Minister of Budget and National Planning, Udo UdomaThe “taste of the pudding,” they say, “is in the eating.” This is a fitting saying that describes what is currently trailing the latest economic policy tagged: Economic Recovery and Growth Plan (ERGP). It is an evidence of citizens’ fastened mode in “let’s watch, wait and see” mindset, after an impossible ‘change’.
Coming barely two years after the inauguration of the present administration noted for “change” mantra, the business community, political class, multilateral and international institutions have clamoured for an economic blueprint.
From the end of third quarter of 2015 to the announcement of the nation’s recessionary mode in August 2016, blames have never ceased to go the direction of slow decision-making, inaction and lack of economic document by this administration as the foundation of the ongoing economic crisis.
Already there are arguments that as good as the plans are, there are little or no clear details. For example, there is a projection of 2.5 million barrels per day within the implementation timeframe. How this would be realised is yet to be made clear, amid uncertainty in production presently, courtesy of unresolved Niger Delta issues. Is it by further investment in oil discovery and development? Where is the place of the non-oil sector?
There seems to be a contradiction too. In a period where diversification is the major economic recovery plank, how come the oil production is expected to increase within the period and perhaps, a major source of revenue as well? There is need for more explanation and a clear one, on how this policy would put Nigerians back to work and restore the nation to sustainable growth path.
The Managing Director and Chief Executive Officer of Cowry Asset Management Limited, Johnson Chukwu, lauded government for the bold step to launch a roadmap in the first place, although long expected.
He also said the content is showing that the country’s leadership can dream of a better thing, if not for the country as a whole, but for themselves, whether realisable or not.
He however, warned that the plan was too ambitious, given our capability at the present, with the figures being mostly unrealistic. “One of which is the Gross Domestic Product’s growth numbers. These projections need to be broken down further.”
The ERGP also aims to increase export earnings and government income by N800b more yearly for a period of three years. The same plan a N35b from sale of national assets, including oil joint ventures and reducing stakes in oil and non-oil assets. There is also plan to review and if possible, currency control on 41 goods and services that has been on since 2015. It would improve tax collection to raise N350b yearly, partly by implementing and raising tax on luxury goods to 15% from its current five per cent starting from 2018. Agriculture would get an upscale to realise self-sufficiency in rice by 2018; wheat by 2019; and Nigeria becoming a net exporter of rice, cashew, groundnuts, cassava and vegetable oil by 2020.
What would happen to the state of infrastructure, which would drive these plans beginning in 2018, was not explicitly.
Chukwu added: “The government made a general statement by ‘the sale of national assets’. We need to know which assets in particular are involved. This will help the private sector to begin its strategy, while government finishes its regulatory framework towards the plans. These details are not clear and it is not about putting numbers, because it merely will not inspire any confidence.”
But from a political space, another respondent said that this government must avoid getting this economic policy enmeshed in ambiguity. “It must communicate fast and clear, because the policy is not all about government, but also investors- local and foreign, who would take up the plans.
“Again, people are already worn out with sufferings and gloomy outlook as to the end of the hardship. They need hope, not ‘grammar’. They want to see action, not just paper work and promises. But the media should also step up,” he said.
A research analyst at Cyprus-based FXTM, Lukman Otunuga, affirmed that there was a feeling of positivity across the Nigerian economy following the “highly optimistic” economic growth recovery plan for 2017-2020 that painted an encouraging outlook for the nation.
“The four-year plan was anchored around achieving healthy economic growth and sustainable development, boosting sentiment towards Nigeria, which is currently in the process of a critical structural transformation. With a strong focus on the nation augmenting both public and private sector efficiency, while also increasing overall productivity, a growth forecast of seven per cent by 2020 could be a possibility,” he said.
He however said, Nigeria needs to achieve a stable macroeconomic environment, reinvest in agriculture and reinforce infrastructure to promote sustainable economic growth.
While admitting that the recovery plan may be received positively by the international investment community and could translate to an increased foreign investment in the medium to long term, he warned that implementation, continuity of policies and clear policy framework would be the critical consideration.
Also, the Executive Director of OJA Development Consult and public affairs analyst, Jide Ojo, commended the Federal Government for launching the much-awaited economic blueprint, which is to pull the country out of recession now, as opposed to growing the economy from the beginning of the administration.
For him, the roadmap looks good, with all the niceties, sound-bites and desirable action plans, but experience from the past has shown that we are long on rhetoric, but always short on delivery of all our noble plans.
He cited Vision 2010, NEEDS, Vision 20:2020 and even all the country’s earlier development plans in the 60s and 70s that were badly implemented, warning that this should will not follow the same pattern.
“I am particular about the promised diversification of the economy, ease of doing business, increase oil production, reduction of inflation, effective collaboration between the public and private sector, as well as between the federal and the state governments, the leverage on science, technology and innovation and building a knowledge-based economy.
“The ERGP is also consistent with the aspirations of the Sustainable Development Goals (SDGs) given that the initiatives address its three dimensions of economic, social and environmental sustainability issues. It is also laudable that the document is a product of wide consultations,” he said.
He however, expressed fears that ERGP came late, something one would have expected a serious government to have come up with in the first six months of inauguration, but worse still, there was no cabinet in place as at then.
“Launching this, two years into this administration, with 2020 deadline is a big minus. This administration will face election in 2019. Should it lose reelection bid, the ERGP may be in jeopardy, more so that there is no law backing it up. Even if there is, there is nothing that stops a new administration from repealing such law and coming up with a fresh plan.
“While the plan aimed at a partnership with the state, it left out the 774 Local Government Areas. This is a significant composite unit of the country that is being neglected. This seems like a costly omission.
The global ascendancy of protectionism may impact negatively on many of the projections as several countries of the world and political groups like European Union embark on economic protectionism, which will necessitate review of trade agreements and economic partnerships.
“Widespread restiveness, terrorism and pervasive insecurity will pose a major threat to the realisation of the many beautiful recommendations in the ERGP. Highly desirable is a diligent and patriotic implementation of this elaborate plan,” he added.
For an economist and financial analyst who would not want his name in print, “this is not the first time there would be such a fantastic proposition. In fact, Nigeria is not short of bright minds and ideas. It is not also short of selfish and political jobbers, who are only interested in circumventing the rules for their personal gains. The crux of the matter is faithful implementation and that is why everyone will be waiting to see how it would pan out.”