‘We must return to national planning’

The Economic Situation Is Very Challenging The theme of our Dialogue today; “Beyond Recession: Towards a Resilient Economy” is very pertinent in our current, most challenging times. I congratulate Daily Trust on succeeding in persuading our very distinguished panel of speakers to lead our discussions today. In November 2012, I was invited to this our […]

The Economic Situation Is Very Challenging

The theme of our Dialogue today; “Beyond Recession: Towards a Resilient Economy” is very pertinent in our current, most challenging times. I congratulate Daily Trust on succeeding in persuading our very distinguished panel of speakers to lead our discussions today.

In November 2012, I was invited to this our Capital City to speak to the Alumni and Course 34 graduates of the National Institute on “Economic Diversification For Sustainable Growth And Development Of Nigeria”. I shall repeat my introductory remarks then to give a background and historical context to our discussions. I shall not of course try to anticipate the analysis and prescriptions which we expected from our very distinguished Speakers.

Nigeria’s Enormous and Diversified Resource Endowments

As we all know, very few countries have been so blessed as Nigeria with such varied and enormous resource endowments – of agricultural potentials; solid minerals like iron ore, lead, zinc, tin, limestones, clay, kaolin, etc; fossil energy like oil, gas, and tar sands, coal and lignite; hydro and other sources of renewable energy; marine resources; and above all human resources. All these in large globally significant reserves are situated near enough in our compact country. Nigeria also has such an advantageous geographical location – for we are only 3,500 miles from the markets of Europe and America whereas Asian producers must traverse more than 10,000 miles to deliver to those markets. In recounting these factors, we are immediately confronted by our dismal history of failure over the past four decades to exploit such resource endowments to achieve rapid economic and social development and to create wealth for our teeming population.

Exactly one week before my address on the 8th of November, 2012 here in Abuja, the Senior Resident IMF Representative in Nigeria, Mr.  Scolt Rogers, was reported to have said that economic diversification was one of the greatest challenges currently confronting Nigeria because oil revenues would be falling.  That was five years ago. One could foresee the implications of America’s success in tracking.

Retired officials like myself can only recall with great pain and regret the 3rd National Development Plan 1975 – 1980 which was launched in April 1975, that is 42 years ago. That Plan was meant to lay the basis for economic diversification and industrialization with priority to be given to modernized agriculture and agro-allied industries, and value-added projects in the oil and gas sector e.g. export refineries, petrochemical and fertilizer plants for the local market and the export. Let me quote a passage from the Chapter of the Plan dealing with “Objectives, Priorities And Strategy”. It states; “An economy that is not diversified is especially vulnerable to changing economic situation. This is so whether the economy is dominated by agriculture or by oil production. It is therefore intended under the next Plan (i.e. 1975 – 80) to achieve greater diversification by a rapid expansion and broadening of industrial activities in the economy. It is expected that in real terms, value added in industrial sector will be diversified through the implementation of a wide range of building materials, agro-allied, petrochemical and other industrial projects. During the Third Plan Period, the economic infrastructure necessary for sustained industrialization of the economy will be established.”

The reasons for adopting above objectives are as valid today as they were then:

• The oil and Gas sector is capital intensive and will yield revenues but it will not create much employment.

•Jobs and broader distribution of income to many more people would only come from modernized agricultural sector, agro-allied processing industries, manufacturing, the services construction, tourism and other sectors.

One must also observe that multiplication of good income-earning jobs and expansion of the middle classes will have beneficial impact on our political development and stability.

The great tragedy is that the Murtala – Obasanjo Administration which replaced the overthrown Gowon Administration effectively abandoned the 1975 – 980 Plan with its great promise of creating the basis for economic diversification and industrialization, and also abandoned indeed, the principle and discipline of planning. The traumatic massive purge of about 10,000 officials countrywide over a period of four months had destroyed the competent, professional, bold, non-partisan, fearless, prestigious, merit-driven Civil Service inherited from the British Colonial Administration, which might have been able to influence the new Administration to keep to the Plan and its constraining discipline. Plan discipline requires the application of funds and other resources for the implementation of pre-determined priorities and projects set out in the plan. The stage was then set for the economic stagnation and the degradation of infrastructure, educational, health and other sectors over the next three decades despite the fairly high level of oil revenues compared with the pre-Civil War and pre-Independence situation. This is when Nigeria’s economic development path diverged from that of the Asian Tigers with whom we were practically at par in the early 1970s.

We may recall the impressive average annual growth rate of 6% achieved under the 1st Plan 1962 – 66, later extended to 1968; and after the Civil War, the average annual growth rate of 11.75% from 1970 – 75.

There were feeble attempts during the years that followed. A 4th National Development 1981 – 85 Plan was produced but this was largely not implemented. Equally feeble attempts were made with so-called rolling-plans under Military Administrations from 1984 to 1999.  There was really no political will and commitment for planning, except perhaps, for the great initiative taken in 1996 – 1997 to produce Vision 2010 under which Nigeria would become by 2010 “A united, industrious caring and God-fearing democratic society committed to making the basic needs of life affordable for everyone and creating Africa’s leading economy”. All sectors of activity were to be galvanized and the economy was to grow between 6% – 10% per annum attaining the growth rate of 10% or more by 2010. By 1998, all the institutions required to drive Vision 2010 had been set up by G en. Abacha’s Administration. He died in 1998 and thereafter all efforts were directed by his successor, General Abdulsalam, to restore elected Civilian Rule within one year.  The New Democratic Regime which came to power in May 1999 with Chief Olusegun Obasanjo as president unfortunately completely set aside Vision 2010.

Serious Economic Challenge Confront Nigeria

So we find ourselves today confronted with serious economic challenges in a more difficult setting of global economic recession.

•Our population which was 40 million at Independent is now about 182 million and is projected to continue g rowing at 2.8% per annum over the next few years and more.

•The proportion of the population living at below poverty line in 1960 was about 20%. The proportion today is about 70%.

•GDP per capita in 2014 was US$2,820.

•In 1975, Nigeria was at about No. 56 a low middle income country, today we are about No. 158 and still a low middle income country but overtaken by so many countries.

•Nigeria’s HDI ranking in 2016 was 152 out of 188 countries.

•Nigeria is still a mono-cultural economy exporting crude oil and LNG which account for 95% of our export earnings until very recently with the crash of oil prices.

• Only 40% of Nigerians living in urban centres have access to electricity.

•Manufacturing contributed just under 4% to GDP, and export of manufactured goods less than 0.7% in 2011.

Vision 20:2020

We are all aware of our flirtation with Vision 2020. During 2009 and 2010, the Government, Federal and States, with the active participation of a board spectrum of Nigerians – including public and private sector experts and representatives of NGOs elaborated Vision 20:2020. The goal of Vision 2:2020 was to make Nigeria one of the 20 largest economies in the world by 2020AD and meanwhile to ensure the achievement before then of the Millennium Development Goals (MDGs) and a drastic reduction of the proportion of Nigerians living below the poverty line. Three medium term implementation Plans were agreed: 2010 – 2013; 2014 – 2017; and 2018 – 2021. The First Implementation Plan 2010 – 2013 which would be our 5th National Development Plan was developed in full detail. Subsequently the Jonathan Transformation Agenda 2011 – 2015 was launched which was said to be coherent with the 2010 – 2013 Plan and anticipated part of the 2014 – 2017 Plan. Again, we failed to try to implement what was planned. So the country finds itself in the current dismal situation.

We shall now listen eagerly to the Hon. Minister of Finance, Mrs. Kemi Adeosun, and two outstanding leaders of the private sector, Mr. Atedo Peterside, CON, a very successful banker and Board Member of a number of leading enterprises, and Mr.  Aliko Dangote, GCON, Africa’s most outstanding and successful industrialist expose for us how best the country can shake off the habits and practices of the past which led to such poor performance and embrace new approaches to lead us to a prosperous and resilient economy.

We shall have time for contributions from the floor. And I am especially delighted that we have with us the Rt. Hon. Speaker of the House of Representatives, who will address us – because the hard choices which the nation must make to resume and sustain economic growth and development will require the commitment support and actions of the Legislative Arms of Government. I hope that at the end of our Dialogue, we shall reach consensus, beyond party and other divides, on a number of urgently necessary tasks to be under taken, on methods and timing, and on selection of competent personnel to implement them to help the national leadership drive positive, beneficial change.

I thank you all for listening to me so patiently.

CHIEF P.C. ASIODU, CFR, CON

ABUJA

19TH JANUARY, 2017