The government initiated the Economic Recovery and Growth Plan (ERGP) for the economy’s restoration after the country came out of recession. To hasten up the job, an Efficiency Unit has been created in the Federal Ministry of Finance. The unit is to optimise public finance management and ensure efficient utilisation of revenue to help the government realise its goals. But its implementation, argues Senior Correspondent COLLINS NWEZE, remains a challenge.
The Federal Government recently unfolded its Economic Recovery and Growth Plan (ERGP), which outlined how the country will get out of recession and attain stability and growth. The economic blueprint itemised the economy’s potential and how it can be harnessed for economic growth, development and the citizens’ good.
The ERGP recognised that Nigeria has the potential to become a major player in the global economy by virtue of its human and natural resource endowments. However, this potential has remained relatively untapped over the years.
Analysts said the content of the ERGP showed that government was already approaching the solution to the nation’s economic challenges with the same will and commitment it had demonstrated in the fight against corruption and economic development.
The belief that the ERGP had brought together all the sectoral plans for agriculture and food security, energy and transport infrastructure, industrialisation, among others means it can actually be used to revive the economy.
Besides, after a shift from agriculture to crude oil and gas in the late 1960s, Nigeria’s growth has continued to be driven by consumption and high oil prices. “Previous economic policies left the country ill-prepared for the recent collapse of crude oil prices and production. The structure of the economy remains highly import dependent, consumption driven and undiversified,” the ERGP said.
The EERGP, a Medium Term Plan for 2017 – 2020, builds on the Strategic Implementation Plan (SIP)and has been developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people – the nation’s most priceless assets.
It is also articulated with the understanding that the role of government in the 21st Century must evolve from that of being an omnibus provider of citizens’ needs into a force for eliminating the bottlenecks that impede innovation and market-based solutions.
The plan also recognises the need to leverage science, technology and innovation (STI) and builds a knowledge-based economy. The ERGP is also consistent with the aspirations of the Sustainable Development Goals (SDGs) given that the initiatives address its three dimensions of economic, social and environmental sustainability issues.
However, stakeholders believe that cost reduction strategies for achieving greater macro-economic strategy and realising the goals of ERGP.
President, the Consumer Advocacy Foundation of Nigeria (CAFON), Sola Salako, said every Nigerian will benefit from efficiency in implementation of available resources. She said efficiency in the management of resources will help achieve the ERGP goals, and save more funds for implementation of more projects. “Government should be seen as business of service and not means of acquiring wealth. The ERGP is key in helping government realise its objectives,” she said.
An Economist, Henry Boyo, said government can be efficient in a productive process. He said having a progressive economic plan provides opportunity for government to be efficient, adding that the economy needs to be diversified and real sector promoted for the real benefits of ERGP to be realised.
“For the economy to grow, the real sector has to be promoted. There is need to manage inflation, reduce cost of borrowing and have efficient exchange rate for the economy to thrive. Government has to implement budget efficiently for it to realise set objectives,” he said.
In the Federal Ministry of Finance, the newly created Effeciency Unit is tasked with reviewing all government overhead expenditure, to reduce wastages, promote efficiency and ensure quantifiable savings for the country.
The unit works across all ministries, departments and agencies to identify and eliminate wasteful spending, duplication and other inefficiencies. It also identifies best practices in procurement and financial management and share such knowledge with the MDAs to ensure its adoption.
“Findings of the Efficiency Unit will be formally communicated accordingly and will be enforced through establishment of expenditure guidelines, undertaking follow-up reviews and spot checks. Other measures that will ultimately checkmate wastage across all areas of Federal Government expenditure will also be adopted, ’’ the statement said.
According to the statement, the development is based on the fact that presently, the nation’s recurrent expenditure completely dwarfs capital expenditure by a ratio of 84/16. “This includes non-wage related overhead expenditure such as travel costs, entertainment, events, printing, IT consumables, stationery,” it said.
The ERGP also indicated that oil accounts for more than 95 per cent of exports and foreign exchange earnings while the manufacturing sector accounts for less than one percent of total exports.
“The high growth recorded during 2011-2015, which averaged 4.8 per cent per annum mainly driven by higher oil prices, was largely non-inclusive. Majority of Nigerians remain under the burden of poverty, inequality and unemployment. General economic performance was also seriously undermined by deplorable infrastructure, corruption and mismanagement of public finances. Decades of consumption and high oil price-driven growth led to an economy with a positive but jobless growth trajectory,” it said.
According to the report, after more than a decade of economic growth, the sharp and continuous decline in crude oil prices since mid-2014, along with a failure to diversify the sources of revenue and foreign exchange in the economy led to a recession in the second quarter of 2016.
“The challenges in the oil sector, including sabotage of oil export terminals in the Niger Delta, negatively impacted government revenue and export earnings, as well as the fiscal capacity to prevent the economy from contracting. The capacity of government spending was equally constrained by lack of fiscal buffers to absorb the shock, as well as leakages of public resources due to corruption and inefficient spending in the recent past,” it said.
It said the current administration recognises that the economy is likely to remain on a path of steady and steep decline if nothing is done to change the trajectory. It is in this context that since inception in May 2015, government has made several efforts aimed at tackling these challenges and changing the national economic trajectory in a fundamental way.
“The earliest action was the prioritisation of three policy goals: tackling corruption, improving security and re-building the economy. Consequently, the Strategic Implementation Plan (SIP) for the 2016 Budget of Change was developed as a short-term intervention for this purpose. Visible successes and achievements have been recorded. However, it is recognised that more needs to be done to propel the country towards sustainable accelerated development,” it said.
It said the ERGP differs from previous plans in several ways. First, focused implementation is at the core of the delivery strategy of the Plan over the next four years. More than ever before, there is a strong political determination, commitment and will at the highest level.
“Whilst all the MDAs will have their different roles in implementing the Plan, a Delivery Unit is being established in the Presidency to drive the implementation of key ERGP priorities. The Ministry of Budget and National Planning will co-ordinate plan-implementation and for this purpose will, amongst other things, build up its capability for robust monitoring and evaluation,” it said.
The plan outlines bold new initiatives such as ramping up oil production to 2.5mbpd by 2020, privatising selected public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60 percent by 2018. Other initiatives include environmental restoration projects in the Niger Delta, which demonstrate the Federal Government’s determination to bring environment sustainability to the forefront of its policies.
“As part of this plan, oil revenues will be used to develop and diversify the economy, not just sustain consumption as was done in the past. The economy will run on multiple engines of growth, not just the single engine of oil. The Plan focuses on growth, not just for its own sake, but for the benefits it will bring to the Nigerian people. This plan also places importance on emerging sectors such as the entertainment and creative industries,” it said.
Besides, the ERGP builds on existing sectoral strategies and plans such as the National Industrial Revolution Plan, and the Nigeria Integrated Infrastructure Master Plan. Rather than re-inventing the wheel, the ERGP will strengthen the successful components of these previous strategies and plans while addressing challenges observed in their implementation.
