Nigeria claims it has surpassed South Africa to become Africa’s largest economy and it seeks to find its place among the world’s top 30 economies by the next decade. The goal is to achieve a minimum GDP of $US900 billion and a per capita income of no less than $US4,000 per annum.
In his determination to significantly curb poverty in Nigeria, President Goodluck Jonathan has devoted an enormous amount of resources to improving key infrastructures. For example, road construction and power attracted 7.59 percent of the budget in 2009, up from 4.58 percent in 2008. In 2010, both sectors received an even higher allocation of ₦374.512 billion ($US2.35 billion), up from ₦235.4 billion ($US1.5 billion) in 2009. This rose in 2011 to ₦403.88 billion ($US2.5 billion), a 7.2 percent hike, after allocations to aviation, transport and agricultural sectors were factored in.
President Jonathan has directed all federal ministries, departments and agencies to give preference to goods made in Nigeria and service procurement contracts are to encourage local producers in order to improve the economy and to create jobs. In 2012, Jonathan signed a Performance Contract Agreement with the members of his cabinet. The agreement set timelines and goals for each ministry in order to “make the ministers accountable, productive, transparent and focused, to deliver to the Nigerian people” according to the president. In September 2013, Jonathan sacked 9 of his ministers for failing to respect the agreement.
A new road map
In spite of the country’s strong macroeconomic indices, fiscal authorities want growth to be reflected in the lives of ordinary citizens. Thus were launched the “2012-2015 Medium Term Fiscal Framework (MTFF) and the Medium Term Expenditure Framework (MTEF).”
Via these guiding policies, the government is pushing for prudent management of the nation’s wealth to free up more funds for infrastructure projects and other developmental purposes. To save the nation’s economy from experiencing the pains associated with crude oil revenue fluctuations, the government has mapped out new strategies to improve Internally Generated Revenue (IGR) from its own agencies. Nigeria is targeting about ₦400 billion ($US2.5 billion) in remittances from revenue generating agencies for this year, a 100 percent leap over the previous year’s ₦200 billion.
More money will be saved by plugging leaks in the public revenue generating system. The most notable steps in this regard are the partial removal of subsidies on petroleum products and the streamlining of payments from the subsidy fund, even as the government insists on paying only verified subsidy claims to oil importers. Similarly, the Subsidy Reinvestment and Empowerment (SURE) Program set up by the government to manage subsidy savings, has set up metrics for monitoring, measuring and evaluating executed projects. Government officials say transparency is a first step towards eradicating leaks and outright fraud. In this regard, the support of the anti-corruption agencies, especially the Independent Corrupt Practices and other related offences Commission (ICPC), has been enlisted.
Nigeria has taken practical steps towards fulfilling its promise to drastically reduce recurrent expenditures to sustainable levels by reducing waste, inefficiency, corruption and the duplication of agencies. Last January, President Jonathan directed a review of the number of committees, commissions and parastatals with overlapping responsibilities as well as MDAs’ overhead expenses.
The Vision 2020 economic transformation blueprint is a long term plan for stimulating Nigeria’s economic growth and launching the country onto a path of sustained and rapid socio-economic development. The blueprint articulates Nigeria’s economic targets and development strategies through to 2020 and it is being implemented using a series of medium-term national development plans.
Spearheading sustainable and viable investment
To achieve the aim of Vision 2020, the country requires massive foreign direct investment (FDI) estimated at some $US10 trillion. The Jonathan administration’s quest for an investment-driven economy has led to the creation of a Ministry of Trade and Investment which is already reporting encouraging results. Since the creation of the ministry, there have been worthwhile investment commitments in the power, manufacturing, agriculture, petroleum and mining sectors, among others, worth trillions of dollars.
In a bid to fast-track the inflow of FDI, the government has also created Trade and Investment desks within Nigeria’s main embassies to act as facilitators, first points of contact and sources of information. The ministry is also collaborating with the Ministry of Foreign Affairs to develop commercial objectives for the country’s main embassies. To this end, the Ministry of Foreign Affairs has approved the issuing of multiple entry visas for accredited foreign investors.
The government had set up two committees (“Doing business and competitiveness” and “Investor care”) with numerous terms of reference as a first step in a series of plans to achieve set targets. These ambitious efforts, which enjoy the support of the UK Department for International Development (DfID), the World Bank and other international organizations, involve clearing bottlenecks that would inhibit the full actualization of Nigeria’s trade potential and repositioning the country’s trade to serve as a catalyst for job creation, wealth generation and economic transformation.
By 2020, Nigeria plans to have a large, strong, diversified, sustainable and competitive economy that effectively harnesses the talents and energies of its people and responsibly develops its natural endowments in order to guarantee a high standard of living and quality of life for its citizens. Nigeria’s targets for 2020 are based on a dynamic comparative analysis of the country’s potential growth rate and economic structure vis-à-vis those of other growing economies in the world. This implies that the Nigerian economy must grow at an annual average of 13.8 percent by the end of the decade, driven by the agricultural and industrial sectors over the medium term, while a transition to a service-based economy is envisaged from 2018.
- Wednesday, 05 February 2014
- Written by Redactor2