Policy Thrusts

NEEDS supports the following policy thrusts:

• Sustain a rapid, broad-based GDP growth rate outside of the oil sector that is consistent with poverty reduction, employment generation, and a sustainable environment.

• Diversify the production structure away from oil and mineral resources.

• Make the productive sector internationally competitive.

• Systematically reduce the role of government in the direct production of goods, and strengthen its facilitating and regulatory functions.

NEEDS supports systematically reducing the role of government in the direct production of goods and strengthening its facilitating and regulatory functions

Key Strategies

NEEDS proposes achieving its goals in the following ways:

• Privatize, deregulate, and liberalize key sectors of the economy.

• Coordinate national sectoral development strategies for agriculture, industry (especially small and medium-size enterprises), and services (especially tourism).

• Develop infrastructure, especially electricity, transport, and water.

• Address the problems of financing the real sector, and mobilize long-term savings and investment.

• Create effective regulatory regimes that include environmental standards.

• Target programmes to promote private sector growth and development.

A major target of the current reform effort is the reduction of poverty. But the effects of some structural changes will be felt only after a lag. Medium-term growth performance is projected based on the assumption that given the reform efforts, almost every sector will perform better in the coming years. Stronger growth performance is expected as the private sector takes advantage of the different reform strategies and policies and as the government reduces its role in the economy and redresses the perverse incentive structure facing investors. Growth projections attach weights to different informal sector activities in order to capture the overall share of the sector in projected economic growth. Changes in agriculture will generally drive increases in growth.

Critical to growth performance is improvement in power and other infrastructure; a reduction in the cost of doing business; creation of a more conducive investment environment, including security of life and property; and training and development of the human resources needed to increase capacity and productivity. Human resource development is needed to reduce the reliance on expatriates and increase the contribution of the local labour force in foreign investment.

Strong growth is expected in the primary and secondary sectors, particularly agriculture, manufacturing, and solid minerals. The manufacturing sector is expected to grow at least 7 percent a year between 2004 and 2007, while agriculture is expected to grow about 6 percent. Growth in other sectors may not be as strong as growth in the primary sector. Aggregate output for the four years of NEEDS is projected to increase 5 percent in 2004, 6 percent in 2005, 6 percent in 2006, and 7 percent in 2007. Output in the oil and gas sector is expected to remain unchanged. The projected decline in oil production as Nigeria maintains its OPEC quota is expected to be offset by increases in gas production, leaving net output in the sector unchanged. Growth of the nonoil sector, the major target of the diversification effort, is expected to rise from 6.8 percent in 2003 to more than 9 percent in 2007.

Annual private consumption is expected to grow 4.8 percent in real terms. With projected population growth rate of 2.8 percent, this will mean a 2 percent growth in annual real per capita consumption. At the same time, public consumption expenditure is expected to steadily decline. Investible resources will be reallocated from the public sector to the private sector, and the investment pattern by both government and private investors will change. For example, with agriculture as a priority area in the medium term, the government will increase incentives for investment in the sector.

Policy Thrusts

The key policy thrusts of NEEDS include the following:

• Create a predictable macroeconomic environment in which resources are used efficiently, predicated on a Medium-Term Expenditure Framework that ensures predictable and sustainable public finance at all levels of government.

• Adopt policies that are consistent with raising domestic savings and increasing private investments.

• Maintain a sustainable level of public debt.

The success (or failure) of the reform programme hinges largely on greater fiscal coordination

Key Strategies

The key strategies and instrument include the following:

• Adopt a budget strategy that strengthens the planning process and project and programme evaluation, with early involvement of stakeholders.

• Adopt tax reforms aimed at raising revenues and diversifying the revenue base.

• Strengthen the Budget Office.

• Adopt a medium-term expenditure framework and a fiscal strategy paper consistent with the thrusts of NEEDS.

• Establish intergovernmental fiscal coordination based on a Fiscal Responsibility Act or similar initiative.

• Reform and strengthen the procurement process.

• Establish a fiscal rule based on the price of oil, and establish a stabilization fund for excess revenue from crude oil sales, with specific conditions for the fund’s use.

• Establish a public expenditure rule that holds the deficit to no more than 3 percent of GDP.

Projections on the fiscal account are based on consolidated public sector revenue and expenditure profiles. The international price of oil is expected to decline over the period, but production and earnings in the gas subsector are expected to rise significantly, offsetting any negative oil price movements that may occur.

A basic assumption made in the fiscal account is that state and local governments balance their budgets. However, the federal government can borrow up to 12.5 percent of the previous year’s retained revenue from the central bank to finance its deficits. This provision, which is consistent with the Central Bank Act, is expected to lapse in fiscal 2004.

Beginning in fiscal 2005, the projections in the fiscal account reflect the provisions of the West African Monetary Zone, which stipulates that no more than 10 percent of the previous year’s retained revenue can be financed by the central bank. An oil price-based rule using projections of oil prices that are lower than the expected international price of oil over the timeframe is also adopted. Public sector (consolidated) deficits are constrained not to exceed 3 percent of GDP. While the reform plan has a long-term component, the framework is designed principally with a medium-term focus.

Given the proposed public sector reforms, overall recurrent expenditure as a proportion of total expenditure is expected to continue to fall. Currently, recurrent expenditure consumes about 70 percent of total revenues at both the federal and other levels of government. Given the planned increase in government efficiency, recurrent expenditure is expected to fall gradually over the reform period. State governments are assumed to maintain previous levels of recurrent expenditure (about 80 percent of total revenue) in 2004. The ratio of recurrent to capital expenditure is expected to improve to 70/30 in 2005 and to 60/40 in 2006 and 2007.

All tiers of government in Nigeria suffer from the volatility of revenue and expenditure. State and local governments account for about 50 percent of consolidated public sector spending. This figure could increase with the proposed new revenue allocation formula. Over time it has been difficult to control the intertemporal distribution of expenditure of state and local governments using monetary and fiscal policies as the Constitution grants each state full autonomy over its fiscal actions. The success (or failure) of the reform programme hinges largely on greater fiscal coordination.

The Fiscal Responsibility Pact, expected to come into effect no later than 2005, will help achieve such coordination. Under the provisions of the bill, executive office holders are expected to structure their expenditures in line with the provisions of the capital and recurrent expenditure provisions of the reform programme. In addition, the central bank is currently discouraging bank lending to all tiers of government. According to the new rule, any bank is free to lend to any government agency, provided it provisions 50 percent of the loan value to the Central Bank of Nigeria if the loan is considered performing or 100 percent if the loan is considered nonperforming. The Securities and Exchange Commission is also revising the conditions for borrowing, lending, and floating bonds by all tiers of government to maintain consistency in the pattern of capital market access and usage by all tiers of government. Coordination will be improved by the active use of the formal organs of government, including the National Council on Development Planning, the Joint Planning Board, and the National Economic Council.

While the key challenge is to rein in government spending and get all tiers of government to spend no more than they take in, spending must also be in line with predetermined priorities and reap value for money spent. Thus part of the strategy of the reform effort is to strengthen the due process mechanism and the institutions set up by the administration. Based on established sectoral priorities, the government will set expenditure ceilings through lump-sum allocations to public enterprises and government agencies, and it will monitor the performance of these agencies. The overall aim is to gradually but consistently reduce the government deficit from the current 5 percent to no more than 3 percent of GDP over the lifespan of NEEDS. Doing so will require a roll-back of recurrent expenditures by all three branches of government—executive, legislature, and judiciary—as well as by all tiers of government, primarily through efficiency gains.

While the key challenge is to rein in government spending and get all tiers of government to spend no more than they take in, spending must also be in line with predetermined priorities and reap value for money spent

The budgeting framework will adopt a mandatory calendar that ensures early involvement of the legislature and finalization of the budget at least three months before the beginning of a new budget year. In collaboration with the National Planning Commission, the Budget Office will produce and disseminate quarterly monitoring and evaluation reports to the general public. The budget process will also be reformed to reduce or eliminate arbitrariness. Essentially, the budget will be in line with the policies and priorities of NEEDS, subject to more detailing of programmes and projects by line ministries and state enterprises.

In the immediate term (2004 and 2005), the aim will be to introduce a more orderly and disciplined budget formulation process that tries to corral the numerous sources of extra-budgetary expenditures, a process that involves input upfront from both the executive and the legislative branches on priorities. The lack of ownership by the legislature of the priorities set forth by the government in previous budgets—as well as attempts to add priorities, regardless of the impact on the overall fiscal position—virtually derailed the budget process in 1999–2003. Part of the new strategy will be to introduce a more collaborative approach between the two branches of government in order to enhance the effectiveness of the budget process.

Part of the new strategy will be to introduce a more collaborative approach between the executive and legislative branches of government in order to enhance the effectiveness of the budget process

The bloated federal recurrent budget is unsustainable, as is the unwieldy capital account, a substantial part of which is made up of abandoned and underfunded projects. State governments also have bloated recurrent expenditures and little room for capital programmes. The challenge is to design appropriate strategies and action plans to redress the situation.

The public sector capital programme will be rationalized to give priority to health, education, agriculture, power supply, and the maintenance of infrastructure projects that have high linkage effects with other projects and those that will generate employment at minimal cost. A sunk cost approach will be introduced in determining whether to proceed with ongoing and abandoned projects. Rigorous project selection criteria will be imposed on new projects, including the need to ensure funding to completion. The cleaning up of the budget will produce a more concise capital programme in fiscal 2005.

Pruning waste. NEEDS will support new procurement procedures by strengthening the due process mechanism and developing a catalogue of commonly procured equipment, supplies, and services as a reference for ministries and agencies. Tender procedures will be enforced, and the scope of checks on value for money will be expanded.

Procedures for competitive bidding, contract review, and award of various levels of contracts have been introduced. The Budget Monitoring and Price Intelligence Unit was created in the Presidency to oversee the procurement reforms and push implementation of the due process review and contract certification process. The mechanism will be strengthened and upgraded into the Federal Procurement Commission. Accounting officers will ensure that excessive expenditures discovered by postauditing checks are recovered from those responsible. Every department will have internal and external auditors, who will be responsible for tracking expenditures and ensuring value for money.

Increasing revenue generation and supporting tax reforms. The reforms also aim at strengthening the machinery for tax collection, tracking all government revenues paid into different bank accounts as well as recovering debts, misappropriated and looted funds, and payments for work not executed. State and local governments are expected to gear up their efforts to generate revenue rather than depend on statutory allocation from the federation account or borrowing on the capital market.

In the short to medium term, the strategy will address six issues:

• The structure of the tax system

• Revenue generation

• Efficiency of collection

• Tracking and response to comparative and international standards

• Investment promotion

• Coordination of tax administration

The structure of the tax system overwhelmingly favours indirect taxes. Although these taxes are generally regressive, the high rate of evasion of direct taxes—attributed mainly to poor data on people and sources of income (the result of a large informal sector)—makes indirect taxes attractive. This structure will continue over the NEEDS period. The main sources of nonoil revenue include customs tariffs, value-added tax, and sales taxes. Governments at all levels will continue to explore the possibilities of collecting user charges on infrastructure and some social services.

The government is collecting far less in income tax (individual and corporate, including withholding taxes) than it should. The tax collection machinery will therefore be revamped, restructured, and strengthened for more effective collection.

A new phenomenon is the loss of revenues arising from the system of remittance of tax revenues paid through banks to the appropriate authority. Significant revenue is being lost through diversion and inadequate monitoring of the process. Such leakages will be plugged, and defaulting banks will be delisted and subject to substantial penalties.

In addressing the level and structure of taxes, attention will be paid to competitiveness. Taxation and fiscal policy will be pro-poor and used as an instrument for reducing high income disparities, as well as providing incentives for investment and productivity growth. Direct taxes on lower income groups will be reduced, while those of the highest groups will be increased. But the structure will pay attention to the competitiveness of Nigeria relative to countries at similar levels of development with which Nigeria has to compete for foreign direct investment. The tax structure will establish a level playing field, adjusting for the cost of doing business due to poor infrastructure, and stimulate private investment in the real sector.

A major nuisance to businesses operating in Nigeria is the multiplicity of taxes imposed at the federal, state, and local levels. While NEEDS will not encourage the pooling of all taxes in a federal system, it will seek agreement among all tiers of government on which level should collect which taxes and how, in order to avoid too great a multiplicity of taxes and conflicting methods of collection. The Joint Tax Board and the peer review mechanism to be established under this strategy will help achieve a more harmonized tax system and ensure coordination and compliance.

Historically, the Nigerian external sector account could be referred to simply as an oil account

Efforts will also be intensified to increase the contributions to public sector financing of major public enterprises, such as the Nigeria Maritime Authority, the Nigeria Ports Authority, the Federal Airports Authority of Nigeria, the Shippers’ Council, the National Civil Aviation Authority, the Securities and Exchange Commission, and NICON Insurance. Over time, these public enterprises have made minimal contributions to development.

Policy Thrusts

NEEDS is based on four main policy thrusts:

• Promote exports and diversify exports away from oil.

• Gradually liberalize imports, harmonize tariffs with ECOWAS’ common external tariffs, and use special levies and import prohibitions to protect local industries.

• Establish a market-determined nominal exchange rate regime, and avoid overvaluation of the real exchange rate.

• Seek debt reduction to make Nigeria’s debt service sustainable.

The trade balance has been in surplus in recent years, as a result of the rise in oil prices. Balance of payments projections assume no change in Nigeria’s OPEC quota and stable oil prices of $22–$23 a barrel between 2004 and 2007. This cautious posture is due mainly to the expected re-entry of Iraq into the oil market and the unpredictable behaviour of Russian oil supply. However, negative changes in the international oil market may not be fully reflected in the balance of trade because of expected positive changes in the gas subsector, where production and earnings are expected to rise.

Export earnings should be diversified. In the short run, the emphasis should be on the export of food and other primary products, with value added to exports over time. Incentives will be given to domestic producers in manufacturing and agriculture to exploit opportunities provided by the numerous bilateral and multilateral trade concessions of which Nigeria is a potential beneficiary.

Despite these incentives, only small changes are expected in the volume of imports in the short run. Although Nigeria has banned the importation of some products, the share of these products in total imports is small. Furthermore, the lowering of tariffs in tandem with the rates set by the West African Economic and Monetary Union is likely to increase the import bill, perhaps offsetting the effects of the import bans. Factor payments arising from industrialization programmes and the import of industrial raw materials will continue, at least in the short run, to put some pressure on the current account. Thus annual current account deficits of about 0.52 percent of GDP are expected between 2004 and 2007.

With modest deficits, net reserves will grow slowly but steadily, from $7.7 billion (about five months’ imports cover) in 2004 to $10.7 billion (more than six months’ import cover) in 2007. This growth is expected to arise from a larger export base and slower growth of imports. The projection for reserves is within the minimum stipulations of the West African Monetary Zone, allowing Nigeria to keep pace with the regional integration process while pursuing its domestic reform programmes.

Assumptions on debt service payment are optimistic. Only 53 percent of the $12.3 billion of debt service due between 2004 and 2007 is expected to be paid in full. The states will account for 25 percent of payments, while the federal government will take up the other 75 percent. If the reforms stay on course, with policy consistency and increased prudence in the management of public resources, Nigeria is expected to be able to get debt relief, substantially reducing external debt service payments.

Debt relief would also reduce the debt stock, significantly affecting the overall balance. Additional resources from debt relief are expected to show up in increased spending on the social sectors (health, education, water, and infrastructure). This reallocation would increase the impact of the reform programme on human capital development, a major policy goal of reform. In addition, current efforts by the Debt Management Office to sensitize state governments to the implications of their fiscal actions will be increased. In this regard, civil society has a responsibility to demand accountability from public office holders.

Securitized domestic public debt nearly quadrupled between 1996 and 2003, rising from about N=343 billion to about N=1.3 trillion. The domestic debt stock is characterized by a number of deficiencies. One is that the stock is concentrated at the short end of the market. About 60 percent of the stock is made up of 91-day Treasury bills; longer term debt constitutes less than 25 percent. This implies a mismatch between assets and liabilities, as much government expenditure is long term.

Another defect is that nonbank public holdings of government securities represent just 6 percent of all debt; the central bank and deposit banks hold about 94 percent. The large holding of government securities by the banking system has adverse implications for the growth of the money supply and the effectiveness of monetary policy. Although reliable figures on nonsecuritized public debt are not available, indications are that the figures run into the trillions of naira for all tiers of government.

If reforms stay on course Nigeria is expected to be able to get debt relief, substantially reducing external debt service payments

Key Strategies

During the medium term, policy will focus on:

• Restructuring existing securities into longer term bonds

• Reducing central bank holdings of the government debt so that the Central bank of Nigeria has wider room for efficient and unconstrained monetary policy

• Financing government deficits by floating bonds in the capital market

• Developing an efficient capital market

In August 2003 the government floated N=150 billion of federal bonds, with tenors of 3, 5, 7, and 10 years—the first bond issue in 17 years. A major goal of domestic debt management during the programme period will be to sustain this effort by lengthening the term structure of debt and increasing nonbank public holding of government debt in order to bring government borrowing under the discipline of the capital market.

In addition, domestic borrowing guidelines will be developed and applied to all tiers of government and their agencies. These guidelines will help ensure that the unsustainable and defective domestic debt portfolio of the federal, state, and local governments does not deteriorate.

Policy Thrusts

NEEDS supports several main policy thrusts:

• Strive to meet the second West African Monetary Zone’s convergence criteria.

• Maintain low real lending interest rates.

• Maintain a competitive but stable exchange rate regime.

• Restructure the composition of credit to the private sector to boost production.

• Provide more credit to the private sector, especially long-term credit for real sector development.

• Create effective regulatory and supervisory mechanisms to ensure orderly development of the financial system.

• Continue to use the retail Dutch auction system to determine the nominal exchange rate regime, and adopt a wholesale Dutch auction in the medium to long term.

The conduct of the monetary, credit, and exchange rate policies will continue to be guided by the central bank’s monetary, credit, foreign trade, and exchange policy guidelines, which are now issued for two-year periods. The current guideline, Monetary Policy Circular No. 37, covers the policy guidelines for fiscal 2004 and 2005. The overall goal of monetary policy remains price and exchange rate stability; the instruments are those consistent with a deregulated financial system.

Given that the government is committed to a tighter fiscal stance, the inflation rate is expected to drop progressively over the four-year time horizon, reaching 9 percent by 2007. The decline in inflation is expected to improve the macroeconomic environment for planning and to reduce pressure on domestic costs and real interest rates. Interest rates will remain deregulated and market determined, but policy will aim at rates that are above the inflation rate in order to mobilize savings. The reform programme will aim to reduce the spread between lending and deposit rates of interest.

Historically, the structure of credit allocation has been a problem. It is widely believed that public sector demand for credit crowded out the private sector. Credit to the private sector has also been affected by the low absorptive capacity of the economy. Monetary projections for the reform period envisage lower public sector deficits, increasing the availability of funds for lending to the private sector. Banks need inducements to lend to the private sector rather than trade in government instruments, conduct foreign exchange transactions, or finance short-term (commercial) activities.

Providing credit to the private sector will be encouraged through a set of incentives. The central bank has already introduced a credit (risk) guarantee scheme for commercial bank lending to small and medium-size enterprises and the agricultural sector. Other incentives, such as the rediscounting and refinancing schemes of commercial bank debts for small and medium-size enterprises, will be intensified. The aim is to create incentives that alter the structure of banking from deposit driven to credit giving. Given these incentives, credit to the private sector is projected to grow at least 30 percent a year. The framework also provides for steady but slow average annual changes in broad money over the reform period. With a substantial decline in government borrowing, less financing of government deficits by the central bank, and reduced dependence on oil income for foreign exchange earnings, changes in broad money are expected to be less volatile.

Causes of Poverty

Inadequate growth is the main cause of poverty in Nigeria. The lack of growth is compounded by the volatility of the oil sector, which affects a range of activities in the economy. High and growing unemployment increases the number of poor people. Other factors that have contributed to the level and evolution of poverty in Nigeria include problems in the productive sector, widening income inequality, weak governance, social conflict, and gender, intersectoral, and environmental issues (table 4.1).

Table 4.1

Incidence of Poverty in Nigeria, Selected Years

(percentage of poor people in total population)

Note: The Federal Office of Statistics is conducting a new household survey. More current data will be available shortly. Source: Federal Office of Statistics.Source: Federal Office of Statistics.

Table 4.1

Incidence of Poverty in Nigeria, Selected Years

(percentage of poor people in total population)

Factor	1980	1985	1992	1996
National	28.1	46.3	42.7	65.6
Geopolitical zones
Northeast	35.6	54.9	54.0	70.1
Northwest	37.7	52.1	36.5	77.2
North Central	32.2	50.8	46.0	64.3
Southeast	12.9	30.4	41.0	53.5
Southwest	13.4	38.6	43.1	60.9
South Central	13.2	45.7	40.8	58.2
Sector
Urban	17.2	37.8	37.5	58.2
Rural	28.3	51.4	46.0	69.3
Gender of head of household
Male	29.2	47.3	45.1	66.4
Female	26.9	38.6	39.9	58.5
Size of household
1 person	2.0	7.0	29.0	13.1
2–4 people	8.8	19.3	19.3	59.3
5–9 people	30.0	50.5	51.5	74.8
10–20 people	51.0	71.3	66.1	88.5
More than 20 people	80.9	74.9	93.3	93.6
Education of head of household
None	30.2	51.3	46.4	72.6
Primary	21.3	40.6	43.3	54.4
Secondary	7.6	27.2	30.3	52.0
Postsecondary	24.3	24.4	25.8	49.2
Age of head of household
15–24	16.2	25.3	28.7	37.4
25–34	17.8	33.4	28.5	52.7
35–44	26.7	46.0	42.1	64.6
45–54	27.1	49.7	45.7	71.3
55–64	39.7	55.7	48.2	69.9
Older than 65	28.8	49.1	49.5	68.0

Note: The Federal Office of Statistics is conducting a new household survey. More current data will be available shortly. Source: Federal Office of Statistics.Source: Federal Office of Statistics.

View Table

Table 4.1

Incidence of Poverty in Nigeria, Selected Years

(percentage of poor people in total population)

Factor	1980	1985	1992	1996
National	28.1	46.3	42.7	65.6
Geopolitical zones
Northeast	35.6	54.9	54.0	70.1
Northwest	37.7	52.1	36.5	77.2
North Central	32.2	50.8	46.0	64.3
Southeast	12.9	30.4	41.0	53.5
Southwest	13.4	38.6	43.1	60.9
South Central	13.2	45.7	40.8	58.2
Sector
Urban	17.2	37.8	37.5	58.2
Rural	28.3	51.4	46.0	69.3
Gender of head of household
Male	29.2	47.3	45.1	66.4
Female	26.9	38.6	39.9	58.5
Size of household
1 person	2.0	7.0	29.0	13.1
2–4 people	8.8	19.3	19.3	59.3
5–9 people	30.0	50.5	51.5	74.8
10–20 people	51.0	71.3	66.1	88.5
More than 20 people	80.9	74.9	93.3	93.6
Education of head of household
None	30.2	51.3	46.4	72.6
Primary	21.3	40.6	43.3	54.4
Secondary	7.6	27.2	30.3	52.0
Postsecondary	24.3	24.4	25.8	49.2
Age of head of household
15–24	16.2	25.3	28.7	37.4
25–34	17.8	33.4	28.5	52.7
35–44	26.7	46.0	42.1	64.6
45–54	27.1	49.7	45.7	71.3
55–64	39.7	55.7	48.2	69.9
Older than 65	28.8	49.1	49.5	68.0

Note: The Federal Office of Statistics is conducting a new household survey. More current data will be available shortly. Source: Federal Office of Statistics.Source: Federal Office of Statistics.

Problems in the productive sector. The limited growth of investment and technological innovation has constrained the labour absorption capacity of the nonagricultural sector, especially manufacturing. This lack of capacity has exacerbated poverty, especially in urban areas. Two other factors—problems associated with the transition away from high-cost industries that are heavily dependent on imports and the impact of globalization on domestic industries that are unable to compete with imported substitutes—also appear to have contributed to the limited growth of domestic production and employment. International evidence from countries in roughly comparable circumstances suggests that the savings propensity in Nigeria is low, providing weak underpinning for the sustained domestic investment growth needed in the fight against poverty.

Income distribution. Widening income inequality has contributed significantly to the increase in poverty in Nigeria. Economic growth has tended to benefit people who work in public sector management. Fiscal policies have not promoted income redistribution. A related problem is the decline in the living standards of a growing number of pensioners (including retired members of the Nigerian middle class), due to underfunding and management problems of pension arrangements in public and private sector institutions.

Weak governance. Weak governance (including corruption) is believed to have contributed significantly to poverty in Nigeria. Governance problems are widely thought to have been among the major reasons why past poverty alleviation programmes have had little effect. The capacity of individuals and businesses to exploit the potential of the Nigerian economy has been hampered by the costs associated with corruption.

Governance problems are widely thought to have been among the major reasons why past poverty alleviation programmes have had little effect

Social conflict. The economic and social dislocations caused by internal conflicts have negatively affected the economic well-being of individuals and businesses in various ways. Conflicts often lead to the deaths of principal income earners or the destruction and loss of major assets, such as houses or land. Those not displaced from conflict areas often face inadequate infrastructure and other facilities needed to earn a decent living. The occurrence—and in several cases reoccurrence—of social conflicts in various localities in Nigeria has increased poverty, not only in areas directly affected by the conflict but also in areas affected by inflows of internally displaced people. The uncertainties associated with actual or potential conflict situations also tend to discourage domestic and foreign investments.

Gender. As in many developing countries, women in Nigeria are more likely than men to be poor. They also have fewer options than men for escaping poverty. Partly due to traditional property rights and inheritance practices, widows are more vulnerable to poverty than widowers. Partly because they have less formal education than their male counterparts, women generally benefit less from using employment to fight poverty. Children’s and Women’s Rights in Nigeria: A Wake-Up Call, a 2001 study published by the National Planning Commission and UNICEF, provides detailed information on the problems, progress, and possibilities facing women and children in Nigeria. The study is a valuable source of information for developing gender policies as the implementation of NEEDS proceeds.

Intersectoral factors. Some evidence suggests that the rural sector, where about 70 percent of Nigeria’s people live, has been facing a more serious poverty situation than the urban sector. The difference is caused by a variety of factors, including the following:

• Sharp seasonality in the flow of production, income, and employment opportunities in the rural sector

• Shortage of social and economic infrastructure compared with urban areas

• Migration of the educated workforce to urban areas and the consequent aging of the rural population

• Low productivity of rural (and especially agricultural) production, due partly to limited access to credit, pesticides, extension services, and modern technology for agricultural production, processing, and preservation

At the same time, increases in population are putting pressure on limited resources in urban areas, which face serious problems of unemployment, underemployment, and housing and other environment-related problems.

Environmental factors. Empirical evidence shows that poverty and environmental degradation are inextricably linked in Nigeria, because 75 percent of rural people depend on natural resources for their livelihood. Environmental degradation reduces opportunities for poor people to earn sustainable incomes. Left with no other viable options, they engage in extractive activities, contributing to the vicious cycle of poverty and environmental degradation. Rural dwellers are also more vulnerable to environmental disasters and hazards and have few or no strategies for coping with these stresses. In urban areas the poor live in slums, where they are exposed to overcrowded living quarters, unsafe water, improper waste disposal, and other health risks. These conditions reduce savings and investment at the individual, household, and national levels.

Other factors. Other factors affecting poverty in Nigeria include the following:

• Historically, actual and potential participants in economic activity faced an unstable and inconsistent policy environment, which hindered the sustained pursuit of personal or corporate economic improvement plans.

• Poor maintenance has caused Nigeria’s infrastructure to deteriorate, increasing the cost of production and limiting opportunities for employment growth and other means of exit from poverty.

• Nigeria faces significant debt service payments, which eat up resources that could otherwise have been used to expand social services and other antipoverty programmes.

• Nigeria’s population is growing at the relatively rapid rate of rate of 2.83 percent a year, making it difficult to increase per capita income.

Weakness of Past Antipoverty Initiatives

The response of various administrations to the poverty problem appears to have been largely ad hoc and uncoordinated. A recent survey of policies and interventions chronicles 28 federal projects and programmes with poverty reduction thrusts. Several state governments have also put poverty reduction schemes in place.

Programmes such as community banks, family support programmes, the National Directorate of Employment, the Peoples Bank, Better Life for Rural Women, and the Directorate of Food, Roads, and Rural Infrastructure were established by different governments to address various manifestations of poverty, such as unemployment, lack of access to credit, and rural and gender dimensions of poverty. While none of these programmes was completely without merit, none of them had a significant, lasting, or sustainable positive effect.

Empirical evidence shows that poverty and environmental degradation are inextricably linked in Nigeria

With the advent of democratic government in 1999, measures were adopted to streamline poverty-related institutions, review past poverty alleviation programmes, and harmonize sectoral efforts. Several major factors hindering the success of government efforts to reduce the level of poverty were identified. They included:

• Poor coordination

• The absence of a comprehensive policy framework

• Excessive political interference

• Ineffective targeting of the poor, leading to leakage of benefits to unintended beneficiaries

• The unwieldy scope of programmes, which caused resources to be thinly spread across too many projects

• Overlapping functions, which led to institutional rivalry and conflicts

• The absence of sustainability mechanisms in programmes and projects

• Lack of involvement of beneficiaries in project design, implementation, monitoring, and evaluation

Policy Thrust and Targets

NEEDS seeks to significantly improve the quality of life of Nigerians, create social safety nets for the vulnerable, and meet the needs of people displaced by the reform process. Economic empowerment is the main focus of the new strategy. Given that overall economic growth may not generate poverty reduction at the desired pace, actions to facilitate individual economic empowerment, particularly among the poor and other vulnerable groups, are imperative.

NEEDS seeks to significantly improve the quality of life of Nigerians, create social safety nets for the vulnerable, and meet the needs of people displaced by the reform process

To reduce poverty, NEEDS will seek to meet the following broad targets:

• Increase average per capita consumption by at least 2 percent a year.

• Create about 7 million jobs by 2007.

• Increase immunization coverage to 60 percent by 2007.

• Increase the percentage of the population with access to safe drinking water to at least 70 percent by 2007.

• Significantly increase school enrolment rates, especially for girls, and increase the adult literacy rate to at least 65 percent by 2007.

• Significantly improve access to sanitation.

Empowering People through Education

The Constitution of Nigeria gives all citizens the right to education. But the delivery of education in Nigeria has suffered from years of neglect, compounded by inadequate attention to policy frameworks within the sector. Findings from an ongoing educational sector analysis confirm the poor state of education in Nigeria. The national literacy rate is currently 57 percent. Some 49 percent of the teaching force is unqualified. There are acute shortages of infrastructure and facilities at all levels. Access to basic education is inhibited by gender issues and sociocultural beliefs and practices, among other factors. Wide disparities persist in educational standards and learning achievements. The system emphasizes theoretical knowledge at the expense of technical, vocational, and entrepreneurial education. School curricula need urgent review to make them relevant and practice oriented.

NEEDS recognizes education as the vital transformational tool and a formidable instrument for socioeconomic empowerment. The education sector has responsibility for producing and supplying the personnel required to propel and sustain the NEEDS initiative. The goals of wealth creation, employment generation, poverty reduction, and value reorientation can be effectively pursued, attained, and sustained only through an efficient, relevant and functional education system. Education is critical to meeting the goals set by NEEDS. It is also a sector that the initiative seeks to reform.

Policy thrust. The overall policy thrust of NEEDS in education is to:

• Provide unhindered access to compulsory universal basic education to all citizens as a bridge to the future socioeconomic transformation of Nigerian society.

• Establish and maintain enhanced quality and standards through relevant, competency-based curricula and effective quality control at all levels.

• Enhance the efficiency, resourcefulness, and competence of teachers and other educational personnel through training, capacity building, and motivation.

• Strengthen Nigeria’s technological and scientific base by revamping technical, vocational, and entrepreneurial education and making optimal use of information and communication technologies to meet the economy’s manpower needs.

• Provide an enabling environment and stimulate the active participation of the private sector, civil society organizations, communities, and development partners in educational development.

Educational goals and key strategies. NEEDS sets six goals for education. The first is to ensure and sustain unfettered access to education for the total development of the individual. Targets for achieving the goal include the following:

• Increase the percentage of graduates of primary schools who acquire functional literacy and numeracy to 100 percent.

• Increase the percentage of junior secondary school graduates who go on to senior secondary school or senior secondary technical school to 80 percent.

• Increase the percentage of senior secondary school and senior secondary technical school graduates who go on to tertiary institutions to 20 percent.

• Increase the adult literacy rate to 65 percent.

• Reduce the number of cases of examination malpractice in educational institutions by 40 percent.

• Reduce the number of cases of cultism in educational institutions by 90 percent.

• Increase to 90 percent the percentage of primary and secondary schools that establish sustainable programmes of physical development.

• Ensure that all tertiary institutions establish sustainable programmes of physical development.

NEEDS recognizes education as the vital transformational tool and a formidable instrument for socioeconomic empowerment

The second goal is to improve the quality of education at all levels. Targets for achieving the goal include the following:

• Ensure that 80 percent of primary school teachers acquire the minimum teaching qualification (the National Certificate in Education).

• Ensure that 90 percent of secondary school teachers obtain professional qualifications (B.Ed., PGDE).

• Ensure that 80 percent of teachers in tertiary institutions acquire pedagogical skills.

• Ensure that 80 percent of teachers at all levels are professionals.

• Ensure that 50 percent of primary schools have conducive teaching and learning environments.

• Ensure that 60 percent of secondary schools have conducive teaching and learning environments.

• Ensure that 60 percent of all tertiary institutions have conducive teaching and learning environments.

• Ensure that 60 percent of head teachers and assistants undergo training in school-level management.

• Establish an efficient institutional framework for monitoring learning and teaching process at all levels.

Education is critical to meeting the goals set by NEEDS

The third goal is to use education as a tool for improving the quality of life through skill acquisition and job creation for poverty reduction. Targets for achieving the goal include the following:

• Ensure that Nigerians who have completed basic education acquire the literacy, numeracy, and basic life skills needed to live meaningful lives and contribute to national development.

• Ensure that 50 percent of secondary school students have access to good-quality vocational and entrepreneurial education.

• Ensure that 50 percent of tertiary education graduates acquire sufficient technical skills, entrepreneurial skills, and knowledge to be self-employed and wealth creators.

The fourth goal is to ensure periodic review and effective implementation of the curriculum at the secondary level to meet the requirements of higher education and the world of work. Targets for achieving the goal include the following:

• Complete the curricular revision exercise to reflect the dynamism of society and emerging global issues.

• Rehabilitate vocational basic technology and resource centres nationwide.

• Establish new basic technology and resource centers nationwide.

• Produce education materials that reflect the revised curricula.

• Establish libraries and information resource centers for teachers and students to complement formal and life-long education and create awareness of their importance.

• Involve local craftspeople in the delivery of vocational education in schools.

The fifth goal is to mobilize and develop partnerships with the private sector and local communities to support and fund education. Targets for achieving the goal include the following:

• Improve collaboration among major stakeholders.

• Achieve 80 percent community involvement in the management of schools.

• Achieve 60 percent private sector involvement in managing and funding education.

• Retain the 2 percent education tax and enforce 100 percent compliance.

The sixth goal is to promote information and communication technology capabilities at all levels. Targets for achieving the goal include the following:

• Ensure that 10 percent of primary school graduates are computer literate.

• Ensure that 80 percent of secondary school graduates are computer literate.

• Ensure that 80 percent graduates of tertiary institutions are computer literate.

• Ensure that 50 percent of school managers and proprietors are computer literate.

• Ensure that 30 percent of secondary schools have functional information and communication technology facilities.

• Ensure that 80 percent of tertiary institutions have functional information and communication technology facilities.

• Ensure that 50 percent of teachers at all levels are trained in computer skills.

Strategies for achieving the goal include the following:

• Complete and harmonize all on-going educational planning programmes and initiatives in the Ministry of Education and its agencies.

• Make learning and teaching environments child and teacher friendly.

• Train and retrain teachers, through formal and distance learning programmes.

• Review curricula at all levels for relevance, and make them competency based to meet global challenges and the needs of the job market.

• Provide adult and youth vocational centers with materials and equipment for functional literacy and the acquisition of occupational skills.

• Establish effective partnership and collaboration with the organized private sector and the informal sector.

• Produce textbooks and other instructional materials to reflect the curricula.

• Integrate local craftspeople in curricular delivery to accelerate the number of craftspeople and improve access to their products.

• Involve parents and community leaders in the planning and management of schools in their communities.

• Set guidelines on private sector involvement in education and monitor its implementation.

• Incorporate computer literacy in primary and secondary school curricula.

• Develop and produce curricula for teaching computer education in secondary schools.

• Provide secondary and tertiary institutions with information and communication technology equipment and facilities.

Tertiary education. Under NEEDS the government recognizes the critical importance of tertiary institutions for developing high-quality human resources, especially in an increasingly technology-driven world economy. The government also recognizes the challenges facing these institutions, challenges that include inadequate funding and facilities, curricula that are inadequate to meet the challenges of nation building, inadequate and inappropriate staffing (especially among the lecturers), cultism, and low moral and academic standards among students. Higher institutions in Nigeria currently depend almost exclusively on government subsidies. The bulk of federal government spending on education goes to tertiary institutions; state governments spend at least 20 percent of their budgets on education, mostly primary and secondary education. Almost total dependence on the government for funding higher education is neither practical nor sustainable. There is therefore a need for fundamental reforms of the higher education system.

NEEDS recognizes the critical importance of tertiary institutions for developing high-quality human resources, especially in an increasingly technology-driven world economy

The strategy for reform includes the following:

• Strictly adhere to the provisions of the University Autonomy Act.

• Diversify funding by attracting private sector funding and considering more appropriate pricing of facilities and services (including hostel accommodation).

• Update and restructure curricula to meet the demands of the national economy. Mainstream science and technology, especially information and communication technology.

• Establish effective monitoring of public and private universities to ensure strict adherence to standards.

• Develop innovative approaches to ensure continuing retooling and capacity building of lecturers so that they operate at the cutting edge of their disciplines.

• Increasingly move towards a decentralized and competitive wage bargaining system, which promotes a performance-based reward system.

NEEDS advocates greater involvement and participation by the private sector in educational development

Private sector participation in the education sector. The NEEDS initiative advocates greater involvement and participation by the private sector in educational development. An enabling environment will be created to increase private sector participation. Establishment of good-quality privately owned educational institutions at all levels will be encouraged to ensure that gaps in the provision of education are filled. Efforts will be made to achieve 100 percent compliance in paying the 2 percent corporate profit tax that funds education. Linkages between educational institutions and the private sector will be strengthened to ensure the appropriate interface with the world of work.

Improving Health

The goal of the NEEDS health component is to improve the health status of Nigerians in order to reduce poverty. The strategy will continue to emphasize the strengthening of preventive and curative primary health care services. The initiative will involve comprehensive health sector reform, aimed largely at strengthening the national health system and enhancing the delivery of effective, efficient, good quality, and affordable health services.

Policy thrusts. Under NEEDs the government will:

• Improve its stewardship over policy formulation, health legislation, regulation, resource mobilization, coordination, monitoring, and evaluation.

• Strengthen the national health system and improve its management.

• Improve the availability and management of health resources (financial, human, infrastructure, and so forth).

• Reduce the disease burden attributable to priority diseases and health problems, including malaria, tuberculosis, HIV/AIDS, and reproductive health-related illnesses.

• Improve physical and financial access to good-quality health services.

• Increase consumers’ awareness of their health rights and obligations.

• Foster effective collaboration and partnership with all health actors.

Major strategies and interventions. The government will adopt the following strategies to meet its goals:

• Redefine the roles and responsibilities of the Ministry of Health and other federal public health structures and institutions in providing and financing good-quality health services.

• Reorganize and restructure the Ministry of Health and other public health structures within the context of the redefined roles and responsibilities.

• Review existing health policies and strategies as well as health legislation. Publish a new national health policy and enact a National Health Act that defines the national health system and the health functions of each of the three levels of government.

• Strengthen the capacity of the Ministry of Health in policy formulation and implementation.

• Improve existing or set up new mechanisms to generate and use evidence and information for developing and implementing health policy, programmes, and plans.

• Strengthen local governments’ capacity in primary health care management.

• Refurbish primary health care facilities and make them operational.

• Implement the Vamed Engineering Project for refurbishing teaching hospitals and standardizing their equipment.

• Establish a national hospital services commission to improve management of tertiary health institutions.

• Establish systems for efficient management of health resources, including finance, human resources, and physical infrastructure.

• Construct and institutionalize National Health Accounts.

• Develop and implement a comprehensive health care financing strategy, including the fast-tracking of the National Health Insurance Scheme.

• Rehabilitate and refurbish the National Drug Production Laboratory.

• Fully operationalize the National Institute for Production of Vaccines and Biologicals.

• Establish a national blood transfusion system.

• Create an enabling environment for local manufacture of about 70 percent of Nigeria’s needs for essential drugs and supplies and antiretroviral drugs and reagents.

• Improve data on the burden and socio-economic impact of diseases in Nigeria.

• Develop and implement a well-costed strategic plan for combating malaria, tuberculosis, and other diseases.

• Develop and implement an appropriate response to the HIV/AIDS pandemic.

• Create or strengthen mechanisms for checking the transmission of polio by the end of 2004; detecting, diagnosing, and responding to epidemics in a timely manner; and rapidly and sustainably increasing routine immunization coverage.

• Strengthen existing programmes and initiatives for eliminating or eradicating specific diseases, such as Guinea worm.

• Develop and implement a mechanism for measuring the performance of tertiary health institutions.

• Develop and implement a strategy to improve health workers’ attitude, morale, and commitment.

• Establish a reliable system for supplying good-quality drugs and medical materials to health facilities.

• Strengthen the ability of the National Agency for Food and Drug Administration and Control to perform its regulatory functions.

• Develop and implement a strategy to increase consumers’ knowledge and awareness of their personal obligations and rights to better health.

• Develop and implement a strategy to enhance community participation in providing and financing health services.

• Use the results of the study on the private health sector to formulate policy for promoting public-private partnerships in health care provision and financing.

• Develop and implement a framework for enhancing effective coordination of development partners.

• Integrate all tiers of care, as well as traditional medical practitioners. Traditional medical practitioners are included in the referral chains of medical care, as they provide low-cost care and are the first point of contact for rural dwellers.

• Strengthen the ability of the Nigeria Natural Medicine Development Agency and related agencies to develop standards and monitor practitioners to carry out clinical trials to confirm the efficacy and proper dosage of preparations, for example.

The goal of the NEEDS health component is to improve the health status of Nigerians in order to reduce poverty

Many of the diseases that affect Nigerians are due to unhealthy environmental conditions

Improving Environmental Health

Good health remains unobtainable unless the environments in which people live promote health. Many of the diseases that affect Nigerians—including malaria, tuberculosis, diarrhea, and dysentery—are due to unhealthy environmental conditions. Environmental health considerations therefore remain vital to achieving the objectives of NEEDS.

Under the environmental health reform programme, the government will:

• Articulate a national environmental health policy and national environmental health action plan.

• Review and harmonize existing sanitation laws.

• Develop environmental health performance indicators.

• Develop procedural guidelines for an environmental health impact assessment.

• Develop a national solid waste management master plan.

• Assess the environmental health impact of communities in oil-producing and mining areas.

• Promote community-based integrated sanitation services.

• Promote sound food sanitation practices to ensure food security.

• Promote the safe use of pesticides and other agro-chemicals.

• Increase antenatal, postnatal, and family planning services and outlets in order to reduce maternal mortality from the current level of 704 per 100,000 live births and infant mortality from the current level of 77 per 1,000.

• Intensify the campaign to eradicate harmful traditional practices, such as female genital mutilation and child marriage. Several state governments have already passed the necessary legislation, and many more are in the process of doing so.

Tackling the HIV/AIDS Challenge

HIV/AIDS is a cross-cutting issue, with links to education, health, agriculture, defence, labour, and other sectors. The HIV/AIDS epidemic in Nigeria has extended beyond high-risk groups. More than 2.7 million Nigerians are now infected with the virus. An estimate based on a 2001 sentinel survey conservatively puts prevalence at 5.4 percent of the population. The figure suggests that the nation is in real danger of facing explosive growth in the epidemic, with dire consequences for economic growth, health, and social development.

HIV/AIDS is already having a disastrous impact on social and economic development in Nigeria. If not adequately contained, the epidemic will prove to be the greatest single obstacle to reaching national poverty reduction and other targets for social and economic development. The devastation caused by HIV/AIDS is unique, because it is depriving families, communities, and the entire nation of their young and productive people. The epidemic is deepening poverty, reducing human development achievements, increasing gender inequalities, eroding the ability of government to provide essential services, reducing labour productivity and supply, and putting a brake on economic growth.

By 2001 it had become clear that the complexity of the HIV/AIDS epidemic required a developmental, holistic, coordinated, and multisectoral approach. The strong political commitment of the President of Nigeria to fight HIV/AIDS served as a powerful catalyst and motivator for establishing a supraministerial and sectoral body, the National Action Committee on AIDS (NACA) under the Presidency. A national policy on HIV/AIDS was launched in August 2002 to give policy direction and to make a policy statement on the transformation of NACA from a committee to a full-fledged agency that is well positioned and poised to scale up the fight against the epidemic.

The response to HIV/AIDS being coordinated by NACA has focused on the challenges of containing the epidemic and preventing new infections through advocacy, information and education campaigns, behaviour change communication, condom distribution, targeting of groups particularly vulnerable to infection, and other key interventions. It also focuses on treatment and care of people living with HIV/AIDS. Both prevention and treatment are top priorities to NACA, not only because they save lives and reduce human suffering but also because they limit the future impact of the epidemic on human development and poverty reduction efforts.

Through an International Development Association credit, NACA provides funds for NGOs, community-based organizations, and federal line ministries throughout the country to support implementation of high-priority and demand-driven programmes. NACA is also the principal recipient of funding from the Global Fund to Fight AIDS, Tuberculosis, and Malaria. Those funds are disbursed to the Ministry of Health to finance voluntary counseling and testing, prevention of mother-to-child transmission of HIV, and antiretroviral treatment for people living with AIDS. The multisectoral response is being implemented in collaboration with developmental partners, including the World Bank, the U.S. Agency for International Development, the Department for International Development, UNAIDS, the Canadian International Development Agency, the World Health Organization, UNICEF, the United Nations Development Programme, the United Nations Population Fund, and other organizations. Positive outcomes of these efforts are the increasing flow of resources for community and sectoral responses, as well as broad ownership of the national response beyond the health sector.

HIV/AIDS is having a disastrous impact on social and economic development in Nigeria

Projected impact of HIV/AIDS on Nigeria’s economy and development. HIV/AIDS is projected to affect many sectors of the Nigerian economy.

• Macroeconomic effects. Studies in Africa suggest that the HIV/AIDS epidemic reduces annual GDP growth by about 1–2 percent.

• Health sector. The epidemic affects demand for and supply of medical care, staffing levels by function, training and replacement costs, employment terms, quality of care, and health care delivery. The provision of HIV/AIDS-related services adversely affects the provision of other health care services.

• Education. The epidemic affects staffing, replacement and training needs, employment policies, contracts, employer liabilities, costs, delivery, and quality.

• Agriculture and food security. HIV/AIDS has serious adverse impacts on food security in Nigeria, potentially affecting subsistence and small-scale commercial agriculture, rural livelihood strategies, and household and community support systems. Both economic and noneconomic losses will result from the epidemic.

• Urban livelihoods. HIV/AIDS has grave implications for urban dwellers. The epidemic will affect employment, labour market operation, income inequality, and access to services of people living in urban areas.

• Loss of social reproduction capacity. The impact of HIV/AIDS is not solely, or even mainly, economic. Some of the most serious costs include loss of social capital and interpersonal and intracommunal trust and support. Such losses—at the individual, household, and community levels—will continue for more than a decade.

The NEEDS HIV/AIDS policy aims to create an environment in which all Nigerians will be able to live socially and economically productive lives free of the disease and its effects

Policy thrust and targets. The overall goal of the NEEDS HIV/AIDS policy is to control the spread of HIV/AIDS in Nigeria, provide equitable care and support for those infected with HIV/AIDS, and mitigate its impact to the point where it is no longer of public health, social, or economic concern. The policy aims to create an environment in which all Nigerians will be able to live socially and economically productive lives free of the disease and its effects.

The following targets have been set to guide programme planning and implementation:

• Achieve at least a 25 percent reduction in the adult prevalence of HIV every five years.

• Increase the use of safe-sex behaviour among the general population and high-risk groups by 20 percent by 2005 and by 50 percent by 2007.

• Reduce the prevalence and incidence of sexually transmitted infections by 50 percent by 2007.

• Ensure that at least 20 percent of all local government areas offer home-based care to people living with HIV/AIDS by 2007.

• Ensure that 30 percent of health institutions will be able to offer effective care for and management of HIV/AIDS by 2007.

• Ensure that 5 percent of communities affected by HIV/AIDS will have programmes designed to provide social safety nets for people living with HIV/AIDS by 2005, and increase the proportion of communities with such programmes to 15 percent by 2007.

• Reduce mother-to-child transmission of HIV by 50 percent by 2007.

• Increase ready access to voluntary confidential counseling and testing services to at least 50 percent by 2007.

• Ensure access to antiretroviral drugs in all states by 2007.

Strategies. To achieve the goal of controlling the spread and mitigating the impact of HIV/AIDS, NACA will adopt the following strategies:

• Promote a national multisectoral and multidisciplinary response to the epidemic, and establish an appropriate legal and institutional framework for its coordination.

• Identify sectoral roles and assign responsibilities for implementing programmes based on sectors’ comparative advantages and core competencies.

• Increase awareness of and sensitivity about HIV/AIDS among the general population.

• Foster behaviour change as the main means of controlling the epidemic.

• Improve national understanding and acceptance of the principle that all people must accept responsibility for the prevention of HIV transmission and the provision of care and support for those infected and affected.

• Provide access to cost-effective support and care, including antiretroviral drugs, to people with HIV/AIDS.

• Protect the rights of people infected and affected by HIV/AIDS, as guaranteed under the Constitution and the laws of Nigeria.

• Remove all barriers to HIV/AIDS prevention and control.

• Empower people infected and affected by HIV/AIDS to cope with their circumstances, through training, counseling, and education.

• Support research, monitoring, and evaluation of programmes; relevant documentation of activities related to the epidemic; and the dissemination of information to stakeholders and the general population.

• Ensure that prevention programmes are developed and targeted at vulnerable groups, such as women and children, adolescents and youth, sex workers, longdistance commercial vehicle drivers, prison inmates, migrant workers, and others.

• Transform NACA into a statutory body, and provide adequate resources for it to meet the goals and targets set for HIV/AIDS prevention and control.

Policy Thrust

The government’s policy thrust is to develop and maintain adequate and appropriate infrastructure that is conducive to private sector-driven economic growth and development, ensuring private sector participation in the process and creation of a competitive business environment. Under NEEDS the government will:

• Rapidly privatize key infrastructure services to ensure effective service provision.

• Enhance and enforce relevant laws to improve competition and protect consumer welfare in industries providing infrastructure services.

• Provide targeted interventions in the provision of infrastructure, especially to rural areas and vulnerable groups.

• Encourage private sector initiation and participation in the provision of infrastructure, using such methods as build-operate-and-transfer (BOT), build-own-operate-and-transfer (BOOT), rehabilitate-operate-and-transfer (ROT), and concessioning.

• Provide counterpart funding for major infrastructure projects for which either the resource involvement is too high or the incentive too low for private sector participation.

• Increase the share of renewable energy in the total energy mix.

Transport Sector

Infrastructure reforms in the transport sector will aim to:

• Complete ongoing construction of a 3,000-kilometre network of roads, and embark on new construction if fund-specific assistance or finance becomes available. Rehabilitate and maintain the 500 roads commissioned by the President under Operation 500 Roads.

• Strengthen the newly created roads maintenance agency, and involve the private sector in the management of roads.

• Create a prominent role for Nigerian sea ports within ECOWAS by encouraging private sector participation in coastal shipping activities.

• Develop a seaport with capacity to handle modern shipping activities, and establish inland dry ports. Provide incentives to use other seaports.

• Make Nigeria’s ports more efficient and competitive, with capacity to handle modern shipping activities. Implement policies that target local human capital development.

• Rehabilitate and upgrade the railways with a view to restoring their relevance in transporting bulk, haulage, and passengers.

• Ensure the achievement and maintenance of world class standards in all aspects of aviation operations, by developing local manpower and maintenance capacity and adopting other measures.

• Achieve total radar coverage of Nigerian airspace, and establish an effective and efficient emergency rescue unit under the Federal Airports Authority.

The government’s policy is to develop infrastructure that is conducive to private sector-driven economic growth

Specific strategies for the sector include the following:

• Provide, through the draft Public-Private Partnership in Infrastructure Provision Bill, the enabling legal framework for private sector participation in several infrastructure projects, including roads, railways, and port development.

• Privatize or concession Nigerian Railways to the private sector in order to rehabilitate and modernize it. The government will continue to restructure and strengthen the company to make it functional until it is privatized or concessioned.

• Mainstream the maintenance culture for all infrastructure facilities.

• Provide the Road Maintenance Agency with sufficient capacity to undertake rehabilitation and maintenance of federal roads.

• Ensure that infrastructure development is consistent with environmental regulations.

Power is the most important infrastructure requirement for moving the private sector forward

Power Sector

Power is a strategic sector. Indeed, it represents the most important infrastructure requirement for moving the private sector forward.

NEEDS envisions reforms that will transform the power sector into one led by the private sector, with the role of government primarily in policy formulation and establishment of an appropriate legal and regulatory framework. Full implementation of the NEEDS reforms would eliminate generation deficits; rehabilitate, reinforce, and expand transmission and distribution networks; impose payment and collection discipline; and increase rural access to electricity, using grid and off-grid approaches.

Nigeria’s power system is so inadequate that it has held back economic progress and social well-being. The system is unreliable and incapable of meeting the demands placed on it. The following facts underscore the neglect of the sector:

• No new power stations were built between 1990 and 1999.

• No major overhaul of plants was carried out between 1990 and 1999.

• Only 19 out of 79 generating units were in operation in 1999.

• Actual daily generation fell to less than 2000 megawatts (MW) in 1999.

• No transmission lines have been built since 1987.

• Federal government funding to the sector decreased continually between 1980 and 2000.

Some improvement took place between 1999 and 2003, with generation rising to about 4,000 MW a day. Problems of adequacy, transmission, and distribution remain, however. Improvement occurred largely as a result of the President’s mandate and the new funds and capacity injected into the National Electric Power Authority (NEPA). Some of the highlights of the mandate include the following:

• Expeditiously implement the electric power sector reform programme.

• Generate 10,000 MW a day by 2007, from existing plants, new host generation, and reasonably priced independent power plants.

• Develop the capacity to transmit and distribute the higher level of generation.

• Explore alternative energy sources, such as coal, solar power, wind power, and hydropower.

• Renew attention to the question of electricity tariffs.

• Deregulate the power sector to allow increased private sector participation.

These mandates imply increased system capacities (generation, transmission, distribution, marketing) and reform of the electricity industry through deregulation to encourage private sector participation and attract investment. Deregulation and liberalization of the electricity industry will encourage development and use of alternative energy sources. They will also affect electricity tariffs, which will require regulatory attention.

Policy thrust and targets. NEEDS proposes a set of targets for the power sector to meet before 2007:

• Increase generation capacity from 4,200 MW to 10,000 MW (an increase of 138 percent).

• Increase transmission capacity from 5,838 megavolt amperes (MVA) to 9,340 MVA, a 60 percent increase.

• Increase distribution capacity from 8,425 MVA to 15,165 MVA (an increase of 80 percent).

• Increase tariff collections from 70 percent to 95 percent.

• Reduce transmission and distribution losses from 45 percent to 15 percent.

• Reduce controllable costs by at least 30 percent.

• Rightsize to reduce staff strength by about 15 percent.

• Create 11 semiautonomous business units (profit centers). (This target was met in January 2004.)

• Make the transmission company a semiautonomous unit by April 2004.

• Unbundle generation by the fourth quarter of 2004.

The electricity supply industry is capital intensive and cannot be funded adequately by the federal government alone. The sector therefore needs to be reformed in order to attract private sector participation.

Key strategies. Necessary reform of the electricity industry cannot take place without enactment of the Electric Power Sector reform bill. Competition (facilitated by unbundling of NEPA and private sector investment) will not take place without an appropriate legal and regulatory framework, clearly defined market rules and adequate trading arrangements, tariffs that reflect costs, and improvement in tariff collection. Reform of the industry is therefore predicated on the federal government’s national electric power policy and the enabling legislation. The proposed Electric Power Sector Act will entail:

• Unbundling NEPA into distinct business units

• Establishing a regulatory agency for the electricity industry

• Establishing a rural electrification agency and fund

• Increasing access to electricity

• Privatizing business units that will emerge from unbundling NEPA

The electricity supply industry needs to be reformed in order to attract private sector participation

The unbundled entities can be incorporated into separate legal entities only after the Electric Power Sector reform bill is enacted. Nonetheless, actions are being taken to operationalize the unbundling programme and to carry out other transitional initiatives that are consistent with the overall reform process and have the potential of fast-tracking the restructuring and privatization of the sector.

There are several other important strategies for the power sector:

• Revenue enhancement measures. The Commercial Re-Orientation of Electricity Sector Toolkit (CREST) initiative has commenced in some NEPA business units. An extensive metering programme has begun, with a view to metering all customers within the next two to three years. Particular attention will be given to industrial and high-demand customers. Efforts are under way to put all government establishments on prepaid meters by the end of 2004. Outsourced revenue collection contracts will be strengthened, and measures will be introduced to discourage late payment of bills.

• Distribution and customer service. Some short-term external managerial and technical support will be provided to the unbundled entities. Expansion and reinforcement of the distribution network will be carried out to improve the quantity and quality of supply and to reduce losses. The proposed expansion and reinforcement will be funded largely from internally generated revenue, since the unbundled distribution companies will be the first to be divested to the private sector.

• Transmission. The government will continue to own most of the major transmission company (TransysCo), but the company could be operated under a management contract. TransysCo will be responsible for electricity transmission and for market and system operations. Meanwhile, projects to close the grid loop and decongest bottlenecks in the network will continue. The ongoing World Bank-assisted transmission development plan project will be concluded. Multilaterals will provide up to $500 million to develop the additional transmission capacity required for the enhanced generation.

• Generation. The private sector is already participating in electricity generation. The federal government is funding four new stations, with a total capacity of about 1,400 MW. Most of the anticipated new capacity will come from the private sector. Generation will be unbundled by the fourth quarter of 2004, ahead of its ultimate privatization. Coal-fired generation will be developed as a strategic alternative source of electricity, mainly through private-public partnership, a proven option for this sort of activity. An initial integrated coal utilization project proposed for Enugu will incorporate a 500–1,000 MW power station. Before its implementation, comprehensive studies will be undertaken to ascertain actual levels of coal reserves. Other proposed programmes include development of the Mambilla and Zungeru hydro stations on a private-public partnership basis (with project development studies for Mambilla to be concluded in 2004) and commencement of the second phase of major rehabilitation of some power stations (Jebba, Kainji, Egbin) to prevent a reduction in capacity.

• Gas pricing. The gas and electricity industries in Nigeria are very interdependent. Reform in both sectors is imperative. Gas producers will need to make gas-gathering investments, while the Nigeria Gas Company will need to expand or upgrade its transportation infrastructure. The Nigeria Gas Company and NEPA have agreed on gradual adjustments in gas prices compatible with NEEDS economic empowerment and rural development priorities.

• Vandalism. Preventing vandalism of distribution and transmission infrastructure is a major challenge. (The timely completion of the Abuja-Shiroro line was threatened by vandalism.) The high cost of emergency repairs of the power infrastructure as well as lost revenue during periods of repairs are of grave concern and pose threats to the reform process. The government will consider forming a special security unit for policing power installations.

Reform of the power sector is predicated on the federal government’s national electric power policy and the enabling legislation

Policy Thrust

The government’s policy direction commits to eradicating water-borne diseases and to improving water supply and management for other productive economic activities. NEEDS particularly recognizes the importance of managing water resources in an integrated and sustainable manner. The policy thrust of the government therefore will build on the National Water Resources Management Strategy (WRMS), which involves all stakeholders to ensure integrated management and development of water resources in the country. The thrust is on more on integrated and sustainable water resources management to meet the nation’s present and future water resources needs in all demand sectors—including human consumption, animal husbandry, agriculture, hydropower, inland waterways, environmental protection, and industry. The key objectives of the water resources policy include:

• Ensuring the development and management of water resources in an integrated manner and as a national strategic resource

• Protecting water resources and the environment for balanced social and economic development

• Involving all stakeholders—particularly the private sector—in the sustainable development of water resources through coordinated management and holistic utilization

• Optimizing the use of water resources at all times for present generations to survive on without compromising water supplies for future generations

The government’s policy direction commits to eradicating water-borne diseases and to improving water supply and management

Strategies

• Develop and implement a system of quality assurance consistent with WHO standards—with hydrogeological mapping and water quality laboratories

• Reactivate the River Basin Development Authority and other existing urban water development schemes

• Protect watersheds to enhance underground water supply for sustainable aquifer recharge

• Establish a legal and regulatory framework to promote rational use and protect water resources

• Create an institutional framework and participatory approach encompassing all stakeholders in a public-private partnership in the sustainable development of the nation’s water resources

• Build an information and water resources database to coordinate management and utilization of water resources in an integrated and holistic way

• Uphold the principles of water resources economics and financing to ensure adequate funding and economic viability in water resources management

• Maintain high standards in water resources infrastructure and assets management at all times

• Uphold Riparian principles and the philosophy of sharing of benefits in matters of international waters

The National Water Supply and Sanitation Strategy

Because water supply and sanitation are central to improvements in so many aspects of human development, health, education, urban and rural development, development of industry, and general economic development—and thus central to the Government’s primary mission of poverty reduction—water supply and sanitation will remain a primary focus of the government under NEEDS. The National Water Supply and Sanitation Programme proposes an intervention strategy for the water supply and sanitation sector in four subsectors: urban areas, small towns, rural areas, and water resources management and sanitation.

Because water supply and sanitation are central to improvements in so many aspects of human development, they will remain a primary focus under NEEDS

For urban areas, federal and state governments have agreed to cooperate in financing capital investment. State governments that are directly responsible for operational service will also need fundamentally reorientation their provision of services. Reform will require basing institutional and regulatory frameworks on the concept of water supply as a service industry. Despite the public monopoly characteristics of water supply, separating infrastructure investment and ownership from service operation creates competition with significant efficiency gains. Allowing state water agencies more autonomy and increasing commercialisation through service, management, and lease contracts with private firms could increase efficiency. Detailed legal, institutional, and financial preparations are needed for water utilities to be efficiently managed and adequately regulated, and for state water agencies to become asset owners or regulators.

For small towns, government policy is to decentralize ownership and management of water supply systems to attract and involve optimal community involvement and support from the private sector—including operating under contract—and regularizing the services of independent providers or franchisers. In small towns, the focus is on community ownership coupled with local private sector contracting for operations.

For rural areas, government focus is on increasing the water supply to attain 60 percent rural coverage by 2007 with a three-pronged approach of water rehabilitation, expansion, and construction of low-cost rural water schemes. This strategy includes sharing ownership and management by communities and local governments, with communities taking charge of operations and maintenance. In small towns and rural areas, the fiscal focus must be on phasing out subsidies for maintenance altogether and restricting such subsidies to partial capital costs to engender greater community ownership.

Policy thrust

NEEDS focuses on ensuring a safe and healthful environment that secures the economic and social well-being of Nigerians on a sustainable basis. The specifics of the agenda are enunciated in the Environmental Renewal and Development Initiative, the primary objectives of which are “to take full inventory of Nigeria’s natural resources, assess the level of environmental damage, as well as design and implement restoration and rejuvenation measures aimed at halting further degradation of our environment.”

Targets

The reform programme includes several targets:

• Control environmental degradation processes.

• Bring environment and waste pollution in cities and urban centers under control.

• Foster private sector participation in environmental protection.

• Comply with international standards in controlling and monitoring the environment.

• Promote local manufacture of equipment and the use of raw materials for environmental protection and conservation.

• Standardize the use of equipment in environmental services.

• Comply with international safety, health, and environmental standards as they relate to specific industries and sectors of the economy.

• Reverse the loss of biodiversity.

• Phase out persistent organic pollutants.

• Phase out ozone-depleting substances.

NEEDS focuses on ensuring a safe and healthful environment that secures the economic and social well-being of Nigerians

Key strategies

The government’s strategic intent is defined by the following:

• Establish a central self-sustaining regulatory agency responsible for environmental enforcement, compliance monitoring, environmental auditing, impact assessment, and standards setting.

• Strengthen the machinery for desertification, erosion, and flood control.

• Promote synergy in implementing environmental conventions.

• Use space-based research and information technology for environmental management.

• Develop a private-public partnership scheme to address the increasing urgency of waste management.

• Promote a programme for private sector investment in waste-to-wealth management in cities and urban centers.

• Evolve proactive management of extreme climatic conditions.

• Reduce deforestation, especially in ecologically fragile areas.

• Adopt community-driven development approaches to environmental management.

• Promote community-based sanitation services.

• Install, calibrate, and standardize relevant early warning systems for monitoring the onset of environmental hazards.

• Promote the safe use of pesticides and other agro-chemicals to protect the environment and public health.

• Ensure food security by engaging in sound food sanitation practices.

• Promote sustainable measures for reforestation and afforestation that foster community-based industries and improve food security.

• Promote agro-forestry.

• Monitor and evaluate environmental management plans.

• Implement a strategic environmental assessment.

• Review the environmental impact of Decree 86 of 1992.

• Promote wildlife farming, sericulture, apiculture, and the marketing of nontimber forest products.

• Develop and adopt a system of national accounting that captures the economic contribution of the environment sector.

• Encourage the growth and adoption of aromatic and herbal plants for primary health care.

• Implement the National Biodiversity Strategy and Action Plan.

Policy Thrust

Given the dominant role of agriculture in the economy, prospects for food security, the supply of industrial raw materials, and overall economic growth are critically dependent on what happens in this sector. Accordingly, the government is committed to increasing investment in food and agricultural production. Its main policy thrusts include the following:

• Provide the right policy environment and target incentives for private investment in the sector. Implement a new agricultural and rural development policy aimed at addressing the constraints in the sector.

• Foster effective linkages with industry to achieve maximum value-added and processing for export.

• Modernize production and create an agricultural sector that is responsive to the demands and realities of the Nigerian economy in order to create more agricultural and rural employment opportunities, which will increase the income of farmers and rural dwellers.

• Reverse the trend in the import of food (which stood at 14.5 percent of total imports at the end of 2001), through a progressive programme for agricultural expansion. The government is committed to reducing the growing food import bill to stem the rising trade imbalance as well as diversify the foreign exchange earning base.

• Strive towards food security and a food surplus that could be exported.

• Invest in improving the quality of the environment in order to increase crop yields.

Targets

To restore agriculture to its former status as a leading sector in the economy, NEEDS sets the following targets:

• Achieve minimum annual growth rate of 6 percent in agriculture.

• Raise agricultural exports to $3 billion by 2007. A major component of these exports will be cassava.

• Drastically reduce food imports, from 14.5 percent of total imports to 5 percent by 2007.

• Develop and implement a scheme of land preparation services to increase cultivable arable land by 10 percent a year and foster private sector participation through incentive schemes.

• Promote the adoption of environment-friendly farming practices.

• Protect all prime agricultural lands for continued agricultural production.

The government is committed to increasing investment in food and agricultural production

Strategies

To achieve these targets, the following strategies will be employed:

• Vigorously implement presidential initiatives on cassava, rice, vegetable oil, sugar, livestock, tree crops, and cereals. Under this initiative, Nigeria hopes to generate as much as N=3 billion a year from agricultural exports.

• Take advantage of the various concessional arrangements provided by the World Trade Organization (WTO), the European Union’s African, Caribbean, and Pacific states agreement, the U.S. African Growth and Opportunity Act, and the National Partnership for African Development, as well as the huge West African market.

• Strengthen agricultural research, revitalize agricultural training, and streamline the extension delivery system. Involve NGOs and opinion leaders in extension delivery by building capacity and promoting improved technologies that meet farmers’ needs.

• Review the agricultural input supply and distribution system with a view to developing an effective and sustainable private sector-led input supply and distribution system.

• Promote integrated rural development involving agricultural and nonagricultural activities, including through the provision of physical infrastructure such as feeder roads, rural water supply, and rural communications.

• Encourage states to develop model rural communities and farm settlements, providing them with feeder roads, boreholes, vocational training, simple farm tools and equipment, alternative energy sources, and communications centers to provide a wholesome rural life and reduce the incentives to migrate to urban areas.

• Adequately capitalize the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB) to provide soft agricultural credit and rural finance. (NACRDB has been restructured and its mandate expanded to include full financial intermediation.)

• Refurbish the eight functional silo complexes and phase completion of the remaining ones to improve and increase the capacity of the food reserve programme as a step towards achieving food security. These facilities would be leased to farmers on an individual or group basis.

• Promote joint venture, private sector-managed, multicommodity development and marketing companies to guarantee remunerative prices for farmers, stabilize consumer prices, and provide alternative markets for farm produce through a buyer-of-last-resort mechanism.

• Support all-season farming by promoting rain-fed and irrigated farming, with an emphasis on fadama agriculture.

• Implement the programme for the massive production of tree crop seedlings.

• Increase crop productivity through sound environmental rehabilitation and management.

The manufacturing sector has stagnated

Policy Thrust

The overriding objective of industrial policy is to accelerate the pace of industrial development by radically increasing value-added at every stage of the value chain. Under NEEDS, for the most part Nigeria’s resources will no longer be traded in their primary state. The government will emphasize increases in total factor productivity by pursuing knowledge- and skill-intensive production on the basis of best practices. Nigeria’s industrial development strategy will encourage forward and backward linkages in a few niches. The government will continue to provide the enabling environment for private sector leadership, facilitate renewal for sunset industries, and encourage innovators. Specific policy thrusts include the following:

• Establish a structured and efficient micro-, small, and medium-size enterprise sector to enhance sustainable economic development, generate employment, and create wealth.

• Facilitate the development of an industrial sector that is internationally competitive and can take advantage of existing preferential arrangements as well as give priority to the processing of Nigeria’s abundant resource endowments into intermediate raw materials or finished goods for local consumption and export.

• Develop science and engineering infrastructure—well-trained technical and managerial personnel, physical plants, tools, spare parts, materials, and other inputs needed to operate efficiently and profitably.

The objective of industrial policy is to increase value-added at every stage of the value chain

Targets and Strategies

Targets for the manufacturing sector include the following:

• Increase annual growth of the sector by at least 7 percent a year.

• Increase capacity utilization to about 70 percent by 2007.

• Increase the private sector’s share of investment in the sector to 70 percent by 2007.

To reverse the dwindling fortunes of the manufacturing sector, the government is committed to the following strategies:

• Remove infrastructure constraints on small and medium-size enterprises, and expedite action on establishing clusters and industrial parks. These critical ingredients for increasing the participation of the private sector will be targeted at growth poles.

• Provide appropriate institutional support, by undertaking studies aimed at attracting foreign investors and by scanning overseas markets and monitoring developments that could have implications for the sector. The Small and Medium Enterprise Development Agency of Nigeria will be provided with appropriate infrastructure and executive capacity. In collaboration with the relevant agencies at the state and local government levels, it will play the role of promoter, facilitator, and coordinator of all policies affecting small and medium-size enterprises.

• Strengthen the Bank of Industry and other special-purpose finance institutions (the Nigerian Export Import Bank, the Nigerian Agricultural, Rural, and Cooperative Bank) to perform their statutory roles (especially the provision of concessional loans and credit guarantee schemes) and enlarge their scope to include large manufacturing companies.

• Strengthen the legal and institutional framework for the operation of micro-finance institutions by streamlining the operational guidelines and tax incentives for small and medium-size enterprises and adopting other measures. Explicitly recognize the informal sector, remove constraints to implementation of the Small and Medium Enterprise Investment Equity Scheme (SMEIES), and design incentives targeted at investors who would specialize exclusively in exporting.

• Review and implement a codified tax and incentive structure reform (including providing for necessary tradeoffs) that supports an export-oriented manufacturing sector and encourages large businesses to foster the growth of small and medium-size enterprises in their value and supply chain.

• Provide targeted incentives (such as tax deductibility) for science, technology, and research and development spending.

• In collaboration with relevant agencies at the state and local government levels, coordinate and facilitate the implementation of an effective competitive industrialization strategy.

• Promote joint ventures and provide incentives to facilitate the flow of foreign direct investment in partnership with existing small and medium-size enterprises.

• Implement a government procurement policy that supports locally produced goods and services, especially of small and medium-size enterprises.

• Promote the production of good-quality goods and services in Nigeria to facilitate a competitive export-oriented manufacturing sector.

• Strengthen the Loan Guarantee Scheme, which will enable banks to make loans to small and medium-size enterprises.

The service sector has witnessed a boom in recent years

Information and Communication Technology

The following issues represent challenges to improving information and communication services:

• High cost of private provision of power

• Lack of local manufacture or maintenance of information and telecommunication equipment and the lack of local software development capacity

• Absence of effective and efficient postal communication

• Inadequate human capacity and indigenous technical know-how

Policy thrust. Under NEEDS the government is committed to the following policy thrusts:

• Develop and sustain a modern information and communication technology to support private sector-driven growth and economic development and to improve the quality of life and reduce the level of poverty significantly.

• Improve access to Internet connectivity, and raise the level of computer usage and literacy.

• Facilitate the development of a national multimedia supercorridor, including provision of appropriate incentives for private sector involvement.

• Aggressively promote information and communications technology as an instrument of mass education, growth, and development.

Targets and strategies. NEEDS sets the following targets:

• Increase telephone density to one telephone per 25 people.

• Make telecommunications accessible to a wider range of Nigerians, regardless of where they live.

• Develop a national communications and telecommunications backbone, including a national multimedia supercorridor.

NEEDS adopts the following strategies:

• Use a combination of fiscal and financial incentives to encourage private sector investment in service provision in the industry.

• Enforce intellectual property rights, and promote entrepreneurship, training, and partnerships.

• Pursue a local content policy in the manufacture of electrical and electronic equipment and communications and telecommunications equipment, including handsets, accessories, and components.

• Facilitate access to special financial support (through NEXIM, the Bank of Industry, SMEIES, and other institutions) for private sector-driven wireless telephony and Internet connectivity development in rural areas.

• Foster an enabling environment for developing software capacity.

• Provide incentives to develop industrial parks in information and communications technology.

Improvements in the service sector are expected to strengthen performance of the real sector

Tourism

Nigeria’s tourism industry has great potential for attracting foreign investment, which would generate employment and foreign exchange. The industry is constrained by several factors, however:

• Inadequate facilities at established tourist centers

• Low level of global awareness of tourist attractions in Nigeria

• Undeveloped tourist infrastructure

• Lack of security

• Low level of investment

• Poor attitude and disposition towards recreation and vacation by Nigerians

Target. The primary focus of NEEDS in the tourism sector is to make Nigeria the preferred tourist destination in West Africa. The key target in the immediate term is to increase tourist arrivals into the country by 10 percent a year.

Strategies. To achieve this target, the government will:

• Concession existing tourist attractions and provide support infrastructure for tourism.

• Encourage private sector investment in the tourism sector, and participation in the management of national parks.

• Improve security to encourage foreign tourists to visit Nigeria.

• Launch an awareness campaign within and outside the country on the benefits and potentials in the sector.

• Reorient visa officials to a pro-tourism approach.

• Establish a tourism database.

• Establish a private sector-oriented institute for hospitality and tourism, regulated by the government.

• Pursue an aggressive environment policy that supports and encourages the tourism industry.

The focus of NEEDS in the tourism sector is to make Nigeria the preferred tourist destination in West Africa

Film Industry

The Nigerian film industry has significant foreign exchange-earning capacity. Recent reports indicate that some 2,000 Nigerian videos were rented or sold in a single month in a single outlet in the United States. The potential market for Nigerian films is large, but the industry is held back by several constraints:

• Low level of technological input in the industry

• Uncertain intellectual and proprietary rights

• Underdeveloped distribution structure

• Lack of access to adequate financing

• Lack of professionalism and inadequate human capacity

• High rate of informality

Policy thrust. The government’s policy thrust is to facilitate the development of a technologically competitive, private sector-led film industry in Nigeria that will create employment, wealth, and net foreign exchange earnings.

Targets and strategies. NEEDS has established the following targets:

• Facilitate technological input into the production process.

• Foster development of a Nigerian version of Hollywood for film production.

• Encourage the local manufacture of film production inputs, and support services clusters.

• Generate $200 million in foreign exchange earnings by 2007 from the export of videos.

• Develop standards and provide incentives for private sector investment in the industry.

To achieve these targets, the government will:

• Strengthen the regulatory agency for the industry to facilitate healthy competition, upgrade quality, ensure appropriate controls, monitor standards, and promote standardization.

• Strengthen the capacity of regulatory and promotional agencies to promote the industry, enforce standards, and ensure compliance with copyrights laws. These agencies include the Ministry of Information and National Orientation, the National Film Corporation, the National Film Institute, the Nigeria Copyrights Commission, and the Nigeria Film and Video Censor’s Board.

• Encourage the development of a window of special funding for the industry through the banking industry.

• Design, develop, and implement a formal fast-track export scheme to bring export transactions into the formal sector.

• Provide incentives for further private sector investment in the sector.

Financial Services

Over the past decade and a half, the financial sector has experienced substantial fluctuations in fortunes. These developments have highlighted their strategic role in Nigeria’s development process. Apart from their importance in mobilizing and efficiently allocating resources, they also play a key role in pricing and trading risks and implementing monetary and fiscal policies.

The shift in emphasis to a private sector-led economy deepens the significance of the financial sector in Nigeria’s overall development. There is a strong case for ensuring the efficiency of the financial system and for dealing with the contradiction inherent in the fact that despite high profit levels the sector does not appear to be playing a catalytic role in the real sector. Other concerns include the following:

• The capital market remains shallow.

• The banking system is dependent on public sector funds as a significant source of deposits and foreign exchange trading.

• Some of the information submitted to the monetary authorities is not accurate.

• Fiscal and monetary policies are not harmonized.

• Bank loans and advances are not repaid promptly.

Policy thrust. To build and foster a competitive and healthy financial system to support development and to avoid systemic distress, the thrust of policy under NEEDS is to:

• Deepen the financial system in terms of asset volume and instrument diversity.

• Drastically reduce and ultimately eliminate the financing of government deficits by the banking system in order to free up resources for lending to the private sector.

• Review capitalization of financial institutions in the system.

• Develop a structure of incentives to enable the financial system to play a developmental role by financing the real sector of the economy.

The shift to a private sector-led economy deepens the significance of the financial sector

Strategies. Given that the success of NEEDS will depend, in part, on the ability of financial intermediaries to play their roles, the financial regulatory authorities and monetary policy framework will adopt the following strategies:

• Embark on a comprehensive reform process aimed at substantially improving the financial infrastructure (legal codes, information systems).

• Restructure, strengthen, and rationalize the regulatory and supervisory framework in the financial sector.

• Address low capitalization, the poor governance practices of financial intermediaries that submit inaccurate information to the regulatory authorities, and the consequent costs to the financial system.

• In collaboration with banks and other financial institutions, work out a structured financing plan that ensures less expensive and more accessible credit to the real sector.

• Direct government policy towards financial deepening (establishing links between rural and urban, banking and nonbanking, and formal and informal financial systems) and financial product diversification (filling the missing middle for commercial financial services for small and medium-size enterprises with new services based on best-practice technologies for cash flow financing, leasing, and so forth).

Policy Thrust

The government’s policy thrust is defined by the need to:

• Increase the level of crude oil reserves.

• Ensure regular supply and distribution of petroleum products through a liberalized and deregulated supply, distribution, and refining system.

• Increase the drive for investments to establish integrated petrochemicals based on gas stream, with a majority private sector interest.

• Increase local content, improving linkages to the rest of the economy.

• Sustain the focus on the terminal date for ending gas flaring.

• Hedge the national economy against volatility in the crude oil market and OPEC quota.

• Harness and exploit the country’s huge gas reserves to increase the use of gas in power generation and boost foreign exchange earnings from gas.

• Foster healthy, orderly, and competitive development of oil and gas subsectors through effective and efficient regulation, standards, and quality control agencies.

Targets and Strategies

NEEDS has established the following targets in the sector:

• Achieve an OPEC quota increase of 7–10 percent in 2004 and a reserve level of 40 billion barrels by 2007.

• Design and facilitate the implementation of a national gas grid by 2007.

• Completely deregulate and liberalize the downstream petroleum sector, including the distribution network.

• Unbundle the Nigerian National Petroleum Corporation (NNPC) and privatize its downstream subsidiaries, and enable the Nigerian petroleum Development Company and a professionalized NNPC to compete as other oil companies around the world do.

• Increase local content in the oil and gas service sector to at least 50 percent by 2007.

• Review and codify the incentives in the oil and gas industry

To achieve the targets, the government will adopt the following strategies:

• In collaboration with the private sector, ensure the effective implementation of a national oil and gas policy and a national gas grid system.

• Explore the use of alternative funding schemes in the sector. Set up long-term financing arrangements in support of local content.

• Develop a database in Nigeria on the country’s oil and gas deposits, facilities, and professionals.

• Review, streamline, and codify existing incentives in the sector.

• Facilitate projects that transfer technology and generate employment in the nonoil sector, especially the petrochemical industry.

• Complete deregulation of the downstream sector by privatizing the refineries, product haulage facilities, and distribution network.

• Improve security (against vandalism at facilities), and strengthen the Department of Petroleum Resources and the Ministry of Environment to allow them to perform their regulatory functions properly.

• Encourage transparency in the management of oil revenue by implementing the principles of the Extractive Industries Transparency Initiative.

• Facilitate private sector investment in the development of support industries that use petrochemical products as primary raw materials.

• Encourage oil companies to proactively work towards greater backward and forward integration with the domestic economy, especially in downstream activities, and partner with or involve local companies in joint ventures. Where capacity exists, reserve specific jobs for domestic value-adding industry, strengthening the domestic base of the sector. Make companies’ track records in promoting domestic value-added a consideration in determining the allocation of future oil and gas blocks.

• Implement the National Oil Spill Contingency Plan.

Independent estimates indicate that solid mineral deposits could provide more revenue and employment than the oil and gas sector

Policy Thrust

The goal of government policy in the sector is to provide incentives and an enabling environment for private sector investment. The major policy thrust is to ensure the vigorous and orderly exploitation of solid mineral resources in order to generate employment, increase revenues and exports, and provide inputs for local industries. The NEEDS action plan will vigorously support exploration for base metals and precious and semiprecious stones. Informal sector mining activities will be formalized and supported to encourage sustainable production and create self-employment.

Strategies and Specific Measures

The government will adopt the following strategies:

• Implement the existing legal framework for small and artisan operators in the sector.

• Complete the upgrading of the sector, empower the Geological Survey Agency to become the industry regulator, and provide a comprehensive database of the locations and estimated reserves of all known solid minerals in Nigeria that could be mined.

• Promote and ensure a systematic and orderly allocation of bitumen and tar sands blocks in the vast Nigerian bitumen belt, which stretches from Edo State to Lagos State.

• Compile a cadastral register of all available mining rights, licences, and leases of known minerals.

• Codify a system of incentives to attract private sector investment in the sector.

• Simplify the process of issuing licences.

• Review the Land Use Act to facilitate entry into the sector.

NEEDS outlines several specific measures for the sector:

• As an immediate first step, conduct a geological survey of the entire country in 2004, using remote sensing (Landsat/Radarsat). That survey will be complemented by aeromagnetic, electromagnetic, and radiometric surveys. The government will conduct ground-truthing surveys using the remote sensing results in the hope of attracting private investment. It will also immediately begin digitalizing existing maps.

• Establish licenced buying centers as the procurement interface between the mining cooperative and licenced miners on one side and local users and export markets on the other. Buying centers can ease the problems associated with marketing products and enable miners to earn premiums on sales of products near operational sites. The centers will also help the government reduce smuggling and collect revenues.

• Create extension services. Technical assistance and support services in prospecting and exploration will be provided to artisanal and small-scale miners in order to enhance and sustain their operations.

• Review current legislation through a consultative process with mining communities, ensuring that public interests (social, economic, and environmental) and community interests (cultural, social, economic) are considered.

• Inventory the number of miners, the environmental status, the market structure, licensing, and other features of artisanal small-scale mining in Nigeria.

• Promote mining cooperatives and associations of miners in order to simplify control and assistance (financial and technical) and guarantee the sustainability of mining, in active collaboration with community leaders and state and local governments.

• Promote the establishment of central processing units in order to enhance the value of the minerals.

• Promote environmental awareness and environmental rehabilitation of sites after mining.

• Promote training in environmentally acceptable mining and processing methods in order to improve skills and competence and reduce health risks of miners and their dependents.

• Develop basic infrastructure services in mining communities.

• Stimulate and enhance access to financial assistance for artisanal and small-scale miners.

• Promote transparency and participation at all levels of government and management of small-scale mining activity.

• Promote interaction and consultation between different agencies exploiting natural resources (land, forest, minerals).

• Establish and enforce environmental standards for mining activities.

Licenced buying centers can ease the problems associated with marketing solid minerals

Policy Thrust

The thrusts of the NEEDS trade policy include the following:

• Continue to work towards the macroeconomic convergence criteria as well as the harmonization of financial and economic policies that are expected to lead to monetary integration within ECOWAS.

• Strengthen infrastructure, particularly infrastructure that plays a key role in building regional markets (roads, electricity, telecommunications), and reinvigorate intra-African trade.

• Continue to cooperate with other West African countries in addressing common regional concerns, such as conflicts and wars, environmental threats, regional infrastructure, poverty and migration, and governance issues.

• Fully implement the New Partnership for African Development (NEPAD), especially as it pertains to the African peer review mechanism, the promotion of good governance, intra-African trade, investment, and infrastructure development.

Strategies

The government’s strategies include the following:

• Harmonize trade and investment codes as well as port and customs clearance procedures across West African countries in order to increase market integration within the subregion. The government will work with the ECOWAS Secretariat and other West African countries to ensure effective implementation of all protocols designed to advance economic integration of the subregion.

• Facilitate the establishment of a regional, private sector-driven stock exchange. Through ECOWAS, the government will encourage harmonization of the operations of the financial and payment systems within the region.

• Promote regional trade associations, such as the Federation of West African Manufacturers Association.

• Encourage the private sector to build refineries and distribute refined petroleum products in West Africa as part of the deregulation of the downstream sector.

• Promote the concept of regional security integration (as distinct from the regular peacekeeping force of the ECOWAS Monitoring Group) to provide security and facilitate business linkages.

• Continue to encourage the learning of a second language (French) by all Nigerians to enhance the integration of the people of West Africa.

• Stipulate minimum domestic value added for commodities and manufactures to be traded within ECOWAS under existing protocols, and strictly enforce the rules of origin clauses in intraregional trade.

Policy Thrust

The thrust of policy is to drastically reduce the uncertainty and unpredictability of the trade policy regime, harmonize trade practices with those of other ECOWAS countries (and thus facilitate the Free Trade Area within the region), respect Nigeria’s obligations under the multilateral and regional trading system, and create a conducive and competitive environment in which Nigerian businesses can flourish and compete in the global and regional economy. The goal of policy is to lay a solid foundation for fully exploiting Nigeria’s potential in international trade and helping it become the gateway to West and Central Africa.

The thrust of policy is to reduce the uncertainty and unpredictability of the trade policy regime

Strategy and Instruments

Nigeria’s strategy is to aggressively promote exports and gradually sequence import liberalization. NEEDS aims to promote an export-led growth strategy that will take advantage of globalization and the external trade opportunities that regional and international trade and economic integration arrangements offer. The strategy will encourage the growth of industries that have been hampered by narrow domestic market opportunities, promote technological innovation, and diversify foreign exchange earnings. The elimination of exemptions and adoption of a tariff structure that is harmonized with that of other ECOWAS countries will give investors and producers access to capital goods and raw materials at very low duty rates.

Selective import restrictions are used as safeguards against unfair trade practices and the dumping of counterfeit and substandard goods, as well as for health and cultural reasons. Some restrictions are warranted to provide temporary protection to firms and industries that need to restructure and upgrade their technologies and operations in the light of global trends or to allow the government to address the high cost of doing business (especially Nigeria’s high infrastructure costs). This strategy is expected to create jobs, stimulate domestic investment and industrialization, and earn significant foreign exchange. Through trade policy—a key component of the strategy for economic diversification—nonoil exports are expected to increase significantly over time, and dependence on imported finished consumer goods (especially food products) is expected to decline significantly.

The key instruments and strategies employed to achieve the objectives of policy include the following:

• Drastically reduce the domestic cost structure—especially infrastructure costs—to provide a competitive investment climate as a necessary foundation for production and exporting.

• Aggressively promote exports and economic diplomacy. It is the responsibility of all Nigerians, the private sector, and government agencies and missions abroad to promote Nigeria’s commercial interests abroad.

• Harmonize tariffs with the Economic and Monetary Union of West Africa (UEMOA) and other countries to create a common ECOWAS external tariff. The common tariff is expected to come into effect no later than 2005. Already the government, in consultation with stakeholders, has decided to harmonize Nigeria’s tariffs with tariffs imposed in UEMOA countries. When the new tariff book comes into effect (after legislation is passed by the National Assembly), Nigeria will have reduced the number of tariff bands from 19 to 4 (0, 5, 10, and 20 percent). About 65 percent of Nigeria’s total imports (capital goods, raw materials, and essential goods, such as medicine and books) are subject to duties of 0–10 percent; before the reform, 83 percent of Nigeria’s tariff lines were higher than the UEMOA rates. By harmonizing with the UEMOA rates, Nigeria’s average tariff rate is expected to decline more than 50 percent.

• Continue to use special levies and import restrictions in particular circumstances to protect domestic industries and critical sectors against unfair competition; to protect the health, culture, and environment of Nigerians; and to ensure food security. Import restrictions also give the government time to address the domestic cost structure. But for the high cost structure in Nigeria, domestic firms could be competitive in some industries in which Nigeria has a comparative advantage. The temporary protection will be reduced in step-wise manner as costs are reduced, in order to expose the firms to international competition, thereby encouraging innovation and growth.

• Rationalize and strengthen institutions responsible for promoting and facilitating trade. Task forces will ensure that Nigeria fully harnesses the potential benefits of concessionary trade arrangements, such as the U.S. Africa Growth and Opportunity Act and the EU Cotonou Agreement.

• Cooperate and collaborate with other African and developing countries to ensure that the WTO trade negotiations address the concerns and interests of Nigeria and Africa. Provide leadership in the negotiation of the Economic Partnership Agreement with Europe, as required under the Cotonou Agreement, to ensure that it promotes rapid economic development in Nigeria and West Africa.

• Continue to actively strengthen links with Nigerians and other Africans in the diaspora to deepen technical and business ties with the rest of the world, and improve export market penetration, especially in textiles, food, and cultural artifacts.

• Reform customs and ports to drastically reduce turnaround time in the ports. Reduce transactions costs at the ports, enhance prompt and effective collection of government revenues, and ensure customs clearance within 48 hours.

• Develop a deep-sea port, inland container depots, free trade zones, and a shipbuilding facility to enhance coastal shipping, international trade, and regional integration. Nigeria is well positioned geographically to serve as a major hub for regional trade and distribution network in a rapidly expanding global market. To take advantage of these opportunities, the private sector will be encouraged to develop new and creative production arrangements with foreign partners, develop entrepreneurial skills, and significantly increase local capacity in shipbuilding and maritime services.

Nigeria’s strategy is to aggressively promote exports and gradually sequence import liberalization

Enforcing Anticorruption Laws

To enforce existing anticorruption laws, the government established the Independent Corrupt Practices and Other Related Crimes Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC). The leadership of the commissions has demonstrated strong commitment to tackling financial crime, money laundering, and other economic misconduct that has created difficulties for Nigeria with the OECD Financial Action Task Force. In view of the pervasiveness of corruption in Nigeria, early in the NEEDS period the government will set up task forces to help formal institutions attack selected aspects of the problem, including corrupt practices in schools and sales outlets, money laundering, and corruption at the local level.

The work of the ICPC and EFCC is fully complemented by ongoing reforms of justice administration and the police. These efforts include an anticorruption campaign, recruitment and training of personnel, provision of equipment, increased wages and allowances, and general improvement in conditions of service.

Progress has been made in introducing competition into the process of bidding for government contracts

Reforming and Strengthening Public Procurement

Historically, the award of contracts in Nigeria has been perceived as lacking transparency. Inflated contract costs and processes that were closed, discretionary, and well-designed conduits for abuse of public power were systemic.

The administration recognized that a piecemeal approach to remedying the process of competition for government contracts would be too incremental and not sufficiently farreaching. It therefore set up the Budget Monitoring and Price Intelligence Unit, which began a process of contract award review, oversight, and certification, commonly referred to as “due process.” This simple mechanism certifies for public funding only projects that have passed the test of proper project implementation packaging. Through certification, value for money is returning as the fundamental premise for public expenditure.

In the two years since implementation of the due process mechanism, progress has been made in introducing competition into the process of bidding for federal government contracts. By reviewing contracts, the Budget Monitoring and Price Intelligence Unit has saved the government huge sums, estimated at hundreds of millions of dollars. Several contracts awarded by spending units that failed to comply with open, competitive bid parameters have also been cancelled.

While the government has expressed concerns about the timeframe for contract review, oversight, and certification, the success of the due process mechanism has strengthened the government’s resolve to create a Public Procurement Commission with a broader mandate of oversight over all federal procurements. The executive recently withdrew a bill for the establishment of the commission from the National Assembly for comprehensive review through broader stakeholders’ consultation. The revised bill should be approved by the Federal Executive Council and resubmitted to the National Assembly by the end of June 2004.

Reforming the Bureaucracy

The government has begun implementing a range of administrative reforms that reduce the incentive for corrupt behaviour through strategies such as monetizing benefits (cars, housing, utilities, domestic assistance, drivers); redefining and redesigning processes to reduce delays; rotating officers; and increasing supervision. Reducing the size of the bureaucracy will free up resources, which will be directed towards reducing incentives for corruption by giving civil servants higher wages, bonuses, and more favourable working conditions.

Increasing Information and Transparency

A committee has been set up to implement the Extractive Industry Transparency Initiative. The privatization and liberalization of key economic sectors has been a deliberate action to entrench transparency and accountability and to build consensus in support of reforms.

The administration has also embarked on a number of initiatives designed to complement its anticorruption drive. Its emphasis on efficiency, civil service reform, and service delivery and the campaigns for quality leadership at the local level, democratization of political parties, empowerment of civil society, and the transformation of institutions have unleashed new enthusiasm for building accountability throughout Nigeria. The local government reform initiated by the government is designed to check waste, disorganization, inefficiency, and corruption.

Successfully weaning some sections of the private sector from the old guarantees of profit through distortions in public sector operations and policies is a Herculean task. In the short to medium term, it will result in social dislocations, but these dislocations are the price that may have to be paid to create a more durable, productive, and sustainable system.

Other reforms involve properly redefining and streamlining the role or form of planning, bringing the capital and recurrent budgets together in a manner consistent with the plan. The strengthened Budget Office will collaborate effectively with the National Planning Commission and the Ministry of Finance to ensure proper synergy between capital programmes and recurrent expenditures.

The administration will encourage private sector and civil society checks on the exercise of government power by providing information about government actions. It will publish budgets, records of revenue collection, statutes, and rules and encourage the Nigerian National Petroleum Corporation (NNPC) and the oil companies to fully disclose their revenues and cost of operation. Both the Offices of the Accountant General of the Federation and Auditor General of the Federation will be strengthened to perform their statutory functions as effectively as possible to improve transparency and reduce corruption.

The administration will encourage private sector and civil society checks on the exercise of government power

Increasing Transparency in Privatization and Market Liberalization Processes

Privatization and liberalization of key economic sectors have been deliberate and timely, seeking to entrench transparency and accountability and build consensus in support of reforms. The sale of government-held equity stakes in cement, petroleum marketing, and banking companies in 2000 and 2001 was by open, competitive bidding—the first time this level of transparency has been displayed in Nigeria in recent history.

The televised auction of digital mobile licences, carried out with the technical assistance and support of British consultants in 2001, was hailed as one of the most transparent licence auctions in the world. Since 2001 the second and third phases of the privatization and market liberalization programme have been implemented with the same degree of transparency. All advisory services being procured and assets and shares being sold have been advertised, and the auctions for all divestiture transactions have been broadcast live on national television.

Improving Economic Coordination and Implementing Institutional Reforms

NEEDS will provide a strong economic coordination platform for federal, state, and local government programmes. The budget process at all levels and tiers of government will be strengthened and made more transparent and cohesive. Efforts will be made to establish an annual budget framework and guidelines that will be followed by all tiers of government.

The televised auction of digital mobile licences in 2001 was hailed as one of the most transparent in the world

A Fiscal Responsibility Bill will be enacted into law early on as an essential component of the reform programme. The Peer Review Mechanism to be established under the strategy will enable heads of government agencies to exchange views on how well counterparts are performing and who is violating the agreed principles and guidelines. These principles and guidelines will encourage the government and its agencies to adopt a balanced budget stabilization strategy to encourage “saving for a rainy day,” generate revenue internally, implement agreed upon priority programmes, impose budget discipline, reduce the incidence of arbitrariness in the selection of projects and use of public funds, and apply cost-effective methods in implementing projects. The codified guidelines will be discussed with all levels and tiers of government and democratically agreed on. The Joint Planning Board, the Joint Tax Board, and the National Economic Council will work to achieve a more effective and cohesive economic management system.

At the federal level, ongoing studies to rationalize institutions to streamline and strengthen economic coordination will be completed early in 2004. The roles of various arms of the Presidency, the National Planning Commission, the Ministry of Finance, and other institutions will be redefined to promote harmony and establish an effective framework for economic coordination.

The role of the legislature in the budget process will be addressed to reduce or eliminate conflicts and delays in enacting appropriation bills into law. Release of the annual budget should become more timely under NEEDS.

Regular press releases and special reports will be published and widely disseminated to keep stakeholders abreast of the performance of the budget. Room for discretionary application of funds will be discouraged; only the process of virement will be permitted under appropriate circumstance.

Redefining the Role of Government: Promoting Public-Private Partnerships

The large size of the government has been a barrier to growth in Nigeria. Not only has it promoted inefficient use of resources, it has also distorted market signals and stifled private investment through its impact on inflation, interest rates, the exchange rate, and the pattern of credit expansion. Right-sizing government, reducing budget deficits, and properly structuring the entry of all governments (especially the federal and state governments) into the capital market will enhance macroeconomic stability and stimulate private investment.

The government has begun to withdraw from the dominant role it played in the economy, by privatizing, liberalizing, and deregulating. That process will be accelerated under NEEDS. The government will withdraw from direct production of goods, except in the oil and gas sectors. Service provision will be in the key areas of education, health, water supply, science and technology, and capacity building. The public and private sectors, the donor community, and users will share responsibility for infrastructural services. The adoption of build-operate-transfer, build-own-operate-transfer, rehabilitate-operate-transfer, and other innovative schemes to attract private capital will be intensified in power generation and distribution, roads, railways, water supply, ports, prison infrastructure, the courts, and other areas. The administration has already started the process in the power sector (in Sapele and Afam) and the Niger Bridge. More concerted efforts will be made in this direction.

The role of government will become that of a facilitator providing the enabling environment for the private sector to invest and operate in a free market system. For the government to play this role effectively, a significant paradigm shift is needed in the public service, from the old orientation of control and checkmating, risk avoidance, personalizing of governance, patronage, and so forth to the new orientation of efficient and timely delivery of services. The service delivery framework and guidelines will be set up by 2004/05, with implementation commencing immediately thereafter. Efforts will be made to streamline role definition of different agencies and tiers of government to avoid duplication of efforts. E-governance and subscription to International Standards Organization (ISO) standards will be pursued as part of the reform. A productive partnership must be forged between the public and private sector, with the public sector facilitating and the private sector committing to playing by the rules and delivering good-quality and competitively priced goods and services. Less bureaucracy, less paper work, and fewer hurdles will open the way to increased private investment.

Improving Regulation

The free enterprise, market-driven, private sector-led growth strategy does not imply the absence of regulation. Regulation will, however, be aimed at enhancing competition, breaking up monopolies, improving the functioning of the market, protecting weak and vulnerable groups, and stimulating industries and activities in which Nigeria has a medium- to long-term comparative advantage. NEEDS will attempt to explore these areas under special incentive schemes and measures that will not jeopardize investment flows. The economy will brace for globalization armed with the appropriate tools and responses. The competition law will be enacted in 2004, supported by antitrust and consumer protection laws.

The government has begun to withdraw from its dominant role in the economy by privatizing, liberalizing, and deregulating

Improving Service Delivery

Increasing the efficiency of service delivery will form a major thrust of the efforts to reposition government to better serve the people of Nigeria. A service delivery charter will be developed, the monitoring of inputs and outputs and processes of government agencies will be increased, and regular bulletins and publications will be provided to inform the public on the activities and benchmarks of each government agency.

Efforts will be increased to refocus government policies and programmes on improving the provision of basic social services and supporting the sources of growth in the economy, such as agriculture, small and medium-size enterprises, oil and gas, solid minerals, and manufacturing. They will also seek to improve debt management and develop proposals for debt relief and debt reduction.

These reforms will be accompanied by a modest rudimentary programme of measurement and monitoring of inputs, outputs, processes, and outcomes. The idea is to make policymakers, ministers, and programme managers more aware of the need for accountability for resources used and results obtained. The government will also need to create a consensus building and communications programme that reaches out to the legislature and to the grassroots to explain the rationale for the reforms, get inputs, and keep stakeholders abreast of progress.

As part of a policy to improve service quality, every government agency will be encouraged to implement a service delivery charter that includes checklists, processing deadlines, and other benchmarks for delivery of public services. The charter will mainstream service delivery at the national, state, and local government levels.

Monetization of benefits should encourage public servants to make responsible decisions about the use of their resources

Monetizing Fringe Benefits in the Federal Public Service

Over the years the cost of governance has continued to rise, partly because of the in-kind benefits the government provides public servants. These benefits, largely a carryover from the colonial era, include highly subsidized accommodation, transport facilities, chauffeur-driven vehicles (for the senior echelon of the service), free medical services, and highly subsidized electricity, water, and telephone services. The cost of providing these amenities has become so large that little is left for funding capital projects. The problem is compounded by the fact that these benefits are not provided in the most cost-effective manner.

To check the spiraling cost of providing these benefits, the federal government monetized fringe benefits for all categories of public servants. The new policy is designed to stem the ever-rising annual outlay on benefits.

These benefits did not help public servants prepare adequately for life after retirement. On the contrary, for many of them it created a dependency syndrome that was ill suited to postretirement life. Monetization of benefits will help prepare public servants for life after retirement and prevent them from suffering a sharp drop in their standard of living. It should also encourage public servants to make responsible decisions about the use of their resources. The policy is likely to affect the real estate market in the larger cities, especially Abuja, the seat of the federal government, where the rent on leased properties is expected to fall once the government stops leasing houses for its workers. In addition, the government will release a number of publicly owned houses into the market, putting a downward pressure on housing prices, if not in the short term, at least in the medium to long term.

The monetization policy was given legal teeth with the passage and coming into effect of the Certain Political, Public and Judicial Office Holders Act, 2002, which was extended by circular to cover all federal civil servants. The law took effect July 1, 2003, and was extended, with somewhat modified rates of benefits, to federal civil servants October 1, 2003. The monetized fringe benefits and allowances for federal civil servants are shown in table 8.1.

Table 8.1

Monetized Fringe Benefits for Federal Civil Servants

^a.Vehicle loans are provided by banks at a single-digit interest rate, subject to repayment capability, in accordance with financial regulations.

Table 8.1

Monetized Fringe Benefits for Federal Civil Servants

Benefit	Pay grade level	Amount
Accommodation subsidy	01–06	50 percent
	07–14	60 percent
	15 and above	75 percent
Transport subsidy	01–17	25 percent
Meal subsidy	01–06	N=6,000
	07–10	N=8,400
	12–14	N=9,600
	15–17	N=10,800
	Permanent Secretary and above	N=16,200
Utility subsidy	01–16	15=percent
	17 and above	20 percent
Domestic servant	15	1 GL 3 Step 8
	16–17	2 GL 3 Step 8
	Permanent Secretary and above	3 GL 3 Step 8
Leave grant	01 and above	10 percent
Medical care	01 and above	10 percent (to be paid to National
		Health Insurance Scheme)
Furniture allowance	01–06	0
	07 and above	40 percent for 5 years
Vehicle loana	01–05	100 percent
	06–07	150 percent
	08 and above	200 percent
Driver	17 and above	1 GL 3 Step 8

^a.Vehicle loans are provided by banks at a single-digit interest rate, subject to repayment capability, in accordance with financial regulations.

View Table

Table 8.1

Monetized Fringe Benefits for Federal Civil Servants

Benefit	Pay grade level	Amount
Accommodation subsidy	01–06	50 percent
	07–14	60 percent
	15 and above	75 percent
Transport subsidy	01–17	25 percent
Meal subsidy	01–06	N=6,000
	07–10	N=8,400
	12–14	N=9,600
	15–17	N=10,800
	Permanent Secretary and above	N=16,200
Utility subsidy	01–16	15=percent
	17 and above	20 percent
Domestic servant	15	1 GL 3 Step 8
	16–17	2 GL 3 Step 8
	Permanent Secretary and above	3 GL 3 Step 8
Leave grant	01 and above	10 percent
Medical care	01 and above	10 percent (to be paid to National
		Health Insurance Scheme)
Furniture allowance	01–06	0
	07 and above	40 percent for 5 years
Vehicle loana	01–05	100 percent
	06–07	150 percent
	08 and above	200 percent
Driver	17 and above	1 GL 3 Step 8

^a.Vehicle loans are provided by banks at a single-digit interest rate, subject to repayment capability, in accordance with financial regulations.

Increasing the Effectiveness of the Police

The number of police in Nigeria tripled between 1999 and 2003, rising from 110,000 to about 310,000. The challenge now is to make the police effective. To enable the police to meet the challenges of modern policing and crowd control and to eliminate corruption, NEEDS will build capacity by training police personnel, pursue a paradigm shift in the orientation of the police force, and better equip the force to improve its image and its responsiveness to distress calls and to adopt a more proactive approach to crime prevention and detection. Specific policies include the following:

• Change the orientation of the police to improve the quality of service.

• Increase the use of scientific methods in policing (forensic science, lie detectors, psychologists, computerization of vital information) to enhance the quality of evidence and investigation.

• Introduce appropriate equipment (such as custom-built vehicles suitable for sandy or marshy areas) and develop an exclusive communication system to improve police effectiveness.

• Build capacity, train, and retrain the police, and involve communities in policing.

• Use lethal weapons less often to control crowds.

• Pay all entitlements, especially call and duty allowances, in a timely manner.

The police will be properly trained and equipped to enhance their effectiveness in combating crime. In hiring new police officers, attention will be paid to applicants’ educational qualifications and capacity for training and retraining. Particular attention will be paid to attracting more personnel with higher national diplomas and university degrees. GSM telephony, sophisticated equipment, and improved vehicles should improve police performance. The overall goal is to effect a paradigm shift towards friendly, fairer, and firmer interactions between police and the public and to create a police force of dedicated people who shun corruption.

Reforming the Nation’s Prisons

The prison system faces great challenges, including the following:

• Congestion and a high proportion of inmates awaiting trial

• Decaying infrastructure

• The burden of imprisonment on prisoners and their families (disease exposure, social ostracism, loss of means of livelihood)

• The cost to society of keeping a large number of people in jail

• The poor quality of prison personnel

The prison system will be reformed to emphasize rehabilitation rather than punishment. The number of inmates per square metre will be reduced. A parole system and system of house arrest will be introduced for offenders who show remorse and display good conduct.

In collaboration with relevant agencies and other stakeholders, the federal government will work to reduce overcrowding in prisons. As an immediate step, the government is committed to taking the following steps:

• Expose and deal with the root causes of the problem, such as missing case files, lack of sureties, abuse of escort due process, lack of functional escort vehicles, and so forth.

• Strengthen the capacity of the Legal Aid Council to provide legal services to the poor.

• Encourage and recognize private practitioners involved in pro bono work. Attorneys wishing to qualify as Senior Advocates of Nigeria may be required to show evidence of having rendered free legal service to poor people.

• Encourage NGOs and other groups working on prison reforms.

• Conduct an up-to-date audit and develop a database on inmates awaiting trial in all prisons.

The welfare of inmates will be improved by providing better medical care, meals, and access to athletic activities. Prisoners will be given greater access to training and skill acquisition opportunities and encouraged to engage in productive activities, such as agriculture, arts and crafts, and small-scale industries to enable them to run small businesses on discharge. Such activities should also assist in providing food and clothing to inmates. Prisoners with appropriate skills acquired under the skill acquisition scheme will be considered for access to cheap credit (microcredit schemes) for starting their own businesses upon release from prison.

Prison wardens will be trained, equipped, and oriented to handle prisoners evenhandedly. The private sector will be encouraged to build prison infrastructure for lease to the government. Voluntary organizations and religious institutions will also be given the opportunity to provide assistance to prisoners and improve their living environment.

Improving the Judicial System

Justice is the ligament that holds civilized society together. Any threat to the administration of justice is a threat to the corporate existence of the society. The essence of democracy is justice. Every democracy ought therefore to strive to provide access to justice for all and protect the rights of the citizenry. The destiny of the country lies in making the system of justice work smoothly and efficiently.

Justice is the ligament that holds civilized society together

The congestion in Nigeria’s prisons is due partly to the judicial system, which is characterized by an enormous load of pending cases, frequent adjournments, ineffective dispensation of justice, and in some instances pure perversion of justice. An unjust judicial system cannot instil confidence, and it often promotes self-defence, aggressiveness, and abandonment of the rule of law. NEEDS provides for the strengthening of the judicial process.

Partnering with the private sector. The government will initiate a sustained dialogue with the private sector on designing and implementing reform measures. A Law and Economy Group will be set up to articulate necessary reforms in the commercial laws, with a view to promoting economic development. A key component will be creating a legal environment that is conducive to the inflow of capital, that encourages competition, and that improves the level of trust and confidence.

Increasing access to justice. As a democratic country, Nigeria has a duty to ensure that all people, rich or poor, can easily use the institutions and processes of law to resolve their disputes. This requires that people be able to use the law and the courts with or without the intervention of lawyers for simple matters. Efforts will be made to simplify proceedings and the law itself and to encourage the use of alternative dispute resolution mechanisms that are closer to the African method of resolving disputes. To widen access to justice, NEEDS will encourage the provision of greater state and privately funded legal assistance to the poor.

One of the dividends of democracy in the past four years has been the prevailing atmosphere of freedom

The rules and procedures of Nigeria’s civil courts will be reviewed to:

• Lower the cost of litigation and broaden access to justice.

• Reduce delays so that cases can be decided speedily.

• Ensure that litigants have an equal opportunity, regardless of their resources, to defend their legal rights.

• Make the legal system understandable to those who use it.

Creating a more effective criminal justice system. During the NEEDS period, vigorous efforts will be made to improve the efficiency of criminal justice administration. Part of this process will be the elimination of excessive delays in disposing of criminal cases. The government will explore the possibility of stipulating a reasonable duration as well as processes and procedures for hearing and determining criminal cases. The review will also consider options for empowering judicial officers to curtail irrelevant or unduly protracted cross-examination and testimony and amending the rights to interlocutory appeal in criminal matters. The judiciary is already getting rid of corrupt or ineffective officers. Also important is the commitment to train and upgrade judicial support staff, equip judicial libraries, and introduce computers for storing and retrieving data and writing judgments. Attention will be given to upgrading the infrastructure of the court system.

Promoting and Protecting Human Rights

One of the dividends of democracy in the past four years has been the prevailing atmosphere of freedom. Human rights, especially civil and political rights guaranteed by the Nigerian Constitution, have been accorded due respect.

The broad pursuit of human rights has become one of the hallmarks of modern democracies. The National Action Plan on Human Rights is the government’s response to the violations of human rights that characterized the military regimes of the past. The Ministry of Justice will soon formally present to the President the National Action Plan on Human Rights, so that agencies can begin implementing it. The ministry is also seeking amendments to the constitutive instrument of the National Human Rights Commission. Those amendments will enhance the work of the commission while strengthening its capacity to play its envisaged role in implementing the National Action Plan on Human Rights.

Ensuring fairness in dealing with citizens and other residents will boost the confidence of investors and contractual partners. The principle of the sanctity of contracts will continue to be upheld and enforced. A juvenile justice system in line with the provision of the Child Rights Act of 2003 will be instituted. The judiciary will constantly be reviewed to eliminate corrupt personnel and reward uprightness, efficiency, fairness, and the impartial delivery of justice. The courts will be better equipped with needed personnel and equipment to enable them to function effectively. The use of arbitration and other alternative dispute resolution mechanisms will be encouraged and strengthened to provide speedy resolution of disputes. A strategy for computerizing court processes and proceedings will be adopted.

Pending cases will be reviewed regularly, so that prisoners do not serve time in excess of that to which they would have been sentenced had their cases been heard expeditiously. Abuse of the court process, including the unwarranted adjournment of cases, will not be condoned. The rule on offences for which bail can be posted will be rigorously applied. Innovative processes and mechanisms for dispute resolution will be developed or strengthened by establishing small claims courts and mobile courts for traffic offences and by expanding the multidoor court system. The number of commercial courts will be increased, and civil society will be encouraged to set up mechanisms for counseling and the peaceful resolution of disputes, in an effort to create a more harmonious society. State and local governments will be encouraged to facilitate the process and establish such mechanisms. Access to justice will be widened by increasing state-funded legal assistance to the poor and involving nonstate legal aid providers.

Increasing Women’s Rights

The Women Affairs Ministry will identify and review substantive and procedural laws that affect women, with input from the Ministry of Labour and Productivity and other ministries that work in areas in which women have traditionally been neglected. Relevant committees of the National Assembly and civil society groups and organizations will also participate in the discussions.

Access to justice will be widened by increasing state-funded legal assistance to the poor and involving nonstate legal aid providers

Ensuring the Rights of People Living with HIV/AIDS

In line with the recently launched national policy on HIV/AIDS, the Ministry of Justice will produce a clear statement on the rights of people with HIV/AIDS. The ministry will work with the relevant agencies to create awareness among lawyers and judges about the appropriate legal responses to HIV/AIDS-related issues. Ministries charged with enforcing and protecting the rights of Nigeria’s citizens (such as the Ministry of Labour and Productivity, which has responsibility for protecting the rights of people in the workplace) will be strengthened.

Matching Grants Scheme

An ad hoc committee will be set up to take a census of federal government projects in the states and determine which can be passed on to communities, local governments, or states or sold outright. This committee will also identify the areas for direct intervention by the federal government and areas for facilitation or coordination and application of matching grants. Coordination among the tiers of government is important to avoid duplication and waste in the delivery of services. Given that most social services are included in the concurrent list of the Constitution, it is important for the federal government to coordinate with state and local governments to determine the scope and limitations of federal interventions.

The system of execution of programmes at the federal, state, and local governments in areas of concurrent jurisdiction is duplicative, inefficient, and wasteful. Programmes on potable water supply, primary health, primary education, and agriculture are replete with duplication. NEEDS seeks to drastically reduce duplication and waste. One possible way to do so is through a matching grants scheme. Under such a scheme, the federal government would provide matching grants to states and local governments for projects and programmes that are national priorities but whose implementation is best handled at the state or local level. In 2004 a committee will work out the modalities and incentive structure for implementing the scheme as well as the projects and programmes for which the scheme will be applicable. The scheme will be based partly on need and partly on performance by state and local governments.

To enhance synergy, harmonization, and complementarity, NEEDS enhances coordination, based on a recognition that a developing country such as Nigeria requires more active coordination than industrial economies do. The goal is to design strategies, policy guidelines, and programmes that avoid duplication of effort and waste of scarce resources.

NEEDS envisions new forms of coordination and partnership

The Fiscal Responsibility Pact will be enacted into law early in the life of NEEDS as an essential component of the reform. The pact will provide the legal basis for coordinated fiscal behavior of all three tiers of government, promote greater transparency and accountability, ensure predictability and sustainability of public finance, and ensure that national fiscal behavior is consistent with Nigeria’s macroeconomic objectives.

Peer Review Mechanism and Public-Private Partnerships

A peer review mechanism is a key element of the implementation process. The mechanism will be used at all levels of implementation—within ministries and agencies; among ministries and agencies at the federal and state levels; at the federal, state, and local government levels; between the public sector on the one hand and the private sector and civil society organizations on the other; and within the framework of aid coordination. The Independent Monitoring Committee (together with the NEEDS Secretariat, the Economic Management Team, and the Service Delivery Unit) will work out details and modalities for periodic peer review meetings at the federal level.

Ministers and implementing agencies will report on progress, innovations, and challenges at regular internal reviews. These reviews will provide opportunities for sharing experiences on implementation, learning, and group brainstorming on solutions to implementation problems. Public reviews will involve ministries and implementing agencies appearing in front of the private sector and civil society, the press, and other stakeholders to account for their sources and uses of funds, innovations introduced, results achieved, and challenges ahead. The mechanism allows the people to hold individual implementing officers and agencies accountable, thereby promoting effective service delivery.

Ministers and implementing agencies will report on progress, innovations, and challenges at regular internal reviews

It is proposed that a peer review meeting/public-private partnership summit be held at least once a year, to bring together federal, state, and local governments to account to the Nigerian people. The meeting would be organized in partnership with the private sector, academia, nongovernmental organizations (NGOs) and civil society organizations, the international community, and other stakeholders in the Nigerian economy. In addition to the federal government, state governors would be offered the opportunity to address all Nigerians on prime time television and radio about the most innovative approaches they are adopting to reduce poverty, create wealth, and generate employment. The private sector and civil society groups would also be offered the opportunity to discuss their contributions to the economy and the challenges they face. The international community, including donor agencies, would have the opportunity to address the public on their activities in Nigeria. The goal is to provide at least one national forum for evaluating performance, sharing experiences, and learning, and providing feedback from stakeholders.

States are also encouraged to undertake periodic peer reviews of their SEEDS, in collaboration with relevant stakeholders. The National Council on Development Planning and the Joint Planning Board agreed to set up a joint monitoring committee to evaluate implementation of SEEDS. In addition to representatives of government agencies, the joint monitoring team would include representatives of the private sector, NGOs and civil society, and the international community. Guides and benchmarks for the joint monitoring exercise will be developed. Part of the donor coordination effort in Nigeria would entail the alignment of donor assistance with SEEDS. Selection of a state for donor assistance would depend on the coherence of its SEEDS, its implementation record, and the basic needs of the state. States that are in need and have demonstrated capacity to provide value-for-money would be given priority.

At the local government level, planning and public accountability mechanisms should be institutionalized. State governments are expected to work with local government councils to develop medium-term plans. Such plans should be prepared with the participation of all relevant stakeholders. Periodically (say, every quarter) the local council should convene town hall meetings of all relevant stakeholders—traditional rulers, community heads, ward councilors, and representatives of the private sector, labour, NGOs, and civil society—to discuss the sources and uses of funds, results achieved, challenges, and a road map for the future. Town meetings should help promote good governance, transparency, and accountability at the local government level and greatly improve service delivery and poverty reduction.

NEEDS intends to mainstream public-private partnership at all levels of government. Sectoral ministries are encouraged to continuously interact with private sector associations, NGOs, and civil society organizations. Partnership between the public and private sectors is critical for effective implementation of NEEDS. Government agencies are encouraged to maintain an open door policy with regard to ideas and suggestions from the private sector. The formal organs for coordinating plan implementation, especially the National Council on Development Planning and the Joint Planning Board, will have private sector representation.

Donor coordination is an important element of implementing NEEDS. Without effective donor coordination, resources are wasted through duplication of effort. An ongoing effort at the National Planning Commission to articulate a strategic framework for borrowing policy and donor coordination will be completed in 2004, in collaboration with the Ministry of Finance. The goal is to move away from the current system of uncoordinated (largely project based) assistance towards a coordinated system aligned to national priorities, sector-wide approaches, and budget support.

Restructuring the National Statistical System

NEEDS recognizes that Nigeria’s national statistical system is weak. The current system, managed by the Federal Office of Statistics, is governed by the 1957 Statistics Act, which is obsolete. Of about 4,700 staff of the Federal Office of Statistics, only 5 percent belong to the professional cadre. In the 57 years of its existence, the office has never had a building of its own, and it has been grossly underfunded. The consequence has been a largely ineffective institution.

Timely and reliable statistics are critical to effective planning, monitoring, and evaluation of performance. Consequently, the government considers the restructuring and strengthening of the statistical system a very important priority. With the help of international and national consultants, a new master plan (with a new draft statistics bill) was produced. Stakeholders were consulted and the final master plan was approved for implementation. The government has already sent a strong signal regarding its seriousness about reform by purchasing a new building for the Federal Office of Statistics. Development partners are providing assistance to ensure state-of-the-art furnishing and equipment of the building, as well as institutional capacity building. The government has also significantly increased the budgetary allocation to the Federal Office of Statistics to enable it to collect timely statistics. Effective implementation of the master plan will ensure timely, robust, and reliable statistics.

The quality of services delivered by ministries and government agencies will be monitored

Monitoring Service Delivery

The quality of services delivered by ministries and government agencies will be monitored. Heads of ministries, agencies, and public enterprises will monitor that all correspondence is dealt with within 72 hours. All ministries and state enterprises will subscribe to ISO standards. The Service Delivery Unit will monitor and report on progress in this area.

A complaints point will be established in each ministry and state enterprise as well as the Planning Commission, where citizens who receive poor service or are rudely treated in government offices will be able to register their complaints. Services covered include investment-promotion activities, data and information dissemination (other than personal or security information), and services delivered by health, telecommunications, police, prisons, ports, customs, immigration, and other institutions that deal with the public. The monitoring by the Service Delivery Unit will be done in collaboration with the relevant supervisory authorities and the Public Complaints Commission. Over time governance will be depersonalized as much as possible, so that the bulk of communication will be through the Internet rather than by mail or by queuing up at government offices. E-governance is the ultimate goal.

NEEDS targets minimum annual GDP growth rates of 5 percent in 2004, 6 percent in 2005 and 2006, and 7 percent in 2007

The Role of the National Assembly

The National Assembly is expected to be critical to implementing NEEDS. In addition to contributing to the content of NEEDS, members of the National Assembly will play three key roles:

• Enacting the relevant laws needed to implement NEEDS and ensuring that budgetary appropriations are consistent with the thrusts of NEEDS

• Overseeing the relevant agencies to ensure that NEEDS is implemented

• Educating the people about NEEDS and mobilizing their support

Laws that inhibit free enterprise need to be reviewed and changed, and new legislation needs to be enacted. Table 11.1 gives examples of some of the bills that are urgently needed to jump-start implementation of NEEDS.

Table 11.1

New Legislation Needed to Implement NEEDS

Table 11.1

New Legislation Needed to Implement NEEDS

Bill	Target institution or sector	Reform component
Bills about to be initiated
Fiscal Responsibility Bill	All government agencies	Fiscal discipline
Competition and Antitrust Bill	Ministry of Commerce	Domestic trade and production
Energy/Electricity Reform Bill	National Electricity Power Authority	Power provision and consumption
Finance Bill	Ministry of Finance	Budget
Pension Reforms Bill	Head of Service	Pension and long-term funds
Tax reform bills Revision of corporate tax Personal Income and Value-Added Tax Bill	Individual and corporate taxpayers	Tax policy
Local government reform	All local governments	Effective grassroots administration
Public Procurement Bill	All government agencies	Due process and accountability
Bills being reviewed by the House
HB 4 Corrupt Practices and Other Related Offences Bill (amendment), 2003	All government agencies	Presidential initiative on fighting corruption
HB 7 National Institute of Tourism and Hospitality Bill, 2003	Tourism subsector	Presidential initiative on tourism development
HB 6 Right to Information Bill, 2003	Information subsector	Transparency in government business
HB 16 Niger-Delta Commission Bill (amendment), 2003		Infrastructure development
HB 10 Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the UN Convention against Transnational Organized Crimes Bill (ratification and enforcement), 2003	Women and youth	Women and youth development
HB 11 Convention against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment Bill (ratification and enforcement), 2003	Judicial system	Social charter
HB 15 Convention of the African Telecommunications Union Bill (ratification and enforcement), 2003	Ministry of Communications	Infrastructure development
HB 21 Agriculture Input Bill (provision of subsidy), 2003	Ministry of Agriculture	Agricultural development and food security
HB 22 Shelter Belt Project Bill, 2003	Housing and Urban Development	Housing and Urban Development
HB 24 Guaranteed Minimum Price for Farmers Authority Bill, 2003	Ministry of Agriculture	Agricultural development and food security
HB 30 Palm Oil Development Fund Bill, 2003	Ministry of Agriculture	Agricultural development and food security
HB 37 Allocation of Revenue Bill (federation account), 2003		Budgetary and fiscal reform
HB 25 Agriculture Bill (provision of budget allocation), 2003	Ministry of Agriculture	Agricultural development and food security
HB 40 Pension Reform Bill, 2003	Pension Board	Presidential initiative on pension reforms
HB 41 Nigerian National Volunteer Service Bill, 2003	Youth and social development	Reorientation of social service
HB 35 Agricultural Credit Guarantee Amendment Bill, 2003	Ministry of Agriculture	Presidential initiative on food security
HB 31 Handicapped Persons Special Facilities (Public Buildings) Bill, 2003	Ministry of Sports and Social Development	Social charter
HB 32 National Social Security Board Bill, 2003	Ministry of Sports and Social Development	Social charter
HB 42 Nigerian Solid Minerals Development Bill, 2003	Ministry of Solid Minerals Development	Presidential initiative on the development of solid mineral sector
HB 49 Economic and Financial Crimes Commission Bill, 2003		Anticorruption
HB 50 Money Laundering (Prohibition) Bill, 2003		Anticorruption
National Forestry Bill	Ministry of the Environment	Sustainable management of forest resources and equitable distribution of benefits with local communities
National Drought Bill	Ministry of the Environment	Proactive management of droughts
National Oil Spill Contingency Bill	Ministry of the Environment	Equity issue sand oil spill management
Revision of Environmental Impact Assessment Decree	Ministry of the Environment	Increased responsiveness to contemporary issues in environmental management
National Environmental Management Bill	Ministry of the Environment	Updating of existing laws

View Table

Table 11.1

New Legislation Needed to Implement NEEDS

Bill	Target institution or sector	Reform component
Bills about to be initiated
Fiscal Responsibility Bill	All government agencies	Fiscal discipline
Competition and Antitrust Bill	Ministry of Commerce	Domestic trade and production
Energy/Electricity Reform Bill	National Electricity Power Authority	Power provision and consumption
Finance Bill	Ministry of Finance	Budget
Pension Reforms Bill	Head of Service	Pension and long-term funds
Tax reform bills Revision of corporate tax Personal Income and Value-Added Tax Bill	Individual and corporate taxpayers	Tax policy
Local government reform	All local governments	Effective grassroots administration
Public Procurement Bill	All government agencies	Due process and accountability
Bills being reviewed by the House
HB 4 Corrupt Practices and Other Related Offences Bill (amendment), 2003	All government agencies	Presidential initiative on fighting corruption
HB 7 National Institute of Tourism and Hospitality Bill, 2003	Tourism subsector	Presidential initiative on tourism development
HB 6 Right to Information Bill, 2003	Information subsector	Transparency in government business
HB 16 Niger-Delta Commission Bill (amendment), 2003		Infrastructure development
HB 10 Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the UN Convention against Transnational Organized Crimes Bill (ratification and enforcement), 2003	Women and youth	Women and youth development
HB 11 Convention against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment Bill (ratification and enforcement), 2003	Judicial system	Social charter
HB 15 Convention of the African Telecommunications Union Bill (ratification and enforcement), 2003	Ministry of Communications	Infrastructure development
HB 21 Agriculture Input Bill (provision of subsidy), 2003	Ministry of Agriculture	Agricultural development and food security
HB 22 Shelter Belt Project Bill, 2003	Housing and Urban Development	Housing and Urban Development
HB 24 Guaranteed Minimum Price for Farmers Authority Bill, 2003	Ministry of Agriculture	Agricultural development and food security
HB 30 Palm Oil Development Fund Bill, 2003	Ministry of Agriculture	Agricultural development and food security
HB 37 Allocation of Revenue Bill (federation account), 2003		Budgetary and fiscal reform
HB 25 Agriculture Bill (provision of budget allocation), 2003	Ministry of Agriculture	Agricultural development and food security
HB 40 Pension Reform Bill, 2003	Pension Board	Presidential initiative on pension reforms
HB 41 Nigerian National Volunteer Service Bill, 2003	Youth and social development	Reorientation of social service
HB 35 Agricultural Credit Guarantee Amendment Bill, 2003	Ministry of Agriculture	Presidential initiative on food security
HB 31 Handicapped Persons Special Facilities (Public Buildings) Bill, 2003	Ministry of Sports and Social Development	Social charter
HB 32 National Social Security Board Bill, 2003	Ministry of Sports and Social Development	Social charter
HB 42 Nigerian Solid Minerals Development Bill, 2003	Ministry of Solid Minerals Development	Presidential initiative on the development of solid mineral sector
HB 49 Economic and Financial Crimes Commission Bill, 2003		Anticorruption
HB 50 Money Laundering (Prohibition) Bill, 2003		Anticorruption
National Forestry Bill	Ministry of the Environment	Sustainable management of forest resources and equitable distribution of benefits with local communities
National Drought Bill	Ministry of the Environment	Proactive management of droughts
National Oil Spill Contingency Bill	Ministry of the Environment	Equity issue sand oil spill management
Revision of Environmental Impact Assessment Decree	Ministry of the Environment	Increased responsiveness to contemporary issues in environmental management
National Environmental Management Bill	Ministry of the Environment	Updating of existing laws