Major threat to economic recovery





At long last, the much-awaited Economic Recovery and Growth Plan of the Federal Government, which contains the road map for Nigeria’s economic development, has been unveiled by the Ministry of Budget and National Planning. The four-year plan (2017-2020), envisages that by 2020, “Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy”. Real GDP is projected to grow by 4.6 per cent on average over the Plan period from an estimated contraction of 1.54 per cent recorded in 2016 reaching seven per cent at the end of the Plan period while inflation rate is projected to trend downwards to a single digit by 2020.

The Plan outlines bold initiatives such as ramping up oil production to 2.5mbpd by 2020, privatising select public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60 per cent by 2018.The country is expected to become not only a net exporter of refined petroleum products by 2020 but also a net exporter of key agricultural products such as rice, cashew nuts, groundnuts, cassava and vegetable oil that take up a lot of foreign exchange. Following the implementation of the Plan, unemployment is expected to reduce from 13.9 per cent as of Q3 2016 to 11.23 per cent by 2020 which translates to the creation of over 15 million jobs during the Plan horizon or an average of 3.7 million jobs per annum. By 2020, it is hoped, Nigeria will have become a well-diversified economy having multiple streams of revenue.

Without any shred of doubt, the 140-page document has been well-packaged just like similar previous Plans considering that the development of the Plan according the Minister of Budget and National Planning, Senator Udoma Udo-Udoma, “went through a rigorous process, including wide consultations and robust engagements with stakeholders from a range of relevant fields, economic experts from the public and private sectors, academia, organised private sector, civil society groups, organised labour, sub-regional governments, international development partners, the National Economic Council and the National Assembly”. Similar Plans in the past toed the same path. In recent time, Vision 2010, NEEDS as well as Vision 20:2020 readily come to mind. This time round however, the minister assures the story would be different citing sufficient “Political Will” on the part of the government to drive the process. This assurance is comforting but there are considerable threats. Mindful of these risks, the ERGP document in section 8.1 (pg 112) highlights the “downside risks” associated with the Plan to include “the uncertainty in the current global economic environment” which could jeopardise Nigeria’s ability to achieve its high growth projections. It recognises that the “challenging global economic conditions associated with rising interest rates and protectionism in developed country markets or a continued slowdown in emerging markets such as China, could reduce the attractiveness of Nigeria as an investment destination”. Adding that “if the measures being put in place by government to address disruptions to oil production resulting from crude oil theft, pipeline vandalism and Niger Delta militancy are ineffective, then the nation may face the challenge of not achieving the crude oil production forecast in the Plan and this would create additional implementation risks for the ERGP.”

Indeed, numerous other vulnerabilities remain but the biggest threat to the ERGP, in my view, is the political risk which received no mention under the section. Nigeria’s experience over the years has shown that implementation of Development Plans suffers neglect whenever there is a change in government. This point was recently buttressed by Chief Philip Asiodu who blamed the country’s lack of economic development on the abandonment of Development Plans by successive regimes. Against this backdrop, the “Political Will” argument holds water only in the context of stability in government which is guaranteed where the Visioner (the President) is in office throughout the Plan period. This condition must be met for any National Plan to succeed.

During the occasion ofthe annual Daily Trust Dialogue which held on January 19 2017 in Abuja, Chief Asiodu told the audience that Olusegun Obasanjo was a member of the Yakubu Gowon Administration which approved the Third National Development Plan (1975 to 1980) and was therefore in a good position to superintend the implementation process but this Plan, which was aimed at diversifying the economy, went up in flames after the Gowon Administration was toppled. By implication, a Plan can be jettisoned once there is a change of baton even within the same ruling party.

By releasing the timetable for the 2019 general elections two years before the conduct of the polls, the Independent National Electoral Commission seems to be telling politicians to be on their marks and get set. Expectedly, the country will enter into an election mode soon after this administration clocks three years in office on May 29, 2018, barely one year from now.

A review of key economic variables over the years indicates that penultimate and ultimate election years impact economic performance. Government spending usually goes up in an election year which tends to fuel inflation rather than spur growth, suggesting that the extra public expenditure ahead of polls was largely wasteful. In its communiqué No 77 of July 2011, the Monetary Policy Committee of the Central Bank of Nigeria observed that inflationary pressures remained elevated during the first quarter of 2011 largely on account of “high expenditure levels associated with the April 2011 general elections”. In March 2015 also (another election year), the MPC had “noted withconcern, the gradual increase in the year-on-year headline inflationduring the first two months of the year from 8.0 per cent inDecember 2014 to 8.2 per cent in January and further to 8.4 per centin February 2015,” pointing out that the major risks to inflation in 2015 was the “elevated aggregate spending in the run-up to the 2015 general elections”. By extension, the forthcoming election poses a threat to the ERGP goal of subduing inflation to a single digit level by 2020. In fact, the economy typically slows down every time there is a general election. The ERGP acknowledges this fact by stating that “the slight dip in growth in 2019 is projected to result from the general election in that year”.

As earlier pointed out, the success of the ERGP will depend not only on how well it is implemented through the penultimate and ultimate election years (2018 and 2019), but also on the commitment of the succeeding administration to see it through to the terminal year. If President Buhari does not run for a second term or power slips from the ruling All Progressives Congress, chances are that the ERGP will go the way of the National Confab report which was jettisoned not least because the government that conceived it left office. Many agree that the 2014 National Conference involving 492 delegates was one of the boldest attempts in recent times in appraising the operational structure and system on which the country is run. Understandably, the PDP which is the major opposition party will not be disposed to continuing with the ERGP hook, line and sinker, in the event that it clinches power at the centre come 2019.

From a broader economic and political perspective, the following question is pertinent in relation to the ERGP: will the Federal Government receive the cooperation of the state governments if a majority of states become controlled by the opposition party in 2019? Allied to this is whether the National Assembly will continue to play a supportive role if majorities in the House and Senate are held by the major opposition party.

Having identified political risk as the major threat to the ERGP, what then is the safeguard? A cursory look at Puerto Rico’s Fiscal and Economic Growth Plan provides the answer. In order to ensure the success of the country’s FEGP, the National Parliament of Puerto Rico passed the Fiscal Responsibility and Economic Revitalisation Bill into law. The FRER Act established a Board independent of government, with oversight authority over most government entities having powers to levy sanctions for non-compliance with measures contained in the FEGP. By the same token, Nigeria needs an enabling law to back up the ERGP. With elections in 2019 fast approaching, the government seems to be racing against time given the fact that the ERGP was late on arrival. The idea of setting up a Delivery Unit in the Presidency to assist the Ministry of Budget and National Planning in overseeing the ERGP implementation is good but not sufficient. If the Delivery Unit is not a creation of the law, it lacks the capacity to discharge its duties.

To this end, the Federal Government as a matter of urgency, should forward a bill to be known as the “Economic Recovery and Growth Bill” to the National Assembly. This bill should take care all issues specific to the ERGP distinct from the current Fiscal Responsibility Act of 2007 which focuses on annual budgets and the three-year Medium Term Expenditure Framework. The government has barely one more year to prove that the ERGP will not go the way of its forebears. One of the key deliverables of the Plan is to reduce petroleum product imports by 60 per cent in 2018. Quickly putting in place an enabling law as well as passing the Petroleum Industry Bill is one sure way of safeguarding the country against the major threat to the Economic Recovery and Growth Plan.

Uwaleke, a Chartered Banker and Fellow of ICAN, is an Associate Professor of Finance and Deputy Director of Research at Nasarawa State University Keffi


Facebook Comments


  1. Its like you learn my thoughts! You seem to know so much about this, such as you wrote the guide in it or something. I think that you just could do with a few to force the message house a bit, however other than that, that is great blog. A great read. I will definitely be back.

  2. This is a great tip particularly to those fresh to the blogosphere. Short but very accurate info Thanks for sharing this one. A must read post!

  3. Nice blog here! Also your site loads up very fast! What host are you using? Can I get your affiliate link to your host? I wish my site loaded up as quickly as yours lol

  4. Thanks a lot for the fantastic post! I really enjoyed learning about.I will make certain to take note of the site and will come back in the future. I would really like to encourage you to ultimately keep on with your great writing, maybe blog about lovely birthday messages too, have a fine day!

  5. Incredible! This blog looks exactly like my old one! It as on a totally different topic but it has pretty much the same page layout and design. Wonderful choice of colors!

  6. Desert tour staggering spot inundating them to make it a huge the one that they can treasure later. After the voyage closures, men and ladies will backpedal to their quality desert camps for survey the typical life drove by general individuals in the place.

  7. Desert Safari Dubai turns out to be extremely bother free as you can appreciate the excellence and excite of the place with no sort of stress or stresses as the desert safari bargain incorporates each action that you can partake in whether it is free or paid. It likewise incorporates how long would you be able to appreciate a specific movement

  8. It as essentially a cool and beneficial piece of information. I am content which you just shared this valuable data with us. Please hold us informed like this. Thank you for sharing.

  9. This particular blog is without a doubt entertaining additionally diverting. I have picked a lot of helpful advices out of this source. I ad love to go back over and over again. Thanks a bunch!

  10. This particular blog is definitely interesting and besides diverting. I have picked up many helpful things out of this amazing blog. I ad love to visit it again and again. Cheers!

  11. Wonderful beat ! I would like to apprentice while you amend your site, how can i subscribe for a blog site? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast provided bright clear concept|

  12. Greetings from Los angeles! I’m bored at work so I decided to browse your website on my iphone during lunch break. I really like the information you provide here and can’t wait to take a look when I get home. I’m surprised at how quick your blog loaded on my cell phone .. I’m not even using WIFI, just 3G .. Anyhow, great blog!|

  13. Attractive section of content. I just stumbled upon your weblog and in accession capital to assert that I acquire actually enjoyed account your blog posts. Any way I’ll be subscribing to your feeds and even I achievement you access consistently rapidly.|

  14. Pretty nice post. I just stumbled upon your blog and wanted to say that I’ve really enjoyed surfing around your blog posts. In any case I will be subscribing to your rss feed and I hope you write again soon!|

  15. Have you ever considered creating an ebook or guest authoring on other sites? I have a blog based upon on the same subjects you discuss and would really like to have you share some stories/information. I know my subscribers would value your work. If you’re even remotely interested, feel free to send me an email.|

  16. Just wish to say your article is as astounding. The clarity in your post is simply nice and i can assume you are an expert on this subject. Well with your permission let me to grab your RSS feed to keep up to date with forthcoming post. Thanks a million and please keep up the rewarding work.|

  17. Wonderful beat ! I would like to apprentice at the same time as you amend your web site, how could i subscribe for a blog web site? The account helped me a acceptable deal. I had been tiny bit familiar of this your broadcast offered bright transparent concept|

  18. Heya i’m for the first time here. I came across this board and I find It truly useful & it helped me out a lot. I hope to give something back and aid others like you aided me.|

  19. You actually make it appear really easy with your presentation however I in finding this matter to be really one thing that I feel I’d by no means understand. It sort of feels too complex and extremely extensive for me. I’m having a look ahead in your next publish, I will try to get the cling of it!|

  20. We are a group of volunteers and starting a new scheme in our community. Your web site provided us with valuable information to work on. You’ve done an impressive job and our whole community will be grateful to you.|

  21. obviously like your web site however you have to test the spelling on quite a few of your posts. Many of them are rife with spelling issues and I in finding it very bothersome to inform the truth nevertheless I will surely come back again.|

  22. May I just say what a relief to find a person that actually understands what they are discussing on the web. You definitely understand how to bring a problem to light and make it important. A lot more people have to look at this and understand this side of your story. I was surprised that you’re not more popular since you definitely have the gift.|

  23. My brother suggested I might like this website. He was entirely right. This post truly made my day. You can not imagine simply how much time I had spent for this information! Thanks!|

  24. Nice blog here! Also your site loads up very fast! What host are you using? Can I get your affiliate link to your host? I wish my web site loaded up as quickly as yours lol

  25. We stumbled over here by a different website and thought I might check things out. I like what I see so now i am following you. Look forward to finding out about your web page again.

  26. It is appropriate time to make some plans for the future and it is time to be happy. I have read this publish and if I may just I want to counsel you few fascinating issues or suggestions. Perhaps you can write next articles relating to this article. I desire to learn more things about it!|

  27. You really make it seem really easy with your presentation however I in finding this topic to be really something that I believe I’d by no means understand. It sort of feels too complex and very wide for me. I am looking forward to your subsequent post, I’ll attempt to get the dangle of it!|

  28. Thank you for the auspicious writeup. It in fact was a amusement account it. Look advanced to far added agreeable from you! By the way, how can we communicate?

  29. whoah this blog is great i love reading your posts. Keep up the great work! You know, a lot of people are looking around for this information, you can aid them greatly.

  30. You’re so cool! I don’t suppose I have read anything like that before. So wonderful to discover someone with unique thoughts on this subject matter. Really.. many thanks for starting this up. This web site is something that’s needed on the internet, someone with some originality!|

  31. You can definitely see your expertise in the work you write. The arena hopes for even more passionate writers such as you who aren at afraid to say how they believe. Always follow your heart.

  32. Can I simply say what a relief to uncover an individual who truly knows what they are talking about on the internet. You certainly realize how to bring an issue to light and make it important. A lot more people should look at this and understand this side of the story. I was surprised that you are not more popular since you certainly have the gift.|

  33. Hi there, i read your blog occasionally and i own a similar one and i was just curious if you get a lot of spam comments? If so how do you reduce it, any plugin or anything you can advise? I get so much lately it’s driving me crazy so any assistance is very much appreciated.|

  34. [url=]plavix 75mg[/url] [url=]bupropion hcl[/url] [url=]viagra pills[/url] [url=]albuterol[/url]

  35. Thank you for some other informative web site. The place else could I get that kind of information written in such an ideal method? I have a venture that I’m simply now operating on, and I have been on the glance out for such info.|

  36. [url=]Cymbalta 30 Mg[/url] [url=]vardenafil 20mg[/url] [url=]purchase colchicine[/url]

  37. [url=]buy colchicine[/url] [url=]bupropion[/url] [url=]doxycycline pharmacy sale[/url]

  38. [url=]fluoxetine 20mg[/url] [url=]doxycycline price[/url] [url=]lisinopril 2.5 mg[/url]

  39. [url=]colchicine with no prescription[/url] [url=]Order Fluoxetine[/url] [url=]buy doxycycline[/url]

  40. [url=]Cephalexin Antibiotics[/url] [url=]trazodone hcl 50 mg[/url] [url=]order fluoxetine[/url]

  41. [url=]fluoxetine 20 mg[/url] [url=]bupropion[/url] [url=]doxycycline without a prescription[/url]

  42. [url=]cost of celexa[/url] [url=]best site to buy viagra online[/url] [url=]buy elocon[/url] [url=]diclofenac[/url]

  43. [url=]buy trazodone online[/url] [url=]zoloft[/url] [url=]drug finasteride[/url] [url=]revia[/url]

  44. [url=]erythromycin 500 mg[/url] [url=]order generic viagra[/url] [url=]Cephalexin Capsules[/url]

  45. [url=]levitra super active[/url] [url=]zithromax[/url] [url=]elimite[/url] [url=]propranolol[/url]

  46. [url=]buy cialis[/url] [url=]buy erythromycin without prescription[/url] [url=]hydrochlorothiazide[/url]

  47. [url=]hydrochlorothiazide[/url] [url=]cephalexin 250 mg[/url] [url=]fluoxetine tablets[/url]

  48. [url=]amoxil[/url] [url=]crestor medicine[/url] [url=]generic sildalis[/url] [url=]get more info[/url]

  49. [url=]buy fluoxetine[/url] [url=]proscar[/url] [url=]tretinoin cream[/url] [url=]advair[/url]

  50. [url=]medrol pack[/url] [url=]hydrochlorothiazide mastercard[/url] [url=]ciprofloxacin hcl 500 mg[/url]

  51. Do you have a spam issue on this site; I also am a blogger, and I was wondering your situation; we have developed some nice procedures and we are looking to swap solutions with other folks, why not shoot me an email if interested.|

  52. [url=]Cialis Pills[/url] [url=]TRAZODONE PRICE PER PILL[/url] [url=]Erythromycin 500 Mg[/url]

  53. Having read this I thought it was rather enlightening. I appreciate you finding the time and effort to put this information together. I once again find myself personally spending a lot of time both reading and posting comments. But so what, it was still worth it!|

  54. [url=]cost of viagra[/url] [url=]cialis[/url] [url=]cephalexin[/url] [url=]doxycycline[/url]

  55. I know this if off topic but I’m looking into starting my own blog and was wondering what all is required to get set up? I’m assuming having a blog like yours would cost a pretty penny? I’m not very internet smart so I’m not 100 positive. Any recommendations or advice would be greatly appreciated. Many thanks|

  56. Hey I know this is off topic but I was wondering if you knew of any widgets I could add to my blog that automatically tweet my newest twitter updates. I’ve been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.|

  57. <