Udo Udoma Unveils Buhari’s Untold Agenda on Economy

Udoma Udo Udoma, an eminent and outstanding citizen of Nigeria was born on February 26, 1954. An indigene of Awka-Ibom State, he holds a Bachelors of Arts Degree in Jurisprudence (1976), a Bachelors of Civil Laws Degree and a Masters of Arts (1977) from St. Catherine’s College, University of Oxford. He is a senior Advocate of Nigeria (SAN) Udoma Udo Udoma is an accomplished lawyer and member of the Nigerian Bar Association (NBA).

 He has served on several national committees and also as the  Chairman of the Nigerian Securities& Exchange Commission (SEC). Udoma Udo Udoma was elected Senator representing the Akwa-Ibom South Constituency of Akwa-Ibom State of Nigeria at the start of the Fourth Republic under the platform of  the People’s Democratic Party (PDP). He took office on 29 May 1999. He was re-elected in April 2003. While at the Senate in June 1999, he was appointed to committees on Public Accounts, Judiciary, Banking & Currency, Science & technology, Privatization and Drug & Narcotics. He also served variously as Chief Whip, Chairman of the Committee on National Planning, Revenue Mobilisation and Poverty Alleviation and Chairman of the Appropriations Committee, among others.
 Udoma Udo Udoma, CON, was a Senior Partner of Udo-Udoma & Belo_Osagie. He was Chairman of UAC of Nigeria Plc.  He served as the first Chairman of the Corporate Affairs Commission in 1991-1992 and was the part-time Chairman of the Securities and Exchange Commission.
He has served the nation in other roles such as Special Adviser to the Minister of Petroleum and Mineral Resources from 1993 to March 1994. He was Chairman of the Presidential Committee on Waivers, Incentives and Concessions, among others.
 Udo Udoma specializes in advising on Nigerian investment laws and the investment environment generally, particularly in the petroleum, energy and natural resources sectors; advising Nigerian and international companies on company law, corporate restructuring, mergers and acquisitions and the raising of financing in the capital and money markets, as well as on major construction and engineering projects. Udo Udoma was Chairman of the Union Bank of Nigeria Plc and its Director. He served as Vice Chairman of Linkage Assurance Plc and served as its Director. He has been a Director of Unilever Nigeria Plc and chairman of UAC of Nigeria Plc among others at various times.  He is a recipient of the national award of Commander of the Order of the Niger (CON).
 In October, 2015, he was appointed Minister Of Budget and Planning.  In this chat with the New Diplomat’s team comprising Chairman and Editor-in-Chief, Mr Oma Djebah and the Abuja Bureau Chief, Austin Osayande, Udoma throws more light on the 2016 Budget, the removed   fuel subsidy, new refineries, job creation, Buhari’s plans for the economy, among other issues of national interest.

Now that the budget has been signed into law, what are the measures put in place to ensure that Nigerians reap the benefits?
Maybe I should start by saying something about the budget itself and what is the focus of the budget. The budget is aimed at four objectives.  It is aimed at improving security, so we have devoted some money to Defence and Interior, including the police. First you must have a secure and safe nation before you can talk about development.
The second focus of the budget is critical infrastructure. To provide the enabling environment for economy to grow for Nigerians to invest, for Nigerians to get jobs and create jobs. You have to fix your infrastructure. We have set aside N60 billion as counterpart funding for the Lagos-Kano new standard gauge rail project and another N60 billion as counter-part funding for Calabar-Lagos rail. So we focus on rail, then on aviation, the airports, making sure that we get all our airports fixed properly. We also look at the power sector, we have devoted resources to power, that is for infrastructure.
We are also looking at diversifying the economy and so we have put in resources in Agriculture and Solid Minerals to diversify the economy. We expect, based on the infrastructure we are putting together, to increase manufacturing that is light and medium manufacturing from the processing of Agricultural produce.
And finally, this is very unprecedented, social intrusion, we put aside N500 billion for social intrusion projects. This include recruitment of teachers and artisans, school feeding for children, revolving loans for market women and artisans and special grant for students excelling in their studies. These are really the thrust of the budget.

The total sum of the budget is N6.06 trillion and we are already in May. Do you think there is still enough time to implement it?
There are indicators that we can run this budget till May next year. So, we have some time for the implementation. However, I will like to point out that it is our intention as a government to try and get the 2017 budget prepared in good time so as to get it to the National Assembly in time for them to pass it before the end of this year. This is because we would like to bring back predictability into the financial year. If we can get it passed before the end of the year, we can now go back to the January to December financial year which would ease planning for everybody. So people will know that budget run from January to December and not from whenever it’s been passed into law because it is difficult to plan if you have that degree of uncertainty. There is another reason why we like to achieve that. A lot of our projects like the roads can really be done during the dry season. If we lose January to April and we start in May and we are going into raining season, therefore we lose some months. So, trying to get it back to January to December period will actually make the level of implementation significantly higher. So these are the reasons we want to achieve that.
 
What has the ministry put in place as mechanism for sectoral performance evaluation after releasing funds to the various ministries?
One of the things we are doing is that we are moving away from automatic releases of funds for capital projects. So, we divide the fund for capital projects, to quarterly tranches and for every quarter you will come and take the fund. The quarter that would be released would be based on the performance and therefore you have to achieve certain milestones to be able to get release. That is a way of monitoring performance. So, though we have voted certain amount of money for capital project, if Ministries, Departments and Agencies (MDAs) do not demonstrate that they have achieved some certain milestones, funds would not be released. That is the mechanism of monitoring and every quarter, we would report to the Federal Executive Council (FEC) where we are ministry by ministry.

Many expected that part of the looted funds that have been recovered should be used in funding the budget deficit rather than borrowing.
Yes. The borrowing is the maximum when we have a borrowing plan, this is actually the maximum. You get the National Assembly approval to borrow up to that amount but that doesn’t mean you are going to borrow all of that amount.  We borrow as we need.  For instance, to finance the deficit which is about N2.2 trillion, the more looted funds we recover, the smaller the amount we have to borrow.

The previous administration adopted the National Integrated Infrastructure Master-Plan (NIMP). What is the approach of the current government?
 Well, we are reviewing that, the review is on at the moment. We are reviewing all plans. You know this government came on a mandate. It has has a programme, so every single thing we meet has to be reviewed to make it consistent with our programme. And that includes the NIMP.

What is the rationale for relocating the budget office from Ministry of Finance to your ministry by the current administration?
The reason is that the President believes that at this time when we need a major restructuring of the economy and the plans for that restructuring are done by the National Planning Ministry, the budget is the main instrument through which these plans are implemented and it was felt that it is important to integrate the planning and the budget together so that they can work immensely. So, finance would be responsible as the treasury for raising finance, raising loans, managing revenue that can feed into the budget.  But the monitoring and decisions on the budget is now done by the Ministry of Budget and National planning. It means these two ministries have to work very closely together to ensure that there is effective implementation.

Is there any policy framework for engaging the states in the implementation of this budget?
It is a very important question because this is one economy. The states and local governments contribute at least 50%, depending on the economy and the performance of the economy. So it is important we work very closely. Luckily, there is already an instrument provided by the constitution, the National Economic Council (NEC). The NEC is chaired by His Excellency, the Vice-President. This ministry provides the secretariat for it and we meet every month and all the state governors together with the Vice –President and some ministers whose Ministries are economic related. I am there as the Minister of Budget and National Planning, Minister of Finance, Central Bank (CBN) and a number of other economic related ministeries. We attend and we have used that organ as a mechanism for making sure that we brief the states about what we are trying to do and to get them involved on what we are trying to do so that we can plan for the whole nation.
Arising from those meetings, we have decided to have a retreat and that retreat was held and all the governors were there in which we presented to them our strategic plan for the implementation of the budget. We presented to them our focus and we got their own input and we set up a number of committees to monitor the implementation. Take Agriculture which is one of the most important sectors to turn the economy around. Where you have a country with a large population and a vast land, the fastest route to transformation is agriculture, but agriculture requires expensive contribution because the land is mainly controlled by the states. So it is in the states that agriculture takes place. The Federal government can coordinate and set targets and work closely with the states.
For instance, the only country I have visited as a minister is Ethiopia. I travelled to Ethiopia with the Minister of Agriculture. I chose Ethiopia because it is the fastest-growing country in Africa in the last ten years. It is growing at the rate of 10% a year and it is growing on the back of agriculture. So, we went there to see how they did it and how it is structured. And one of the things that came out is that they have very effective extension workers services. This is because when you need to increase the productivity of our farmers, you need to improve the quality of the seed they use and they need to improve the quality of the fertilizer they use because the fertilizer has to be right for the soil and for the particular crop. Not every fertilizer is good for every crop, so you need to have people with the expert knowledge who can go to each area and help them, take them through, explain to them and train them.
It is the expertise that the extension workers bring. With that expertise, you can double and triple yield. The yield  of lots of our farmers are very low. The federal and state governments  have to supply the extension workers. The extension workers have to live in the communities. In Ethiopia, they have at least one extension worker for every village. The extension workers are local people, who speak the language, who the farmers will welcome and who live among the farmers, who the farmers trust and they can help the farmers, educate the farmers and they can link the farmers and various farm centers. These require very extensive collaboration between the federal and state governments and we discussed it during our retreat with the governors. One of the things we want to do is to look at the crops that they can be produced and set them targets. We also indicated to them that we want to try and be self-sufficient in a number of food items. For instance, we want to be self-sufficient in rice in three years  time; we want to be self-sufficient in wheat in four years   time. So you have to work backward. 
What do you have in place this year in order to meet those targets? It means those states must key in.
Already a state like Kebbi has massive improvement in rice and it is possible in many states to have two harvests in a year. The thing about rice is that, it is a quick turnaround. So if you give credit which the federal government will also support through Central Bank with a low interest rate of 9%, you can get your money back within six months. So, there are so many of these projects that need collaboration between the federal and state governments and we are using the National Economic Council as the framework within which to get that integration effectively achieved.

The problem with a policy like this is that at the top level everything looks okay but at the lower level they lack the capacity. What is the secretariat doing to build capacity at the lower level?
Well, we are working very closely with the states and some of the states have indicated where they need help and where they need support. So those things are work in progress.

Germany said recently it is prepared to help in rice and tomato farming through counterpart funding. What is the ministry doing to coordinate this?
That brings me to the issue of donor’s coordination. One of the roles of this ministry is to coordinate donor’s supports for Nigeria and one of the things we are working on right now is to call all the donors together. We are going to have what looks like donors’ conference. We are going to do that in the next few weeks, meet with all the donors and let them know what our priority is. What we want is to get donors’ supports for the things which are priority for this government. So, we want to tell them these are our priorities, know what are available and how we can coordinate. Some of these donors support will go directly to states, some will come to the federal government but our role is to coordinate and make sure that the funds are effectively and efficiently utilized. Definitely, tomatoes and rice are two products in which we are very interested in getting fast turn- around and so any support from donors for tomatoes and rice would be very welcomed.

As part of the donors’ supports, there has  been various bilateral commissions set up in your Ministry. Has the ministry reactivated some of the bilateral agreements to effect results?
We would explore every avenue for increasing resources for the turnaround of this economy. There is no avenue we would not explore, bilateral, multilateral. But what we want is basically that donors should be targeting and coming in on our priority areas and our priority areas have to do with increasing the production activities of Nigerians, increasing the capacity of our people. We want to turn Nigeria from a consuming nation to a producing nation. If you recall, the President said when he signed the 2015 supplementary budget that we want to try and create a nation where we grow most of the things we eat and we produce most of the clothes we wear. We want a nation where we move away from relying on crude oil and rely more on ourselves, on the capacities of Nigerians to produce because the real strength of Nigeria lies not in the natural resources that we have. Though it is good to always have the natural resources, that is not where your strength lies. The strength of Nigeria lies in the capacities of Nigerians, in their willingness to work hard, in their can-do spirit and what we want to do is to create the environment to tap all that to get Nigerians at their best to develop this country. That is the focus of this government.

Looking at the 2016 Budget, it seems less attention was given to science and technology which can also attract more investment, develop innovation that can develop the economy.Why?
We set out 34 key actions in implementing this budget; number 17 is to enhance support facilities to provide increased financial, technical assistance, networking and information to new investors and existing enterprises. So, we intend to provide support to new and existing investors in all sectors, including technology. Number 19 is to create high-technology innovation hubs to support growth in the digital and technology sector. So technology is one of the focus that we spelt out. But the investment in technology is done by the private investors. You have the Silicon Valley, how much government money is there in Silicon Valley? It is private investors. What you have to do as a government is to provide the environment for them and the Ministry of Science and Technology as well as Communications Ministry are working together  to do that. They are trying to provide the enabling environment to support technology. So, this is the budget that supports technology, supports development of high tech and we believe that it is very important to develop that. But having said that, we still believe that the first thing we have to do is to feed ourselves because a hungry man cannot even do technology, he cannot focus. So, we must get agriculture right and follow up with technology.

As a follow-up, the Minister of Agriculture, a few days ago at a meeting with members of NPAN in Lagos said the country is spending about N55 billion or thereabout to import food daily and that the government is moving to cut that down. Can you throw more light on this?
  That is a  hanging truth. If we can get Agriculture right, we can free up our foreign exchange. That foreign exchange can be used to import technology because you cannot invent all technology. Some of it you have to import and use and build upon. So, the less foreign exchange we need for food daily, the more foreign exchange that can be used for other sectors.

Nigeria has expressed commitment to SDGs. How is the ministry coordinating the SDGs?
The focal person handling SDGs here as well as monitoring and evaluation is the minister of state. She comes from a very good background. She used to be the head of NIETI and so it is something she is very conversant with. So, we are also coordinating that here.

Many people are asking what the policy focus of this government is really?
We have a document that set out our strategic policy intervention. Just to highlight some of the focus of this government, we want to achieve appropriate foreign (exchange?) regime by the end of this year, increase low interest lending to the real sector, maintain capital spending in the budget at a minimum of 30%, complement  this with funds from the infrastructure fund for commercial projects. We want to intensify the public finance management and performance. We want to maintain a sustainable debt management, introduce fiscal incentives to improve collection, sustain fight against corruption, sustain fight against insurgency and kidnapping, I can go on and on.
We set out the targets and goals because it is important that what you cannot measure, you can hold yourself to it. One of the things we are trying to do is to set out specific targets. For instance, we want to be self-sufficient in petroleum products in three years’ time. We want to encourage and create a system in which private investors would go in and build refineries. We already have lots of interest given the deregulation we have announced; now private investors are interested. This would create jobs.  Before, we were exporting jobs, we were importing petroleum products and creating jobs abroad. We want to refine petroleum products here. It is an embarrassment that we should be importing petroleum products. So, we are determined to put together a set of policies that would ensure that within three years we stop importing petroleum products

What is the role of the Bureau of Public Procurement in the tendering process in this government?
They have a role to play.  The law sets out their roles very clearly and they will have to come in whenever there is public procurement. And it is only when they are satisfied that we can release funds.

At the early stage of this government, the President said he would not be involved in deregulation or appropriate pricing. At what point did he realize that if something was not done in the sector, the economy would collapse?
The President came in on a very popular mandate; his concern is “If I cannot bring succor to the poor, I should not increase their suffering.” And so, he came in with the determination to keep the petroleum pricing low. And if you notice, we actually brought the price down, however we were unable to continue. We don’t have the resources to sustain it. It will amount to diverting funds away from every other thing in order to maintain it. We probably have to retrench, we have to cut our capital budget, and we have to allow our factories to close down because there is no foreign exchange for manufacturers. The cost of keeping it is just no longer acceptable. The pain and anguish it was going to bring to our people was such that the President said we could no longer continue.
For the last six months, there have been queues and we could not even deliver the product, the oil marketers could not import and NNPC was importing everything. We reached a stage that we had to  take additional crude thereby depriving the states of revenue. So, it became clear that it just could not succeed. If it could succeed, the President would allow it. It is not that we have a choice, we don’t have a choice. We have to move to deregulate the petroleum downstream so as to free up the economy and turn the economy around and create incentive for people to invest in refineries.  The President is determined that we should not be importing and the only way to achieve that is through this step we have taken. He is looking at the welfare of Nigerians, he is looking at the medium and long term benefit to Nigerians and that is why we have to do this.

Given the challenges the 2016 Budget encountered, can you give an assurance to Nigerians that the 2017 Budget will go through smoothly, and early too?
You know I used to be the chairman of Appropriation committee in the Senate. There is no easy budget. Everywhere in the world, the budget process is a difficult one. You have to sit down and engage the National Assembly and reach an understanding . That is the way budgets are done everywhere.  But one of the thing we want to do is to try and fast-track the process by engaging them early to explain to them  what our objectives are, to get a buy-in from them so that by the time they receive the document they are already familiar with the document. We did not have time to do that in the last budget because we came in November.  But we intend to spend more time with the National Assembly to get them to understand the thrust of the administration. That way we hope to move faster in terms of the 2017 Budget. We intend to send it to the National Assembly by October and expect them to give it accelerated hearing and pass it before December.
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