The past week showed that Nigerians indeed appreciate elegance, moderation and beauty. Thousands, perhaps, millions of Nigerians were glued to their TV sets as the wedding between Meghan Markle and Prince Harry held. The whole ceremony was planned to detail and just did not happen. That brings me to the matter of our economy. It is no longer a subject of debate that the economy was in bad shape as at the time President Muhammadu Buhari’s government came on board. The quarrel for most was that there was no viable roadmap to reboot the parlous situation and engender macro-economic growth.
It is a given that nothing enduring and worth-the-while happens overnight. This is by no means holding brief for the government for the time it took to get a cohesive economic strategy in place. However, given that workable plans are not picked off the shelf, the period of the wait could be the gestation time that the administration was tailoring its Economic Recovery Growth Plan, ERGP.
Since the unveiling of the blueprint in the first quarter of 2017, arguments for and against the plan have been in their numbers, and this is expectedly so. Like in almost every sector in Nigeria, it is uncommon to find unanimity of opinions, which by the way is good as even in the multiplicity of the conversations, common grounds could be found.
Even the most ardent critics of the ERGP agree that it is a compass by which the government can navigate its way through the economic impasse which it has been doing for nearly three years and has been able to chart a path of sustainable economic growth with the right focus and discipline. The introduction of the plan has seen some measurable improvement not just in terms of the ease of doing business, but in the streamlining of the forex market.
The argument of the Chief Executive Officer of RTC Advisory Services Ltd, Mr. Opeyemi Agbaje, on the untenable business environment before the birthing of the ERGP is instructive. According to him, “In 2015 and 2016 for instance, Nigeria “erected” two structural barriers against foreign investment-one, the structure of multiple exchange rates reaching as many as 13 according to some reports and the huge variance between the rates at a point rising to a difference of over N200 between the lowest and the highest rates; and the absence of clarity over economic policy. The result of these twin barriers was the collapse of foreign investment in Nigeria from $20.8billion in 2014 to $9.8billion in 2015 and only $5.1billion in 2016.”
However, at present, there is a significant policy shift in that direction as there is clarity to the administration’s economic policy as well as absence of multiple exchange rates backed by timely interventions by the Central Bank of Nigeria in the Retail Secondary Market Intervention Sales, SMIS, of the inter-bank Foreign Exchange Market.
One can remember clearly that at the launch of the programme, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, had boasted that the ERGP was in several ways different from previous plans in answer to some experts insistence that there was nothing significantly unchanged with other plans across the years. The minister maintained that it differs in several ways as it focuses on implementation as the core of the delivery strategy over the next four years.
One major plank he harped on is the strong political determination, commitment and will at the highest level of the administration to ensure the plan’s objectives are achieved. He had hinted that each of the Ministries Departments and Agencies will have their different roles in implementing the plan with a Delivery Unit established in the Presidency to drive the implementation of key ERGP priorities.
Now, what are the key goals of the ERGP – to increase export earnings and government revenues by an additional N800 billion a year; earn N35 billion from the sale of some national assets, including oil joint ventures, and reducing stakes in other oil and non-oil assets; review and possibly remove a ban on accessing foreign exchange for 41 goods and services; increase the overall tax to GDP ratio to 15 percent from six percent between 2017 and 2020.
As flowery and enticing as the ERGP is, the worry about the plan seems credible when one takes into cognizance the fact that the “bold new initiatives such as ramping up oil production to 2.5mbpd by 2020,” means that oil still remains the cornerstone of the Nigerian economy rather than diversification.
For a plan with a four year strategy, there is little guarantee that the privatising of selected public enterprises/assets, as well as revamping local refineries to reduce petroleum product imports by 60 per cent by 2018 is more on the drawing board rather than being actualized. Also, government is yet to demonstrate the political zest to remove forex restrictions on 41 luxury goods which if done and taxed properly, there is the forecast of raising N350 billion per annum as luxury goods tax will be upped to 15 per cent from its current rate of 5 per cent.
With these and other yet to be addressed concerns, the brinksmanship of the Vice President, Prof Yemi Osinbajo, who is in the lead in the actualization of the plan becomes urgent. No doubt, aware of the urgency of now, the government launched the focus labs to fast track the attainment of the objectives of the ERGP. I must confess that it is a plus to the government that it is focusing on three strategic sectors; agriculture and transportation, power and gas, manufacturing and processing (including solid minerals) rather than taking too many sectors and losing traction.
Notwithstanding the efforts of government, Nigerians are demanding that the politics of 2019 ought not to derail official attention from the vigorous pursuit of the goals of the ERGP. More than anything else, the worry in several quarters is that with the rise in the price of crude, it is easy for the administration to take its eyes off diversification and tank the input from non-oil sector that has witnessed marginal contribution to GDP. Will the ERGP be another flash in the pan, or the silver bullet for Nigerians economic renaissance? The answer, no doubt, lies with the government of President Buhari.
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