PapaBrowne:

I am doing a research on Infrastructure development and it’s been worrisome viewing the outcomes as they reveal the level of Nigeria’s backwardness even when compared to other so called third world countries.

For instance:
For Nigeria to have what Brazil has today, we need about  $190billion worth of new infrastructure developments.
To catch up with South Africa, we need a whopping $328 Billion in corruption free capital expenditure.

Sad news is that last year the FG purportedly spent just $3 Billion on Capital projects, a lot of which must have gone into corruption. At that rate, it will take us over 100 years to be just the way South Africa is today. Sadly also, while we spent $3 Billion last year, South Africa is spending approximately$ 15 billion dollars yearly to improve on its already advanced infrastructure.
Now this is pathetic and sad especially when you consider that Nigeria is blessed with lots of Natural, Human and Intellectual resources.

The Oil and Corruption misconception
It is true that the major cause of all this backwardness is the corrupt leadership that Nigeria has been blessed with over the decades. But it isn’t the only problem. Even if corruption is totally wiped out overnight, Nigeria wouldn’t still be able to afford the kind of infrastructure we need.
Our sole source of income which is oil is very inadequate. We should stop deceiving ourselves that Nigeria is a rich country because of its oil.
2 Million barrels of Oil daily is nothing when shared amongst a population of 150 million people.

To put things in perspective, our 2 million barrels would give us about $45 Billion dollars a year.
*40% of this money will go to the Oil companies leaving us with barely $27billion.
*70% of our budget usually goes on recurrent expenditure, leaving barely $8billion to be shared between corrupt pockets and capital projects.

Financing Projects
Truth is with all our oil, we would never have infrastructure as good as South Africa.
If we must catch up with them, we need to devise innovative methods in which to generate the funds required to build up our infrastructure.

America did it with pension funds.  Some countries did it with loans from institutions like IMF and the World Bank. Others created unique financial instruments that gave them the ability to leverage capital and spread returns far into the future.  Russia used resources from its communist subordinates. Back in time, Britain and France did theirs by despoiling Africa of resources. More recently, China is using its huge chest of capital obtained from its export earnings.
One of the best and most modern ways to do this is through PUBLIC PRIVATE PARTNERSHIPS.
But even at that, the concessionaire still needs to source capital to execute projects.

@knowlittle
Creation of additional states is retrogressive as it would live less money for infrastructural development which we really need and increase administrative and running costs of goverment which is already way to high in this country. Of the 36 states in this country only two can be said to be self sufficient without federal goverment allocations. I am sure if you removed the lucre of fedeeral allocations and states had to sweat to raise their IGR this insne talk of additional states would not be so loud. Infact i believe we should go back to true federalism were each state would be made to generate it's own revenue whilst contributing to the centre[instead of vice versa as we have now] but then this would call for 100% resource control which the hawks in goverment especially the parasitic Northerners would rather die than allow.

70% of our budget usually goes on recurrent expenditure, leaving barely $8billion to be shared between corrupt pockets and capital projects.

Ibime:

Our current budget is N4.07trn or $27bln. . . did you say we need $190bln for infrastructure alone?. . . . hehehehe. . . . that would take forever. . . . . even out of the $27bln sef, $20bln of it will be stolen.

naijamini:

@PapaBrowne

Great topic. I suggest that we figure out the political economy of development first. Here are a few principles of development based on religious sayings since Nigerians are a very religious people:

1. Man was not made for infrastructure, but infrastructure for man - translation?
If your people do not earn enough you can build all the houses, roads, bridges, etc you want, they will not be maintained or used. If used, nobody would pay for them and your multiplier effects goes straight to zero. Bola Ige was certainly not corrupt, but after a couple of years the row of houses he built along Ibadan-Ife road were abandoned. I don't know what is going on with those houses now, but we have similar moribound projects all over the Nigerian landscape.

2. The truth (education) will set you free.
There is no other way to raising people's productivity so they can produce valuable work and earn dignified wages than to increase their skill and knowledge base. Workers can demand all the minimum wage they want, if productivity doesn't increase they are simply going to take the increase from someone else's pocket, get fired or the government would have to borrow to pay them. Or as we do in Nigeria wait for the price of oil to go up

3. The borrower is the servant to the man doing the lending.
It is as simple as that. One thing Ag. President Jonathan and his new finance minister is doing that would ruin Nigeria all over again is this increasingly bold talk about the need to borrow to develop. There is nothing farther from the truth. The lenders that make money from international borrowing are looking to push debt on the ignorant nations of the world. Does that mean we don't need foreign investment? Yes, we need foreign investment, but our government only needs to provide the right environment for capital to come in. Reduce the risk to foreign investors, clean up the system of doing business, improve its efficiency, make sure a sizable portion of the investment gains made in Nigeria is received by Nigerians and let the ball roll. Any government that thinks it is going to borrow to develop Nigeria is showing a serious lack of what Nigeria needs and must not be allowed to remain longer than is necessary.

4. Go to the ants or he that refuses to work let him not eat
Free loading is embedded in our collective psyche. Until we begin to recognize property rights and the need to pay and receive just compensation to/for  ownership of such rights Nigeria will forever travel around a circle the size of a pin-head.

KunleOshob:

@Papabrowne
Great topic however there are quite a number of flaws in your submission which i would try and highlight below:

In the above submission, you are assuming only the federal goverment is spending on infrastructure by stating $3billion which was last year's capital vote of the FG, however ther is a lot of massive infrastructure investment by state goverments across the nation, private sector initiatives, PPP schemes and foreign investments in infrastructural develpoment when all these other sources are factored in, i am sure definately ove $10 billion is being spent on infrasture development annually. Even then we are just scratching the surface as we need to be spending at least double that or even triple considering our huge population and our current dismal level of development

KunleOshob:

The mistake we keep making is focusing on oil alone, first of all oil does not constitute 100% of Goverment revenue but rather roughly 80%, Goverment still makes a lot of money via taxes namely Company profit taxes and custom duties. They also make money from licensing and proceeds of privatisation. That aside the Goverment bonds market as really grown over the last couple of years and is a potential source for goverment to raise trillions for developmental projects. Goverment needs to explore how it can increase revenue generated via taxes, it is common knowledge that at least 80% of Nigerians don't pay taxes, yet they expect goverment to do everything for them. Also about $4billion is wasted on fule subsidy every year, if fuel subsidy alone is stopped apart form the fact that excess of $4 billion would be availbale for infrastrutural development the private sector would be encouraged to invest heavily in the downstream sector of the petroleum industry thereby developing the sector further, the same results would be achieved if PHCN is decentralized and privatized.

KunleOshob:

You already mentioned the solutions in your post above namely "pension funds" and "PPP" I keep on telling people one o the greatest[though largely unnoticed] achivements of the Obasanjo regime was pension reforms, for the first time in the history of Nigeria our financial system is accumulating huge long term funds on a sustainable basis, it is this type of funds that is needed and crucial for development projects. these funds would also eventually force down interest rates as it grows larger and larger. Already as at the end of december 2009 the pension funds had accumulated to over 1.6 trillion naira and growing by an additional 100 billion every month. This is with less than 10% of the pensionable people in this country contributing imagine what would happen if up to 50% are contributing. It is this huge pension funds that would ultimately be availabe to provide long term funds for infrastructural development either via goverment through financing of goverment bonds or via PPP through providing long term funds to financial institutions who would then lend to PPP operators.

Personally i believe all the ingredients for Nigeria to emerge as a developed nation is already there, we just need good leadership to harness these resources and make the best of it. That is why we need to rally round and support a great visionary like Donald Duke  to move this country forward. He was able to develop cross river to be one of the most developed states in the whole country despite the very limited resources the state had.

2 Million barrels of Oil daily is nothing when shared amongst a population of 150 million people. . .
4) Or better still, employ Boko Haram to help reduce the Nation’s population to something like 20 million (At least that way the oil money can go round)

naijaking1:

^^^^
The most appropriate question I have ever heard about Nigeria's development problems so far!
Sharing the national cake 2 million barrels of oil a day amongst our population of 150 million is the reason why we're in this mess in the first place. For one thing, you will never make a sharing formular that will be acceptable to everybody, secondly, how do we even know that the 150 million number is accurate and not designed to maximize a regions share of the so-called cake? There're more questions about sharing the wealth.

KunleOshob:

The real source of gwoth for any economy lies in productivity, i.e human resources. For us to develpoe w need to be much more productive than we currently are. Real wealth lies in productivity of the people.

3)Should we just forget it and resign our faith to being a poor country?
No. We have all we need to be superpower, apart from the actual human resource expertise. Our civil servants need real training. We need to emulate the Japanese and Taiwanese models (not western, they aren't as compatible).

naijaking1:

@papabrowne
Good topic, how did I miss it all this while? I must have been too focused on ---- you know who
Anyway, the answer to you pointed questions require substantial input from historical, social, religious, and political perspectives.
Your analysis of oil as our main income earner is correct, but it underlines our real problem.

Before we struck oil, fought a war, learnt how to be corrupt, Nigeria was at par with Brazil, India, and other countries like Indonesia and Malaysia in terms of develoment and potential for growth. Then came oil, with all the attendant short term benefits and long term disadvantages. Oil lubricates the machinery of our corruption, instability, and subsequent backwards march to the cradlles of civilization. All the countries listed in your excellent chart don't produce oil for export the way Nigeria does, and infact none of the top 5 oil exporters of the World come close to Japan, india, and China in terms of development.

I have focused heavily on oil as the main clog in the wheels of our progress, because somehow the presence and availability of oil has changed the mentality and understanding of Nigerians over these years. With oil, we have a "national cake" mentality, how can a country develop when the people feel and act as if their own country owes a debt. So, young men and women wake up everyday looking for ways to get their own piece of this allegorical national cake. Very few or nobody ever wakes up asking how and what he can do to improve their communities, states, and country as a whole.

Finally, the most dangerous misunderstanding retarding Nigerians development is not necessarily lack of money, oil, or infrastructure, it is not understanding that Nigeria's greatest resources is its people, not oil, cocoa, or even palm trees. It's people.

Our people are our greatest resources!

SapeleGuy:

Bonds can be issued via the NSE.

I don't believe funding has ever been the problem, The fact that Nigeria is currently negotiating a loan illustrates that point.

The problem is that we have a strong record of mismanagement.
$16 billion dollars has been spent on light but we still have darkness.

It may be corruption or incompetence but one thing is for sure dependence on oil has actually become a poverty trap for the nation.

Every state is rich in mineral resources but they are scared to take their destiny in their own hands. Why?

strangleyo:

1)How do you think Nigeria under good governance (E.g Fashola in Lagos) can raise the huge monies required to finance its dream infrastructure projects?

Yes, if we cut corruption by a significant margin. The key is to improve tax collection of citizens.

One way implementing this feat is for individual states in the federation to give their citizens state cards. Without state cards individuals will not be employable, cannot see a doctor, cannot vote, and have no voice in general. This will be an incentive to get people to participate as citizens.

The flipside is that Nigerians with state cards can vote, will be encouraged to visit a private health clinic at least two times a year (which is a double bonus as we can detect preventable problems), they will be used as voting registrations, and they will be used to evaluate taxation per citizen. They will be equivalent to social security cards (of western countries).
State cards will also be used as de-factor census collection. 

This will require excellent planning and expertise and civil servant training.

KnowAll:

Funding massive Infrastructure Developments in Nigeria


That is why the House of Reps is re-visting the issue of  further State Creation, I have said every single one of those Province we had in the 1950's and the 1960's should be a State. The word State in Nigeria is not Synomynous with the word " State in the USA " the word state in Nigeria speak is a nomenclature for Provinces, by not giving it is proper name we are actually short-changing the Nigerian people, by having less State than Provinces we have not only curtailed our grassroot development we have arrested it.

It is time we rectify this anomaly and embrace the development strides of the late 1950's and early 1960's. Some people migth argue that it was because we had strong regional goverments for the supersonic developmental experinece we had in all regions, I beg to differ, what we had then was strong Local Goverment Structure. It would have being a Herculean task and inconceavable for Awolowo to Know what was happening down at the Ethiope Rivers from Ibadan if it was not for the strong district head and Provincial Head.

oyinda.:

Our population size seem to be one of the major hindering factors for development. but what if we try to see it as a strength and use it to our advantage like India and China are currently doing with outsourcing and manufacturing respectively. We can invest in our huge human reserve instead of trying to kill off people like u suggest. lol

so how do we use our 150 million people to our advantage?