Sanusi and the debate on infrastructure funding

The Governor of the Central Bank, Lamido Sanusi, has been under fire since he called for the reduction in the size of the federal civil service by 50 per cent and the possible scrapping of the local government tier of government, so that savings from these reforms can be released for investment in vital infrastructure. Poor Sanusi; he has a habit of shooting sometimes from the hip, and this has not endeared him to some sections of the Nigerian public, especially the elite. Some have said that he should restrict his public comments strictly to matters to do with the Central Bank. This would be good advice if Nigeria were like any other thriving democracy where there was an effective and coherent political opposition unafraid to tell the truth, however unpalatable. Regrettably, this is not the case, and so the likes of Sanusi, the ex-President Olusegun Obasanjo, and the civil society must be allowed to fill this void.

Sanusi’s solutions may be a bit draconian but the issues he raised must concern any citizen. We must focus on the message rather than seek to hang the messenger. No nation can spend as much as 70 per cent of its budget paying salaries and entitlement to civil servants, leaving just 30 per cent, that is if that amount is spent at all, for development. The situation is even more dire in some states where governors are reported to spend their entire budget on one line of expenditure – payroll. This is incredible, to put it mildly. The same is true of the N2.2tn reportedly paid in fuel subsidy this year to a bunch of oil marketers — more than half the entire federal budget for 2012. Whoa! If Nigeria were a person, he would be confined to a psychiatric hospital for urgent assessment. How can it not be right for Sanusi to comment on these matters? Do we really need over 100 senators and over 400 representatives to make laws, with the huge overhead costs these offices attract? Can we afford, as a nation, 774 local governments with all the attendant overheads? With the ongoing constitutional review, could the way forward be to delegate this responsibility to state Assemblies to decide how best to manage and fund economic development in their states? We do not need to have the same tiers of government as Europe or the United States if we find this system of governance an unbearable strain on our economy. We must evolve and proffer a Nigerian solution to a Nigerian problem.

Apart from, perhaps Lagos State, and a few oil-rich states in the Niger Delta, most states in Nigeria are cash-strapped with entire budgets reportedly spent on paying salaries, leaving no funds for infrastructure development or job creation. We like, as Nigerians, to believe the myth that we are a very rich nation because we have oil, forgetting that we are the seventh most populous country on earth, with more mouths to feed. The truth is that, based on GDP per head of population, Nigeria is one of the poorest countries in the world with a GDP per head of about $1,452 in 2011 (Source: World Bank), compared to, say, South Africa with a GDP per head of $8,070. This is notwithstanding our oil, although we don’t like to hear this truth. Apart from Iran with a population of about 75 million people, Nigeria’s population is about the same as the rest of the 10 OPEC countries put together. We really must wake up and smell the coffee. We cannot have the country’s entire budget, whether at federal or state level shared among politicians, senior civil servants, personal assistants and personal advisers – a tiny percentage of the population.

The lessons from India, Brazil, Dubai and the Marshall Plan that rebuilt Western Europe after the 2nd World War are that investment in infrastructure is key to economic growth and the creation of jobs, with a multiplier effect on the rest of the economy. We need to grow the size of the national cake by creating more wealth through investment in infrastructure. Any loss of jobs from a rationalisation of the public sector will be offset by the creation of more jobs in the private sector, if the savings generated are properly invested in infrastructure development.

Anyone who has stepped out of this country would agree that we are a century behind developed economies and most emerging economies in infrastructure development. You almost want to shed a tear for Nigeria when you go to places like Dubai or Singapore. Even tiny countries like Rwanda will put Nigeria to shame in terms of the level of their infrastructure development. The challenge for us as a nation is how to fund our infrastructure gap, estimated at N33tn. So we need to be clever on the budget choices we make in carving up our resources and must not allow the debate on these matters to be drowned in emotions and sentiments. The cost of governance is critical in this debate but is not the only solution. The government must also be seen to be delivering on the war against corruption. It is not enough for the President to placate Nigerians by telling us that individuals are being prosecuted in court. These prosecutions must be sped up, as justice delayed is justice denied. Until we begin to see bus loads of corrupt officials who have stolen from the public purse locked up in prison for many years, Nigerians will not believe the sincerity of government in its supposed fight against corruption.

The consequences of lack of infrastructure in Nigeria are real. Millions of Nigerians are needlessly dying because of the poor funding of our health services; hundreds, if not thousands of citizens are dying every day in road accidents because of poor transport infrastructure; the state education system has virtually collapsed; and the rich are voting with their feet, sending their children to Ghana, Europe and the USA, some paying as much as $20,000 a year in school fees. In the 21st century, no Nigerian city apart from Abuja perhaps can boast an effective drainage system with pavements. What we have are open gutters that go nowhere; open gutters that serve as refuse dumps and breeding grounds for mosquitoes. Although it appears the present government has begun in some measure to address our infrastructure requirements by partnering the private sector, it needs to be more forthcoming on the state of the nation. Given our current level of economic development, it is highly unlikely that the government will achieve its ‘Vision 2020’ objective of becoming the 20th most developed country in the world by the year 2020. Visions have to be built on robust plans and facts, not myth.

We need an intellectual debate on how we can create jobs for the growing population of our citizens and how we can build a better Dubai, or Cape Town in Nigeria. This is exactly what the CBN Governor has kick-started. For the sake of the burgeoning millions of employed youths pounding our streets, the status quo cannot be an option. The critics of Sanusi must now proffer their own solutions.

•Nwachukwu, an international business consultant based in London, wrote in via emmanuel@pssolutions-ltd.com