President outlines progress in key speech
President Goodluck Jonathan has delivered a Democracy Day speech in which he outlines a number of key commitments and policies of the government. We have abbreviated the speech to outline the key elements as follows:
• The country’s credit rating is positive, in contrast with many nations being downgraded. In 2011, our economy grew by 7.45%. As at mid-May 2012, our foreign exchange reserves had risen to $37.02 billion, the highest level in 21 months. We have stabilized and improved our fiscal regime. We brought the fiscal deficit down to 2. 85% of GDP from 2.9% in 2011. We reduced recurrent expenditures from 74% to 71% and reduced domestic borrowing from N852 billion in 2011 to N744 billion in 2012. We cut out over N100 billion of non-essential expenditure and increased our internally generated revenue from N200 billion to N467 billion.
• We now have a draft Trade Policy which provides a multi-dimensional framework to boost our trade regime and facilitate the inflow of investments. We have generated over N6. 6 trillion worth of investment commitments. To facilitate the ease of doing business in Nigeria, we have a policy in place to make visa procurement easier for foreign investors, with safeguards to prevent abuse.
• We are gradually reducing the footprints of government in business activities through privatization, liberalization and deregulation based on our recognition that the private sector should be the engine of growth in our economy. To ensure that the private sector is well positioned for this task, our administration has embarked on key structural reforms in the Power Sector and at the Ports.
• To improve reliable power supply, our administration is judiciously implementing the Power Sector Roadmap, which is at an advanced stage, to fully privatize power generation and distribution while reducing the cost of electricity to rural households and the urban poor. Our approach is two-pronged: First, is the immediate repair of power plants, as well as transmission and distribution infrastructure in the short term. The second is the building of institutions and the provision of enablers to attract investors. We have revived and are accelerating the completion of the National Integrated Power Projects. We are also building about 4000km of transmission lines and hundreds of substations. We have completed the design for the construction of both Mambilla and Zungeru Hydro power plants which will add about 3, 000 MW to the national grid.
• Our administration has streamlined bureaucratic activities at the Ports by reducing the number of agencies from 14 to 7. We have also reduced the time for the clearance of goods from about a month, to seven days, with the long-term objective of ensuring that cargoes are cleared within 48 hours in line with international best practice. In the meantime, our ports, for the first time, now open for business for 24 hours.
• We are re-drafting the Petroleum Industry Bill (PIB). Work on the PIB will be concluded in June 2012 and formally submitted to the National Assembly. In the Downstream Sector, the Nigerian Content Development Act, since inception in 2010, has boosted the local production of line pipes, in-country fabrication tonnage and engineering support services. As a result, retained in-country spend has grown from approximately US $1bn to a current estimate of US$4bn, and over US$3 billion Foreign Direct Investment has been brought in for upgrading and building new yards, altogether generating over 120,000 direct and indirect jobs. Capacity utilization of existing domestic refineries has greatly improved from 30 to 60 percent. We have commenced the phased plan to return the refineries to 90 percent capacity utilization with the expected completion of the rehabilitation of Port Harcourt refinery by the end of 2012, to be followed by Warri and Kaduna refineries in 2013.
• In the Upstream Sector, the April 2012 commissioning of the Usan Deep Offshore Field has increased crude oil production capacity by 180 thousand barrels per day. Also, Government continues to support the National Oil Company, NPDC, by assigning 55% equity in 8 divested blocks which has resulted in increase in reserves from 350 million barrels to 2.1 billion barrels and 160, 000 barrels of production. We have also made significant progress in gas infrastructure development, investing close to US$1bn for the construction of some 1000 km of pipelines, gas supply growth and stimulation of gas industrialization. Between now and the third quarter of 2013, Final Investment Decisions (FIDs) will be made on gas-based industries, such as the petrochemicals and fertilizer plants at Koko, the Central Processing Units (CPF) in Obiafu/Obrikom, and the gas growth projects. Also, the sum of N11 billion is provided in the 2012 Budget for Hydro-Carbon exploration in the Lake Chad Basin.
• As a deliberate move, our goal is to transform Nigeria from a mono-modal economy, to a diversified one. The sector that we are focusing on to diversify our economy – and one in which Nigeria has huge comparative advantage – is the agriculture sector. Agriculture accounts for about 40% of our GDP and over 70% of all employment. Increases in agricultural productivity will drive down rural poverty and revive our rural economy. In this regard, we are aggressively pursuing an agricultural transformation agenda. Agriculture is no longer a development programme. We are now treating agriculture as a business, one that can generate wealth and create jobs for millions of our youths. We have implemented major reforms in the sector, notably in the fertilizer sub-sector. We have ended the practice of Federal Government procurement and distribution of fertilizers.
• We are reviving our lost glory in cocoa, with massive distribution of 3.6 million pods of high-yielding cocoa varieties for farmers all across the cocoa growing states of the country. The pods will be provided free of charge. We are reviving cotton production in the North, as well. I have directed that all seeds for cotton should be provided, free of charge, to all cotton farmers.
• Our administration is committed to the rapid and beneficial development of our country’s Minerals and metals potential. In the last year, we recorded remarkable achievements in Mines and Steel Development. We increased the number of investors in the mining sector due to the transparent manner in which titles are now issued on a “first come-first served and use it or lose it basis.” A total of 2,476 active mineral titles were issued compared to 666 titles issued out in the previous year, thereby reducing, significantly, illegal mining activities. About 350, 000 additional jobs were created, arising from the activities of newly registered operators. We have initiated a programme to support private steel production outfits. This has resulted in an increase in production figures for steel and other metals to over 1 million tonnes.
• One of the first steps taken by this administration was the creation of a Ministry of Communications Technology. Its mandate includes the design of programmes and initiatives to deploy ICT as a driver of sustainable growth and the training of skilled manpower. For our country to remain relevant, we need to adequately educate our people, as it is through education that we can turn our people into assets that can help Nigeria compete globally, and create jobs in the new knowledge economy.
• An efficient and affordable public transport system remains a priority of this Administration. Our transformation agenda in the road sector which seeks to deliver better and safer roads to Nigerians, as well as to link the six geo-political zones in the country with dual carriageways, is very much on course. There has been increased construction activities in the ongoing dualisation of Abuja–Abaji–Lokoja Road, Kano–Potiskum–Maiduguri Road; the Benin–Ore–Shagamu Expressway; the Onitsha–Enugu Expressway; and the construction of the Loko–Oweto bridge, across River Benue. Work has been slow on the East-West road due to budgetary constraints, but government will discharge all liabilities to contractors before the end of June, and funds for the remaining part of the year, will be provided to accelerate the pace of work. In other parts of the country, about 21 other road projects are in different stages of completion. These include the Yola–Numan road, Aba–Owerri road, Owerri–Onitsha expressway, Oyo–Ogbomosho old road, and the Gombe-Potiskum road. Many others are at different stages of completion. Government is also currently rehabilitating about 3,000 kms out of the 3,505 km existing narrow gauge rail lines across the country. The Lagos-Kano corridor will be completed this year, while the Port Harcourt-Maiduguri corridor, which has equally commenced, will be completed by the end of 2013. We have also commenced the construction of the Abuja–Kaduna segment of the Lagos–Kano standard gauge rail lines, while the Lagos–Ibadan segment will be awarded this year. The Itakpe–Ajaokuta–Warri standard gauge rail line is nearing completion with the entire tracks completely laid.
• Within the last 12 months, we completed the capital dredging of the Lower River Niger from Warri (Delta State) to Baro (Niger State) to boost our inland water transportation. This year, work will commence on the dredging of the River Benue in addition to the construction of River Ports at Baro (Niger State), Oguta (Imo State), and Jamata/Lokoja, (Kogi State). The Onitsha River Port in Anambra State, equipped with modern cargo handling equipment, has been completed and I shall be commissioning the project in the next few weeks.
• The Aviation sector remains pivotal to our economic growth. Within the last year, we have developed a road map for the restoration of decaying facilities and infrastructure, some of which had not been attended to since they were first constructed over 30 years ago. Currently, we are renovating airports across the country and have begun the development of four new international terminals at Lagos, Port Harcourt, Kano and Abuja. We have also reviewed our Bilateral Air Service Agreements to ensure improved service delivery, and more customer-friendly processes. We are working to ensure that within the life of this Administration, the aviation sector in Nigeria will be transformed into a world class and self-sustaining provider of safe, secure and comfortable air transportation.