57 years of groping for a workable economy

critically examines reasons the nation’s promising economy at Independence has remained stagnated despite the illusion of growth 57 years after.
 
AFTER two years in the woods, the Nigerian economy is heading north.

Shortly after President Muhammadu Buhari’S assumption of in 2015, the economy slumped into a recession and struggled for five quarters before crawling out at the end of June 2017.

The slide in the economic growth was consequent on the slump in the price of crude oil, the economy’s mainstay, in the world market. Oil prices had gone down from about $140 per barrels in 2013 to about $35 dollars in 2015. The situation was compounded by the plummeting of the country’s foreign reserve at a time the demand for foreign exchange was spiraling resulting in the inability of the critical sectors of the economy to source foreign exchange for their productivity activities.

This scaled down production in the country and the economy contracted as a result. This, coupled with the vacillation of the government in taking decisive steps to remedy the situation, quickened the pace of the country on the trip to recession.

However, the deplorable state of the Nigerian economy is a result of years of travelling on the wrong road with the hope of landing in the right place.

The colonial masters bequeathed a wealthy country to the nation’s first generation of leaders. Every sector worked very well. The education sector produced well-informed and properly groomed people. The medical system was very functional, infrastructure was well developed, the civil service provided the ingenuity and creativity that facilitated development, and unemployment rate was quite low.

These were made possible because there was a plan in place to achieve all these and more. There was a plan to grow the economy through agriculture, there was a plan in place to have a functional education system and there was a plan to ensure that the hospitals were not mere ‘consulting clinics’. There was a development plan that the colonial masters worked with.

The country’s first development plan was a 10-year plan that was rolled out in 1946 and lasted till 1955. It was called Development and Welfare Plan. At the expiration of that, there was a five year plan between 1955 and 1960. This was later extended to 1962.

The first indigenous development plan was for between 1962 and 1968. This had a broad scope which spelt out government plans to achieve accelerated growth and improved welfare of the citizens. Then the government had specific development goals in mind. The government was quite clear on what it wanted to achieve with respect to every sector of the economy. The plan resulted in the emergence of state-owned enterprises, marketing boards as well as extension services.

For the Second National Development Plan, which spanned 1970 to 1974, the government’s focus was rebuilding the physical assets destroyed during the civil war.

The government purposed in the Third National Development Plan between 1975 and 1980 to increase the annual rate of capital expenditures twelvefold. The government documented its plans to expand agriculture, industry, transport, housing, water supplies, health facilities, education, rural electrification, community development, and state programmes.

In 1980, the government of Alhaji Sheu Shagari postponed the take off of the Fourth National Development Plan from 1981 to 1985 for nine months because of the recession that was occasioned by a decline in oil revenue. Exports which had been projected to rise by 12.1 per cent annually fell by 5.9 per cent during that period. This affected the country’s capacity to import construction materials and related capital goods also fell, reducing growth in the construction, transport, communications, utilities, and housing sectors.

After the overthrow of Alhaji Shagari, the military postponed the commencement of the Fifth National Development Plan till between 1988 and 1992 to allow the soldiers clear the mess left behind by the civilians.

General Ibrahim Babangida who was in power at the take off of the Fifth Development Plan focused on the Structural Adjustment Plan (SAP), whose objectives were the devaluation of naira, removal of import licenses, reduction of tariffs, opening the economy to foreign trade, promotion of non-oil exports through incentives, privatization of state-owned enterprises, generation of employment opportunities and achieving national self-sufficiency in food production.

Without allowing the Fifth Plan to run its full course, Babangida administration changed the national development plan to a rolling plan. Instead of a five-year term, it changed it to three years. So, in 1989, the government came up with a three-year rolling plan from 1990 to 1992. In justifying this, the government stated that a rolling plan was more suitable for an economy facing uncertainties and rapid changes.

The objectives of the rolling plan “were to reduce inflation and exchange rate instability, maintain infrastructure, achieve agricultural self-sufficiency, and reduce the burden of structural adjustment on the most vulnerable social groups.”

When General Sani Abacha took over the reins of government, he introduced the Vision 2010, a long-range development plan, for the country. The Vision was to focus on ensuring stable polity, growing the economy to reduce dependence on oil, improving the quality of education, embarking on urbanization without neglecting rural development, reducing rate of unemployment, improving infrastructure, and scaling down corruption.

The Vision was continued by General Abdulsalami Abubakar after the demise of General Abacha.
President Olusegun Obasanjo, who was in power between 1999 and 2007, gave Nigeria the National Economic Empowerment and Development Strategies (NEEDS) and the State Economic Empowerment and Development Strategies (SEEDS) documents as a development plan. NEEDS was a medium term strategy (2003– 2007) meant to achieve poverty reduction, wealth creation, employment generation and value re-orientation. It was planned to achieve Nigeria’s vision of becoming the largest and strongest African economy and a key player in the world economy.

Its counterpart, SEEDS, was a system for measuring state developmental performance using SEEDS and to identify priority areas and states that demonstrate effective use of allocated resources.
The administration of President Umaru Yar’ Adua gave the country the Vision 20:2020. This was a plan intended to make Nigeria one of the top 20 economies by 2020. The three pillars of the Vision were guaranteeing the well-being and productivity of the people, optimizing the key sources of economic growth, fostering sustainable social and economic development.

President Goodluck Jonathan came up with the Transformation Agenda, a medium term development strategy to actualize the Federal Government’s economic growth agenda between 2011 and 2015 and speed up the actualization of Vision 20:2020. Its aims were to create decent jobs in sufficient quantity to resolve the protracted problem of unemployment and reduce poverty, lay the foundation for robust and inclusive growth within the Nigerian economy, and improve, on a sustainable basis, the well-being of all classes of Nigerians regardless of their circumstances and location.

After almost two years in the saddle, the administration of President Muhammadu Buhari unveiled its Economic Recovery and Growth Plan (ERGP). According to the Minister of Budget and National Planning, Senator Udoma Udo Udoma, “The vision of the ERGP is one of sustained inclusive growth. There is an urgent need as a nation to drive a structural economic transformation with an emphasis on improving both public and private sector efficiency.

“This is aimed at increasing national productivity and achieving sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security. This plan is a pointer to the type of Nigeria that the people desire in the short to medium-term, and encourages the use of science, technology and innovation to drive growth.

“It also provides a blueprint for the type of foundation that needs to be laid for future generations, and focuses on building the capabilities of the youth of Nigeria to be able to take the country into the future.”

The ERGP has three main objectives which are restoration of growth, investment in the people, and becoming a globally competitive economy.

The ERGP is designed to achieve agricultural transformation and food security. It also aims to achieve improved foreign exchange inflow, 10GW of power generation, becoming exporter of refined petroleum products, stable macroeconomic environment, infrastructural development and industrialised economy are other parts of the outlook Nigeria envisions by 2020.

Commenting on the protracted underdevelopment of the country, the Chief Executive of Heritage Associates, Lagos, Dr. Kenneth Madu, said Nigeria found itself in this rut because it lacked long-term planning.

According to him, “The feats recorded by the country in its early years were possible because we had long term plans that those in government were committed to. It did not matter who started the programme those who succeeded them ensured that the programmes were properly executed. That is why we were able to make the strides that we made. This is a major difference between Nigeria and the countries that we started with.

Malaysia got the palm tree seedlings from Nigeria, today the country is regarded as the leading country in palm oil production. This was possible in Malaysia because the government had a vision and it kept to it. Where does Nigeria that gave Malaysia the seedlings in oil palm production globally? We have to learn to develop long term plans that we will stick to come rain, come shine.”

Speaking on this matter, Professor John Adeoti of the Nigerian Institute of Social and Economic Research, Ibadan, said Nigeria has been battling with underdevelopment because it wants a short cut to development.

He said development is a product of hard work and commitment, noting that many of those in leadership positions in Nigeria want omelet without breaking eggs. “It just does not happen that way.

 We believe that we can have development overnight. No country has ever recorded that. We have to put the right policies in place and work the policies. If we do the right things we shall get the right result if we do the wrong things, the result is obvious. So, the government must generate right policies. Policies must be well thought-out and they must be properly implemented; they should not be abandoned after a while. Economies are not run on the rule of thumb.”

He added that Nigeria should develop a system in which a policy must not be jettisoned because a new person is in government.

“If we keep shopping for new policies or new development plans because we have a new government what will happen is that we shall have starts and stops, there will not be consistent progress. Every country that has developed had patiently allowed their policies to mature. Policies too have a gestation period,” he said.

Commenting on the effects of policy Professor Marshal Mikhail of Texas University said, “Nigeria’s failure to stick to a plan to the end has cost the country a fortune. Nigeria is littered with abandoned projects. Look at the wasted resources at Ajaoukta Rolling Steel Mill. The project had almost been completed and was abandoned because there was a change in government.

 That project, if it had been fully completed, would have impacted positively on the nation’s economy. There is a dam in Iseyin, Oyo State, which had been fully completed with every accessory in place but was abandoned because there was a change in government. If that had had been activated, it would have contribute greatly to electricity generation in the South West region. There are one thousand and one of such in the country.

No country can develop that way. The NEEDS and SEEDS documents have the potential to precipitate national development but those documents have been abandoned because there was a change in government. Even the Transformation Agenda of the last administration is a very profound development plan but nobody is talking about it.

I can put my money on it that as soon as this administration is out of office, the ERGP will be abandoned. How can Nigeria develop that way? If Nigeria is to develop, the leaders must be selfless and must avoid abandoning a programme because it did not emanate from them.”