As stakeholders gathered penultimate week to address bottoming oil prices, the national deficit in real estate as well as the failing state of health sector, a recurrent theme was centered around the high-handed nature of government in enacting laws that appease luxury consumers and alienate citizens on other income strata.
Speaking to BD SUNDAY on the issue, Olisa Agbakogba, a senior advocate of Nigeria categorically said, “The Nigerian government is too elitist in everything you look at; whether it is in the capital market or real estate sector and the rules have to change.”
Further impressing his point, he beamed the spotlight on the recent directive by the FG instructing primary mortgage institutions (PMIs) to provide an oversubscribed 66,000 housing units to Nigerians at N50,000 per month through the Nigerian Mortgage Refinancing Company.
This move, albeit minimal, is geared towards plugging the 17 million housing deficit valued in existence. With single housing structures at an estimated cost of N3.5million (according to reports given by the National Housing Fund) a total amount of about N59 trillion is needed to bridge this gap.
Explaining the rationale for the project, the Managing Director of Federal Mortgage Bank of Nigeria (FMBN), Gimba Ya’u Kumo told pressmen that due to the short term nature of deposit money institutions, it had become very difficult to meet the mortgage requirement of the country which he valued between 15 to 20 trillion naira.
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However, in Olisa’s opinion, the current housing sector policies as well as “the Real Estate Investment Trust are not working well because this is something that should serve more low income earners than just meeting the needs of rich people who can afford to buy the buildings but it is not.”
With the World Bank placing the average income level of Nigerians at a headcount ratio of $60 (N10, 140) per day at purchasing power parity post rebasing of the nation’s Gross Domestic Product, a youth dependency ratio of 84 percent and a general monthly minimum wage pegged at N18,000, the ‘Housing For All’ agenda under the present circumstances may be a tall transformational dream.
While critics reviewed this reality, external factors affecting the commodities market saw interest rate rise to an all time high of 13 percent. The new bench mark was set after the Central Bank devalued the naira and raised the monetary policy rate by 100 bps at it tried to defend the local currency hit by lower oil prices.
On the backdrop of this occurrence, financial institutions are expected to charge higher interest returns on loans granted to either to the heavy industrial sector or the small and medium scale industries.
Also with the oil price slump revealing anatomic shortcomings in the nation’s economy, the sudden clamour by for blanket increment in taxation across board to hedge the impact of dwindling revenues, experts say, will drive more than 70 percent of the 160 million strong population further into poverty.
Addressing government’s propensity to create sharp policies that carry the capacity to estrange and generate apathy between the upper, middle and lower income earners, Imoh Itsueli, the chief executive officer of Dubril Oil posited, “It is clear that Nigeria’s economic policies are capitalist and designed to suit the wealthy. This is not very good and some changes need to be made.”
With the nation being classified as a middle income, mixed economy and emerging market, with expanding financial, service, communications, technology and entertainment sectors by the World Bank, reforms in its current economic policies just may be a dire requirement to improve the quality of living of its citizenry.
At present, the country is ranked 26th in the world in terms of GDP; a four-point rise in position from its 2013 rank before the rebasing of the placing it as the largest economy in Africa. As a result of this statistical revision where Nigeria added 89% to it’s internally generated output.
According to a Citigroup report, Nigeria may get the highest average GDP growth in the world between 2010 and 2050, position the country as one of two countries from Africa among 11 Global Growth Generators countries.
Although this implies better times for the economy especially with a triple rise in broad-spectrum purchasing power parity (PPP) from $170 billion in 2000 to $451 billion in 2012 (at last count by international ranking authorities), recent estimates still place the welfare at 153 out of 186 countries.
For the agricultural sector, the Federal Government constituted a 14-member Policy-Working Group (PWG) to design modern institutional policies with the aim of facilitating the realization of the President Goodluck Jonathan’s Agricultural Transformation Agenda.
The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, during the inauguration of the Policy-Working Group in Abuja said the aim of constituting the committee was to ensure the scale up of the budgetary allocation to the sector as 10 percent recommendation by the Maputo Declaration, so as to meet growing need of the sector and sustain the gains that have been achieved.
Yet, recent statistics show that the nation is caught between enormous potential, immense ambitions, and still-insufficient concrete. While overall agricultural production rose by 28% during the 1980s and 90’s, per capita output rose by only 8.5% in the last decade.
Some investors have alluded this decline to the huge concessions given to large-scale farmers, the lack of access to finance for mid and small scale farmers which make up more than 83 percent of Nigeria’s agro-farming population and the near disconnect between the government directives and its realization at the grass-root level.
If the economy is to chart its way out of depression, all encompassing policies that will foster the growth of the middle class and keep low income earners out of poverty needs to be adopted.
Rita Ohai
