Millennium Development Goals and Global Financial Challenges in Nigeria


nigeria-map-flag

The Millennium development goals (MDGs) were launched at the beginning of the 21st century to help developing countries eradicate extreme poverty and hunger, achieve universal primary education, reduce infant and maternal mortality rates, promote girl child education, combat HIV/AIDS, malaria and other diseases, among others. The available information indicates that Nigeria has appropriated over N340 billion (2.27 billion US dollars) for MDGs in the last three years in Nigeria and that over 24 trillion nairas (160 billion US dollars) will be needed in the next five years to meet the MDGs by 2015. We inferred in this paper that Nigeria will not be able to raise this huge amount of money and that the progress in achieving MDGs will be hindered due to global financial crisis which induced a decrease in export prices (oil and cocoa prices), decline in international remittances from developed countries, a slowdown or even withdrawal of Foreign Direct Investments as well as increased inflation and taxation.

Introduction

At the millennium summit in September 2000, the largest gathering of world history, adopted the UN Millennium Declaration, committing their nation to a new global partnership to reduce poverty, improve health, and promote peace, human rights, gender equality, and environmental sustainability. The partnership between rich and poor countries was reaffirmed in November 2001 to launch the Doha Round on International Trade. Soon after, world leaders met again at the March 2002 International Conference on Financing for development in Monterrey, Mexico, establishing a landmark framework for global development partnership in which developed and developing countries agreed to take joint actions for poverty reduction. Later that same year, UN member states gathered at the World Summit on sustainable development in Johannesburg, South Africa, where they reaffirmed the Millennium Development Goals (MDGs) as the World’s Timebound developmental goals (UN, 2002a). If the MDGs are achieved by 2015, it means that more than 500 million people will be lifted out of extreme poverty. More than 300 million will no longer suffer from hunger. Rather than die before reaching their fifth birthdays, 30 million children will be saved. So will be lives of more than 2 million mothers (UK, 2005).

Conceptual and theoretical issues

The progress of attaining Millennium Development Goals on poverty eradication in Nigeria is assessed using 1990 as the baseline. Globally, poverty is decreasing in the world (including sub-Sahara Africa (SSA) as indicated in Table1), however, the level of poverty in Nigeria has increased from about 43% in 1990 to 54.4% of the population in 2005. the implication of this is that in 1992 about 39 million Nigerians were poor, which increased to more than 76 million in 2005 and has since continued to increase. In terms of poverty reduction, Nigeria is lagging behind the Sub – Sahara Africa average in the Millennium Development Goal of halving poverty by 2015. According to 2005 MDG report in Nigeria, if the current efforts at poverty reduction in Nigeria are maintained (without global financial crisis), the poverty incidence in Nigeria would reduce to 43% as opposed to 21.4% by 2015.

Progress in Developing a Global Partnership for Development in Nigeria

The level of official development assistance has increased from 2.8 to about 49 US dollar per capita in Nigeria between 1990 and 2007. This increment can be attributed to improved democratic environment within the period. Another area where Nigeria has improved significantly is in the area of debt services. Debt service as the ratio of GDP reduced from 23% to 16% between 1990 and 2007. Nigeria has enjoyed debt forgiveness within the period and the money saved as a result of debt forgiveness forms major component fund used for executing the MDGs projects. However, the financial crisis may lower the future chance of achieving this goal as it may lead to a decline in the official aid and that Nigerian government may incur more debt in order to finance the critical project for which they may not have enough fund. In fact, MDG report (2009) has indicated that share of OECD/DAC Aid in Gross National Income declined from 0.33% to 0.30% between 1990 and 2008. The GFC may threaten this further

Table 1: Progress in MDGs in Nigeria between 1990 and 2007

1990

2007

Poverty level (Headcount)

42.7

54.4

Malnutrition prevalence [weight for age (%) of children under 5]

35

26

Literacy rate %

74

57

Primary school net enrolment (%)

58

62

Ratio of girls to boys in primary and secondary schools (%)

0.79

0.82

Immunization against measles [(%) of children ages 12 – 23 months]

54

35

Mortality rate [infant (per 1000 live births)]

91

76

Mortality rate under 5 (per 1000)

230

194

Maternal mortality (per 1,000,000 live births)

800

704

Sources: Millennium Development Goals Report (2009)

Impact of Global Financial Crisis in Nigeria and its Implication on MDGs

If pre-crisis trends had continued unabated, Nigeria would likely be able to attain the MDGs of net enrolment in primary education, gender equality in education and possibly also combat HIV/AIDS and other diseases (MDG Report, 2005). The speed of progress for achieving the goals for extreme poverty reduction and hunger has been insufficient, though, pre-crisis progress, however, is assessed on the basis of linear projections, even though the path towards the goals need not follow a linear pattern (Vos and Sachez, 2009). However, the incidence of the GFC has affected and will affect the chances of MDGs in several ways.

In Nigeria, the debate was intense on whether the global financial crisis wills affect the country or not. Most commentators were of the opinion that the banking sector would weather the storm due to the fact that (i) the financial system is not strongly integrated into the international financial architecture, (ii) the relatively simple nature of the 9 financial products and (iii) the strong capitalization and liquidity of Nigerian banks.

However, the reality is that the global crisis has affected Nigeria through sharp declines in the value of oil exports, rapid depreciation of exchange rate, worsening investor sentiments in the banking sector, fall in foreign direct investment and remittances. In addition, as foreign investors divested from the Nigerian stock exchange, market capitalisation plunged drastically (Babatunde and Busari, 2009). This section explains in details how the GFC has affected Nigeria and the impact it will have on the achievement of MDGs.

Remittances:

Remittances are a way by which the global financial crisis can affect African economies. Remittances are a component of international capital flows mostly used for consumption and investment purposes. Many economists argue that large amounts of remittances can substitute financial underdevelopment and promote economic growth.

In the case of Nigeria, the Nigerians in Diasporas remitted $10 billion in 2008, indicating a 10 percent increase to amount remitted in 2007(World Bank Report, 2009). The $10 billion inflow represents 5 percent of the nation’s gross domestic product (GDP) and puts Nigeria at number six among the top ten recipients of migrant remittances in the world (Nurudeen and Obi, 2009). The report shows that despite the global economic meltdown which peaked in 2008, remittance to Nigeria by migrant workers have been increasing steadily in the past six years from $1.2 billion in 2002 to $9.98 in 2008. This 10 improvement according to the World Bank is due to the fact that remittance flow to Nigeria is diversified in terms of destinations. The World Bank report also indicates that while remittances are expected to fall in 2009 due to the biting effect of the global crisis, with remittances to Nigeria declining slightly to $9.58 billion in 2009 (Komolafe, 2009)2. Moreover, informal remittance to Nigeria, which is estimated as 50% of formal transfer, is expected to be more affected by GFC than the formal remittance. The implication of this is that the household who relied on remittance to finance their education and health care will not be able to do that, thereby hampering the progress on attainment of school enrolment and health goals. This is important because the household contribution as an investment in attaining MDGs is about 9% (UN Millennium Project, 2005). So if this percentage is missing, the chance of achieving the MDGs may be bleak, particularly for the MDGs that require a substantial contribution from the households such as health and education.

Taxation and Inflation:

As the controversy over the Federal Government’s deregulation policy in Nigeria rages on (which was triggered by GFC), the 36 state governors have unanimously resolved to impose more taxes. The indication that Nigerians are to face harsher economic realities is further reinforced by the latest report of the National Bureau of Statistics, 2009 (NBS) that the surge of inflation in the country is likely to lead to increases in the prices of food and other products. As a way to shore up their dwindling revenue bases, governors of the 36 states of the federation have agreed on the need to promulgate new tax laws, review existing ones, as well as ensure that they are enforced to reflect the existing realities. These decisions formed part of the 14-point communiqué issued at the end of the three-day 1st National Roundtable Strategy Session on Internally Generated Revenue (IGR). The communiqué noted with concern the dwindling revenue base of the federal, state and local governments, owing to fluctuation in the price of oil, stressing the need to explore and identify alternative sources of revenue so as to forestall the dire consequences of an over-dependence on oil and attain fiscal autonomy (Usigbe and Omankhanlen, 2009). Even before the Governors’ Roundtable Strategy meeting, Governors of Edo and Lagos states have imposed some taxes and levies on the populace to soar up their revenue base which has dwindled since the inceptions of the GFC.

Moreover, in a bid to raise the government revenue base, the federal government decided to increase the tariff rate (electricity tariff rate increased by 10% in 2009). All these are bound to reduce the people purchasing power and further worsen the chance of eradicating poverty and hunger.

Meanwhile, against the promise of the Central Bank of Nigeria (CBN) governor, Mr Sanusi Lamido Sanusi, that the nation’s inflation will fall below 10 percent by the end of the year, the rate has continued to rise. A report by the National Bureau of Statistics(2009) indicated that consumers’ inflation rose to 11.6 percent year-on-year in October 2009, from 10.4 percent the previous month. The growth in food prices, which form the bulk of the inflation index basket, rose to 13.5 percent from 12.5 percent in September 2009. The rise in the index was caused by an increase in the prices of food items like meat, fish and seafood and fruits (Usigbe and Omankhanlen, 2009). These increases in prices of food items and inflation will definitely affect the progress on poverty and reduction goals of MDGs.

Foreign Direct Investment:

Another transmission channel of the crisis is through its impact on foreign direct investments (FDI). Given that corporate profits are going to fall due to the crisis, their ability to invest in other countries will be negatively affected. FDI is considered to be one of the consequences of globalization and its advance is led by Multinational Cooperation’s (MNCs) or Transnational Cooperation’s (TNCs) in the hope that FDI will transfer superior technology and management skills, stimulate investment and growth, generate efficiency spillovers and enhance job creation. In the 1990s the promotion of FDI became popular, especially amongst developing countries.

The realization of FDI’s contribution to economic growth and sustainable development led to policies for attracting FDI becoming an integral part of national policies. The main source of FDI into Africa is the United States and European Union. Between 2004 and 2007, FDI inflows into Africa increased from 13 to 33 billion dollars, with Nigeria and South Africa accounting for 55% of the inflows (UNCTAD, 2009). While FDI inflows have been more stable compared to other forms of private capital throughout the worst part of the crisis, FDI inflows will not remain unaffected. According to UNCTAD, the pattern of continued FDI inflows is going to change. In Nigeria, among the capital inflows which include, foreign direct investment and portfolio investments, bilateral and multilateral aid resources, amongst others, their reduction would result in the sharp reduction in investment.

It is projected that the FDI in Nigeria will fall and this will jeopardize the country’s hope of realizing $600 billion in FDI before 2020 to further its vision of being one of the world’s top 20 economies by 2020. To further endanger Nigeria’s FDI prospects is the negatively volatile nature of oil prices since the last quarter of 2008. It is interesting to note that most FDI inflows to the country are directed to the oil sector (Obi, 2009).

The decline in Export:

The recent economic slowdown being witnessed can, however, be attributed to the declining trade flows the dependency on (narrow range of) primary commodities for export is largely responsible for the impact of the slowdown on African countries. For example, Nigeria’s investment, output and government revenues have fallen significantly due to declining prices for hydrocarbons (oil and gas). Oil and gas extraction account for 30 percent of the economy’s GDP, over 90 percent of its exports and a large share of government revenues (Babatunde and Busari, 2009).

Fall in commodity prices:

Oil export remains Nigeria’s major revenue earner. The current global economic crisis has brought about a radical decline in crude oil prices. The severe fall in crude oil price from a peak of $147 in 2008, has brought about intense pressure on the exchange rate.

The foreign exchange market came under enormous pressure at the onset of the crisis in the country. The naira declined by 10 percent and increased the cost of imported intermediate inputs with great consequences for production, output and employment. With the depreciation of currency and Nigeria being a net importer of food which is a major component of consumer price index, domestic prices of consumer goods in the country will increase with a reduction in access to food by the vulnerable groups.

Exchange-rate depreciation will also increase exchange-rate risks faced by domestic firms and increase the likelihood that they will default on loans owed to domestic banks, thereby increasing the vulnerability of these banks. According to the central bank of Nigeria, the official exchange rate was N150.6/$US on 28 August 2009 against the N119.30/$US in 2008

The reality is that the current financial crisis would have a negative effect on both short-term and long-term programmes of government. Indeed, the shortfall in oil revenues might lead to abandonment, postponement or outright cancellation of large investment projects. This would have negative multiplier effects on employment, poverty reduction, achieving MDGs. Also, revenue contraction could lead to a decline or inability to achieve infrastructural development which would, in turn, worsen the infrastructure-finance gap; thereby making it difficult to actualize Nigeria’s various development goals e.g. the lingering problem of electricity (Hassan, 2009).

A Downturn in the Capital Market:

The current financial crisis has affected the capital market in Nigeria. Starting from August 2008, share trading value of the capital market drastically reduced from about N13trillion down to about N5trillion. The worsening economic climate has made investors be cautious, resulting in significant divestment (flight of capital) back to their home economies. This resulted in foreign investors withdrawing some $4 bn from the Nigerian capital market in 2008 (Laishley, 2009). With about 65% of the value of the entire Nigerian stock market being held by banks, they are the most affected by the crisis in the stock market. Having lost an estimated N1 trillion from their exposure to the stock market, banks are now frantically sourcing for money as this has affected their balance sheet with an increased build-up of bad debt and decreased profitability. The has shown that market capitalization fell, from N10.18 trillion in January 2008, to N6.957 trillion January 2009 and further to N5.02 on 7th May 2009. A huge loss of about N3 trillion was recorded by the market on August 22, 2008, and this is larger than the total budget of the government for 2008.

Fall in Nigeria’s Foreign Reserves:

Mordi (2009) has shown that Nigeria’s foreign reserve has declined from$53 billion in 2008 to about $47 billion in 2009. This is not unconnected to the fall of the oil price at the international oil market. Further depletion could be experienced if political pressure persists to spend the excess crude. The fall in the value of the external reserves may be due to frequent and large intervention to smoothen volatility of the Naira which increases drawdown and un-curtailed withdrawal by the fiscal authorities as well as servicing of foreign commitments. The outcome, of course, would be reduced accumulation of external reserves due to the fall in crude oil prices. In fact, income generation and safety concerns on external reserves will set in. The likelihood of renewed external debt build-up and the resultant effect of debt servicing on the external reserves cannot be ruled out.

Declined Economic Growth:

Nearly all the region experienced a marked reduction in GDP growth.Nigeria, for instance, had its output down in the first quarter of 2009 to 4.85 percent from 5.75 per cent estimated for 2008. The decline in economic growth which the current global financial crisis portends for Nigeria would likely reverse the progress that has been made in the economy the past decade. Available statistics indicate that GDP growth rate projection for Nigeria as at March 2008 was 5.30 % for the year 2008 and 3.30% for the year 2009 (Accenture, 2009). Of course, these are all below the required ratio3. The latest estimates of economic outlook of Sub-Saharan Africa shows that a lower rate of output growth is expected in 2009. In the case of Nigeria, GDP declined by 2.2% between 2008 and 2009 as a result of GFC. Indeed, a lower economic growth would slow down the fight against poverty, unemployment and inequality. Thus, the prospects of meeting the MDGs target of halving the number of the poor people by 2015 would remain a mirage.

According to Awofadeji (2009) major challenge towards the achievement of the MDGs in Nigeria is the corruption that is said to have defined the spending of the DRF funds. Across the states, there are reports of contracts for projects that were not executed, leading to the discovery of no projects during site visits. Yet, the contractors were fully mobilized. In other instances, contracts were awarded for the supply and distribution of drugs when there were no health facilities available for the drugs. A visit to Amuwo Odofin Health Centre, in Festac Lagos as well as that in Agege, is revealing enough (Nwokeoma,2009). Sadly enough, in spite of the deluge of complaints that trailed the expenditure towards the MDGs so far, no audit of the expenditure has been undertaken by the government, much less finding and prosecuting contractors and agencies that might have fleeced the nation. Strangely, these sad developments notwithstanding, an analysis of government posturing tend to show that its emphasis seems not to be on the evaluation of the impact of the DRF spending on the targeted communities, leading to the achievement of the MDGs, as it is on the quantum of funds disbursed. Reeling out statistics of funds released when there is nothing on ground to show for such expenditure is not a sure way of achieving the MDGs (Nwokeoma, 2009). For example, in Bauchi state, the realisation of the Millennium Development Goals [MDGs] might not be possible as the state government has frozen the account of the Office of Millennium Development Goals on the allegation that money allocated to that office has been misappropriated (Awofadeji, 2009).

The fact that implementation of MDGs is not transparent is evident by the case of Niger state in Nigeria. The Governor of Niger State was worried by the grim reality evident in his state, ordered the probe of all the contracts awarded under the MDGs in the state since 2006. According to him, in spite of the huge sum totalling N3.7bn claimed to have been spent by the Federal Government on MDGs- related projects in Niger state, there was nothing on ground to show that such amount was committed to development projects in the state.

The Senate, which reviewed the performance of the Federal Government in the Millennium Development Goals (MDGs) projects, lamented that they were characterised by corruption, inefficiency and waste (Jimoh and Daka, 2009). It was said that the process of selecting contractors for the MDG projects has been hijacked by the senior special assistant and her members of staff, who fabricate company names and pre-qualify them for the job in many instances. Nearly all the companies awarded the MDG jobs in one state are traced to one person and one address, though they appear to be different companies (Jimoh and Daka, 2009). The result is that the jobs are undone because the companies lack capacity, and were never interested in doing these jobs in the first instance.

Generally, Corruption has increased in Nigeria with the country currently ranking 130th out of 180 countries surveyed in the 2009 Corruption Perceptions Index (CPI) released by Transparency International (TI). Last year Nigeria scored 2.7 points and took the 121st position out of 180 countries but this year the country’s CPI score dropped to 2.5 ranking at on the same position Lebanon, Libya and Mauritania (Edet, 2009). This suggests that Nigeria scored 2.5 out of a maximum mark of 10 in the transparency index. The implication of this score may have a far-reaching implication on the achievement of MDGs. The available information indicates that Nigeria has appropriated over N340 billion (2.27 billion US dollars) for MDGs in the last three years in Nigeria, with the score of 2.5 as Transparency Index, this implies that only 25% of the fund actually went into MDGs projects and programmes. The remaining 75% must have ended in private pockets. This may explain the non-existence of some claimed projects and the slow pace in achieving MDGs in Nigeria. The high corruption level in the country will rob on the over 24 trillion nairas (160 billion US dollars) needed in the next five years to meet the MDGs by 2015. If the corruption level persists, it is possible that most of the money will go into private pockets even if the money is made available. The high corruption level will also corrode the impact of stimulus packages on the economy during GFC. This made the Chair of Transparency International (TI), Huguette Labelle, to say that at a time when massive stimulus packages, fast-track disbursements of public funds and attempts to secure peace are being implemented around the world, it is essential to identify where corruption blocks good governance and accountability, in order to break its corrosive cycle (Udo, 2009).The other reality about the MDGs projects in Nigeria is lack of proper coordination among the tiers of the government. During a recent advocacy visit to a top official of the Lagos State government with an international NGO engaged in monitoring the utilization of the DRF towards poverty eradication in the country, the delegation was shocked to discover that the state government was almost in the dark about the various MDGs related projects financed in some council areas by the Federal Government (Nwokeoma, 2009).

Nigeria Government Responses to the Global Financial Crisis

The Nigerian government used the 2009 budget and the country’s foreign exchange reserves (which now stands at less than US$50 billion) as stimulus package to reduce the impact of the crisis and to promote economic growth. The federal and state governments 22 were expected to borrow N1.6 trillion (stimulus) to meets their expenditure for the 2009 fiscal year. Besides, in February 2009, the government injected 70 billion nairas into the textile industry to revive ailing companies. Nigeria Government (through the Central Bank of Nigeria) announced a bailout of 420 billion nairas to save five commercial banks with huge debt and non- performing loans4 (Nurudeen and Obi, 2009). In addition, the former management executives of the respective banks have been sacked, the new one has been appointed.

Also, Soludo (2009) reported that, in response to the global financial crisis, the monetary authorities have adopted various measures for proper supervision and regulation, as well as ensure the soundness of the financial (and banking) system. For instance, in an attempt to manage liquidity within the economy, the Central Bank of Nigeria (CBN) reduced the MPR from 10.25 % to 9.75 % and now to 8.0 % (below inflation rate), CRR from 4.0 % to 2.0 % and now to 1.0 %, and the liquidity ratio from 40.0 % to 30.0 % and now to 25.0 %. The CBN also expanded the discount window which allows banks to borrow for up 360 days (at an interest rate not exceeding 500 basis points above the MPR). It also suspended the aggressive mop-up of liquidity since late 2008. Under foreign exchange and exchange rate management, the CBN adopted an exchange rate adjustment that would help to preserve the country’s foreign exchange reserves.

To this end, it has moved from the Whole Sale Dutch Auction System (WDAS) to Retail Dutch Auction System (RDAS) and to checking the speculative demand for foreign exchange, as well as introducing a band of plus or minus 3 % to ensure stability. Also, the CBN has embarked on the restructuring of the Bureaux de Change (BDC) operations by categorizing them into Classes ‘A’, ‘B’ and ‘C’. In addition, is the sale of cash Foreign exchange only through bank operated BDC and the revision and enlargement of transactions that are eligible under the RDAS window? In order to properly regulate and supervise the banks, the CBN has deployed resident examiners to the banks with effect from January 2009. There is also ‘standby teams’ of target examiners that may be deployed to any bank at any time to fish out those that do not observe the code of corporate governance, in order to inject discipline and restore confidence in the system.

The CBN is rendering advisory service to banks on risk management. This includes extra conservation during the time of crisis, capital conservation, cost minimization, the de-emphasis on size, salaries and or bonuses, to mention just a few. Furthermore, the CBN is also strengthening institutional coordination through the Financial Sector Regulatory Coordinating Committee (FSRCC). The CBN has continued to emphasise the use of e- FASS as a tool for banks’ returns analysis for speedy identification of early warning signals. Henceforth, ‘Consolidated teams’ rather than the current fragmented one are to examine and supervise the financial sector in 2009, while a common accounting year end has been adopted for all banks with effect from an end- December 2009. The objective here is to improve data integrity and comparability of the status and soundness of every bank, as well as the adoption of International Financial Reporting Standards (IFRS).

Finally, the CBN will continue to review the BOFIA in order to strengthen regulatory capacity. In an attempt to reduce pressure on inter-bank rates, the CBN reduced the Expanded Discount Window (EDW) rate to a maximum of 500 basis points above MPR beginning from March 16, 2009. This measure is expected to help reduce the problems of banks facing the temporary liquidity crisis. Moreover, the bankers’ committee has pegged the maximum deposit and lending rates at 15 % and 22 % respectively, effective from April 1, 2009, until end of 2009, so as to promote the growth of real sectors of the economy. In the area of confidence-building, CBN has repeatedly emphasized that Government and the monetary authorities will ensure that all banks remain sound and no bank would be allowed to fail. In fact, in the last two months, the CBN has disbursed over N700 billion to banks facing liquidity problems. The 2.8 trillion naira (22.6 billion dollars) 2009 budget submitted to the National Assembly is noticeably heavy on recurrent expenditure and light on capital spending and investment. The government launched a Presidential Steering Committee on the Global Economic Crisis in January 2009. The Committee is responsible for developing a framework to respond to the global crisis. The government announced a plan to suspend the 5 percent excise duty on some goods manufactured such as juices, instant noodles and non-alcoholic drinks, aiming to support its stressed industry and avert job losses. Nigerian government imposed foreign exchange controls to stem off the slide in the Naira. These measures include that foreign exchange purchases from the central bank window are only to be used for customers, and not on the interbank foreign exchange market. The net open foreign exchange position of banks reduced to 1 percent of shareholders’ funds, down from 20 percent in mid-December 2008.

Conclusion and Policy Recommendations

The problem of development is a global challenge and the MDGs is a response by world leaders to that effect. The MDGs provide a platform to engage the development process. The situation in Nigeria indicates that there are challenges in meeting the goals by 2015 which is threatened by GFC. Generally, for Nigeria to meet the goals in 2015 despite the GFC, there is the need to formulate and implement policies that will promote transparency and accountability; overcome institutional constraints; promote pro-poor growth; bring about structural change and enhance distributive equity.

Recommendations for Weathering the GFC

To achieve the MDGs and to scale through the period of global financial crisis, Nigeria needs to change the structure of the economy in such a way that the economy is not dependent on only one product but the diversified economy and expanding the industrial sector. For Nigeria to whether the liquidity problem during the global financial crisis, the commercial banks have to reduce their benchmark prime lending rates. This will allow a flow of fund to the real sector of the economy and promote economic growth. The stimulus packages should not concentrate on banking sector but should be diverted towards farmers’ loans, rural employment and other social security programmes as done in India (Singh, 2009). Export sector and infrastructure sector can be offered financial aid as part of bail-out packages. For example, pre and post-shipment export credit can be made available for labour-intensive exports, i.e., textiles (including handlooms, carpets and handicrafts), leather, gems and jewellery, marine products and small and medium enterprise (SME) sector. They can be made more attractive by providing an interest subvention subject to the minimum rate of interest of 7 percent per annum. The bailout money should be deducted from excess crude oil account and Debt Relief Gain, not resulting in excessive borrowing in time like this.

Recommendations for Achieving MDGs in the Period of GFC

Constitutionally, implementation of MDGs activities fall within the purview of subnational governments, hence significant progress cannot be made unless states and local governments are committed to and coordinated in implementing MDGs related activities. The need to address the weak database for effective monitoring of MDGs in the country is vital for substantial progress to be made. Deliberate efforts and policies must be put in place to redistribute income. The MDGs will be met if the poor and excluded in society are empowered to meet their basic needs. In addition, meeting the MDGs will require a partnership between government, donor agencies, civil societies, the public sector and the private sector.

Members of the National Assembly must demand details of the disbursement of the money spent on MDGs and should go out of their way to verify the claims that the funds have been applied to projects. Indeed, there ought to be a public hearing on the matter to allow Nigerians to come forward and testify of how they have not yet felt or felt the impact of the debt relief funds. President Umaru Yar’Adua, from whose office Mrs Ibrahim operates should also review the progress of the country towards attaining the MDGs with a view to re-strategising to ensure the success of the programme. If the state governors have been misusing the funds, a new strategy must be evolved to stop such, If it is confirmed that the MDGs’ office in the presidency cannot cope with the execution of constituency projects, alternative arrangements must be made to ensure that these grassroots-based projects are executed to bring relief to the people who need them most. The debt relief funds and every other income of the country must be prudently and transparently applied for maximum effect and those in authority at all levels must ensure this.

References

Accenture (2009). The Challenges of global financial crises. Paper presented at the Information Technology Retreat. Central Bank of Nigeria, Abuja, Nigeria.

ADB (2009). African Development Bank response to financial crisis. Available on the internet at http://www.afdb.org/en/news-events/article/afdb-response-tofinancialcrisis-economic-impact-4362/

Alabi, R. A (2009). Redistribution of Education and Redistributive Effect of Education Spending in Nigeria. A Paper Presented at the Nigeria Country Workshop on New Researchers on Development in Nigeria Organised by Institute for World Economics and International Management, University of Bremen, Bremen, Germany. 29th July 2009.

Amusa, K (2009). Global Economic and Financial Crisis: Transmissions channels and impacts on African Economies. A paper presented at the African Economic Research Consortium (AERC). Rethinking African Economic Policy in Light of the Global Economic and Financial Crisis Conference. Nairobi, Kenya.

Awofadeji, S. (2008). Corruption: Bauchi freezes MDGs accounts. Available on the internet at http://www.thisdayonline.com/nview.php?id=127662

Babatunde, M.A and D.T Busari (2009). Global economic slowdown and the African Continent: Rethinking export-led growth. A paper presented at the African Economic Research Consortium (AERC) Rethinking African Economic Policy in Light of the Global Economic and Financial Crisis Conference.

Nairobi, Kenya.Committee of African Finance Ministers and Central Bank Governors (2009). Impact of the crisis On African Economies –Sustaining growth and poverty reduction: African perspectives and recommendations to the G20. A report from the Committee of African Finance Ministers and Central Bank Governors established to monitor the crisis. March 21.

Edet, B (2009). Nigeria: The country slips on the corruption index. Available on the internet at http://allafrica.com/stories/200911180190.htm

ERA (2005). Our common interest. Report for Commission for Africa. Department of International Development, London.

Giuliano, p and Arranz, M, (2005). Remittances, financial development and growth. IMF working paper. Available on the internet at www.worldbank.org

READ:  Globalization And The Challenges Of National Development: The Case Of Post Debt Relief In Nigeria
Home « Term Paper

Have any Question or Comment?

Email, Name & Website are not compulsory! Leave Blank for anonymous comment.


Archives