COVID-19 and Nigeria Economic Sustainability Plan (2), By Isaac N. Obasi

Spread the love

This second part of the article presents and examines the key proposed projects in the Nigeria Economic Sustainability Plan which when fully implemented within 12 months will help to get Nigeria out of the COVID-19 induced economic crisis. Before presenting and examining the key proposed projects of the Plan, we will first present the general objectives as well as the three pillars of the Plan.

Whatapp NewsTelegram News

 It is important to point out again that the Sustainability Plan is designed to be executed in 12 months and hence both the general objectives and the three pillars are also meant to cover 12 months. All these mean that the Sustainability Plan is an emergency intervention which implies that time is of essence in achieving the various projects. This also means that the slow wheel of the bureaucracy should not be allowed to grind the projects to a halt. 

The discussion on the specific aspects of the Plan will take excerpts or quotations directly from the Executive Summary section of the Plan, while figures of the estimated costs for three key project areas selected for demonstrative purposes will be taken from the main sections of the Plan.

General Objectives of the Plan

The general objectives of the plan are: (i) to stimulate the economy by preventing business collapse and ensuring liquidity; (ii) retain or create jobs using labour intensive methods in key areas like agriculture, facility maintenance, housing and direct labour interventions; (iii) undertake growth enhancing and job creating infrastructural investments in roads, bridges, solar power, and communications technologies; (iv) promote manufacturing and local production at all levels and advocate the use of Made-in-Nigeria goods and services, as a way of creating job opportunities, achieving self-sufficiency in critical sectors of our economy and curbing unnecessary demand for foreign exchange which might put pressure on the exchange rate; and (v) extend protection to the very poor and other vulnerable groups – including women and persons living with disabilities – through pro-poor spending.

These general objectives are consistent with the Terms of Reference and therefore cover adequately a wide-range of economic issues and problems generated/or exacerbated by the COVID-19 pandemic. This consistency or clarity of purpose will no doubt facilitate implementation of proposed projects in so far as the corresponding political will and spirit of selfless service are present.  

Three pillars of the Plan

The pillars of the Plan are (a) real sector measures, (b) fiscal and monetary measures, and (c) implementation. The first pillar “Real Sector Measures” ‘comprises a mix of project and policy approaches, which focus on the creation of jobs across the fields of agriculture and agro-processing, food security, housing construction, renewable energy, infrastructure, manufacturing and the digital economy. The aim is to safeguard existing micro, small and medium scale businesses while ramping up local productive capacity by encouraging opportunities for innovation in the various sectors’. 

The second pillar “Fiscal and Monetary Measures” ‘outlines steps that will be taken to maximise government revenue, optimise expenditure and enshrine a regime of prudence with an emphasis on achieving value for money’. The overriding objective is to keep the economy active…and boost investments in strategic sectors affected by the COVID-19 pandemic, while supporting the financial viability of State Governments’.  The “third pillar is Implementation”… Each minister will be responsible for supervising the implementation of plans situated in their Ministry through a ministerial implementation Committee chaired by the Minister…The Committees shall also drive the execution of specific projects, coordinate the entire sectorial value chain and ensure resolution of bottlenecks impeding implementation. The Economic Sustainability Committee, which is an inter-ministerial committee, will be responsible for general oversight of implementation and will report to the President. Expenditure will be monitored through the National M&E Framework and the Budget Office of the Federation.

Proposed Key Projects

The Economic Sustainability Plan provides for a stimulus package of N2.3 trillion to be spent in 12 months. Each of the proposed key projects is allocated a specified amount of money based on the estimates. For illustrative purposes, the amounts allocated to three proposed key project areas (namely Mass Agricultural Programme, Social Investment Programme, and Support for Micro, Small and Medium Enterprises) will be specified under these key project areas.. 

Key projects put forward by relevant Ministries to sustain economic activity, boost production, create the maximum number of jobs possible and save foreign exchange include – 

(i) A Mass Agricultural Programme: This is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every State of the Federation. The aim is to create millions of job opportunities, directly and indirectly, over a 12-month period. A significant number of Nigerians will be incentivised to engage in farming and agro-processing, as that is a field in which Nigeria has comparative advantage. The Minister of Agriculture and the CBN Governor have agreed on a detailed plan of action in this regard. 

The estimated cost for the agricultural projects is N634,982,256,367.46. For those following the news, the Minister of Agriculture, Sabo Nanono, announced few days ago that the Federal Government is going to inject over N600 billion as stimulus response into the agricultural sector. This will support small scale farmers among others. This statement is in line with the provisions of the Plan. Let us watch how its implementation will go.

(ii) Extensive Public Works and Road Construction Programme (focusing on both major and rural roads): As the country cannot afford to continue with the importation of bitumen for road construction, emphasis will now be on the use of locally available materials like limestone, cement and granite. Options have been explored for using these materials in major federal highways. Similarly, a significant number of workers can be engaged in the construction of rural roads using stones and other materials available locally. The Minister of Works and Housing is developing the engineering concept and template for this approach in order to assist the Ministry of Agriculture and Rural Development, which is responsible for rural roads. 

(iii) Mass Housing Programme: This programme is expected to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium scale businesses within the construction industry. Such enterprises will use indigenous labour and materials working on dedicated housing sites. For instance doors, windows and other materials will be produced, finished or assembled at mass housing construction sites. Also, home designs can be standardised and costed with economies of scale in mind to ensure their affordability. For the construction of houses to continue uninterrupted across the country, the Federal Ministry of Works and Housing, CBN and the Family Homes Fund (under the Ministry of Finance) are making arrangements for purchase through cooperatives and for warehousing of completed houses, which will then be mortgaged or let out on rent-to-own basis. 

(iv) Installation of Solar Home Systems: The proposed Solar Home Systems Project will cover up to five million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. In view of the scale of materials required, solar equipment manufacturers will be required to set up production facilities in Nigeria, thereby offering additional job opportunities to Nigerians. In addition, installation, servicing and payment collections are expected to provide thousands of other jobs. 

(v) Strengthening the Social Safety Net: This will be achieved through an increase in the number cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The preexisting conditional cash transfer will be extended to cover mostly the rural poor. However, on account of the current lockdown, most of the urban poor, artisans, labourers, petty traders, street vendors, cart pushers, have become further impoverished. 

The estimated cost for this project area is N87,063,566,666.67.

(vi) Support for Micro, Small & Medium Enterprises: Implementation of a scheme to support business activities of MSMEs through guaranteed off take of items like personal protective equipment, face shields, face masks, hand sanitizers, shoecovers, soaps, etc. In this regard, we expect to catalyse massive investments in light manufacturing, which will ensure that many common articles of everyday use are made in Nigeria to acceptable standard. 

The estimated cost for various projects in this key area is N625,000,000,000.00. This total amount is our summation of separate amounts allocated for the different tracks under this key project area. The Vice President, Prof. Yemi Osinbajo, announced few days ago that the Economic Sustainability Plan has provision to support small businesses. This revelation is also in line with the provision of the Plan. 

(vii) Reduction in NAFDAC registration fees: Practical support has also been initiated for MSMEs as an immediate response to support resilience. In this regard, the National Agency for Food and Drug Administration and Control (NAFDAC) has implemented an 80% reduction of its product registration charges and total waiver of administrative charges for product license renewals. 

(viii) Survival Fund: This is to give payroll support to small and medium-sized enterprises so that they can keep their employees and help maintain jobs.

(ix) Promotion of Domestic Gas Utilisation: To take advantage of Nigeria’s abundant gas resources, which is also cheaper and more friendly to the environment, this project will promote indigenous manufacture of gas cylinders, building of gas filling stations and conversion of cars to promote the wide use of compressed natural gas in the domestic market. 

(x) Digital Technology: To foster a culture of innovation and create a wide variety of technology and ICT jobs, special attention will be paid to the promotion of technology hubs, call-centres for business process outsourcing and digitisation of processes, both in Government and within the private sector. Experience thus far indicates that, if well harnessed, this is a sector that can create jobs on a large scale and earn foreign exchange for the country.

Cross-Cutting Imperatives: It is further envisaged that a range of measures must be necessarily taken to undergird the implementation of the Plan, enhance service delivery and build resilience in the post- COVID-19 economy. These measures include: (i) Digital identification of every Nigerian, this will help improve the provision of cash transfers and other benefits; (ii) Broadband connectivity to help school children access digital education across the entire country; (iii) Local production of all that we can: shoes, steel fabrication, ceramics, plastics, furniture and building materials; (iv) Promoting strategic investment in the local manufacture of generic medicines to reduce importation of expensive drugs; (v) To establish a national research fund for medicine and pharmaceuticals funded by contributions from TETFUND and Corporate Social Responsibility expenditure of private companies; (vi) To promote the uptake of the FGN Savings Bond to encourage all Nigerians to save a portion of their income no matter how small.

In concluding this piece, the following points need to be made. First, the proposed key projects are very comprehensive and adequate to address the COVID-19 induced economic problems. However, concerning the universities, the provision under the cross-cutting imperatives above, are not enough, as they needed a separate and more targeted package. Universities constitute huge but neglected business areas or centres that would have required their own separate COVID-19 stimulus package to generate huge multiplier effects given their mammoth student and staff population. 

Secondly, the implementation of the Plan is, in our humble opinion, under threat unless the slow wheel of the bureaucracy is made to operate differently under this COVID-19 pandemic emergency. The dominant reliance on the ministries for the implementation of the various key projects in the Plan, is likely to experience a setback unless there is serious and regular presidential oversight beyond the Economic Sustainability Committee. There should be a higher level of a demonstration of political will to achieve the desired results. 

Thirdly and lastly, the 12 months period for implementing the projects appears to be unrealistic unless there is a doubling of implementation efforts. So far, it is only few key drivers of the Plan that have made serious policy statements towards the implementation of the Plan. One therefore commends the vice president, the Minister of Finance as well as that of Agriculture for keeping hope alive by making policy statements on the implementation of the Plan. We need more of such, as this Plan is one sure way of getting Nigeria out of a potentially long period of recession.

Prof. Obasi, a public policy expert (& former columnist in the Daily Trust, Abuja, March 2003 to October 2006, & Daily Champion, Lagos, April 2005 to December 2008), is of the Department of Public Administration, University of Abuja. Email: nnamdizik@gmail.com      


Spread the love