Economic Recovery and Growth Plan — Growing a Diversified Economy
Nigeria has untapped potentials stemming from the dependence on oil sales and the neglect of other sectors and human resource. With the oil boom of the 70s, the country gradually shifted from an agrarian one to depending on barrel sales to boost the economy. Oil accounts for more than 95 per cent of exports and foreign exchange earnings while the manufacturing sector accounts for less than one percent of total exports. The high growth recorded during 2011–2015, which averaged 4.8 per cent per annum mainly driven by higher oil prices, was largely non-inclusive in terms of investing in human resource the nation has in abundance. Instead, economic growth was undermined by deplorable infrastructure, corruption and mismanagement of public finances.
The Buhari led administration recognizes that the economy is likely to remain on a path of steady and steep decline if nothing is done to change the trajectory. It is in this context that since inception in May 2015, Government has made several efforts aimed at tackling these challenges and changing the Nigerian economy in a fundamental way. The earliest action was the prioritization of three policy goals: tackling corruption, improving security and re-building the economy. Consequently, the Strategic Implementation Plan (SIP) for the 2016 Budget of Change was developed as a short-term intervention for this purpose. Visible successes and achievements have been recorded. However, it is recognized that more needs to be done to propel the country towards sustainable accelerated development.
The Economic Recovery and Growth Plan (ERGP) is a medium term all-round developmental initiative focused on restoring growth, investing in people and building a globally competitive economy. It has been developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people — the nation’s most priceless assets. The Plan also recognizes the need to leverage Science, Technology and Innovation (STI) and build 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.
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 12 strategic priorities for executing the economic recovery and growth plan are grouped into five main categories. These are; stabilizing the macro environment, achieving agriculture and food security, ensuring energy sufficiency in power and petroleum products, improving transportation infrastructure and driving industrialization focusing on SMEs.
Leveraging on the success of initiatives in the agricultural sector like Anchor Borrowers Programme (ABP) and other pipeline pilot projects like Accelerated Agricultural Development Scheme (AADS), West African Cotton Company Limited (WACOT), Rice Mill in Argungu, Kebbi State with production capacity of 120,000 metric tonnes, African Soil Information Service (AFSIS), productivity has been enhanced in the agricultural sector. About 80 per cent of the budgeted N55bn for ABP has gone into rice production, further driving the nation’s target of attaining self-sufficiency by 2018 with respect to rice production. These initiatives have helped agriculture contribute 21.97% to nominal GDP since its inception. This figure is higher than the rates recorded for the fourth quarter of 2016 and lower than third quarter of 2017 at 21.35% and 24.44% respectively with an annual growth rate of 11.29% in 2017 as against 9.61% in 2016. The drive to achieve agriculture and food security has made the budget allocation for agriculture increase to N118.98 billion, N15b higher than N103b of the previous year.
Transportation infrastructure has been improved through the delivery of targeted high priority transportation projects. This has seen to the construction of the rail road infrastructure of which the first stage has been completed. Implementing the ERGP, advanced rail network is strategic to connect the nation together. The first batch of the rail network is the Abuja-Kano rail network. The construction is in batches with the Abuja-Kaduna section completed and open for business. Economic recovery and transformative growth cannot be achieved by the government alone. It is essential to harness the dynamism of business and the entrepreneurial nature of Nigerians, from the MSMEs to the large domestic and Multinational Corporations to achieve the objectives of this Plan. The Plan prioritizes the provision of a more business friendly economic environment with inclusion of Public Private Partnerships in the financing of transportation infrastructure in the country.
As much as the key players in the financial sphere are being targeted in this ERGP, it creates the environment for the growth of Micro, Small and Medium Enterprises (MSMEs). There are specific policies for the MSMEs to grow and contribute to the nominal GDP. These policies center around improving the ease of doing business in Nigeria and providing a safe and conducive environment for businesses to thrive. This improvement has led to Nigeria moving up 24 places to rank 145 among 190 economies on the World Bank’s Ease of Doing Business Index.
The ERGP sets the ambitious target of 7 percent real GDP growth by 2020. This is initially driven by the oil sector and then increasingly by strong non -oil sector growth (agriculture, manufacturing, and services). Although the target might seem ambitious, it does not water down the effect the initiatives under this plan have on the growth of the country’s GDP since it was launched and activated. If strategically implemented, the ERGP is a tool to grow and sustain a diversified economy.
