Is Nigeria’s Financial System Strategy 2020 still a dream

Three years after missing the deadline of an economic development plan aimed at catapulting Nigeria into the league of the first 20 global economies by 2020, none of the outlined plans is yet to translate economic growth into equitable social development for all citizens, according to findings by BusinessDay.

Promoters of Financial System Strategy (FSS 2020) had envisaged that Nigerians would wake up to the New Year 2020 with fanfare and heavy fireworks to celebrate the country’s achievement of becoming one of the top economies of the world by 2020.

Goldman Sachs believes that only two countries in Africa will overtake Italy in GDP size by 2015 and that is Nigeria and Egypt.

To achieve Goldman Sachs, Nigeria launched FSS 2020 on June 18, 2007, aimed to develop and transform Nigeria’s financial sector into a growth catalyst and engineer Nigeria’s evolution into an international financial center.

In his presentation on n titled “Our Dream” in 2007, Chukwuma Soludo, former governor of the Central Bank of Nigeria said for Nigeria to achieve this feat, the country must maintain an annual average growth rate of 12.4 percent over the next 15 years.

The strategy was designed to strengthen and deepen the domestic markets, enhance integration with the external financial markets; and promote sustainable economic development.

However, 16 years after those promises, hopes of a better nation envisaged in the plan appear to be fading with Nigeria still faced with several economic maladies including unreliable power supply, weak infrastructure, and institutions among others.

The country currently boasts 113 million people living in multidimensional poverty, according to data sourced from the National Bureau of Statistics.

“Nigeria has the problem of policy somersaulting rather than consistency which is making it achieve little or less of set goals,” said Evans Osabuohien, professor of economics and chairman of the Centre for Economic Policy and Developmental Research at Covenant University, Ota, Ogun State.

Findings showed Africa’s largest economy has spent huge resources, not once, twice or thrice, in developing an economic development plan and has always lacked the political will to implement its set agenda.

A recent example is the Economic Recovery and Growth Plan (ERGP) formulated in 2017 under former President Muhammadu Buhari. The ERGP aimed at resuscitating an ailing economy from a recession following the drop in oil income, due to a drop in prices, which accounts for almost 85 percent of the West African nation’s foreign earnings.

From all indications, the projections made in the plan appear to have failed.

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For example, the ERGP forecasts that by 2020, Nigeria’s economy would grow at an average of 4.6 per cent annually while inflation was projected at a single digit.

Similarly, the unemployment rate was expected to be within 11.23 percent by 2020 and an average of 3.7 million jobs were created to increase the total jobs added into the country to 15 million.

But in reality, GDP stood at -1.79 percent while unemployment moved to 33.3 percent even as the economic effect of the COVID-19 pandemic struck.

Inflation is nowhere near the country’s single-digit target. The federal government is planning on collapsing both Vision 2020 and the Economic ERGP into a new development plan called ‘Nigeria Agenda 2050’, according to a statement made by Zainab Ahmed, former minister of Finance.

Analysts fear little or no progress will be made in the proposed plan based on the failure of previous plans.

“It is clear that Nigeria is lagging behind in almost everything and that is because of failure of being consistent in achieving long-term policies and objectives, ” said Philip Alege, professor of Economics at Covenant University.

Aside from failing to implement policies drafted in its development plans, Nigeria has a penchant for killing policies however good so long as they were drafted by previous governments.

Before the formulation of Vision 2020 in 2009, Nigeria had an economic development plan known as Vision 2010 that was drawn up under the then military government of General Sani Abacha.

The Vision 2010 plan which was crafted in 1996 was articulated by over 300 Nigerian stakeholders from all walks of life including expatriates. It had a workable document to put Nigeria on an economic growth trajectory by 2010.

Vision 2010 was, therefore, a more comprehensive development strategy programme by both Nigerians in the public and private sectors to put Nigeria on a path of growth and development through economic diversification, political restructuring and socio-cultural unification.

The Vision 2010 was also against the backdrop of gross mismanagement and political misalignment after years of military dictatorship.

In 1996, at the time of Vision 2010 was being made it was clear that after 36 years of independence; the economic and political performance of the country was far below its potential and the expectation of Nigerians. The Chairman of Vision 2010 Committee, Ernest Shonekan said then:

“For us in Nigeria, the need to do this visioning has never been more compelling given our relatively weak position in the world in many areas of human endeavour”. The Vision which looked at many sectors, assessed where Nigeria was, where the country wants to be and marshalled out road maps on how to get there.

The Vision 2010 was abandoned by subsequent governments: Abdusalami Abubakar, Olusegun Obasanjo, Musa Ya’Adua, Goodluck Jonathan and Muhammadu Buhari.

From a pre-independence economic growth rate of 6-7 percent to 11 percent immediately after independence, Nigeria is now struggling to grow at a rate of less than four percent.

Michael Omolayole, a member of Vision 2010 and who had served as managing director and chairman respectively of many companies including Unilever, Chemical and Allied Products and American International Insurance Company Plc. (AIICO) regretted the abandonment of what he described as the collective wisdom in Vision 2010.

Looking at Nigeria’s past and present, Felix Ohiwerei, a shrewd industrialist who was on a committee for Vision 2010 said non-implementation of the vision to put Nigeria on a growth path is regrettable.

Sam Ohuabunwa, another member of Vision 2010, reckons we have not made progress as a country due to the non-implementation of the vision. “There has not been any significant improvement, and in some cases, it is worse and this means that we have not done the right things. If we have followed policies consistently, we would have arrived at a better position,” he said.

Phillip Asiodu, who served as chief economic adviser to former President Olusegun Obasanjo, considers the non-implementation of the Vision 2010 by the Obasanjo government as a great regret.

Asiodu believed that any leader could have made a difference in economic growth as envisioned in Vision 2010 if the recommendations were implemented. “When you are in power, you must always think of the people and their welfare,” he said.

In 2006, after realising the failure of Vision 2010, the Nigerian government led by Obasanjo assembled technocrats again to come up with another plan, Vision 2020.