Home Technology Okonjo-Iweala, Elumelu task governors on fiscal discipline, debt management

Okonjo-Iweala, Elumelu task governors on fiscal discipline, debt management

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Okonjo-Iweala

The Director General of the World Trade Organization, Ngozi Okonjo-Iweala, has advised governors of the 36 states of the federation to be wary of incurring debts that could derail their quest for providing democracy dividends for their people.

Okonjo-Iweala gave the charge on Monday in Abuja at the induction programme for re-elected and elected governors, organized by the Nigeria Governors’ Forum.

The week-long event, holding at the Banquet Hall of the Presidential Villa, is being attended by re-elected and elected governors, past governors, members of the international community and resource persons drawn from across various disciplines.Speaking on the theme, “Task of Nation Building,” the WTO boss painted a gloomy portrait of the nation’s economy, urging the governors to learn and imbibe best practices that can help them deliver on their promises to the electorate. 
She said, “Nigeria’s gross debt level has climbed from N19.3 trillion in 2015 to $N91.6 trillion in 2023. The debt-to-GDP ratio has almost doubled from 20 per cent to 39 per cent over that time period.

“While the debt-to-GDP ratio may not look so alarming, as revenues decline, the burden of debt servicing has increased dramatically. 
“The debt service to revenue ratio is certainly alarming, at 83.2 per cent in 2021 and 96.3 per cent in 2022, according to the World Bank. This means that at the federal level, after servicing our debt there is little room to pay for recurrent expenditures, let alone investment. 

“Excellencies, please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems. Please endeavour to pay teachers, health workers, and others their salaries, and retirees their pensions.

On the level of economic activity in the country, she said, “The International Monetary Fund projects 3.2 per cent Gross Domestic Product growth this year and 3 per cent next year – slightly better than global growth but underperforming the projected growth rates for sub-Saharan Africa as a whole, which are at 3.6 per cent and 4.2 per cent respectively.

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“The current GDP growth rates are higher than the very low 1.2 per cent average annual growth rate registered between 2015 and 2019, the five years before the pandemic, but well below the 6.4 per cent average for the preceding five-year period, from 2010 to 2014.

“In our country, given its size, diversity, and economic development challenges, the scale of the task of nation-building is particularly large.
“As you take office or return to your governorships, our 222 million compatriots will be counting on you to rise to the occasion. The states are closest to the people: what you do- or don’t do – directly impacts people across the country.”

Relying on World Bank estimates, Okonjo-Iweala noted that the COVID-19 pandemic and the war in Ukraine have pushed as many as 90 million more people into extreme poverty – most of them in South Asia and sub-Saharan Africa.

“In this gloomy and uncertain global context, Nigeria has to work much harder to avoid falling even further behind.
“Dear governors, I remain convinced that a better future is within our collective grasp. But to move ahead and seize it, we will need political and business leaders at the state and national levels to form a compact in pursuit of pro-growth and pro-development policies. 

“We ought to be seeking to double our growth rate and sustain that higher growth until we attain upper middle-income status. We can also aim to double Nigeria’s share of world trade from 0.33 per cent to 0.66 per cent within a decade,” she said, adding that “To build such a compact, we need trust.”

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“Nigeria is a country with no social contract, meaning that Nigerian political leaders have never been able to agree with each other to stick to a common set of principles, values, and policies that consistently deliver for their citizens regardless of ethnic group or political persuasion.

“You have a lot of healing to do – within your states, and between them. Through your words, deeds, and policies, you need to demonstrate to Nigerians that they are equally loved. That they can settle and do business in any part of the country without fear.

Population outgrowing means of survival
According to the WTO DG, “The World Bank estimates that with the COVID-19 pandemic having pushed 5 million more of our fellow citizens into poverty, the number of Nigerians below the national poverty line reached 95 million last year, 43 per cent of our population, which has considerably worsened from 40 per cent in 2018/19, and an estimated 37 per cent in 2015.”

She continued, “Food insecurity is also on the rise. A government-led, UN-supported analysis earlier this year warned that the number of Nigerians at risk of facing hunger could rise from 17 million to nearly 25 million in the lean season between June and August.”
Young population as an advantage
“With our young population – roughly half of Nigerians are under the age of 18 – Nigeria, and Africa more generally, have a chance to attract investment in labour-intensive production processes. An additional factor in our favour is that many businesses are already looking to diversify their production networks to better manage climate, economic, and geopolitical risks. 

“The question for you governors and for Nigeria is: How is the country gearing up to attract businesses that want to diversify their supply chains following the shock experienced by the world during the pandemic of overconcentration of supply chains in sectors like pharmaceuticals, semi-conductors etc? 
“While we sit inactive, South Africa, Rwanda, Senegal and Ghana are grabbing this opportunity. They are getting investments and will produce and sell to us if your Excellencies do not act,” she warned. 

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She also tasked the governors to take advantage of the digital economy to create jobs and wealth for the people. 
On the “Japa” bug, the former Minister urged youths who leave the shores of Nigeria in pursuit of greener pastures to remember to ‘Kaka (return home)’ to build their country. 

On his part, billionaire businessman, Tony Elumelu who spoke on “Entrepreneurship, youth engagement, and wealth creation,” said there is more to achieve if the governors focus on empowering the youths.

He said, “Our country has a population of about 220 million – the largest in Africa and the great majority are young people. Each governor will govern a state with different dynamics, different population density, different composition of ethnolinguistic groups, different natural resource endowments, different levels of economic activity and different rural and urban dynamics. But there is one constant! You will all govern states where there will be majorities of young people- Nigerians below the age of 35. What does that mean?”We know politics sees many interest groups and stakeholders, competing, jostling – but your success will mean prioritising the largest stakeholder group in your states, our youth.

“I urge you all to prioritise youth engagement; it is the sure means to create the most impact and catalyse socio-economic development and growth – for your respective states and Nigeria at large,” he said.

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