Given the drama that surrounded his emergence as Acting President, Nigerians from all walks of life have thrown their weight behind Goodluck Jonathan, in his bid to salvage Nigeria’s ailing economy. Their thinking is that, as Vice President, he has seen in recent times how bad the situation in the country is, and what the expectations of the people are. Analysts see this development as a golden opportunity for him to show the stuff he is made of in the next 100 days, by taking the country to higher levels, and earn himself the much-needed credibility for a place in the 2011 presidential election.

Indeed, these experts have come up with what amounts to an agenda for the Acting President. One big factor that Jonathan must have at the back of his mind, they say, is that he does not have the luxury of time. He has basically about 100 days to make visible changes in the economy, before the preparations for the 2011 elections get into top gear. Against this background, he must focus his attention on projects with short gestation period, but which have the potential of making positive impacts on the economy. 

The power sector is one of such areas of priority; being the fulcrum around which the other sectors of the economy revolve. If current indications are anything to go by, the situation in that sector of the economy has gone from bad to worse. According to the Power Holding Company of Nigeria, PHCN, about 5,000 megawatts, mw, of power generation capacity lie inactive because there is no gas to power turbines. About six thermal stations are currently idle as a result of this development, and generation capacity is said to have dropped to 2,700 mw;

from 3,710 mw in December 2009.

To worsen the matter, Shell Petroleum Development Company, SPDC, one of the major suppliers of gas in the country, last week, served notice that it was shutting down three critical power plants, which supply gas to PHCN, with effect from the weekend. The company, which gave the above indication in a letter, dated February 10, 2010, and addressed to Lanre Babalola, the minister of power, and Rilwanu Lukman, his petroleum counterpart, stated that it might be compelled to shut down the Oben, Sapele and Utorogu gas plants, unless the stock of condensate, a by-product of gas blocking its pipelines, was evacuated.

The manufacturing sector has been the most affected by the country’s energy crisis and parlous infrastructure generally. Though the issue of tackling the country’s infrastructure problem has a longer term of gestation, part of the agenda is that the Acting President should come up with intervention measures, to save the manufacturing sector. The plight of manufacturers have been worsened by the lingering dispute over the price of gas has heightened fears that more industries may close down on account of its high cost. While gas suppliers insist on the adoption of the benchmark price of Low Pour Fuel Oil, LPFO, for gas, manufacturers who had switched to gas to power their generators say the proposed price of between N70 and N75 per cubic metre will cripple their operations. The implication of all this for the Jonathan-led executive is to take all the necessary steps to achieve within the next three months the 6,000 mw target earlier promised by the administration, to bring succour to the manufacturing sector which

has been groaning under the weight of the power.

In addition to the burden of poor infrastructure, problems like policy somersaults and multiple taxation have made the cost of doing business in this clime so high that an alarming number of manufacturing companies in the country have been closing down on a monthly basis, while those remaining in the business are finding it increasingly difficult to pay salaries.

The consensus of observers is that the country has no choice but to adhere to international best practices to be able to attract investments. In spite of the potential of the country, it is not attractive to foreign investors, because on a competitive scale, it is at the bottom of the list. For instance, manufacturers have challenged claims of sufficient funding support to the industrial sector by Nigerian banks. Bashir Borodo, president, Manufacturers Association of Nigeria, MAN, has argued that what the industries receive from banks is, at best, meagre credit. This has been the situation over the years.

In recent times, however, access to credit has further reduced considerably, following Lamido Sanusi, Central Bank of Nigeria, CBN, governor’s reform in the banking sector and this is beginning to have a crippling effect on the economy. Analysts insist that there is the need to dialogue with the new bank chiefs and the central bank governor, to make credit available to importers of petroleum products, as well as operators in the real sector. Oliver Mordi, chief executive officer, Starways Energy, an oil and gas consultancy outfit, is one of those who subscribe to this view. “One would like to see the CBN governor categorising thos

those sectors that are in dire need of credit, and at the same time authorise the banks to intervene. The real sector needs credit very badly because the effect of the current reform in the banking sector has been very damaging to manufacturers,” he told the magazine.

If these measures are taken, it would positively impact on the economy. For instance, resolving the energy and the credit issues have the prospects of doubling the capacity utilisation of manufacturing outfits in the country, which are operating at about 30 per cent of installed capacity at the moment. And this would in turn reduce the unemployment situation in the country. Even if it means breaking the agreement the country has with international buyers of its gas, it is necessary to make that commodity available to the existing power plants and new ones coming up in the country. In recent times, the issue of lack of gas seems to have assumed greater importance in the bid to improve the power situation, and presumably it must be one of the issues contained in the Petroleum Industry Bill, PIB, which is still before the National Assembly. But in the meantime, Jonathan and his team must intensify the process of gas gathering, to make the product readily available.

The other issue is that of security. Being of Niger Delta extraction, Jonathan should be able to strike a bargain with militants, to solidify the amnesty agreement, thereby ensuring that further vandalism of oil and gas pipelines are stopped. The government has already admitted that its efforts to rehabilitate militants who have embraced peace would involve a tidy sum of money, details of which is still being worked out. Godwin Ab

Abbe, minister of defence and chairman of the Presidential Committee on Amnesty, who gave the above indication last week, said a sub-committee is currently holding deliberations with representatives of the militants and that of the federal government, to sort out the loose ends.

1. The Acting President is expected to build on the goodwill he is enjoying at the moment, particularly in tackling the Niger Delta crisis, which is holding the country’s economy down in a number of ways. Mujahid Asari-Dokubo, former leader of the Niger Delta People’s Volunteer Force, NDPVF, gave an indication that Jonathan’s ‘rescue mission’ had the backing of former Niger Delta militants when he described his declaration as Acting President as a restoration of the dignity of the Niger Delta region. “After wide consultations with our movement and other allies, we acknowledge and support the transfer of power to Dr. Goodluck Jonathan, no matter the irregularity involved in the process,” he stated. Beyond the issue of vandalism of oil and gas pipelines, finding a viable solution to the crisis would rekindle the confidence of international investors that Nigeria is a safe country to do business.   
2. Jonathan’s prospects of achieving the above objective would invariably depend on the calibre of people that make up his economic team. He was part and parcel of the President Umaru Yar’Adua administration, although he was not the person at the driving seat. For this, some economic experts believe that he really cannot be exonerated from the current malaise in the economy because there were certain aspects of it that he wa

was in-charge; he was the head of the economic team. Nevertheless, some observers say though he was head of the economic team, he did not have the luxury of selecting members of the team. As the Acting President, he is now in a position to juggle the team to enhance its performance in terms of its delivery to the economy.   

   

It has also been widely suggested that the Acting President should take a second look at the Justice Uwais Report on review of the country’s electoral system, which was backed by many prominent Nigerians. Among other things, Yar’Adua rejected the suggestion that the chairman of the Independent National Electoral Commission, INEC, be appointed by the Chief Justice of the Federation. Observers say if he succeeds in the issues of carrying out electoral reforms and in tackling the security situation in the Niger Delta alone, he would have succeeded in restoring the confidence of investors in the Nigerian economy.

But how far Jonathan can really go, in salvaging the economy, remains to be seen. He is expected to have fewer hang-ups about the economy in exercising his power within this period because he is not known to be an astute politician. From the experience of the recent battle to make him the Acting President, Jonathan should have seen that it pays to be tolerant and to consider other people’s views and ideas. Thus, he is expected to run an open government, with avenues to share his experiences, policies and difficulties with the Nigerian populace, with a view to receiving a feedback. How he would go about it without stepping on toes remains the big question.

 

Jonathan: <

Needs to take the bull by the horns

Borodo: Canvasses lifeline for manufacturers

Sanusi: His reform having crippling effect on economy

Mordi: The real sector needs credit badly

Abbe: Sorting out differences with militants

Asari-Dokubo: Supports transfer of power to Jonathan