A GAME-CHANGING PLAN

Nigeria 2018 | ECONOMY | FOCUS: ECONOMIC RECOVERY AND GROWTH PLAN

With a game plan set to redirect the country toward sustainable growth, everyone is waiting to see the plan turn into actions for developing the Nigerian economy.

In 2017, President Buhari launched his ambitious Economic Recovery and Growth Plan (ERGP) to turn around Nigeria's fate and position the country onto its path to sustainable growth. Among the plan's envisaged goals are 7% GDP growth, single-digit inflation, a reduction in unemployment, and self-sufficiency in petroleum products by 2020. During the launch, President Buhari introduced the program as one that, “brings together all our sectoral plans for agriculture and food security, energy and transport infrastructure, industrialization, and social investments together in a single document."

The plan, which was laid out by the Ministry of Budget and National Planning, contains 60 initiatives expected to get Nigeria out of recession and place it on its path to growth. In particular, the outlook includes a number of objectives; firstly, a stable macroeconomic environment, with inflation projected to decrease from 2017's 19% to single-digit figures by 2020 and a stabilization of the exchange rate.
Secondly, the plan aims to reach 7% GDP growth compared to the 1.54% contraction recorded in 2016, representing a 4.6% average growth during the plan's period. Furthermore, development of agriculture and food security is another focus of the plan; over the period, the sector is expected to grow by an average of 6.9%, and self-sufficiency is expected in tomato paste, rice, and wheat. The fourth objective enunciated by the plan is self-sufficiency in power and petroleum products, with the goal to achieve 10GW of operational capacity and for Nigeria to become a net exporter of petroleum products by 2020.
Improving transportation infrastructure through strong partnerships with the private sector is another of the plan's goals, followed by the industrialization of the economy, which will be achieved through ongoing strategies to improve Nigeria's ease of doing business, which, in turn, will boost manufacturing. In fact, the manufacturing sector is predicted to grow from -5.8% in 2016 to 10.6% in 2020. Job creation and youth empowerment is the next step in the plan's outlook, with the objective of reducing unemployment from 13.9% in 3Q2016 to 11.23% by 2020, the equivalent of 15 million jobs. Finally, the plan aims to improve foreign exchange inflows, which will mainly be achieved through the aforementioned reduction and ultimately the elimination of petroleum product imports, automatically reducing the demand for foreign currencies.
Some may wonder how this plan differs from the previous ones. The Ministry of Budget and National Planning, in the plan's introduction, explains how first and foremost, the ERGP is focused on implementation, and toward this end the political will and commitment are higher than ever before. Furthermore, the approach includes new initiatives such as increasing oil production, privatizing certain public assets, and building closer cooperation between public entities and the private sector. Another differentiating factor is that the budget and planning functions of the government were united into one ministry to form a stronger link between annual budgets and the ERGP. As the Minister of Budget and National Planning, Senator Udoma Udo Udoma, explained to TBY, “We will make sure that we will mobilize resources to support the targets. The budget, which this ministry is also responsible for, will be driven by this plan."
Lastly, what differs from previous plans is that each ministry will be held accountable for a specific activity of the plan. “For each of the executions that we have indicated, the key activities and for all activities, there is accountability. There is a ministry responsible, which will be held accountable. That is different from the previous plans," Minister Udoma told TBY during an interview. He is confident that in the first year after the plan's launch, 2018, Nigeria will be able to reach its envisioned target of 4.8% growth. Should this optimism translate into positive growth figures, the ERGP will be the plan that changed Nigeria's fate, pivoting the country toward a stable, investor-friendly, and flourishing economy.