How far has the Economic Recovery Growth Plan (ERGP) gone to boost the economy, activate growth of non-oil sectors and deliver diversified economic growth? COLLINS NWEZE examines the components of the EGRP through which government hopes to deliver maximum welfare, freedom and happiness of every citizenry.
The priority of every right-thinking government is to invest in its people, promote their welfare and happiness. The Economic Recovery and Growth Plan (ERGP), a scheme of the Federal Government is making positive impact on the lives of the people through social investment and direct financial empowerment to make their lives better.
The ERGP is a product of consultations. It sets out in one comprehensive document the government’s vision for the country and sets out the policies and programmes required for Nigeria to achieve long term growth. The underlying philosophy is to optimize local content and empower local businesses. The three strategic objectives of the ERGP are to restore and sustain growth; invest in the people; and build a globally competitive economy.
The plan is based on five fundamental principles, that is to say, tackling constraints to economic growth; leveraging the power of the private sector to drive economic recovery and sustained growth; promoting national cohesion and social inclusion; allowing markets to function optimally while strengthening Government regulatory oversight to minimize abuse; and upholding core values that define the Nigerian society as enshrined in the 1999 Constitution, such as discipline, integrity, dignity of labour, social justice, religious tolerance, self-reliance and patriotism.
To achieve the objectives of the ERGP over the medium term, it sets out 60 strategies which cut across all the sectors of the economy. It also identifies five key execution priorities which are stabilizing the macroeconomic environment; achieving agricultural transformation and food security; ensuring energy sufficiency (power and petroleum products); improving transportation infrastructure; and driving industrialisation, focusing on Small and Medium Scale Enterprises (SMEs).
Since its development and launching in 2017, the Federal Government has been implementing the various initiatives and reforms outlined in the ERGP which has resulted in the economy recovery, currently being experienced. The ERGP Focus Labs constitute one of the many initiatives introduced to further facilitate the implementation of the Plan and consolidate the economy’s recovery.
Understanding ERGP Focus Lab
A Focus Lab, in the context of development plan implementation, is somewhat different from the conventional physical laboratory experiment. Rather, it is a problem-solving platform that focuses on tackling issues faced by an entity through an iterative trouble-shooting process.
Sector or Focus labs are designed to tackle complex challenges by bringing together all stakeholders to identify the root causes of the challenges, and generating ideas and resources to solve them. The expected outputs from Labs are detailed implementation programmes, with the total funding required from both the public and private sectors; and identifying the persons responsible/accountable for each line item, with timelines attached to each and every stage of the implementation plan.
Focus Labs, although being utilized in Nigeria for the first time to facilitate implementation of the ERGP, have been successfully used in Malaysia, Oman, South Africa to transform the national economy.
Between ERGP and Social
Empowerment
The Government Enterprise and Empowerment Programme (GEEP) MarketMoni remains a Social Intervention Programme (SIP) that provides loans of up to N300, 000 to rural dwellers. This is because grassroots dwellers, petty traders, artisans, traders and cooperative societies are among the most neglected segments of the society when it comes to credit access in Nigeria.
Ironically, more than 70 per cent of Micro Small and Medium Enterprises (MSMEs) are operated by these categories of people. They lack access to loans and financial facilities to sustain and grow their businesses.
But, the narrative is changing as the Federal Government has taken steps to bridge the credit gap and create wealth for Nigerians on the lower rung of the economic ladder. To tackle the issue head-on at inception, the President Muhammadu Buhari-led administration introduced the Government Empowerment and Enterprise Programme (GEEP). The GEEP is one of the Social Intervention Programmes (SIPs), designed to offer zero interest rate loans to over 1.2 million beneficiaries at the grassroots.
Under the scheme, micro business owners, who hitherto had no access to loans to grow their businesses, are being offered unhindered access to affordable micro credit. Some beneficiaries of the GEEP TraderMoni scheme, a unique micro credit facility rolled out nationwide by the government spoke on their experiences of the live-changing SIP.
According to Vice President Yemi Osinbajo, TraderMoni is for petty traders with trading capital not more than N5, 000 and N10, 000.
Prof Osinbajo said: “We want to give those types of people some credit as well, and once they pay back, we will give them more money. We want to make sure that the very poor trader, no matter how poor you are, so long as you are trading or working, the Federal Government will support you by giving you some extra money to do whatever you are doing. “So, every Nigerian who wants to work, who wants to do something, can get the opportunity to do some work.”
Explaining the TraderMoni scheme, the Chief Operating Officer of GEEP, Uzoma Nwagba, said since the scheme commenced 18 months ago, the government has been focusing on higher end of the micro-enterprises, disbursing N50, 000 to N300, 000 loans.
The Special Adviser to the President on Social Investments, Mrs. Maryam Uwais said: “GEEP works with cooperatives to assist MSMEs and the Bank of Industry (BoI), manages it by verifying the membership of the cooperatives through BVN. Those who default in repaying the loans get blacklisted and prevented from further access. GEEP targets 1.66 million MSMEs.”
Speaking further, she said the Conditional Cash Transfer (CCT) has been designed to support one million of the most vulnerable and poorest Nigerians. According to her, the programmes have taken off in 14 states.
Social investment/projects
The Federal Government in line with the ERGP mandate has invested in transport infrastructure and hopes to attract private sector investments in roads and rail development and management.
Minister of Budget and National Planning, Udoma Udo Udoma disclosed that road construction projects are currently going on in all parts of the country even as the Federal Government has increased spending on infrastructure projects.
“Just by way of illustration N251.42 billion was allocated to the Ministry of Transportation in the 2018 Budget – up from N8.8 billion in 2015. We recently issued a N100 billion Sukuk bond, which has been channeled into funding the construction of 25 major roads across the country”.
“On rail, the Federal Government recently commissioned the Abuja Metro-line to connect the Central Business District of Abuja with the Abuja International Airport and the Abuja – Kaduna rail line. In addition, an upgrade of the 3,500-kilometre narrow gauge rail network across the country is in progress while work on the Lagos to Ibadan standard gauge line has commenced. The Warri – Itakpe standard gauge line is nearing completion. You might also recall that this administration commissioned the standard gauge Abuja to Kaduna rail line and completed the upgrade of the runway of the Abuja Airport within a very tight time frame, as promised,” he said.
Power sector reforms
Also, in the energy sector, government has been focused on increasing power generation by optimizing non-operational capacity, encouraging small scale projects particularly in the non-bio-fuel sectors and pursuing long-term capacity development. Government has created a N701 billion payment assurance guarantee for Nigeria Bulk Electricity Trading Company (NBET) to ensure that payments to GenCos improve.
Udoma said that government is focused on achieving more than 2,000 megawatts of additional power generation capacity by the end of 2018, alongside private sector partners and investors. Already, it has launched the Energizing Economies Initiative which is targeted at getting reliable and efficient power to economic clusters around the country. The pilot scheme has commenced in industrial clusters in Aba, Lagos, Kano and Akure.
Besides, there are also, the ongoing power projects on the Mambilla Plateau and the Kashimbila Dam project, amongst others, which will increase the country’s power generating capacity and boost industrial and agricultural activities. Also, Government’s Transmission Expansion and Rehabilitation Programme have resulted in a 50 per cent expansion in grid capacity since 2015, from 5,000 to 7,125 megawatts as at December 2017.
There are a number of off-grid power projects going on across the country, mostly in partnership with the private sector, particularly in solar energy. For instance, the public-private sector partnership scheme with the Niger Delta Power Holding Company has successfully deployed 20,000 units of solar home systems to power rural households across 12 states since July last year.
As far as industrialization is concerned, the Federal Government has made provision for the establishment of industrial hubs across the six geo-political zones of the country and is accelerating implementation of the Nigeria Industrial Revolution Plan, as well as giving attention to agro-processing through a number of intervention programmes. The investment in infrastructure, particularly in power, roads, rail, air and sea ports, will also support industry.
Finally, with regard to ICT, the ERGP envisioned the promotion of the ICT sector through supporting technology development. So far, there have been a number of policy initiatives to promote ICT literacy among the young people by subsidising acquisition of computers in schools, and by private firms; encouraging the expansion of existing as well as establishment of new hardware and software clusters; stimulating technology content development; promoting the use of e-governance and digitalizing federal government data and encouraging local content support for Ministries, Departments and Agencies (MDAs), among others.
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. What steps are you taking to ensure that more foreign exchange is earned outside oil?
The focus of the Buhari administration is on diversifying the economy away from dependence on just one commodity – crude oil, for government revenues and our foreign exchange earnings. To achieve this we must improve the competitiveness of Nigerian products. In short, we must improve the quality and quantity of our non-oil products and our non-oil exports. The ERGP strategy number 26 sets out the ways we intend to increase our non-oil exports. We have identified a number of major products, including cotton, rice, leather, gold, soya, cocoa, petrochemicals, fertilizer, palm oil, rubber and cement, which we believe Nigeria can not only export, but become a major exporter.
Developmental milestones
According to data on the economy, over N82 billion has been disbursed as credit to more than 350,000 farmers under the CBN Anchor Borrowers’ programme as at mid-June, 2018. Rice farming yields increased from 2.5MT to about 4MT between 2015 and 2017. Over N2.6 trillion was released as Federal Government capital expenditure to finance infrastructure and other related projects from 2016 to 2017. The figure for 2016 stood at N1.2 trillion while that of 2017 was at N1.44 trillion.
Besides, appropriated capital budget provision for 2018 is N2.86 trillion with 1.5 per cent GDP growth rate achieved by the second quarter of this year, 15 million jobs to be created by 2020 while about 50 per cent increase was achieved in power generation from national grid from approximately 4,000Mw in 2015 to 7,000MW in 2018, although 5,000 MW is distributed.
Besides, foreign reserves hit a five-year high of $45.83 billion as at August 31, 2018 with over $22.5 billion worth of private sector investment to be unlocked by 2020 through the ERGP Focus Labs. $10 billion worth of investment projects for immediate development. Also, over N1.91 trillion disbursed to States as Bail-Out Fund for payment of salaries, pensions and other liabilities during 2016 to 2017.
Agriculture/ Anchor
Borrowers’ Programme
In the course of the Focus Labs, the team was able to identify about $4.73 billion worth of private investments that could be generated in the agricultural sector with a potential of creating up to 128,000 jobs.
Under the Anchor Borrowers’ programme, for instance, over N82 billion has been given out to more than 350,000 farmers, facilitated by the Central Bank of Nigeria (CBN). It is also worth noting that 14 moribund fertilizer blending plants have been revitalized through the Presidential Fertilizer Initiative (PFI) with a total capacity of 2.3 million metric tons of NPK fertilizer. Nigeria’s milled rice has increased by about 60 per cent as a result; and, in the last two years, eight new rice mills have been added to the existing ones.
“The ERGP Focus Labs have succeeded in identifying more than US$22.5 billion in private investments from about 164 projects, which can be unlocked. Of this amount, $$10.9 billion of them are what we call ‘Most Ready’ projects, that is, we are almost sure to unlock these projects and accelerate their delivery by the private sector. These projects are forecast to create more than half a million new permanent jobs for the people of Nigeria up until the year 2020, demonstrating the far-reaching impact of the ERGP Focus Labs in unleashing a brighter future for our country.
“The ERGP is unlike others introduced by governments in the past. At its core is a focused approach to its implementation, supported in particular, by the highest level of political will, from the President himself through to our civil servants on the ground. It is no longer business as usual for us in government.
The agricultural sector is also being supported by improved budgetary allocations, with capital provisions raised from N8.8 billion in 2015 to as high as N149.2 billion in the 2018 budget. Similar attention is also devoted to the Ministry of Water Resources, to provide the needed support to agriculture. We are also making efforts to connect the rural areas with the cities and towns by building feeder roads for ease of transportation of agricultural produce.
