financing for development final project
TRANSCRIPT
Profound appreciation to the World Bank Group for the immense privilege to be a part of this life impacting course.
Special mention of the dedicated Coordinating Team, Susan McAdams, Scott White, Julius Gwyer, Marco Scuriatti, Demet Cabbar.
And all the Contributing Experts from the World Bank Group, the United Nations, IMF, Foundations, Private Sector and various development experts drawn from every corner of the Universe.
The experience would not be complete without the over 25,000 participants drawn from all nations of the world; the discussion forum particularly proves that the World can actually come together to pursue a common goal devoid of any divisiveness.
Appreciation to my husband and kids for support and understanding through the several hours of devouring volumes of invaluable resources
Through the period of the course, learning about Financing for Development, vis-à-vis :
1. The financial requirements for funding the very ambitious Sustainable Development Goals SDGs (estimated to require about $1 trillion per annum globally) over the next 15 years
2. The Current realities that Global Development efforts have hitherto relied on Official Development Assistance from Donor Countries (Less than 30 countries) which has plateaued in the last few years to about $135Billion following the Global Economic recession.
3. It translates that, when the 17 SDGs kick off by 2016, there would be a deficit of $871.7Billion except the Global Development Community (All Nations, Institutions and Individuals) come up with innovative ways to finance Global Development.
4. Effective Domestic Resources Mobilization has been identified as having a major potential to significantly contribute, through Public Domestic Finance (Better Tax Administration, increase productivity etc), Domestic Private funds (Banks, Bonds etc), Foreign Direct Investments, Remittances, as well as the International Finance Institutions (MDBs, IMF) enhancing their roles in leveraging available funds as well as offering technical support among other options
2 critical issues inures for Nigeria to meet the SDGs and consciously avoid the enormous shortfalls of the MDGs
1. The obligation to generate substantial development funds in addition to the ODA
2. The duty to ensure that every Dollar is spent effectively to yield maximum development returns
The Project focuses on the 2nd issue as highlighted above.
Without the challenge of Financial Impropriety, Nigeria would have nochallenges generating needed funds to drive its development policies.The challenge has been and still remains The duty to ensure that everyNaira (Dollar) yields maximum development returns.
Hence the Title: NO FISCAL RESPONSIBILITY, NO DEVELOPMENT
Nigeria has all the indicators of a wealthy nation and has indeedgenerated a lot of revenue over the years which has not translated to thewellbeing of the populace or any significant development indicators.
As long as financial impropriety remains the highest perpetrator ofunderdevelopment in Nigeria, there is no hope for any meaningfuldevelopment in any sector or at any rate until the stifling menace issignificantly curtailed.
To design any beautiful project without addressing this challenge wouldonly end up in frustration: several great ideas have been destroyed byfinancial malpractices, while others have been rejected where there is noprospect of kickbacks. Some of the Best Policies have been drafted butfailed woefully at implementation due to corruption.
This project serves to orientate the consciousness of Nigerians toembrace good financial practices that would translate to collectivenational development.
International Businessman, Sir Richard Branson’s bad experience is case in point of many businesses gone bad in Nigeria due to the alarming rate of corruption, and financial impropriety . This Day Newspapers quote copiously on 8 November 2015 a statement by the International Entrepreneur in 2012 in reaction to the failed Virgin Nigeria project, which it partnered The Nigerian Government to establish.
“We fought daily battle against government agents who wanted to daily make fortune from us, politicians who saw the government 49 per cent as a meal to seek for all kinds of favor…watchdogs (regulatory body) that didn’t know what to do and persistently asking for bribes at any point…Nigerian people are generally nice but the politicians are very insane…that may be irony because the people make up the politicians.“But those politicians are selfish…we did make N3 billion for the Federal Government of Nigeria during the joint venture…realizing that the government didn’t bring nothing to the table/partnership except dubious debts by the previous carrier, Nigeria Airways…The joint venture should have been the biggest African carrier by now if the partnership was allowed to grow, but the politicians killed it…Nigeria is a country we shall never consider to doing business again.”
-Sir Richard Branson of Virgin Group
The losses of that single enterprise can be viewed in the overall economic impact; the government revenue, the job losses, the complimentary businesses that serve the airline and more. There are sevral businesses both local and foreign that have been slain on the altars of Nigeria’s institutionalized Greed & Corruption
The Media buzzes on a regular basis of unbelievable sums “lost”, Stolen, reckless spendings, extra-budgetry spending, “waivers”, falsifications, overpricing, under-invoicing alterations, unremitted revenues among others, yet there is little or no penalty.
It therefore remains an effort in futility to continue to devise new sources of finance when financial recklessness poses a major impediment to all other efforts.
Nigeria’s Financial Rut must be fixed, and all other things with proper planning will fall in place/
The SDGs Goal 16. To Promote peaceful and inclusive societies forsustainable development, provide access to justice for all andbuild effective, accountable and inclusive institutions at all levels
Goal 16.4 by 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime
Goal 16.5 substantially reduce corruption and bribery in all its forms
Goal 16.6 develop effective, accountable and transparent institutions at all levels
Goal 16 in focus addresses the imperative to embrace good financial practices as a Development Goal in itself, hence the SDGs cannot be fully realized without eradicating all forms of Financial Indiscretion that affects the effective spending of finances for development
GEOGRAPHY -Set on the West Coast of Africa
bordered to the West by Benin, straddled in the East and north by Cameroun, Chad and Niger. The South melts into the Gulf of Guinea in the Atlantic Ocean creating a eclectic mix of climates and vegetation from the fringes of the Sahara to the Atlantic within a land mass of slightly below 1million Square Kilometers.
(32nd largest landmass in the world)
POPULATION – 177.5 Million (7th Globally) ( with Over
500 ethnic groups and 300 languages
ECONOMY- largely based on Petrodollars has a very strong showing in the OPEC (Organization of Petroleum Exporting Countries) – 12th largest producer of Petroleum products, 8th largest Exporter of Petroleum Products, and 10th largest proven Oil Reserve
GDP (PPP) 2015 estTotal -$1.109 Trillion (20th Global)Per capita - $ 6,204 (124th Global)
GDP (Nominal) Total - $573,652BillionPer Capita - $3,298 (121st Global)
GDP Growth Rate – 6.2% (Citigroup forecasts Nigeria to get the highest GDP growth rate in the World between 2010-2050 due to the enormous untapped sources of growth potentials and several profitable investment opportunities
Debt to GDP Ratio – 11% (8% below Average Global Ratio)Inflation Rate – 9.3LABOUR FORCE - 74Million (Due to high youth population)Nigerian Stock Exchange is the 2nd Largest in Africa - $85.4 Billion 3rd Largest Movie Industry in the World
INTERNATIONAL RELATIONS –A Regional Power in AfricaA Middle Power in the International AffairsAn emerging Market for FDIAfter Petroleum Export, Nigeria’s 2nd largest FOREX
earnings is Remittances at $21Billion with over 17million Nigerians oversea ( An estimated 2million Nigerian migrants in UK and US respectively)
LANDMARK ACHIEVEMENTS- In2006 Nigeria was the first African country to completely pay off its debt ($30Billion), a clear indication that prudence would solve a lot more development problems
About 20 of the Fortune 500 Global Companies current have business presence in Nigeria
The Citigroup forecasts Nigeria to get the highest GDP growth rate in the World between 2010-2050 due to the enormous untapped sources of growth potentials and several profitable investment opportunities
Goldman Sachs’ Jim O’Neill validates Nigeria on the list of the MINT Countries (Mexico, Indonesia, Nigeria and Turkey) with good economic prospects.
Nigeria also features on The Next 11 Countries with strong development potentials in the next 20 years after the BRICS (Brazil, Russia, India, China and South Africa) on the Newly Industrialized Countries List .
Sadly, Nigeria’s potentials though apparent to all, would only remain atpotential level except something is done to redress the crippling FinancialImpropriety.
•NIGERIA BOAST A GOOD MARCOECONOMIC OUTLOOKo Low debt to GDP ratioo Low inflationoStrong GDP growth rate
•NIGERIA ISTHE LARGEST ECONOMY IN AFRICA BY GDP (oil-Based)
•All the gains hang in a lopsided concentration at the Top of the society, and does not translate to the microeconomic realities of civil Servants, the organized private sector, entrepreneurs and socially-dependent folks.
•The paradox to the Largest economy is that South Africa has emerged the only Newly Developed Country in Nigeria by 2010
•As of 2015, Recurrent expenditures have continued to gulp over 70% of national budget leaving 30% to Capital Projects, most of which are never executed
POTENTIALS PARADOX
Nigeria has raked in a whooping $800 Billion in Oil revenue in the last 50 years ( Former Group Managing Director, Nigeria National Petroleum Corporation)
That is not difficult to believe where 2014 revenue was $77Billion (OPEC Revenue Fact Sheet 2014)
Extreme Poverty remains therealities of a staggering33.1% Nigerian population withanother over 40% on the fringes ofPoverty.Potable drinking water, basicsanitary hygiene,In 2015, 47% Lack access to PotableWater, less than 10% connected toPublic Sewage, with an attendantChildren death annually fromDiarrhoea, choleraSeveral Communities cannot boostof Primary Health CentresNo 100km of standard roadsanywhere in Nigeria outside theFCT
POTENTIALS PARADOX
HUMAN CAPITAL:
1 in every 4 African is NigerianNigeria’s largest economic potential remains her Human Resources.Nigeria has over 50% active population of her 177.7Million people
•7.5% of that population is unemployed following World Bank data for Q1, 2015 that puts at some 6 million unemployed and a large preponderance underemployed.
•18,000 Naira Monthly ( $91 at official exchange rate) minimum wage remains unattainable especially by the Sub-National Governments.
POTENTIALS PARADOX
AGRICULTURE: Nigeria’s Arable Land is put at 39.53% of the 923,768km2 , majorly food crops are produced with the Nigeria dropping off the Major Exporter list of Major exporters of Cocoa, Peanut, Rubber, Palm Oil, Poultry
Nigeria has not only lost most of the export markets, but also has a huge domestic production deficit in Rice, Wheat, Barley, and other foods costing Nigeria a whooping $2Billion and more annually on Food Importation excluding undocumented and under invoiced imports.
POTENTIALS PARADOX
Financial impropriety in Nigeria has been institutionalized to an extent that many malpractices are now an accepted standard.
Financial misconducts flow from the Government institutions to the everyday man on the street.It is easier to prosecute a petty thief or burglary through the Criminal Justice system than to secure a
conviction of Corrupt Public Office Holders.Corruption has become an acceptable way of life as long as you do not get caught, or you do not
belong to the wrong crowd.The Swiss Government returned $700million of a former Dictator , and the same money has fizzled
without traces.All the anti-graft measures have failed because laws alone cannot ensure success where the lack of
impetus stems from the Leadership and replicates through the ranks and files Sharp Practices is hailed and official processes are replete with bottle necks that makes it impossible
to transact without underhand dealings.The dearth of Information, data, and documents have been deployed as a strong tool to cover tracks
in spite of the enormous resources ploughed into ICT equipments annually.The Fiscal Responsibility Act 2007 has remained as puny in implementation as other preceding
bodies which have duplicated functions and yet very minute impacts; The Independent Corrupt Practises Commission, The Economic Financial Crimes Commission , the Code of Conduct Bureau with a Tribunal , The Due Process policy, The Bureau of Public Procurement
OFFICIAL MALPRACTISESPublic Holders, Public Servants and all levels of Administration include:•Bribery and Corruption•Outright Stealing & Diversion of Public Funds, facilities and equipments•Project Malpractices : overpricing, Nepotism issued to Incompetent Contractors for Kickbacks, Poor Evaluation & Monitoring, Unexecuted or Substandard delivery•Cost of Administration is grossly escalated •Open ended and unsupervised spendings at different levels.•Frequent frivolous foreign trips plus •Lopsided remunerations ( Each Nigerian Legislator takes a total package higher than the US President)•Policy Abdication & manipulation
PRIVATE MALPRACTISESIt takes someone to take Bribe and another to give it.Nigerian Citizens are neck deep in malpractices and everyone seems to wait his turn to get a hand into the National Cake of Public Office•Tax evasion, •Tampering with meters and government utilities in the bid to stretch meager resources•Stealing, •Sharp Practices (Fraud, Scam)•Piracy and Copy Right Infringements• Fake & Substandard Goods•Money Laundering & Counterfeiting•Drug Peddling•Kidnapping•Oil bunkering•Corporate malpracticesEtc
Nigeria has lost so much more than it has gained; a lot of wealthy Nigerians are now preys to the underworld that has thrived due to pervasive underdevelopment, and lopsided resources distribution as we continue to grapple with the realities of:
The highly unsatisfactory attainment of the MDGs Continuous High level of poverty and underdevelopment Total breakdown of infrastructure, obsolete facilities and significant socio-economic
deficits in all sectors Increased crime rate & heightened insecurity Loss of valuable Expertise to other countries Reduction in life expectancy to 52 Loss of international goodwill due to collateral effects of Nigeria’s underdevelopment Loss of further development potentials Weakened and frail institutions, systems and services Nigeria has become a breeding ground for some foreigners of questionable characters to
ply their trade Nigeria is a destination for expired goods, toxic wastes, sub standards goods, with little or
no safeguards. And several significant consequences
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Nigeria must make very deliberate and concerted effort to stem this ugly tide, and accelerate it development agenda.
The Criminal Justice System must be strengthened There must be a Strong National Reorientation Effort due to the pervasiveness of
the problem. There must be a redress of Work ethics; Freedom of Information and Whistle
Blowing must be encouraged, rewarded and Protected The Leadership Must begin to set good examples for the citizens There must be a Public-Private Collaboration to drive the much needed change
agenda The Government must work quickly to address the lopsided distribution of
wealth and opportunities The Active Population must be productively engaged, while Civic Education be
introduced in the educational system Malpractices going forward must be publicly condemned and given expeditious
attention Accountabilty and transparency must be introduced into all official processes ICT components must be explore for maximum administration of Government
Revenues.
I remain optimistic that Nigeria has all it takes to rise and lead the next phases of
Development Drive.____________________________
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www.worldbank.org www.un.org www.opec.org www.Vanguardngr.com www.thisdaylive.com Noipolls Limited Beyond Economic Growth: Meeting the
Challenges of Global Development, Tatyana P. Soubbotina withKatherine A Sheram
Course Materials.