President Buhari is marching into office with the mantra of anti-corruption, and a renewed focus on job creation, welfare and elimination of inefficiencies.
An excerpt from Buhari’s manifesto said there would be social insurance schemes and welfare payments of about 25 million Nigerians on 5000 nairas per month, this will come to about 125 million naira a month and 1.25 trillion naira a year.
According to Tunji Andrews, economist and CEO of SBM Intelligence, focus could change from a capitalist-slash-liberalist government to a welfare government.
Andrews said there have been a lot of talks regarding where this money is going to come from in the face of dwindling crude oil prices. The rhetoric has been to cut down government expenditure and civil servants reform to be able to free up funds.
“I do not think it will be enough because if you look at those figures it comes up to a quarter of the national budget as we speak," said Andrews.
Despite this concern, Andrews said these were good and “lofty projects”. Although the government is aiming big, they still need to come back and tell us how they are going to meet this short term revenue objectives, he said.
Andrews told CNBC Africa that in the long term, there needs to be a massive drive to collect taxes from Nigerians and the federal state.
“Right now it’s about 7 per cent of the GDP, which is greatly underestimated and a lot of it comes from the oil sector which is 45 per cent of total revenue collected, which is a very small area.”
Buhari aims to provide a feeding scheme for school children, and create a business opportunity for people who will provide the supply. On this sentiment, Andrews said this would not work on the short term.
“There are immediate problems. We can’t just be chunking out a huge part of our revenue and start feeding children in schools especially when the educational sector is poor in itself. The quality of the teachers, the quality of the classrooms, the books, the conditions of the schools itself.”
Andrews redeems that it’s a “fantastic idea” but there is infrastructure to take care of that. There is the challenge of making sure these people get the money so as to not create the “ghost worker” dilemma.
According to Andrews, there will be a rise in business. Buhari’s manifesto alluded to creating 3 million jobs, majority coming from the agricultural sector, not just the core business of it but the value chain surrounding agriculture.
“There is a lot of export opportunity for the products we are farming in Nigeria,” he said.
“The ABC in this manifesto is speaking about supporting peasant farming with the hopes of moving them to mechanised farming, which is a fantastic idea.”
Andrews said that this was more at the heart of the matter than feeding schemes.