashola, Minister of Works, Power and Housing, and Nana F Mede, Permanent Secretary, Ministry of Budget and National Planning, who will be secretary.

The Implementation Monitoring Committee chaired by Zainab S. Ahmed, Minister of State, Budget and National Planning. Members are Mrs. Yosola Akinbi, Senior Technical Adviser to the Vice President on the National Economic Council, Mr. L.O.T. Shittu, DG, Nigeria Governors Forum, Mr. David Olofu, Commissioner for Finance and Planning, Benue State, Mohammed Kauji, Commissioner for Finance and Economic Planning, Borno State, E.A. Onwiodokif, Commissioner for Economic Planning, Akwa Ibom State, Mrs. Aisha M. Bello, Commissioner for Budget and Planning, Kano State Mrs. Aderenle Adesina, Commissioner for Budget and Planning, Ogun State.

Others are Mark Okoye, Special Adviser, Economic Planning and Budget, Anambra State, Mr. Tunde Lawal, Director, Macroeconomic Analysis Department, Fed. Min. BNP, Kayode Obasa, Director, Economic Growth, FMBNP and A.B. Saadu, Director, Special Duties.

http://thenationonlineng.net/jobs-cash-coming-govt-plans-n350b-revival-pill/

The question now should be how far can this govt implement this economic policy? We may have to wait till June 2017 to December 2017 to clearly say whether they failed, or succeeded or are in d right direction.