The presence/extent of political will is a key determinant of the success or failure of policies. It is captured by the capability of political actors to achieve the implementation of policies which they prescribed or supported. Political will can be verbally expressed, observed through institutional changes, or demonstrated by budgetary commitments by state actors (Shiffman, 2007; Fox, Goldberg, Gore & Barnighausen, 2011).+ Importantly, the application of political will in achieving policy change usually involves other stakeholders, beyond state actors. Thus, the success in policymaking really depends on a complex interplay of varying degrees of interests, motivations, and beliefs; competencies and skills; coordination abilities and strategic decision-making; among many others.

In societies with huge governance and institutional deficits, political will can play an active role in navigating the challenges to achieve the desirable policy goal/change. However, political will has been generally weak in most societies in Africa, where several constraining factors limit the ability to genuinely move for policy change. In the absence of strong political will, the influence of non-state actors in providing policy support for social and political change becomes critical. In particular, Civil Society Organisations (CSOs) and Trade Associations have been the driving force behind some of the policy decisions in Africa. These non-state actors are generally abreast of the issues the general public faces, and therefore they can mobilise action around issues that protect the interest of citizens.

So while the state bears the ultimate responsibility for effecting policy change, non-state actors may trigger political will, or support an existing one. The likelihood of political will effecting policy change(s) can well depend on the role played by these non-state actors. Following some tenets of Brinkerhoff and Kulibaba’s (1999) conceptual framework for political will for anti-corruption reforms, this piece highlights two indicators of political will: the locus of the initiative and the mobilisation of stakeholders. + It throws light on two separate instances where the influence of non-state actors can drive the build-up of political will for policy change – in tobacco taxes, and trade policies in Nigeria.

Tax increase on tobacco products

Tobacco use has been long proven to be hazardous to the health of both primary and secondary consumers. Governments across the world have made several efforts to curb the use of tobacco through measures such as taxation, publicising the dangers of tobacco smoking, banning use in public spaces, among others. While measures such as these are typically government-driven, non-state actors can play notable roles in shaping their design, implementation, and evaluation. Usually, the loci of initiative of tobacco control measures are government ministries, particularly the Health and Finance ones (see Danishevski et al., 2008; Tam and Walbeek, 2014; and Hoe et al., 2016).+ However, in Nigeria, the recent tobacco control legislation was mainly driven by CSOs, particularly the Nigerian Tobacco Control Alliance (NTCA) – the umbrella organisation dedicated to tobacco control in Nigeria.

NTCA consists of domestic civil society groups, research organisations, Community-Based Organisations (CBOs), Faith-Based Organisations (FBOs), international organisations and professionals, and their activities are mostly donor funded – by Bloomberg Philanthropies and Campaign for Tobacco Free Kids (CTFK). The Alliance mobilised diverse stakeholders and was able to effect the tobacco policy change by harnessing the respective competencies of the members – mostly through evidence-based research, advocacy, and awareness creation. This section provides chronological narrative of the key activities/events that led to the tobacco tax policy change.

As the targeted policy change was to increase excise taxes, evidence-based research became critical in the tobacco control campaign of the Alliance. A report by the Nigerian Tobacco Research Group (NTRG) revealed the tobacco industry was targeting children with promotions, advertisements and the sale of tobacco products around schools as part of their marketing strategy. With such evidence, and the increasing momentum towards tobacco control across the globe, the Alliance became more motivated to explore ways to discourage both tobacco consumption and initiation of use. This coincided with a period when the Nigerian government, particularly the Ministry of Finance, was exploring alternative sources of non-oil revenue. Taxation, which has been proven to be the most effective control measure, became the focus. The Alliance then reached out to the Centre for the Study of the Economies of Africa (CSEA), which had conducted a study on tobacco tax simulations, to join the group in order to provide the much-needed evidence to inform their advocacy efforts.

The Alliance was notably vibrant in their advocacy for the tax increment, and were able to achieve buy-ins from the relevant stakeholders and the public. Reports, articles, and press releases highlighting the growing dominance of the tobacco industry in Nigeria, as well as their marketing strategies were released to the public. In addition, the Alliance educated the public in general and young people in particular on the dangers associated with tobacco use and second-hand smoking. It was revealed that tobacco use kills more than 7 million people globally each year, and developing countries like Nigeria will contribute 80 percent of these deaths by 2030 (World Bank, 2019).+ Furthermore, the potential impacts of substantial increments in tobacco tax on public health and the government revenue base were made known to the wider public.

As the momentum for reduced tobacco consumption and higher government revenue was building, a workshop of the Technical Working Group on Tobacco Control became the critical platform for the push for an increase in excise taxes on tobacco products. The workshop gathered policymakers and tobacco taxation experts from relevant government ministries and agencies including the Ministry of Health, Ministry of Finance, Ministry of Budget and Planning, and the Federal Inland Revenue Service; as well as from ECOWAS, CSOs, research institutes, and the media. The group noted that there were huge shortfalls in the tax rate at the time when compared to the WHO-recommended excise tax burden of 70 percent, and stressed the need for stronger tobacco control laws. They deliberated on the appropriate excise tax that would reduce tobacco consumption on one hand, and increase government revenue on the other (Win-Win), using evidence from tobacco tax simulations presented by research organisations.

Four months after the workshop, the Nigerian government announced a new tax policy for tobacco products and alcohol beverages. While the new policy maintains the current 20 percent ad valorem-based excise duty rate on tobacco products, it introduces an additional N58 (US$ 0.19) specific tax on a pack of cigarettes which will be implemented over three years (N20 in 2018; N20 in 2019; and N18 in 2020). Although the increment puts the excise tax burden at 16.4 percent, which is still way below the WHO-recommended excise tax burden of 70 percent, it signifies a major milestone in the campaign against tobacco use – a notable success.

Opting out of the EU-West Africa EPA

In April 2014, the Nigerian government opted out of the EU-West Africa Economic Partnership Agreement (EPA) which comprises of the 15 ECOWAS states and Mauritania. The EU-West Africa EPA aims to facilitate free trade, greater regional integration, and economic development while, protecting infant industries in West Africa. The economic anchor of the Agreement is the immediate removal of 100 percent of the custom duties for West African goods entering into European Union member states, and the gradual removal of up to 75 percent of tariff lines for products from EU into West Africa. It is noteworthy to mention that most West African countries including Nigeria participated in the trade negotiations for about ten years, but Nigeria opted out after the negotiations had been finalised.

The Nigerian government opted out of signing the EPA for the principal reason that the CSOs, particularly trade unions, were not in support of the EPA. At the 2016 Plenary of the European Union Parliament in Strasbourg, France, President Buhari stated that “…the Manufacturers Association of Nigeria (MAN) and Associated Trade Unions, raised concerns over the negative impact of the EPAs on Nigeria’s industrialisation programme”. + The concerns centred around the potential negative impact of the EPA on the country’s revenue base and balance of payment position, noting that the influx of goods into the Nigerian market at a significantly reduced tariff would lead to losses in government revenue and increased imports. The Manufacturers Association of Nigeria (MAN) which represents about 2,000 private and public companies, as well as the National Association of Nigerian Traders (NANTS), built the momentum against the Agreement by effectively mobilising stakeholders to provide evidence-based analyses, lobby key interest parties, and organise various media campaigns.

The core of the analyses is that on one hand, Nigeria will not benefit from the EPA, as the majority (95 percent) of its exports to the EU is oil and gas which is not subject to import duty; and that local manufacturers have limited capacity to produce and export industrial goods to the EU. On the other hand, EU countries will import cheaper finished products thereby rendering the existing manufacturing industries uncompetitive, and hindering the country’s ongoing industrialisation programme. As a result, Nigeria will continue to be an importer of processed goods, an exporter of unprocessed raw materials, and will suffer revenue losses. The coalition of organised private sector groups led by MAN, estimated that the revenue losses due to the tariff removal will amount to US$1.3 trillion.

In an attempt to legitimise their stance, MAN enlisted the support of prominent national and international figures and provided them the platform to engage with other stakeholders. At the 2015 general meeting of MAN, Thabo Mbeki, South Africa’s former president, highlighted that signing the EPA had negative implications on the economies of African countries. Similarly, at the 2017 general meeting of MAN, Benjamin Mkapa, Tanzania’s former president stated that the Agreement is counterproductive. Nigeria’s former Minister of State for Finance, Ambassador Bashir Yuguda, in a discussion with MAN advised the government to reconsider its position towards the EPA.

The position of Nigeria’s organised private sector as well as the views of the prominent individuals were repeatedly published in major newspapers including The Guardian, Punch, Leadership and Thisday.  Particularly, NANTS ran a periodic publication on EPA-related issues in its Regional Trade Advocacy Series in one of Nigeria’s major newspapers – the Vanguard. Interviews with CSO groups were also aired on leading TV channels and radio stations such as the Nigerian Television Authority (NTA), African Independent Television (AIT), and Cool FM.

These aforementioned activities of MAN and NANTS resulted in a general disapproval of the EPA among industrialists and the working class. With the use of evidence-based studies, support from prominent individuals, and widespread dissemination activities, the civil society provided a clear and extensive review of the implications of signing the EPA, and narrowed the government’s options towards rejecting the Agreement.

Tying the two instances together

The two instances presents some notable parallels that can explain how political will for policy change can be built, as well as the critical role of CSOs. In both cases, the composition of the Alliance or coalition was a key determinant of the successful outcome. The size and diversity of the Alliance improved the collective capacity of the group in making their claims, exerting influence, and achieving their overall aim. The inclusion of a wide array of actors such as CSOs, research organisations, and international partners in the NTCA brought together champions that could spearhead the group’s agenda; experts to provide evidence-based analyses, and donors to fund the group’s activities. Similarly, the large size of MAN (over 2,000 members) provided clout for the favourable results.

Despite the fact that both groups possessed a strong drive towards a specific policy stance, their motives seemed to have differed considerably. While the position of NTCA seemed to be driven by genuine disapproval for incessant tobacco use and the negative health implications, the agitation from MAN and NANTS was largely driven by their fear of competition from imported goods if the EPA was signed. Thus the NTCA were mostly anti-tobacco advocates aiming for a tobacco-free society, while MAN and NANTS were essentially trying to protect themselves from potentially harmful competition.

In both cases, the use of credible evidence that was able to demonstrate the magnitude of improvement in public health in the case of tobacco taxation, and the public revenue losses in the case of the EPA, played a critical role as a tool to drive the advocacy efforts. CSEA, a partner of the NTCA, conducted a study on tobacco tax simulations which showed that increments in line with the WHO-recommended tobacco tax rate would result in substantial improvements in public health and government revenue. Likewise, research by the MAN-led coalition concluded that the revenue losses to the government as a result of signing the EPA would be significant. However, the robustness of both evidence differs slightly. While the tobacco tax simulation model was detailed and robust, and has been applied in several countries, the limited information on how MAN arrived at the size of revenue losses makes the quality of the evidence debatable.+

The advocacy and outreach mechanisms in both cases were similar. The choice of media channels was strategic, and dissemination activities were persistent. Leading newspapers, TV stations and radio channels were utilised on a regular basis to share pertinent information. The ability to use diverse media outlets to push their agenda and share the progress was instrumental in capturing the interest and the support of the public as well as highly-placed individuals. In addition, organising round table discussions were instrumental in keeping members of the alliance informed on recent events and future activities.

In sum, although there is no silver bullet in the approaches to building political will for policy change, these two instances have highlighted the importance of CSOs in building a strong and competent coalition, leveraging on evidence-based analyses, and undertaking rigorous dissemination activities in achieving successful outcomes.

concerns about an impending debt crisis in Africa are rising alongside the region’s growing debt levels. As of 2017, 19 African countries have exceeded the 60 percent debt-to-GDP threshold set by the African Monetary Co-operation Program (AMCP) for developing economies, while 24 countries have surpassed the 55 percent debt-to-GDP ratio suggested by the International Monetary Fund. Surpassing this threshold means that these countries are highly vulnerable to economic changes and their governments have a reduced ability to provide support to the economy in the event of a recession.

While debt is a global issue, Africa’s past debt crises have been devastating, creating the need to cautiously monitor this recent debt buildup. There are parallels between the present rising debt in Africa  and the Heavily Indebted Poor Countries (HIPC) initiative period that proffer solutions for prevent another crisis.

Figure 1: Government debt as a percent of GDP for African countries, 2017

Source: IMF, 2018. Regional Economic Outlook

 The events that led to HIPC and the Multilateral Debt Relief Initiative (MDRI) started in the 1960s from a public spending spree by recently independent countries to stimulate their economies through rapid investment in industry and infrastructure projects (Figure 2). Commodity booms and heavy use of external debt supported this spending as policy leaders relied on future export earnings and economic growth to improve the capacity to service the debt. Notably, those countries did not reduce expenditures during negative commodity shocks and instead took on more loans.Three key factors drove the subsequent debt crisis—the 1980s global recession, the rise in interest rates in developed countries, and a decline in real net capital inflows, which was largely due to the real negative interest rate in many countries.

As a result, the external debt-to-gross national income (GNI) ratio for the continent rose from 49 percent in 1980 to 104 percent in 1987. The World Bank’s Structural Adjustment Program attempted to tackle the problems by reducing fiscal deficits through expenditure cuts, but these austerity measures had severe, adverse impacts on social spending (and thus on livelihoods), and resulted in large current account deficits, astronomical inflation, and depressed currencies. This situation led the World Bank and the IMF to establish the HIPC initiative in 1996 to provide debt relief and reduce debt service payments of up to 80 percent for eligible countries.

Figure 2. Description of events leading to Africa’s indebtedness in the 1970s and early 1980s

In addition, in 2005 the IMF initiated the MDRI, which provided full debt relief on eligible debt. Under HIPC and MDRI, 36 countries, including 30 African ones, reached the completion point (the phase at which total debt relief is received) resulting in debt relief of $99 billion by the end of 2017. Between 1999 and 2008 alone, HIPC and MDRI reduced the external debt-to-GNI ratio for the region from 119 percent to 45 percent.

IS AFRICA HEADING BACK TO THE HIPC ERA?

Not quite…but the present composition of debt is worrisome.

The drivers of the present rising debt situation are similar to, but not the same as, that of the HIPC era (see Figure 3). In the wake of the 2007-2008 global financial crisis, governments deployed countercyclical spending to compensate for depressed private sector spending.

Another key driver was the huge rise in public expenditure on infrastructure—an effort to close the huge infrastructure gap (Africa needs to spend $93 billion annually from 2009 to 2020 to close its infrastructure gap).Of greatest magnitude was the 2014 negative commodity price shock, which dramatically reduced government revenues.

Figure 3. Description of events leading to the present debt situation

The aforementioned factors led to a decline in primary balance  from 3.9 percent of GDP between 2006 and 2008 to -6.9 percent of GDP by 2015 with countries borrowing excessively to meet public expenditure. The commodity price shock caused a depreciation in the exchange rate for several countries. Following the depreciation, foreign currency- denominated debt increased significantly.

A distinctive feature of the ongoing rising debt problem is the composition of debt. Countries are tilting away from official multilateral creditors who come with stringent conditions and toward non-concessional debt with relatively higher interest rates and lower maturities. This trend raises concerns around debt sustainability given the possibility of higher refinancing risks—particularly for commodity-backed loans in the event of a commodity price shock—and foreign exchange risks.

Furthermore, private non-guaranteed debt has grown: Between 2006 and 2017, private sector external loans tripled from $35 billion to $110 billion. This growth could result in a balance of payment problems as the private sector competes with the public sector for foreign exchange. Also, it may increase the government’s exposure to risks associated with contingent liabilities in the event of a default.

Another noteworthy trend is that countries witnessing a deepening of their financial markets are increasingly borrowing from their domestic debt market. South Africa, Kenya, and Nigeria, among others, have been issuing long-term bonds for large capital projects such as roads and hospitals. While tapping into the domestic debt market provides a sound alternative and does not expose the country to foreign exchange risk, it has the potential to crowd out private sector borrowing, thus hampering investment and output growth.

WHAT CAN BE DONE?

The rising debt burden across the continent is clearly a concern for borrowers, lenders, and the broader international community. Nevertheless, it is important to note that the present debt level is far below that of the HIPC era: In 2017, public debt as a percent of GDP in sub-Saharan Africa was 45.9 percent relative to the 117 percent external debt-to- GNI ratio of 1995. Also noteworthy is that sovereign debt financing is inevitable given that African countries budgetary resources are insufficient to finance their vast development agenda. Thus, in ensuring that all stakeholders become more prudent, we recommend the following:

1.   Better debt management

 Despite the spike in sovereign borrowing, sub-Saharan Africa’s performance in debt management has consistently declined from 3.34 in 2014 to 3.08 in 2017 (on a rating scale from 1 to 6). For those without, authorities need to design and implement formal and legal frameworks for debt management that stipulate borrowing targets and preferences for borrowing sources. Countries can tap into the support programs provided by the IMF and the World Bank. Also, establishing systems and processes to ensure up-to-date debt recording and timely debt service payments is necessary for maintaining accountability,

transparency, and sustainable debt levels. With the characteristics of debt changing significantly (e.g., the rise of nontraditional lenders, growth in domestic debt, an increase in private nonguaranteed debt), debt management authorities must utilize more sophisticated means to better analyze the costs and risks of these changes. Overall, these sound debt management practices should be extended to the subnational level and state-owned enterprises to ensure more comprehensive management.

2.   The issuance of “debt-management” financial instruments

Local authorities should issue debt instruments that can better manage the debt level. For instance, the issuance of the sukuk bond— Islamic bonds that allow investors to generate returns by having a share in the ownership of the asset linked to the investment rather than earning interest from the bond—that is tied to capital projects in Nigeria curtail the improper use of debt. Also, they should consider a state-contingent debt instrument that links debt service to predefined macroeconomic variables, such as GDP growth and changes in commodity prices. Thus, shocks that negatively impact fiscal space, such as economic recession, will not increase the debt service burden of the issuing country.

3.   More responsible lending

A debt crisis poses risks to borrowers and lenders alike. For this reason, lenders should focus on making more responsible lending decisions following due process in authorizing loans and possibly stipulating limits. Presently, the codes of conduct that address irresponsible lending such as the G-20’s Operational Guidelines for Sustainable Financing (2017) and the OECD’s Recommendation on Sustainable Lending Practices and Officially Supported Exports Credits (2018) are only binding on traditional creditors. A first step should be the development of new codes or a revision of existing ones to adjust to nontraditional actors. In addition, these codes should be enshrined in law so that participating countries adhere to them. Better coordination, more engagement, and increased information-sharing between traditional and nontraditional lenders is also crucial.

4.   Streamlining procedures 

The World Bank and IMF impose numerous, stringent, and time-consuming conditions on developing countries in order to access development finance, many of which advocate for controversial reforms such as privatization and trade liberalization policies that are not in accordance with the will of the developing country. Streamlining the lending process to reduce the number and scope of conditions to respect national sovereignty and reduce the burden associated with accessing loans is of the utmost importance. The World Bank could also increase the lending program to middle-income countries that still face development challenges like inequality, unplanned urbanization, and a weak private sector. Better engagement with these countries will enable them to consolidate their development gains and make substantial economic and social progress.

This article was first published on Brookings Institute Website

By Peace John

On March 19, 2019, the new national minimum wage bill, an issue that featured widely in the 2019 presidential campaigns, finally received legislative approval. The Senate approved ₦30,000 as the new National minimum wage, after nearly 8 years of no-increase from the ₦18,000 paid as minimum wage since 2011. The wage increase was due for review in 2016 according to the law that stipulates that minimum wage should be reviewed at least once every 5 years. As of 2017, Nigeria’s labour and trade unions had initiated agitations and advocacy for a raise for minimum wage workers, particularly owing to the over-due review and inflation’s effect on the value of the wages received. The sustained outcry undertook threatening dimensions, such as strikes and protests on several occasions, to accentuate their demands. Now, their voices have been heard, and what seems to be an applaudable achievement for them, if implemented, may bring with it several short-term and long-term fiscal and economic implications for Nigeria. More importantly, based on prevailing economic realities in Nigeria, it is one thing to approve wage policies and another thing to possess the unwavering capacity to pay the agreed amount. In light of the newly approved minimum wage, this piece highlights the plausible responses of the government, businesses, and the macro-economy at large.

Fiscal Responses

Government’s Non-capital Spending to expand.

As the new wage policy awaits the president’s assent, implementation processes become potentially inevitable and the government is expected to fund the costs arising from implementing the policy. Such costs arise in the form of an increase in personnel expenses with spikes in the percentage of the government revenue utilized for wage bills. According to the CBN, the federal government’s personnel cost rose by 18.5% to N1.85 trillion as the minimum wage was increased from N7,500 to N18,000 in 2011, thus accounting for 52% of FG retained revenue. By 2016, personnel spending had gulped about 59% of FG’s N3.2 trillion revenue and is now projected to enlarge to N2.29 trillion in 2019. With the new minimum wage approved, the government is expected to tender a supplementary budget that would provide for the imminent rise in the wage bill. While the federal government is faced with this stern burden of incorporating the new wage bill into its already strained finances, states face a more severe test given the recurring struggles to pay salaries. These excessive burdens may leave the governments with no choice than to increase borrowing to settle personnel costs – causing a devastating swing on the country’s high debt profile. However, given the shortfall in borrowing capacity, borrowing is almost not an option to be considered. Alternatively, a lower hanging fruit may remain an increase in taxation, particularly Value Added Tax (VAT) – but it has its implications.

Increase in tax rate almost inevitable

Taxation is one means, among many others, used by governments to boost revenue and meet fiscal obligations. To enable the Nigerian government to generate more revenue sufficient to fund the supplementary budget, it is considering an increase in tax rate (VAT). At the prevailing standard 5% VAT, the government generated from about N482 billion in 2013 to N972.3 billion and N1.1 trillion in 2017 and 2018 respectively. However, the tax revenue together with IGR and others, were not sufficient to cater to some states salary structures as many workers were owed salaries for several months. With the recent consideration of 50% rate increase, a VAT would be applied at 7.5% if implemented. The new rate provides a renewed opportunity for the government to garner more revenue; however, the actual point of concern is if this likely increase in revenue will be sufficient to pay the new minimum wage. Although no empirical evidence exists to forecast the amount of tax revenue needed to accommodate the wage increase, the fiscal sustainability of the new wage rate is uncertain given the limited progress made on increasing tax revenue in Nigeria.

Economic Responses

Sustained Inflationary Pressure

In theory, businesses are forced to raise prices when there is an increase in minimum wage, and this ultimately places cost-push inflationary pressures on the economy. Real business practices conform with this theory. A strategic attempt to absorb increasing labour costs tend to cause producers to transfer the cost of wage increase to product prices, which are eventually borne by consumers in form of higher prices. For example, in 2003 when the government reviewed a wage increase, prices of goods and services rose, and inflation rate spiked from about 10.5% to as high as 24%. A similar wage-increase in 2011 saw the inflation rate remain at double-digit for two years thereafter, according to data from the CBN.  If implemented, the 2019 wage increase may cause inflation rate to extensively exceed the CBN’s 12% projection and gradually erode purchasing power and value of the new minimum wage in the long term. By then, the cycle of agitations for another wage raise may come into effect, yet again.

Possible job losses

Empirical evidences such as from the World Bank, suggest that employment effects of a rise in the minimum wage are often significant and negative, particularly in a largely informal labour market like Nigeria. By reorganizing internal human resource structure, businesses that lack the capacity to keep up with an increase in overhead costs may take drastic measures such as retrenching workers and downsizing labour time. With a number of job losses and layoffs, unemployment and underemployment rates are forced to increase. A survey by the NBS showed that between 2011 when there was a rise in minimum wage and 2012, about 1.43 million people who were fully employed or underemployed lost their jobs. Although there was an increase in the labour force population, the total number of unemployed persons rose by 82.5% to 7.3 million. It is likely that the implementation of the 2019 approved minimum wage may project a similar trend given past occurrences.

Going Forward:

Although revenue from taxation has grown over the years, efforts of the government and revenue generating agencies to improve tax revenue have yielded limited progress. While collection processes have improved, other areas for improvement exist such as limited tax coverage that mitigates the collection efforts. To ensure that efforts yield the much-needed progress and beyond the existing collection process, widening Nigeria’s tax net is absolutely necessary. Lagos state sets a remarkable example for other states to follow through its model tax administrative machinery. The machinery granted full autonomy to the Lagos State Inland Revenue Service in 2006 and created new tax operational units within the agency. In 2008, the agency introduced the self-assessment filling system and a system for collaboration with other MDAs. To capture a wider range of the informal sector, in 2016, tax assessments were translated to various local languages, and more than 39 tax stations had been established across the state with compliance initiatives as priority. As a result of the wider coverage, Lagos state has witnessed unprecedented IGR growth – from a monthly average of N5.1 billion in 2006 to N56.7 billion in 2018. Going forward, states whose tax agencies lack such machinery should first be granted autonomy by the state governments.  Further, capturing a wider range of informal sector in each state and at the federal level through similar initiatives is vital to adding more taxpayers into the tax net.

Individuals and businesses are not left out in ensuring that the new minimum wage policy works for the improvement of the economy. To do this, critical emphasis on employee/worker productivity is essential, particularly when the alternative retrench mechanism is not an option. For individuals: collecting a higher wage is needful to encourage their improved commitment and performance. For businesses: given that productivity is an important determinant of economic growth, spurring productivity could inform higher national output. More regular assessments and demanding increased realistic targets from each employee are imperative measures that could be used to ensure improved productivity among workers and employees.

In Nigeria, primary education is free and compulsory (in principle). However, in places like Waru, an internally displaced persons (IDP) settlement in Abuja, children of primary school age do not go to school. The reason is simple: their parents cannot afford other non-tuition fees levied on them by the school authorities. The 1,904 out-of-school children in Waru IDP settlement are only a small fraction of over 13 million out-of-school children in Nigeria.

Who are the left behind in Quality Education in Nigeria?

Nigeria has the highest number of out-of-school children in the world, and children living with disabilities account for a significant part of that population. Disabled pupils require specialised training and teaching procedures designed to meet their unique learning needs, such as sign language for the deaf or braille for the blind. However, Nigeria’s educational system is not inclusive of children with special needs. For example, learning outcomes of disabled pupils are not tested in standard literacy assessment in the demographic and health surveys (DHS). The few special schools that exist are found to be socially dysfunctional and irrelevant to the total well-being of persons with disabilities.

Another group excluded from quality education in Nigeria are children from nomadic groups, comprising pastoralists and migrant fishing groups. Over 5.2 million nomadic children are out-of-school despite government interventions, such as the National Nomadic Education Commission (NNEC). Constant mobility of this group in search for economic opportunities is a key challenge. With frequent migration across states, policy interventions by the state and local governments are ineffective.

Over 7 million students in the Almajiri education system in Northern Nigeria are also excluded from quality education. Historically, the system was set up to train children and youth (from 5 to 22 years old) in Qur’anic literacy. However, the system has limited capacity to deliver basic learning due to lack of integration with the formal education system and inadequate support from the government. In the absence of supervision from the government, students are mostly used to collect alms in support of their teachers’ livelihoods.

Violent conflicts in Nigeria have led to the displacement of over 1.7 million people, and of this population, 56% are children (UNICEF, 2016). The displacement has significantly increased the problem of access to education, especially in Northern Nigeria, where human development is lowest in Nigeria. The efforts of government, donors, and foundations to provide emergency education opportunities for children in IDP camps fall short of delivering quality learning. Firstly, the environment is hardly conducive to learning. Secondly, the psychosocial effects of violence on the children affect their preparedness.

Why are they left behind?

Three reasons stand out:

Exclusive policies: The design and management of primary and secondary schools in Nigeria are non-inclusive and inaccessible to children with disabilities. Also, the Almajiri education system is not integrated with the formal education system. This is a setback for the achievement of Sustainable Development Goal 4 (SDG4) goal of leaving no one behind in terms of access to quality education.

Arms proliferation: The proliferation of small arms and light weapons has become a significant challenge for Nigeria. It has led to increased insecurity in numerous parts of the country, fueling communal clashes, criminal activities, insurgency and instability. Such violence has been persistent over the years due to global arms proliferation and deficiencies in the national security and border infrastructure. The violent activities carried out by Boko Haram, which led to the displacement of millions, is further enabled by the use of small arms and light weapons. Over 1,500 schools were destroyed between 2014 and 2017 in North-east Nigeria. There were at least 1,280 casualties among teachers and students. Additionally, over 1,000 students have been kidnapped from their schools by the insurgents.

Poverty: Although basic education is free in Nigeria, students are required to pay a variety of fees, such as sports and sanitation fees. This reduces the likelihood of economically disadvantaged children, such as IDPs, to gain access to schooling.

Way Forward

Our findings within Southern Voice’s “State of the SDGs” project have helped us come up with recommendations for the various actors. To increase access to and improve education in Nigeria, we propose the following:

To the Government: There is substantial scope for the review of the educational system to make it more inclusive. Educational policies should be carefully designed, taking into consideration all groups that are currently unable to access quality education in Nigeria. Increased funding is needed in the sector for the provision of basic needs, like infrastructure/school facilities.

To the international community: Arms proliferation is an enabler of violent conflict. There is a need for enhanced efforts by states and multilateral agencies to work collaboratively to curb arms’ proliferation. This can be done through better accounting of arms trade, as well as control of illegal arms trade enablers, such as illicit financial flows and porous borders.

Quality education is a crucial enabler for sustainable growth and development across nations. Nigeria faces a dual task:

• improving education access to more than 13 million out-of-school children
• and ensuring that all students get quality education.

The government needs to identify those excluded from quality education, as well as work with global actors, to design an effective policy and address the challenges of accessing quality education in Nigeria. With our research, we hope to contribute to achieving these goals.

About the SVSS project

The Southern Voice “State of the SDGs” initiative provides evidence-based analysis and recommendations to improve the delivery of the Sustainable Development Goals (SDGs). As a collaborative initiative, the program compiles a broad range of perspectives that are usually missing from international debates. This report aims to fill an existing knowledge gap. Southern Voice is confident that it will enrich the discussions on the SDGs and level the playfield with new voices from the Global South.

This blog was first published on  SouthernVoice

In 2016, Nigeria signed power purchase agreements (PPAs) worth US$2.5 billion with 14 independent power producers (IPPs) to build a total 1,125 megawatts of installed solar capacity for the national grid. Currently, grid power consists mainly of gas-fired power (85%) and hydropower (15%), with less than 1% solar. The solar IPPs are planned mostly in the northern parts of the country, where higher solar radiation is present (see map). However, put and call options agreements (PCOAs), essential to ensure the bankability of the project, are yet to be signed by twelve of the fourteen IPPs (see Table 1) due to extended negotiations on Partial Risk Guarantees with the World Bank and the African Development Bank.

The deadlock is caused by disagreements between the government and the IPPs on the PPA tariff structure. While IPPs want to sell power at the initially agreed US$0.115 per kWh, the government is insisting on a tariff of US$0.075 per kWh, citing declining solar costs and comparable projects in countries such as Senegal (US$0.05/kWh) and Zambia (US$0.06/kWh).¹

Key Factors for Resolution

1. Fair and Competitive Pricing. While the average cost of procuring solar power has declined globally by 74% since 2009, markets differ greatly across countries.² The compromise must reflect the true risk-adjusted costs of solar systems in Nigeria.³ A balance should be struck between generating appropriate investor returns while delivering inexpensive energy to impoverished areas short of power.
2. Commercial Viability and Cost Recovery. Gas suppliers, GenCos, and DisCos are already affected by tariffs set below cost recovery (averaging US$0.066/kWh), which inevitably lead to stalled projects.⁴
3. Country Risk Premium. Nigeria is already a high-risk market. Disregarding legally-binding contracts agreed in the PPAs may contribute to weakening investor trust, raising the country’s overall investment risk profile, negatively affecting future investment and, ultimately, energy prices.

Conclusion: Broaden the tools to find a solution. The Government and investors can renegotiate and compromise in these deadlocks through resourceful policy mechanisms that could yield more desirable outcomes for both parties. These include the removal of the import duty on solar components to reduce total costs for the power producers. It could also include a capacity scale down to a captive market, for instance secluding reliable solar systems primarily for communities with high commercial, agricultural and industrial activities – to ensure that the government and populace get the most out of the new power projects. Different tariffs could also be applied to different IPPs on the grounds of certain considerations such as project locations and sunk costs.

	Company	Capacity	State	PCOA Signed
1.	Afrinergia Power Limited	50 MW	Nasarawa	April 2017 (7.5c/kWh)
2.	CT Cosmos Limited	70 MW	Plateau	April 2017 (7.5c/kWh)
3.	Pan Africa Solar	75 MW	Katsina	Not Signed
4.	Nigeria Solar Capital Partners	100 MW	Bauchi	Not Signed
5.	Motir Desable Limited	100 MW	Nasarawa	Not Signed
6.	Nova Scotia Power Dev Ltd	80 MW	Jigawa	Not Signed
7.	Anjeed Innova Group	100 MW	Kaduna	Not Signed
8.	Nova Solar 5 Farm Limited	100 MW	Katsina	Not Signed
9.	KvK Power Limited	100 MW	Sokoto	Not Signed
10.	Middle Band Solar One Limited	100 MW	Kogi	Not Signed
11.	LR Aaron Power Limited	100 MW	Abuja	Not Signed
12.	En Africa	50 MW	Kaduna	Not Signed
13.	Quaint Abiba Power Limited	50 MW	Kaduna	Not Signed
14.	Oriental Renewable Solutions	50 MW	Jigawa	Not Signed

This Memo was drafted in collaboration with Patrick Okigbo of Nextier Advisory This article was first published on energy for growth hub