PUBLIC ENLIGHTENMENT ON ECONOMIC INITIATIVES OF THE FEDERAL GOVERNMENT OF NIGERIA
- Agriculture and Agribusiness remain the key to Nigeria’s economic diversification strategy
- Food security initiative promoting the “Grow What We Eat” and “Eat What We Grow” agenda
- Intensification of efforts to grow non-oil exports
- Creation of a financial stimulus package for the Nigerian economy
- Reduction of non-essential spending
- Support for MSMEs and the creation of jobs
- The NESP has been developed as a 12-month, 2.3 Trillion Naira ‘Transit’ Plan between the Economic Recovery and Growth Plan (ERGP) and the successor plan to the ERGP, which is currently in development.
Arising from the outbreak of COVID-19, every single economy in the world has suffered negative impacts, forcing the leadership of practically all countries to rush back to the drawing table to reconfigure projections and realities about their economies. In Nigeria, the need to stabilize the economy and adopt fiscal policies and favourable trade regimes have been adopted following the recommendations of the Economic Sustainable Committee chaired by Vice-President Yemi Osinbajo.
THE COMMON FEARS: Evaluations and projections by multilateral organizations including the World Bank Group and the International Monetary Fund were scary. They warned that the world faces the worst recession since the Great Depression of the 1930s. The International Monetary Fund predicted that the global economy will contract by 3% this year as economies of countries around the world shrink at the fastest pace in decades. The Fund added that a prolonged outbreak would test the ability of governments and central banks to control the crisis. The financial institutions warned that several countries could go into recession — that is a slowdown in economic activity.
But it is noteworthy that even with the rabid pandemic shutting down economies of some First World nations, Nigeria’s external reserves grew from $33.42 billion on April 29th 2020 to about $36.00 billion in May, 2020, which is enough to finance seven months of import commitments. The foregoing indicates that with the collective support of Nigerians at home and in the Diaspora, and proper management of the economy, the nation could successfully mitigate the economic effects of COVID-19 and prevent long-term downturn in economic activity. It is imperative to stress the fact that the understanding and cooperation of all Nigerians are required at this critical period to moderate the shocks that the economy is withstanding.
UNDERSTANDING THE ADOPTED POLICIES: One of the highly remarkable decisions is the Presidential directive to monetary authorities, in implementing fiscal policies to monitor and control liquidity in the foreign exchange market. Other steps include the policy of paying particular attention to Agriculture and Agribusiness, in addition to strengthening the competitiveness of local producers of commodities and services. This is the time for all to come together in the national interest and for the common good to ensure the sustainable growth of the economy. It will test our patriotism, particularly with regard to looking for local alternatives in order for the economy to absorb the shocks and bounce back within the shortest possible time. This is the secret of the wealth of advanced countries that consume what they produce.
PUBLIC ENLIGHTENMENT: A N2.3 trillion stimulus recommended by the Nigerian Economic Sustainability Plan (NESP) has already been approved by the Federal Executive Council to support the Nigerian Economy in the face of the disruptions and challenges of the Covid-19 Pandemic. nThe design and implementation of the NESP is driven by the following principles:
- LOCAL CONTENT AND SELF RELIANCE: The plan promotes local production, local services, local innovation, and the use of local materials, in line with the Mandate of Presidential Executive Order 5 of 2017, on the Promotion of Nigerian Content in Contracts and Science, Engineering and Technology, and also based on President Buhari’s mantra to “produce what we eat and consume what we produce.”
- ECONOMIC STIMULATION: Ensuring liquidity, preventing business collapse, and staving off the worst impact of a potential recession.
- JOB PRESERVATION AND CREATION:The NESP recommends carrying labour intensive programmes in key areas like housing, roads, agriculture, facility maintenance, and direct labour interventions – all heavily utilising local materials.
- PRO-POOR/VULNERABLE FOCUS:The NESP will extend protection to vulnerable groups, including women, and persons living with disabilities. It will also cater to the sectors of the economy that have been worst hit by the pandemic.
HIGHLIGHTS OF KEY INTERVENTIONS
- MASS AGRICULTURAL PROGRAMME (MAP).
The Plan intends to ensure the cultivation of between 20,000 and 100,000 hectares of new farmland in every State, as well as support off-take and agro-processing, with low-interest credit. This will create millions of direct and indirect job opportunities.
- EXTENSIVE PUBLIC WORKS AND ROAD CONSTRUCTION PROGRAMME
A minimum of 1,000 young Nigerians will be recruited per local government into what will be the largest public works programme in the history of Nigeria, amounting to 774,000 direct jobs. There will also be extensive focus on the construction and repair of major and rural roads using locally available materials like limestone, cement and granite. The roads component will include the acceleration and expansion of scope of the Road Infrastructure Tax Credit Scheme (RITCS).
- MASS HOUSING PROGRAMME (MHP)
MHP will deliver up to 300,000 homes every year. Young professionals and artisans will organise themselves into small and medium scale co-operative businesses within the construction industry to develop these houses, which will be based on a set of standardized designs. This programme will also prioritize the use of local labour and materials. Doors, windows and other materials will be produced, finished or assembled at mass housing construction sites.
- INSTALLATION OF SOLAR HOME SYSTEM (SHS)
This targets 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. Solar equipment manufacturers will be required to set up production facilities in Nigeria, to provide the materials required.
- INVESTMENT IN HEALTHCARE INFRASTRUCTURE This will be done through a special intervention fund, as well as by tapping into an existing World Bank facility (REDISSE Programme), to support COVID-19 interventions in the States.
- INFORMAL SECTOR SUPPORT This will take the form of low-interest loans, and the easing of procedures for registration, licensing, obtaining permits, etc. Mechanics, tailors, artisans, petty traders and all other informal business people will be supported to grow their businesses.
- BUSINESS SUPPORT FOR MSMEs This will take the form of payroll support to designated sectors so that they can keep their employees and help maintain jobs; and also loan restructuring and moratorium for existing debt. Also, low-interest loans to boost local manufacturing and production across critical sectors, including but not limited to the pharmaceutical, aviation, hotels and the hospitality industry, private schools, road transportation, technology companies, and the creative industry, amongst others. A Guaranteed Offtake Scheme for MSMEs will function by making government a key purchaser of specific priority products made by MSMEs, like PPE, face masks, face-shields, processed food, pharmaceuticals, etc.
- TECHNOLOGY Underpinning the implementation of the NESP will be a focus on digital identification of every Nigerian. It is imperative that every Nigerian has a unique digital identity. The Public Works Programmes for example will, apart from the focus on providing employment, also help advance the financial inclusion and digital identification agenda. Broadband connectivity will also receive a boost, helping to create jobs and opportunities especially for young people. Also, a national programme will be launched to identify and create job opportunities in digital outsourcing.
- EXPANSION OF THE NATIONAL SOCIAL INVESTMENT PROGRAMMES The implementation of the NESP will see an increase in the number of cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The pre-existing conditional cash transfer will also be extended to cover a larger number of extremely poor and vulnerable Nigerians.
- CUT NON-ESSENTIAL SPENDING The President has approved the implementation of the Report on the Rationalization of government agencies. The NESP will also target a reduction in average production costs of crude oil. Also, the Integrated Personnel and Payment Information System (IPPIS) will be expanded to cover all Federal Government MDAs. Non-critical and administrative capital spending will be eliminated, including purchase of vehicles (except for ambulances, fire-fighting vehicles and other essentials).
- SUPPORT FOR STATE GOVERNMENTS The NESP offers opportunities for State Governments to collaborate with the Federal Government on Affordable Mass Housing, Agriculture, Off-Grid Power Projects and other projects in the Plan. It also provides for the negotiation of suspension of ISPO payments by States, moratorium on deductions in respect of bailout loans, and encourages States to attain the conditions outlined by SIFTAS and other World Bank programmes, in order to access external support. The ESC will also monitor implementation of the Plan while the Vice President will regularly brief the President on progress made.
COLLABORATION FOR GROWTH All over the world, policies and plans of governments have no good chances of materializing without the cooperation of the citizenry. It is imperative to provide guidance and leadership in implementing these policies nationwide. The segment of the civil society, opinion leaders, the organized private sector and the media that shape opinions must take active part in aiding, sensitizing, as well as moving policy formulators, and those who implement these policies to drive and sustain plans put in place to contain COVID-19, and ensure that Nigeria builds a resilient economy of our dream. Additionally, our values must change and our preferences must be for products and services made in Nigeria. It is possible for this nation to come out even stronger from this global economic malaise, if we all play our parts well.
May the Good Lord bless Nigeria.