The year 2016, which marked the beginning of economic recession in Nigeria, was definitely not a good one for many Nigerians. With no other major export, the government was forced to increase borrowing to make up for the shortfall in revenue.
As a country whose economy and national budget has always been driven by revenues from high crude oil prices, consequently, the Naira was further devalued, government revenue dropped considerably, salaries got delayed, while inflation rate also increased.
The Economic Recovery and Growth Plan was therefore unveiled to restore the economy back to a prosperous state by addressing five major objectives, which are: stabilising the macroeconomic environment, achieving agriculture and food security, ensuring energy sufficiency (power and petroleum products), improving transportation infrastructure and driving industrialization by focusing on Small and Medium Scale Enterprises.
Recently, the Federal government of Nigeria unveiled another economic development plan after the expiration of the Economic Recovery and Growth Plan which lasted from 2017 to 2020. The Medium-Term National Development Plan (MTNDP) which is intended to take off from 2021-2025, like the ERGP, is aimed at addressing the issue of poverty, promoting economic stability and ensuring good governance however, its introduction has generated mixed reactions from Nigerians as many are of the opinion that the MTNDP might not be the true solution to the national challenges.
Between the ERGP and the MTNDP: weighing the options
Upon the introduction of the ERGP, Nigeria was finally able to exit its recessive period, however, the fact still remains that living standards have generally not improved. For instance, the World Bank reported that the Nigerian economy which was further worsened by the devastating effect of the Covid-19 shrank by 1.8% thus making it the deepest economic decline since 1983.
The average inflation rate for the year 2021 also rose to about 17% as against 15.7% prior to the period of the introduction of the ERGP. Also, in the aspect of poverty reduction, the measure has also failed to provide any sustainable solution as the research report of the World Bank submitted that over 45% of the Nigerian populace will live in extreme poverty by the year 2022.
Whether the MTNDP might change the narrative still remains largely debatable owing to some of the issues identified below:
The plan is not sufficiently explicit and not categorical in tackling the challenges: As capturing as the contents of the MTNDP seems to be, one major setback of this plan lies in the fact that like the ERGP, it also majorly answers the question of ‘what to do’ in order to provide economic solutions to the challenges facing the country but with less emphasis on ‘how much’ of these infrastructures are we going to revitalise or provide per period to actually tackle the socioeconomic problems facing Nigerians.
For instance part of the objective of the ERGP was to increase crude oil revenue by an additional 800billion naira annually but the ERGP was silent on the need to revitalise its refineries in the same vein, the recently unveiled MTNDP also involves the plan of the government to increase crude oil production to 3 million barrel per day and commercialise up to 80% of the upstream gas power plants without any succinct plans for its refineries. It would have been better if the plan can concisely relate to Nigerians ‘which’ or ‘how many’ of these refineries will be revamped in order to show more seriousness on the part of the government.
Corruption still remains at large: The last released Corruption Perceptions Index by Transparency International ranks Nigeria as 149 on its corruption index and the second most corrupt country in Africa. While recently, 18 Nigerian individuals firms were blacklisted by the World Bank on the charges of corruption and fraudulent practices. Also, a research study by PwC revealed that by the year 2030, corruption in Nigeria could cost up to 37% of its GDP.
Although the present administration seems to be working round the clock to curtail the evils of corruption, there is little evidence to support the fact that the government is winning the fight against corruption. Thus it is evidently clear that one major factor that will militate against the achievement of the MTNDP is the issue of corruption.
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Low drive for industrialisation: From 2021 to 2025, the newly unveiled plan intends to achieve a broad based GDP growth rate of 5%, and also generate 21 million full time employment for Nigerians while also emphasizing on the plans to lift 100million people out of poverty at the end of 10 years explaining that this would be achieved by increasing its investment size to N348.1 trillion. However, the recently released report of the most industrialized countries in Africa by the “World Population Review” revealed that Nigeria with a Human Development Index of 0.539 ranks 27th in Africa.
Also, the 2021 reports by “Business Insider Africa” revealed that in terms of business destinations, Nigeria is not one of the top 10 best countries in Africa while in terms of unemployment, evidence from the National Bureau of Statistics revealed that more than half of its labour force is either underemployed or unemployed.
Furthermore, the research evidence provided by Bloomberg, one of the world’s leading research organisations reported that “Nigeria’s rate of jobless force has more than quadrupled over the last five year as the economy has gone through two recessions thus casting a shadow over the efforts to implement job creation policies by the present administrations”.
If all these statistics are anything to go by, this implies that the ERGP has not met up with its expectations as far as industrial growth is concerned. And whether the MTNDP will be an improvement will only be a matter of time.
Government policies in Nigeria are not sustainable: As it stands now, the 2023 general election is around the corner, what seems to be unclear is whether the current administration will still be allowed to continue their tenure or there will be a change in government. While it has become common that anytime there is a change of power in Nigeria the incoming administration will fail to continue with the policies that were introduced by the previous government. For instance during the tenure of Umar Musa Yaradua Nigeria had the ‘seven point’ agenda that was focused on boosting productivity in major sectors of the Nigerian economy which are Agriculture, Education, Transport, Tourism, Security and Health and when the administration of Goodluck Jonathan assumed office the same economic agenda was changed to ‘Transformation’ agenda before the ERGP was later introduced under the leadership of President Mohammed Buhari and the more recent one being the MTNDP. As interesting as these development plans seems to be, one important question that needs to be answered is whether these policies would still be implemented even if there is a change in government.
Unfriendly Investment Climate: The nation has been going through various challenge of insecurity overtime ranging from religious terrorism and militancy to the kidnapping of both foreign and local expatriates in exchange for huge ransoms coupled with rising cases of attacks by bandits, which is fast spreading to other parts of Nigeria. This is not a good signal that Nigeria will be a safe haven for investment.
The Global Terrorism Index reveals that Nigeria is the third most terrorised country in the world behind Afghanistan and Iraq. If the current wave of insecurity across the nation is anything to go by, then the objectives of the MTNDP will remain an illusion because no investor will want to lose his or her life in the process of investing in Nigeria.
As the Nigerian government continues to roll out economic plans to address the issue of declining living standards, one lesson is clear: economic prosperity goes beyond paper works.
Government has to be more strategic, direct and deliberate in addressing the existing challenges.
Resuscitation of indigenous moribund industries would be more convincing that Nigeria is finally on the right path of getting things right. Sincerity in the persecution of Nigerians that are culpable of corruption irrespective of their political affiliation would also be a beautiful beginning for the nation.
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