Increasing Shared Prosperity and Accelerating Poverty Reduction
We view the World Bank Group as an enabling vehicle that works with Governments to develop sustainable economies. The main objective is to increase shared prosperity, accelerate poverty reduction and reduce inequality among the World’s population.
As part of its strategy, the Bank develops country partnership strategies and assistance programmes for many countries around the World working with a country’s leadership. It’s often a joint initiative.
The most recent Country Partnership Strategy (“CPS”) for Nigeria that covers the four year period from 2014 to 2017 was approved in April 2014 by the Board of Executive Directors of the World Bank. It is centred on 3 key strategic priorities that aim to foster development to reduce poverty and unemployment.
These are: (1) Promoting diversified growth and job creation by reforming the power sector, enhancing agricultural productivity and increasing access to finance; (2) Improving the quality and efficiency of social services delivery at the state level to promote social cohesion; and (3) Strengthening the governance and public sector management with gender equity and conflict sensitivity as essential elements of governance.
We view these priorities as aimed at creating an enabling environment in Nigeria to promote increased private sector participation and, in particular, encourage foreign direct investment. We have in the past written about Nigeria’s power crises, the Marshall Plan for economic stimulus for Nigeria and how we can assist. We have also talked about the importance of Agriculture in job creation and poverty reduction.
All these can be considered to be critical ingredients in support of these strategic priorities as set by the World Bank, including its affiliate MIGA in partnership with the Nigeria’s Federal Government. There is deliberate alignment with Nigeria’s long term development and transformation goals. Our engagement with the various states in Nigeria is aimed at unlocking potential to achieve these strategic priorities for the Country.
As Nigeria emerges as the economic powerhouse of Africa with the largest GDP in Africa, the new Federal Government needs to do more and very fast. There is no justification for procrastinating. All the challenges are well known and documented. What’s required is accelerated implementation of the solutions.
The CSP notes that, with its strong fundamentals, including consistent and strong economic growth since 1999, Nigeria qualifies as one of the continent’s potential economic powerhouses. But this potential is only achievable with the leadership making critical decisions without procrastinating.
No doubt that the authorities have implemented responsible macroeconomic policies that have supported a high degree of economic stability in the past, an example being the fiscal reserve from excess oil revenue introduced in 2004 that later evolved into legislative reforms leading to the creation of a Sovereign Wealth Fund.
Implementation of responsible macroeconomic policies needs to continue and must be accelerated as progress might have been slower than what’s required for effective job creation and poverty reduction, particularly in the face of rapid population growth.
A section in the CSP summarises Nigeria’s key challenge as one of diversifying its economy by leveraging its oil resources to promote sustained inclusive growth, reduce poverty, inequality and unemployment. The country has been growing at 6 to 8 percent annually over the past decade or so but will need to achieve even higher growth rates to make a dent in poverty.
This will require effective macroeconomic management, socio-political stability, the provision of key infrastructure, structural reforms to reduce impediments to diversified growth, and more effective efforts to achieve social inclusion.
Given the large regional, social, and economic disparities and conflict and insecurity in some parts of the country, achieving these objectives requires a resolute and differentiated approach. So the new Government certainly has its work cut out.
The World Bank Group’s support to structural reform agendas for diversified growth and jobs creation in Nigeria focuses specifically on: (1) increasing installed power generation and transmission capacity and improving the efficiency and governance of electricity delivery; (2) boosting agricultural productivity, improving farmers’ linkages with agro-processors, and scaling up resilience to current and future climate variability; and (3) increasing the supply of long-term financing for the housing sector, expanding financing opportunities for SMEs, and strengthening the ability of Development Finance Institutions to mobilize private finance for key sectors of the economy. All these are key areas in which National Standard is able to assist.
With strong political will, and the new administration endorsing the best policies developed to date by previous administrations and perfecting those policies that require refinement, Nigeria is positioned to achieve pole position at a global level.
States in Nigeria operate with a high degree of autonomy, with States and local governments controlling more than half of the nation’s revenue and are responsible for the provision of services that directly influence growth and poverty, such as primary and secondary education, health care, water and sanitation, rural infrastructure, and community services.
Thus it is important to engage the Governors of all the states in pursuing economic development objectives, and National Standard has been doing exactly that. This high degree of autonomy provides states, particularly those with dynamic and progressive leadership, an opportunity to move ahead on their own and lead in the development of the Country.
This autonomy, however, also poses a challenge to building national consensus across different levels of government, including in the areas of macroeconomic stability, prioritizing public resource allocation, and meeting minimal national standards in service delivery. Integration and alignment is therefore a key ingredient to achieve National socio-economic objectives.
National Standard is prepared to work closely with the Federal Government in addition to engaging the individual States. This will ensure that the solutions that we propose filter through the whole economic system at all levels of Government on a consistent basis.
The World Bank led partnership strategy is certainly a tool to achieve accelerated economic development, hence job creation and poverty reduction in Nigeria and across Africa. National Standard has already reached out to the World Bank Group and MIGA to partner in designing solutions for Africa.
In addition, Africa Development Bank (“AfDB”) is also being engaged, with the incoming new President of the AfDB, who is Nigerian, already engaged. With our capabilities, such partnerships will be unparalleled in increasing shared prosperity and accelerating poverty reduction.
Russell Duke is Chairman & Managing Principal at National Standard Finance, LLC. Mr. Duke can be reached at RDuke@NatStandard.com.
Michael Tichareva is Principal & Managing Director of Africa operations at National Standard Finance, LLC. Mr. Tichareva can be reached at MTichareva@NatStandard.com.
The website can be accessed here: www.NatStandard.com
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