Our brand new Economic Recovery and Growth Plan

Finally, after 20 months in office, the Government published its Economic Recovery and Growth Plan (ERGP) last Wednesday. Experts, local and foreign had been confounded on the absence of a recovery plan after two years of debilitating recession. The Medium Term Plan, which is for 2017 – 2020, builds on the assumption that the role […]

Finally, after 20 months in office, the Government published its Economic Recovery and Growth Plan (ERGP) last Wednesday. Experts, local and foreign had been confounded on the absence of a recovery plan after two years of debilitating recession. The Medium Term Plan, which is for 2017 – 2020, builds on the assumption that the role of government in the 21st century must evolve from that of being an omnibus provider of citizens’ needs into a force for eliminating the bottlenecks that impede innovation and market- based solutions. The Plan also recognises the need to leverage Science, Technology and Innovation (STI) to build a knowledge-based economy. The ERGP is also aligned with the aspirations of the Sustainable Development Goals (SDGs) addressing its three dimensions of economic, social and environmental sustainability.

I do not know whether we are supposed to congratulate to government for finally developing a plan. They should have done one long ago. I have been very concerned that there has been no real debate on our economic reform agenda up to this moment when we were given a plan. Of course for over one year, all we had was a shouting match between two camps – WE MUST DEVALUE versus WE MUST NOT DEVALUE as the value of the Naira relative to the dollar continued its steady and fast slide. Eventually there was an announcement that the Naira has been placed on a free float. It soon became apparent however that no such thing happened. The Naira was simply devalued and a policy decision was taken to allocate 60% of available dollars to manufacturers. This policy decision led to an acceleration of the decline of the value of the Naira in the parallel market. The so-called manufacturers then realised that they could make much more money changing the dollars in the parallel market than in importing inputs for manufacture. With the scarcity that was thus created it soon became clear that the real objective was to accelerate fraud. Nigerians who were confronting collapsed systems desperately needed foreign currency for medical tourism, foreign school fees and travel became even more prepared to pay any price for the dollar. Those with direct connection to the CBN became the new centres of wealth in the society through foreign currency trafficking until the recent shift in policy. The tragedy for the country was that throughout this period, there was no real discussion on economic policy and even the few policy pronouncements made were not adhered to. The operational policies that functioned were designed to serve the interests of those with access to the Presidency, rather than serve the national interest.

The new Plan argues that Nigeria has the potential to become a major player in the global economy by virtue of its human and natural resource endowments but this potential has remained relatively untapped over the years. The country had shifted its focus from agriculture to crude oil and gas in the late 1960s. Successive governments had been unable to focus attention of the diversification and transformation of the economy while petroleum rent fuelled high consumption based in imports. There was high growth recorded during the 2011-2015 period, which averaged 4.8 per cent per annum. It was however mainly driven by higher oil prices and was largely non-inclusive. The majority of Nigerians remained under the burden of poverty, inequality and unemployment.

The ERGP claims that it is different from previous plans in several ways. First, Nigerians are being told that this time, there will be a focus on implementation. This is good. I have however not heard of any previous plan that had not sworn that there would be a focus on implementation. Let us hope that this time, the promise would be kept. The second promise of the Plan is that oil production would be increased to 2.5mbpd by 2020 and local refineries would be revamped to reduce petroleum product imports by 60 percent by 2018. Once again, this is a good promise but it would require a brand new approach to addressing the crisis in the Niger Delta to fulfil the promise. The third promise is that the Plan would build on existing sectorial strategies and plans such as the National Industrial Revolution Plan, and the Nigeria Integrated Infrastructure Master Plan. Rather than re-inventing the wheel, the ERGP will strengthen the successful components of these previous strategies and plans while addressing challenges observed in their implementation.

The fourth promise is that the ERGP would promote close partnership between the public and private sectors. In implementing the Plan, the Government will collaborate closely with businesses to deepen their investments in the agriculture, power, manufacturing, solid minerals and services sectors, and support the private sector to become the engine of national growth and development. In addition, science and technology will be effectively harnessed to drive national competitiveness, productivity and economic activities in all sectors. Finally, the ERGP provides for effective collaboration and coordination with the States to ensure that the Federal and State Governments work towards the same goals. The States have a significant role to play in the success of the ERGP and some have already adopted a number of the initiatives being promoted in this Plan. There are very good promises in the plan but the real issue would be the capacity to keep to their words.

The vision of the ERGP is one of sustained inclusive growth. There is an urgent need as a nation to drive a structural economic transformation with an emphasis on improving both public and private sector efficiency. This is aimed at increasing national productivity and achieving sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security. This Plan is a pointer to the type of Nigeria that the people desire in the short to medium-term, and encourages the use of science, technology and innovation to drive growth. It also provides a blueprint for the type of foundation that needs to be laid for future generations, and focuses on building the capabilities of the youth of Nigeria to be able to take the country into the future.

The ERGP has three broad strategic objectives that will help achieve its vision of inclusive growth. The first is to restore growth by focusing on achieving macroeconomic stability and economic diversification. Macroeconomic stability will be achieved by undertaking fiscal stimulus, ensuring monetary stability and improving the external balance of trade. Similarly, to achieve economic diversification, policy focus will be on the key sectors driving and enabling economic growth, with particular focus on agriculture, energy and MSME led growth in industry, manufacturing and key services by leveraging science and technology.

The second is to promote social inclusion. The Federal Government will continue to provide support for the poorest and most vulnerable members of society by investing in social programmes and providing social amenities. Targeted programmes will reduce regional inequalities, especially in the North East and Niger Delta. Finally, the objective of job creation and youth empowerment would receive priority. The ERGP accordingly prioritizes job creation through the adoption of a jobs and skills programme for Nigeria including deepening existing N-Power programmes, and launching other public works programmes. The partnership for job creation will also focus on the policies required to support growth and diversification of the economy by placing emphasis on Made-in-Nigeria, public procurement which takes account of local content and labour intensive production processes. All initiatives under job creation would prioritize youth as beneficiaries.

These are all very good words. They are similar to the good words in previous plans that were never implemented. This government has already built a solid reputation as the slowest government in Nigerian history. If it took 20 out of the available 48 months to develop the Plan, I wonder when the gear will shift to full implementation. Meanwhile, what is important is close monitoring by the National Assembly, and above all by citizens, to ensure real implementation benchmarks are developed and tracked.