By Adaeze Okechukwu
THERE seems to be growing level of discomfort in the private sector over the federal government’s Economic Recovery and Growth Plan (ERGP), as many research analysts/firms have joined some economists in expressing skepticism about its successful implementation.
The ERGP was announced last week, as a medium term plan for exiting Nigeria’s economy from recession and engendering annual growth of up to 7.0 per cent by 2020. Analysts at Cardinalstone Partners Limited, a non-bank financial institution, noted that the plan has an uphill task and ambitious targets to meet in the next three years given the country’s sluggishness in policy implementation.
Confidence level of investors
Cardinalstone’s main concern was that the plan did not explicitly state that there are actionable steps that could restore confidence in the Central Bank of Nigeria’s management of the currency market, the key factor that pushed Nigeria into recession.
They stated: “Stating that the FX will be liberalised simply implies work in progress and adopting the need for flexibility is still not enough to increase the confidence level of investors.”
Also, Afrinvest West Africa, maintained that just like many preceding economic road maps, the ERGP captures the critical challenges facing Nigeria and the proposed strategies to address them.
However, Afrinvest stated that their biggest concern is that Nigeria is long on planning but short on implementation. Nonetheless, they commended setting up of the ‘Delivery Unit’ within the Presidency and the Ministry of Budget and National Planning to implement, monitor and evaluate the plan.
Also, Proshare, a Lagos based market research firm, reiterated that Nigeria’s lack of continuity, consistency and commitment to agreed policies, programmes and projects, as well as the absence of a long-term perspective might be a hindrance to the success of the ERGP. Proshare maintains that the plan was coming relatively late in the life of this government, stressing that with the 2019 elections lurking around, this will likely hamper the success of the plan.
Moreover, they also argued that the plan was unrealistic questioning the basis on which the growth was calculated. The ERGP’s projected seven per cent growth in 2020 is twice as optimistic as that of the International Monetary Fund, IMF.
Furthermore, Proshare posits that eliminating the leakages from the Nigerian Customs and Services will require data interoperability with the Nigerian Ports Authority, which will demand the application of modern information and communication technology, software and hardware.
This exercise, they believe, may require the entire Plan period for execution and training of officers, before the rewards of plugged leakages can begin to materialize.
Proshare, however, commended the government’s efforts to broaden the tax base by enhancing tax collection for the non-oil sector, which they believe, is sure to generate sustainable revenues in the long term. They appreciated government’s initiative of setting up an ‘Efficiency Unit’ with the objective of ensuring a reduction in overhead expenditure by as much as 25 per cent.
They canvassed need for harmonious executive-legislative relationship in the Plan to accelerate actions on some priority legislation needed to foster economic growth.
These, according to them, include the Petroleum Industry Bill, Land Use Act, Companies and Allied Matters Act, Federal Competition and Consumer Protection Bill, among others.