By Nduka Uzuakpundu
As Nigeria’s economy eases, with guarded optimism, out of a deep recession, the development has tended to renew investors’ hope in the country. The crawl away from a two-year-long recession, up to 2017, was hit with a nation-wide petrol scarcity for nearly two months up to December, 2017. As some tidiness returns to the economy, hope, among prospective investors, is high that the rise in the price of crude oil to nearly $70, in the last week of January, 2018, a new chapter is about being written.
Although some economists, would advise that it’s too early to pat the Buhari Administration on the back, it’s no less true that some international or multilateral financial institutions and individuals are bent on flowing with the rather sluggish tide of a post-recession era. For the likes of the African Development, Islamic Development Bank, World Bank, Aliko Dangote, China Exim Bank, and amongst others, the European Union, have found sound business opportunities in the Nigerian economy. The other day, the African Development Bank, whose President, Akinwunmi Adesina, was a former Minister of Agriculture in the Jonathan Administration, lauded the efforts of the Buhari Administration in its fight against corruption and agreed to assist Nigeria with a $600 million loan for agricultural and infrastructural development like the Abuja-Kaduna-Kano railway line.
And now to the message delivered recently by Vice President, Yemi Osinbajo, when he relaunched the Joint Working Group for the Economic Recovery and Growth Plan (ERGP) Focus Laboratories at the State House, in Abuja. The essence of the ERGP said Osinbajo is “to create jobs and ensure that Nigeria continues its journey of building a competitive economy.”
Besides, the Minister of State for Petroleum, Ibe Kachikwu, whose role would be crucial in the post-recession period in advancing the cause of the ERGP, expressed delight, recently, with the coming of Total Upstream Nigeria Limited Egina project, built at a cost of N5.76 trillion or $16 billion. He said that project was a show of confidence in the by international oil companies (IOCs) in the Nigerian economy, especially now that renewed effort was being made by the Buhari administration to re-postion it under the ERGP.
During a recent visit to the Total’s Floating Production Storage Offloading (FPSO) vessel at the Lagos Deep Sea Port (LADOL), Kachikwu called on other major international oil companies to copy the example of Total, because, the Nigerian economy was fast attracting international investors, as one of Africa’s fastest growing economies as testified to by the World Bank. The same project, said Simbi Wabote, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), would promote local content in the oil industry, technology transfer, provide jobs for 2,000 Nigerians and supply about 200,000 barrels of oil per day.
It’s a project that Kachikwu hoped would drive Nigeria’s post-recession economic diplomacy – with special reference to how Nigeria’s crude oil would be one of the commonest commodities in the African oil market. Like most development economists, Kachikwu thinks that the gradual rise in the price of crude oil – about $67, at the middle of February – would make required resources available for the country’s economic strategists to recraft an architecture and conduct feasibility studies with an eye to enriching the capacity and competitiveness of the oil and gas industry, and, so, make the African market ambition realistic.
The ERGP is expected to eradicate corruption in government procurement processes, instill a culture of prudent management of resources, social inclusion, overcoming power constraint and dearth of skills, and promotion of private sector inclusion. Yes, it’s to the credit of the Buhari Administration that the ERGP has lifted the country’s economy from recession and helped to stabilise the fiscal and monetary markets: the Naira, once at almost 600 to the United States dollar, is presently 360.
And as the Head of the Economic and Financial Crimes Commission (EFCC) Ibrahim Magu told the National Assembly recently, the anti-corruption Agency had recovered more than N600billion stolen public funds from some faceless economic saboteurs. The much-publicised recovery by the EFCC is also breeding confidence in the money market and among investors. And so, it’s expected that by the mid-year, the Naira would be exchanging for 245 to the dollar.
But, as Osinbajo said, the Central Steering Committee and Joint Working Group of the ERGP and Focus Laboratories would comprise nine Ministers in Agriculture, Transport, Solid Minerals, Industry Trade and Investment, Power, Works and Housing, Petroleum Resources, Finance, Justice and Budget and Planning. The main duty of the Steering Committee is to liaise with the organised private sector (OPS) to chisel off inhibitions that may have impeded some of the priority investment projects that had been stalled for too long. Government is ready, to put it differently, to partner the private sector to pump new blood into the Nigerian economy. Nigeria, Osinbajo said, is expected to rake in $24billion from the ERGP and Focus Laboratories. It’s an opportunity for indigenous and foreign investors to plough and sow with the Buhari Administration, for as he put it: “Nigeria will not be recognisable in terms of infrastructure in the next few years. This is the country to come for investment.”
Still, like the war against corruption, the new journey to be embarked on by the Federal Government and the OPS does promise less to be a pleasurable one. Minister of Budget and National Planning, Udoma Udo Udoma, said that the government required $245.13 billion to implement ERGP over the next four years. At the relaunch of the plan, he said that the cost of implementation would be divided in a ration of 4:1, with the private sector contributing $195.98 billion, while government’s investment was expected to provide $49.15billion.
Udoma also said that, “the plan, with the five execution priorities and six priority sectors, is expected to create 15 million jobs with the aim of tackling constraints of growth.” There’s an admission, it does seem, on the part of government, that after years of gross mismanagement of the Nigerian economy – with the Naira so weak, inflation at nearly 15.71 per cent, unemployment still on the high side, despite nearly 10million jobs created in the agricultural and mining sectors since 2015, and petrol still being refined outside the country, general decay in infrastructure, education, health and environment; rising, insecurity in the north-east and Middle Belt – perhaps, it’s high time to run the race of diversifying the Nigerian economy by giving truly ample $196 billion to the private sector as a sign of its seriousness, for one, to take advantage of one of the sensible options to effect a sound economic reconstruction.
For another, the ERGP, in which the federal government has voluntarily embraced the private sector as a constructive partner, points to an on emerging chemistry of technocrats and capitalists, who are expected to lay what promises to be a solid foundation for an economic renaissance in the country. The expectation of some development economists is that, after the failure of such economic development programmes like “National Economic Empowerment and Development Strategy (NEEDS) and “Vision 2010”, the Buhari Administration would seek the best of capitalists and captains of industries, who have good records of successful management of human and financial resources in driving a virile enterprise, so as to make ERGP a roaring success.
How well such capitalists, who would be the source of the ERGP’s $196 billion, play their role, in the process of broad diversification of the Nigerian economy, in the next five years, may determine the extent to which government would take them seriously. Their task, like government’s, is to source their own ‘counterpart funds’ for top ERGP projects, create jobs and wealth and slash inflation; to the lessening of insecurity. Perhaps, in all these, emphasis would still be placed on agriculture, so that the country would cut back on food importation, save foreign exchange and boost the Naira. For that, rural roads would have to the rehabilitated nationwide, to ease the transportation of cocoa, cotton, palm oil, groundnut, rice, butter, millet, corn, yams, etc. from the farms to markets in towns and cities.
The ERGP underscores the vital role that agriculture has always played in the Nigerian economy. It was the mainstay, well before the discovery of crude oil. Then, cocoa, rubber, ground-nut, palm oil were the country’s top-most foreign exchange earners. The famous Cocoa House, in Ibadan, for instance, refers. It was built by the Western Region’s government in the 1950s, during the Awolowo Administration. It was from agriculture – cocoa, palm oil, rubber, millet, maize (corn), ground-nut, cassava, cotton, etc. that the first four universities in Nigeria – University of Ibadan, University of Nigeria, Nsukka, University of Lagos, and Ahmadu Bello University, Zaria – sourced about 85 percent of their funds. The ancestors of today’s expressways or dual-carriage ways were products of funds generated from agriculture.
The ERGP is indicative of the ambitious nature of the Buhari Administration to take advantage of the lessons learnt from a deep recession – the lessons of failure, on account of crass mismanagement of the country’s economy – to a renewed hope of jobs, creation of wealth, via the rise of new skippers from the small- and medium-scale industries, highly visible investments in the road and railway, mining and agricultural sectors, prudent management of funds, as the crucial elements in laying a new, sustainable foundation for the Nigerian economy; an enterprise that, hopefully, would eat deep into unemployment, ensure food security and hold recession – the raison d’etre of the the ERGP – in a firm leash.
For the Buhari Administration, Nigeria’s investment of economic prosperity, through the ERGP, is like a post-bellum reconstruction effort, in which banks – especially Bank of Industry and Nigeria Export and Import Bank – will surely play a prominent role.
The ERGP: A new sing-song for Nigeria’s economic recovery
By Nduka Uzuakpundu