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ERGP or next level: Constrained & unachievable!

Nigeria's economy slows by 2.01% in Q1 2019

Given our very precarious socio-economic challenges and the continued failures of Economic Recovery and Growth Plan (ERGP) in almost all the performance targets, there is an urgent need for a rethink and innovation of a better national development strategy. Moreover with our population now approximately over 200 million people accentuated by increasing complexity and volatility of other external factors that can significantly affect our economy and revenue, carrying on with the hope that the ERGP or its mutated name-Next Level will help us achieve inclusive and sustainable growth might be misleading. It will be recalled that ERGP was launched in 2017 as a detailed four year (2017-2020) economic development blueprint to take Nigeria to the promised land of being a major player in the global economy. With three broad strategic objectives of restoring growth, investing in people and building a globally competitive economy, certain key targets were to be pursued and achieved. These include increasing oil production to 2.5 mbpd by 2020, privatization of selected public enterprises/assets, effective turn-around of our local refineries to reduce our petroleum product imports by 60% in 2018, environmental restoration of the Niger-Delta and the effective diversification of the economy.

Interesting and as this column previously indicated, none of these broad targets are being achieved and will not by end of 2020. While we achieved average oil production of about 2 mbpd in 2018, privatization of public enterprises/assets seems to be in a dormant mood and importation of petroleum products is not only ongoing but seems to be increasing. In addition, whereas the environmental restoration of Niger Delta is yet to be properly addressed, the economy especially sources of government revenue remainsundiversified. Just as it is with these broad targets, so it is withother economic and growth performance variables. With about 21 million Nigerians searching for jobs, unemployment rate will certainly increase beyond its current rate of about 23.1%to further perpetuate our position as the poverty capital of the world. Lamentably, even the hopes of a better electricity supply seems to be dashed as average output declined by about 4.09% to about 4,008MWh/hour as at April 2019. In the same vein, while provision of critical infrastructure most required to boost growth remains elusive, insecurity and other violent crimes are on the increase. In the proposed 2019 budget with estimated fiscal deficit of about N1.9trillion, capital expenditure is allocated only N2.94 trillion, while recurrent is about N4.65trillion and debt service at N2.25 trillion, almost same as the capital expenditure.

With such abysmal failures of the economy further affirmed by the recent ranking of Nigeria as the 6th most miserable country in the world, a rethink and review of our national development strategy which is the ERGP is pertinent if we are interested in creating a sustainably growing economy. Like many issues with Nigeria,the problem with ERGP is not really with the contents, it is with the lack of appreciation of our socio-economic and cultural institutional peculiarities which constrain the implementation of the contents. A key aspect of the institutional peculiarities is the structure of governance in Nigeria. Given that we are a very plural society with very limited integrative mechanisms before and after independence, it is important that national economic development strategies appreciate our peculiar situation in policy formulation and implementation. Recalling that we have had many development strategies or plans such as Operation Feed the Nation (OFN), NEEDS, Visions 2010 and 2020, and now ERGP or Next level, a key question that we should seek to answer is why Nigeria has remained highly underdeveloped and still characterized by the same development challenges identified over 50 years ago. The simple answer is that the centralized structure of governance we have is antithetical to the sustainable development of a plural society. As this is our situation, the option we have is to rethink and devise a governance structure is suitable to a plural society.

Helpfully, as we are not the only plural society, an easier way of addressing our development challenge is to examine and learn from the governance structures of other successful plural societies. Such societies include United States of America, United Kingdom, Canada, India, Brazil, Indonesia and even China to an extent. What is common across these plural societies and which has significantly helped in achieving their convincing economic developments is their structure of governance which is a decentralized or devolved system. With such devolution of powers, a high sense of ownership and responsibility is created within the regions which helps to galvanize their communal spirit for inclusive and sustainable economic development. It is the reason why UK for instance can be argued to have even or common development achievements across the four regions of Wales, Scotland, Northern Ireland and England. Interestingly while their development outcomes are common, they are pursued mainly by their different regional governments in Cardiff, Edinburgh, Belfast and London through what can be described as a cooperative competitive approach. If we are to learn from the above societies, it means that a prerequisite for the success of reforms or plans such as the ERGPor Next level is the devolution of powers to regions and states but preferably to regions for size and capacity to effectively execute.

A situation where Lagos state has to seek approval from National Inland Waterways Authority (NIWA) before any meaningful usage or development of their waterways is inimical to development. This is also the case where the South East or South West states individually or collectively cannot construct a railway line without the approval of the federal government. If we are genuinely serious about the sustainable development of Nigeria, it is important that we imbibe the humility to accept the failures of our policies and seek better and tested solutions to the myriad of our development challenges.


Franklin Ngwu

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- [email protected],


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