I. INTRODUCTION
Nigeria’s 2023 general elections, scheduled to commence with the presidential election on February 25, will be make or break for Africa’s most populous country and largest economy. It is the first since 2007 in which an incumbent president was not on the ballot. The Institute for Governance and Economic Transformation (IGET) has undertaken the following highly summarized comparison and assessment of the positions of the top four presidential candidates (out of 18 candidates overall) on the important subject of the national economy.
The candidates whose economic policy agendas we have profiled here are: Ahmed Bola Tinubu of the All Progressives Congress (APC), the political party that formed the present Federal Government of Nigeria following its electoral victory in 2015, and again in 2019, Atiku Abubakar of the opposition Peoples Democratic Party (PDP), Peter Obi of the opposition Labour Party (LP), and Rabiu Kwankwaso of the opposition New Nigerian Peoples Party (NNPP). Although most of the positions ascribed to the candidates are taken from their formal manifestos or policy documents, we have also referred to other, on the-record policy presentations on the economy the candidates have delivered to professional and business groups across the country.
While the candidates also have addressed many other issues in addition to the Nigerian economy in their policy documents, we have chosen to focus on their economic blueprints because of the gravity of the country’s present economic challenges and their implications for both the eventual winner of the election and the country in the immediate future. Whoever becomes the next President of the Federal Republic of Nigeria will confront the heavy, combined challenges of a national debt crisis in which Nigeria now spends all its earnings on servicing its debt, high unemployment of 33%, a high inflation of 21%, and 133 million persons out of the 200-million population living in multidimensional poverty. Nigeria, despite its high levels of potential to achieve prosperity, ranks low on several indices of human development.
And yet, the potential for a turnaround with competent governance and economic policy is precisely partly why the 2023 presidential election has assumed such a unique importance. The ability – or the lack of it – of Nigeria’s next president to restore the country to a path of inclusive economic growth will be decisive for the country’s future.
IGET, being a nonpartisan think tank, takes no position for or against any candidate. What this policy brief seeks to achieve is to set out the candidates’ policy positions on the economy as an indication of what Nigerians and the business investor community can expect from each one of them, should he emerge victorious in the election.
The brief therefore summarizes the economic policy thrusts of the candidates, briefly analyses the strengths and potential pitfalls of each candidate’s manifesto, and concludes with a brief analysis of the importance, not just of the stated policy positions, but just as importantly, factors outside of these positions and how they may influence success or failure. These factors include the substance and style of governance, as well as the character of the politics of the Nigerian state itself.
IGET, being a nonpartisan think tank, takes no position for or against any candidate. What this policy brief seeks to achieve is to set out the candidates' policy positions on the economy as an indication of what Nigerians and the business investor community can expect from each one of them, should he emerge victorious in the election
II.HIGHLIGHTS FROM PRESIDENTIAL CANDIDATES' POLICY PLEDGES
Bola Tinubu's (APC) Policy Thrust
Hope Renewed”: Selected Highlights
Optimize government revenue using “Lagos model”.
- Optimize government revenue using “Lagos model”.
- National Industrial Plan.
- Import substitution.
- Eliminate petrol subsidy.
- Education Reform focused on: accreditation standards and curriculum, teacher training, school management, technological and vocational education.
- Assist farmers with enlightened agricultural policy that promotes productivity and assures decent incomes.
- Rural infrastructure – farm to market roads
- Support autonomy of the Central Bank of Nigeria
- Supports deficit budgeting.
- National Broadband Plan to deliver broadband service to 90% of the population by 2025.
- Interest-free loans for university/technical school students who meet entry qualifications; to be funded by providing guarantees to the banking sector and Government paying off the interest.
Atiku Abubakar (PDP) Policy Thrust
My Covenant with Nigerians: Selected Highlights
Constitutional restructuring to achieve a decentralized, more workable federation.
Private sector-driven economy and greater sector participation in development; public sector repositioned to focus on its core responsibility.
Break government monopoly in all infrastructure sectors, including refineries, rail transportation and power transmission.
Eliminate petrol subsidies.
Eliminate current interventionist exchange rate policy to avert price distortions.
Raise Gross Domestic Product (GDP) to $900 billion by 2027 from the current $432.3 billion. Plans to move the economy from being dependent on oil to agriculture, manufacturing and micro, small and medium enterprises (MSMEs).
Infrastructure: Power Generation. Raise Nigeria’s electricity generation to 25,000MW, while also planning to increase oil refining capacity to two million barrels daily by 2027.
Optimize the fiscal space to generate more revenues for development; stable, predictable fiscal regime that bridges gap between national revenue yield and national expenditure.
Fiscal strategies to include domestic reforms to improve internally generated revenue (IGR), promoting export growth to improve foreign exchange earnings, blocking leakages and financing projects through strategic partnerships with the private sector.
Harmonize state and federal tax laws to avoid multiple taxation of businesses.
Promote Public-Private Partnerships (PPP) – 70% of government spending plans to be funded by private sector.
Privatization of State-Owned Enterprises (SOEs) including 3 government owned refineries and concessioning of Nigeria’s sea and airports to reputable and sound buyers and concessionaires with strong financial standing.
Promote the “New Economy” – Knowledge as a factor of production; streamline Intellectual Property Rights (IPR) through legislation.
"Power Generation. Raise Nigeria's Electricity Generation to 25,000MW while also planning to increase oil refining capacity to two million barrels daily by 2027."
Peter Obi (LP) Policy Thrust
It's Possible: Selected Highlights
Leapfrog Nigeria into the 4th industrial Revolution through scientific and technological innovations to create a digital economy
Shift from consumption to production by running a production centred agrarian revolution and export-oriented industrialization.
Restructure the polity through effffective legal and institutional reforms to entrench the rule of law, aggressively fifight corruption, reduce cost of governance, and establish an honest and efficient civil service.
Leapfrog Nigeria into the 4th Industrial Revolution (4IR), through the application of scientific and technological innovations to create a digital economy.
Build expansive, world-class infrastructure for efficient power supply, rail, road and air transportation, and pipeline network, through integrated public-private partnerships, and entrepreneurial public sector governance.
Enhance the human capital of Nigerian youths for productivity and
global competitiveness
through investment
in world-class
scholarship and
research, quality healthcare, and entrepreneurship education.
Achieve 40,000 megawatts of electric power in 5 years.
Introduce hourly wage jobs into Nigerian economy
Eliminate petrol subsidy.
Guarantee the autonomy of the Central Bank of Nigeria.
Free, compulsory education up to 18 years of age.
Social security for the aged, unemployed, and persons with disability.
Fiscal incentives for high-value industries – rubber, oil palm, solid minerals, petrochemicals, cotton/textiles. Leather, gas, plastics, sugar.
Exploit Nigerian plants for local pharmaceutical manufacturing.
Strong support for role of trade unions.
Gender Equality. Women guaranteed 30% of all appointive and elective positions.
Rabiu Kwankwaso's (NNPP) Policy Thrust
Selected Highlights
Restore Fiscal Discipline. Reduce Deficit. Increase non-oil revenue.
Reform of Value Added Tax (VAT) and Company Income Tax (CIT) –
will reduce CIT to 25% [from 30%]
CBN has become conflicted and lost focus, will be encouraged to focus on its core mandate of price and financial stability and move away from fiscal and trade policy.
Eliminate over-reliance on Ways and Means financing of the Federal Government by the CBN.
Key role for Federal Ministry of Industry, Trade, and Investment in addressing problems faced by businesses in Nigeria, the business environment, and in attracting Foreign Direct Investment into the Nigerian economy; will merge the Nigerian Investment Promotion Commission and the Nigerian Export Processing Council.
Will take advantage of the African Continental Free Trade Area (AFCFTA) to position Nigeria as a natural manufacturing hub for West and Central Africa.
Key portfolios whose performance will affect the overall performance of the economy identified, with a pledge to ensure that they will be “manned by the very best”.
Identified portfolios: Federal Ministry of Finance, Budget and National Planning, Federal Ministry of Industry, Trade and Investment, Central Bank of Nigeria, Nigerian National Petroleum Company Ltd, Federal Inland Revenue Service, National Customs Service, National Ports Authority, National Economic Advisor [Chief Economic Advisor to the President]
Education a priority; will establish a Federal Ministry of Higher Education and Human Capital; sees education as an investment not mere expenditure.
Increase electricity generation, transmission, and distribution to 15,000 – 20,000 megawatts by 2027. “Review” all subsidy regimes.
Targeted poverty alleviation, preventing those lifted out of poverty from returning into the poverty bracket will be a high priority.
"Education a priority; will establish a Federal Ministry of Higher Education and Human Capital; sees education as an investment not mere expenditure."
III. COMMENTARY
A general weakness observed in most of the candidates’ policy documents was the omission of a clear philosophical statement or vision on which their plans are anchored. The failure to anchor economic policy in Nigeria on a philosophical foundation is a major reason for inconsistency of policy and thus the inability to achieve, let alone sustain, long-term success in economic growth that lifts millions out of poverty. Economies that are clearly philosophically anchored, while retaining an element of pragmatism, tend to achieve structural economic transformation better and faster. Rising Asia and the economically advanced western countries offer helpful examples. Economics alone is inadequate to develop any society. Other factors such as values, belief systems (worldviews) matter, and influence the societies and their governments’ broader approach to governance that includes how the economy is managed.
Nevertheless, from a review of the documents we can “ascribe” the following philosophical leanings to each candidate’s thinking:
Bola Tinubu believes in a very strong role for the state, one in which it directs the economy without prejudice to the importance of the private sector. He is therefore a “command capitalist” or a social progressive.
Atiku Abubakar believes strongly in the marketplace as the creator of national wealth. He is not a fan of the Big (and, presumably, inefficient) State, and is therefore a believer in market capitalism.
Peter Obi, while clearly a believer in markets as the engine of wealth creation, emphases the importance of the downtrodden citizen, trade unions, civil society, and women. He therefore believes in “stakeholder capitalism”. This philosophical leaning will likely pay strong attention to achieving inclusive economic growth that carries different stakeholders along.
Rabiu Kwankwaso also strongly believes family-oriented, poverty eradication approaches to the economy, strongly favours the education of girls, while nevertheless recognizing the importance of business and the market economy. He is therefore also a stakeholder capitalist.
"Failure to anchor economic policy in Nigeria on a philosophical foundation is a major reason for policy inconsistency"
Tinubu’s Plan
Strengths:
- Strong Revenue Generation Model: expanding taxation base (not necessarily raising taxes), savings from oil subsidy removal and exchange subsidy removal (“floating” the Naira).
- Educational reform plan.
- A clear National Industrial Policy, if successfully executed, will improve the structural foundation of the economy, and make the economy more competitive.
Possible Pitfalls:
Support for deficit spending (spending more than the Government is earning) is a major potential pitfall. While it might theoretically have benefits such as triggering higher levels of GDP growth , and has been the norm in many industrialized countries, it is problematic in a developing country such as Nigeria because it will likely deepen Nigeria’s debt crisis (including illegal Ways and Means Advances by the Central Bank to the FG), cause more inflation, and will not yet be supported by strong, diversified revenue streams including an efficient taxation system which is still absent in Nigeria. It could shut out productivity-led growth that Nigeria is yet to attain in the first place.
The state must have its hand on the steering wheel. But Nigeria today suffers from weak institutional capacity. The focus needs to be first on rebuilding the capacity and independence of Nigeria’s institutions before entrusting transformative responsibility to them.
Atiku’s Plan
Strengths:
- Prioritization of constitutional restructuring to a more workable federal structure, if achieved, would address structural factors that inhibit Nigeria’s economic transformation.
- Market-driven economy, private-sector transformation of power sector and privatization of ports, if transparently achieved, will renew economic confidence and growth.
- PPPs could potentially create significant fiscal savings for the Federal Government, that could be invested in social infrastructure.
Possible Pitfalls:
Proposing constitutional restructuring, and even hastily submitting an Executive Bill to the National Assembly, runs the risk of rejection by vested interests considering representational imbalances in the NASS.
A predominantly market-led economy requires transparency, accountability, and the rule of law for true, inclusive capitalist economist growth. It will be important to avoid crony capitalism, in which corporate elites make all the money through state patronage, while poverty levels in the wider society remain high.
Obi’s Plan
Strengths:
- The commitment to fight corruption and reduce the cost of governance goes to the heart of what has led to Nigeria’s dire condition – industrial scale corruption and waste in the public sector, which has left political leaders focused only on self enrichment and denied ordinary Nigerians development. Manifestos in themselves cannot solve this problem, no matter how elegant, if the mindset to truly fight corruption is not evident in a verifiable manner. Nigeria has lost trillions of dollars through corruption and waste in the public sector.
- The proposal of hourly-wage jobs is transformational, if successfully implemented. It will improve the flexibility and productivity of labour – the most important component of inclusive growth that can create decent incomes for millions of Nigerians.
- Emphasis on human capital, without prejudice to physical infrastructure, is the foundation for human development. This has been mainly ignored in Nigeria, where investment in social infrastructure such as education and healthcare have been extremely low relative to spending on physical infrastructure.
Possible Pitfalls:
- Fiscal incentives for high-value industries could lead to crony capitalism if not transparently extended across sectors, rather than to individual businesses.
- A promise of social security requires a more precise statement of concept, scope, and funding streams.
Kwankwaso’s Plan
Strengths:
- Clear identification of the government ministries and departments that determine the economy’s performance and a clear statement of intent regarding the required calibre of managers is a sign of effective governance potential.
- Strong and clear focus on steps to take for education reform; the proposed Ministry of Higher Education and Human Capital could potentially yield a greater focus and achievement in education reform.
Possible Pitfalls:
A target of 15,000 to 20,000 megawatts of electricity by 2027 does not appear to be at the required level of ambition to power the Nigerian economy.
IV CONCLUSION
“Politicians campaign in poetry, govern in prose” – Mario Cuomo, Former Governor of New York
Nigerians have become cynical about the promises of electoral candidates, as the pledges are often not faithfully executed upon victory. The fruit of the pudding is therefore in the eating when it comes to the manifestos of the leading presidential candidates. In Nigeria, the emphasis has been far more on obtaining political power than on actual governance. The 2023 presidential election nevertheless appears competitive. Candidates are therefore likely more serious about their pledges.
Poverty and illiteracy, however, have disempowered many voters. Such voters have substituted their right to hold leaders accountable in governance with selling their votes in the heat of elections. This has implications for the possible performance of candidates who procure votes, as they would feel less accountable to voters while in office than candidates who might seek power and responsibility through the “narrow” path of simply appealing to voter sentiments and judgments.
The critical factor regarding the economic agendas of Nigeria’s leading presidential candidates is that the economy’s performance depends more on the nature of governance they unfold if they win the election. It is impossible for an economy to thrive and take people out of poverty, for example, in institutionalized corruption or when the individuals appointed to important economic roles are not the best hands for such assignments because of subjective considerations. Building the right team to translate the laudable ideas into the dividends of democracy for Nigerians will be the acid test for the next President of Nigeria. The policy documents we have profiled in this policy brief are only the first step.
"Building the right team to translate the laudable ideas into the dividends of democracy for Nigerians will be the acid test for the next President of Nigeria."