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A plea for economic development planning

One of the popular delusions in our national economic management is that development planning is bad and that all we need are so-called “rolling plans” and mid-term expenditure frameworks. The history of planning in Nigeria goes back to colonial times. Before independence, the departing British brought in economists from the World Bank to assist in designing our first five-year development plan covering the years 1962-1968. The distinguished American economist Wolfgang Stolper was one of the architects of our first national plan, about which he wrote with such nostalgia in his memoirs.

We have had altogether 4 national plans since independence: the First National Development Plan 1962-1968; the Second National Development Plan 1970-1974; the Third National Development Plan 1975-1980; and the Fourth National Development Plan 1981-1985. In addition, there have been so-called “rolling plans” such as the National Economic Empowerment and Development Strategy (NEEDS), the Seven Point Agenda and Vision 2020.

Vision 2020 was crafted in 2009 as a long-term perspective document with the target of increasing the national GDP to be among the top 20 by the year 2020. Its implementation framework was weak while it was deficient in vital areas such as industrialisation, technology and innovation. In January 2020, it is clear that we have been off-target by a wide margin. With a total GDP of US$446.5 billion, we come 28th in the world GDP ranking. The 20th position that we so coveted is currently held by wealthy Switzerland, followed in descending order by Taiwan, Poland, Thailand, Belgium, Iran, Austria and Nigeria.

In 1985 the Ibrahim Babangida military administration were foolishly persuaded by the Bretton Woods institutions to jettison planning altogether. Our half-baked neoliberal economists who bought into the fraud were in no position to know that works such as those by Naomi Caiden and Aaron Wildavsky, Planning and Budgeting in Poor Countries (1974) were really sponsored stratagems to ultimately ridicule and discourage planning in developing countries. This is not to say we should by any means idealise planning. Economic development planning is not a panacea for all economic ills. But I see it as a discipline and tool for resource and political mobilisation that enabled leaders and the nation’s economic managers to focus on long-term strategic policy choices. Economic planning also helps to minimise the rampant policy inconsistencies and instability that accompanies regime changes.

Contrary to what many suppose, the emerging countries that have enjoyed accelerated growth and structural transformation are precisely those countries that never jettisoned economic development plans. These include: China, India, South Korea, Malaysia, Singapore and Indonesia. Those countries have persisted with economic development in disregard to pressure from foreign powers. And the results have been salutary.

Many of the challenges that we face today are precisely problems that by their very nature require long-term thinking, not just mid-term expenditure plans. We in Nigeria would be well advised to go back to the traditions of economic planning. But we must do so devoid of ideological dogmatism. The idea of lumping planning under finance and budget is technically wrong. The person who plans the economy should not be the same person who spends the money. An inherent conflict of interest will arise in such an arrangement.

It is my considered opinion that we should revitalise the National Planning Commission as an autonomous professional organisation; a centre of excellence attracting the best economists in the country. Regional and urban planning should also be integrated into the new planning framework. We should plan not only for accelerated sustainable growth; we should also plan for our cities and regions while adopting a comprehensive, strategic approach to the overall planning process.

We must embark upon a more ambitious project of accelerated agriculture-based industrial revolution anchored on inclusive growth that generates jobs for millions of our people. We need nothing less than a new philosophy of development that puts people at the heart of the development process.

Of course, without peace and harmony, nothing meaningful can happen. Nigerians have become more divided than ever before, thanks to the private agendas of our population who put private interests before the welfare of the people. We need a coalition of Nigerians who believe not only in peace and justice but who can also be trusted to work hard to deliver solid outcomes in terms of the greatest good for the greatest number. We therefore need forge a new national consensus on the goals and objectives of sustainable growth and national transformation.

Contrary to what many suppose, the emerging countries that have enjoyed accelerated growth and structural transformation are precisely those countries that never jettisoned economic development plans

Bold action is also needed in economic reform, long-term strategic planning and in strengthening governance and institutional performance.  The current administration’s commitment to anti-corruption is in the right direction. But we must also understand that fighting corruption is not a substitute for economic policy. There is a risk that we may be going off tangent by chasing thieves instead of focusing on the arduous imperatives of governance and rigorous implementation of economic policy. We must of course recover all our stolen patrimony, but this must be seen as part and parcel of a policy drive for re-booting our economy and re-engineering growth and long-term sustainable development.

Equally important is placing priority on the private sector as the driver of growth. The notion that government knows everything and is best placed to tackle our national development challenges is part of the old thinking that we need to jettison. We need to reinvent government as a smart entrepreneurial state that focuses on areas in which it has the highest comparative advantage: infrastructures, education, health, security and other public goods, while reforming the civil service to make it more professionalised and effective. We must allow the private sector to become the engine and locomotive of growth while building an enabling environment for foreign investors and local businesspeople, especially SMEs.

Diversification of the economy away from oil dependence has to be one of the fundamental pillars of economic planning and policy in the years ahead. Structural diversification of the economy has to be founded on seven pillars: first, enhancing the quality of governance, leadership and core public institutions, including reform of the civil service; secondly, fixing the energy deficit and the parlous physical infrastructures; placing the private sector at the heart of the economy as the engine and locomotive of growth; thirdly, harnessing our best talents in the service of scientific research, technology and innovation, with strong linkages to industry for production of high value-added products for domestic and world markets; and fourth, up scaling our education system, skills and training, with strong emphasis on the STEM disciplines instead of the current dominance of humanities and social sciences.

It goes without saying that security, social order and harmony constitute the fundamental bedrock of economic progress. This goes hand-in-hand with macroeconomic stability and improvement of economic fundamentals such as moderate interest rates, a stable naira that is progressively a semi-convertible international trading currency, progressive industrial and trade policies, and forging bold regional and international trading partnerships that hook us into the integrated global marketplace.

Going forward, we need to design a long-term perspective plan that is broken down into 5-year economic development plans covering the years 2020-2040. We will need to also create a public-private sector Economic Development Board on the Singapore model that will drive the implementation of this long-term perspective plan.

We should aim to achieve the following five principal targets in our development planning: (1) creation of a $2 trillion economy; (2) lifting our per capita income to $20,000; (3) building of a diversified and industrialised technological knowledge economy; (4) membership of the OECD club of industrialised economies; and (5) building of a strong, united and prosperous democracy anchored on the principles of social justice, the rule of law, equality, fairness, inclusiveness and peace. A country in which no one is left behind.

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