Federal Government: How Nigeria Will Become Big Economy In 2020

The Federal Government during the week launched its clearly laid out economic development economic plan, tagged ‘Economic Recovery and Growth Plan (ERGP), a medium-term plan for 2017-2020, broadly targeting restoration of growth, human development and globally competitive economy, an efforts to combat the current economic crisis and achieve sustained diversification and inclusiveness.

The Ministry of Budget and National Planning, Mr. Udoma O. Udoma released the ERGP document on Tuesday, eventually providing a policy and reform framework, demanded locally and internationally, to haul the economy out of recession and chalk out path to national development.

Unavailability of the ERGP has been mentioned as impeding the country’s efforts to secure the funds needed to address her economic challenges, including funding for the budget especially critical infrastructural objectives. In January, Reuters reported how government’s inability to submit a recovery and reform plan stalled Nigeria’s bid for an international loan, quoting unnamed sources in global and Nigerian finance circles. The Reuters report mentioned the African Development Bank (AfDB) President, Akinwunmi Adeshina, as saying the bank held back the last tranche of $1 billion loan for Nigeria. “We are waiting for the economic policy recovery programme and the policy framework for that,” Mr. Adeshina was quoted as saying, while explaining the reason for holding back the last tranche of loan for Nigeria.

In the plan disclosed Tuesday evening, the Federal Government said: “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.” Objectives The ERGP has three main objectives, including restoration of growth which has been elusive; investment in the people; and becoming a globally competitive economy.

To restore growth, the ERGP focuses on macroeconomic stability through fiscal stimulus, monetary stability and improved external balance of trade; and economic diversification by giving attention to agriculture, MSMEs, etc.

“The revival of these sectors, increased investment in other sectors, less reliance on foreign exchange for intermediate goods and raw materials and greater export orientation will improve macroeconomic conditions, restore growth in the short term and help to create jobs and bring about structural change,” stated the ERGP.

To drive investment in the people, the government said it would focus on social inclusion through targeted programmes that will enhance access and ensure support for the vulnerable. It also said it would reduce regional inequalities, especially in the Niger Delta and the North East. Further, the government also expressed commitment to job creation and human capital by investing in healthcare and education to fill the skills gap in the economy.

“The ERGP aims to tackle the obstacles hindering the competitiveness of Nigerian businesses, notably poor or non-existent infrastructural facilities and the difficult business environment,” stated the ERGP. “It will increase competitiveness by investing in infrastructure and improving the business.”

Outlook by 2020 The ERGP, the government said, is designed to achieve agricultural transformation and food security and make Nigeria become a net exporter of rice, cashew nuts, groundnuts, cassava and vegetable oil by 2020.

For tomato paste, rice and wheat, the government said it targeted self-sufficiency by 2017, 2018 and 2020 respectively. Improved foreign exchange inflow, achieving 10 GW of power generation, becoming exporter of refined petroleum products, stable macroeconomic environment, infrastructural development and industrialised economy are other parts of the outlook Nigeria envisions come 2020.

It is not the first time Nigeria would have a development plan; but mismanagement, lack of coordination, and non-implementation stalled the effectiveness of previous ones. But the government said it would ensure implementation of the ERGP by tackling growth constraints like poor business environment; involving the private sector and allowing market function; promoting national cohesion, social inclusion and core values “that define the Nigerian society as enshrined in the 1999 Constitution, notably discipline, integrity, dignity of labour, social justice, religious tolerance, self-reliance and patriotism.”

Government had also said that asset divestment, stable oil production and expansion of economic infrastructure are parts of the strategic plans it is undertaking to haul the troubled economy out of recession and restore growth. Minister of National Planning, Mr. Udoma dropped this hint on Monday at the State House, Abuja, where he unveiled the Economic Recovery and Growth Plan, 2017-2020, during the Second Presidential Business Forum chaired by the Acting President, Yemi Osinbajo. According to the Minister, the ERGP, a new medium-term plan, was designed to combat the current economic crisis, restore growth and ensure sustained inclusive growth.

To implement the ERGP, he said the government had prioritised 12 strategies, though 59 strategies had been developed. The priority strategies are: privatization of ‘selected’ public asset; cutting costs of governance; restoration of crude oil production to 2.2 million barrels per day (mbpd), targeting 2.5mbpd by 2020; investment in critical infrastructure, especially electricity, roads, and railways to support investments; and revamping the country’s refineries.

Others are: expansion of social investment programmes; improving the ease of doing business in the country; accelerated implementation of the National Industrial Revolution Plan; exports promotion; agricultural transformation; improving skills, and enhancing growth.

The proposed sale of national assets to raise funds needed to combat recession, when it was muted last year, sparked debate, dividing analysts and lawmakers. Nigeria’s economy heavily relies on oil revenue. Slide in oil prices and low output due to renewed insurgency in the Niger Delta region have hit the country and plunged her into recession which has seen businesses and families go through worst experiences in years.

•Nigeria to sells N1.13trn treasury bills in Q2 The Federal Government plans to sell N1.13 trillion (about $3.70 billion) worth of treasury bills between March 16 and June 1, a Central Bank of Nigeria (CBN) debt calendar has shown.

The bank aims to auction N243 billion in 91-day bills, N198 billion in 182-day and N689 billion in 364-day debt. According to Reuters, CBN says it sells treasury bills twice a month to help fund the government’s budget deficit and support commercial banks in managing liquidity.

In February, the Federal Government had said it would raise N142.43 billion (about $453.60 million) from the issuance of shortterm treasury bills. The treasury bills are to fund the national budget deficit, manage banking system liquidity squeeze and curb rising inflation in the economy. With an outlay of N7.298 trillion, the 2017 budget has an overall projected fiscal deficit of N2.36 trillion (about 2.18 per cent of GDP), with half of it funded through domestic borrowings.

The Minister of Budget and National Planning, Chief Udoma Udoma, had said the deficit would be financed mainly by borrowings, projected at N2.32 trillion, consisting of external sources (N1.067 trillion, or 46 per cent) and domestic sources N1.25 trillion. During a consultative meeting with the private sector in February, Udoma had noted that the Federal Government was targeting at least seven per cent growth in the economy by 2020, amid efforts to lift the country out of its first recession in 25 years.

•Ashafa urges training of rail infrastructure engineers

The Chairman, Senate Committee on Land Transport, Senator ‘Gbenga Ashafa has called on the Faculty’s of engineering in Nigerian Univeristies to immediately commence the training of Rail-infrastructure engineers.

He made the call at the ground- breaking ceremony to mark the commencement of the construction of the Lagos-Kano standard gauge railway system with an extension to the Lagos port complex, Apapa by His Excellency, the Acting President, professor Yemi Osinbajo (SAN) (GCON) on Tuesday, March 17, 2017.

While speaking to journalists after the event, Ashafa, who represents the Lagos East Senatorial District in the Senate, said: “It is imperative that the engineering departments of our universities maximise the gestation period of this project, to develop a syllabus on railway engineering for our undergraduates.

“This would adequately prepare our young engineers for the maintenance of the country’s railway infrastructure upon handing over by the expatriates who will handle the construction and also prepare them for jobs that would be available in the industry, in view of the potential of the project to create an estimated 250,000 jobs.”

While commending the Buhari Administration for keeping its promise on infrastructural development, he said that “today marks yet another milestone in the actualization of the commitment towards all round infrastructural development in Nigeria by the Buhari/Osinbajo Administration, particularly in the Rail sector.”