As expected, former vice president, Atiku Abubarkar, the Presidential candidate of Peoples Democratic Party launched his campaign with a 61-page economic development plan overview titled Atiku’s plan for Nigeria! Going through the plan, it covered many sectors of our economy with a focus on human capital development, job creation, poverty eradication and infrastructure development. It promises to achieve many things by 2025- a GDP of $900 billion, increase manufacturing output from 9% to 30% of the GDP, higher electricity generation of 20,000 MW, FDI inflow of about 2.5% of GDP, increased infrastructure stock of 50% of GDP by 2025 and 70% by 2030. In addition, 3 million jobs will be created every year, Nigeria will have the lowest corporate tax in Africa, African Free Trade Continental Agreement (AfCFTA) will be signed, NNPC will be partially privatized and Nigeria will be restructured, fantastic!
While there is no doubt on the good contents of the plan or the possible positive impact it will have if effectively executed, I am concerned that the plan is lacking detail in terms of how it will be achieved. Also, there is need for clarification in certain critical areas that are central to the success or failure of the plan. I will explain the first six clarifications required in this piece.
First, in comparison with other development plans and even the APC’s, it is difficult to see the innovation, freshness or what is spectacular of the Atiku’s plan. For instance, the key factors upon which the plan should be anchored were weakly addressed. These include rule of law, regulatory quality and government effectiveness. While these key factors might sound simple just as they were mentioned in the plan, a deep understanding of their meaning and impacts in creating an inclusive and sustainable development and growth of any country reveals that they are the fulcrum upon which every other thing depends. They are responsible for our high levels of corruption and poverty, limited infrastructural development, insecurity, weak governance and human capital development, high unemployment/underemployment, limited flow of FDI and calls for restructuring. Since proper measurement of the key factors started in 1996, Nigeria has consistently performed woefully. In a performance range from positive (+2.5) the highest to negative (-2.5) the lowest, Nigeria has an average of -0.88 for regulatory quality, -1.18 for rule of law and -1.02 for government effectiveness. Given their prime connection to all our socio-economic and political problems, I think they deserve a detailed and convincing explanation as to how they will be improved to ‘unravel the Nigeria Paradox’.
Second, going through both the 61 pages and the more detailed 186 pages plans, there is an embedded confusion as to the contents of the plan and the promise to restructure the country. It seems that the plan is saying that we will restructure on one hand but on the other hand, let us plan the economy as if we are not going to restructure. A more affirmative clarification is needed. If we are going to restructure as the plan states, it means that the plan need to be reworked and structured to convincingly show that it is a plan for an economy to be restructured. If issues such as minerals and mines, internal security (police, law and order), railways, communication, transport, housing, agriculture and others will be devolved to the concurrent list and states/local governments allocated such tasks, the plan should clearly reflect such arrangement and the way it will work. It also need to clarify how the focus of the central government on defense and national security, monetary policy and customs, international affairs and foreign policy will fit with the tasks of the states/local government in the concurrent list to ensure cohesion, macroeconomic, social and political stability.
Three, recalling that only about 10% of the privatized companies can be said to be successful, the plan to partially privatize NNPC will require further explanation and clarification. While there is no doubt that NNPC has many challenges, a fundamental question is whether a partial privatization will solve the problem. Based on research and facts, the NNPC challenges will not disappear as long as the government maintains significant ownership. If the main reason for the planned partial privatization of the NNPC is to enhance efficiency and accountability, a further question is to identify all the options to achieve that and if partial privatization is the best.
Fourth, a key area of the plan that seriously requires deep thinking and review is the planned funding of the plan. For instance, while about $35 billion is stated as the estimated annual infrastructure investments needed, the plan to fund projects through more borrowing (loans and bond) and Public-private partnerships (PPP) is not very encouraging and convincing. It gives the impression that a repeat of the excessive borrowing to achieve some development targets as it is the case with the present PMB government is likely. If corporate tax will be reduced, will income tax be increased to offset the impact of reduced corporate tax vis-à-vis highly needed government revenue? Moreover, the reason why many foreign firms are not coming to Nigeria is not due to high corporate tax. It is because of issues of rule of law, regulatory quality and government effectiveness. While borrowing and use of PPP will be helpful, it is imperative to urgently in one to two years diversify the economy to exploit our numerous but untapped opportunities to create an export oriented economy.
Fifth, while the promise to increase our manufacturing capacity from 9% to 30% of the GDP by 2025 is commendable, it is not clear how this will be achieved. As this seems to be main opportunity to address many of our challenges such as unemployment, foreign exchange, government revenue and infrastructural development, it is expected that the plan should clearly indicate the focus sectors in the short, medium and long term. It is important that we appreciate that while the global economy is presently in and further planning for fourth industrial revolution, it is not clear if Nigeria is in or has started first industrial revolution!
Sixth, the plan to create 3 million jobs annually while also very commendable requires further clarification. It is highly related to the fifth point on manufacturing and industrialization. As over 40 million Nigerians remain unemployed or underemployed, it is an area that requires good detail as to the sectors through which the jobs will be created and how they will be created. This will enhance the hope of Nigerian youths and convince them of the workability of the plan. I commend Atiku Abubakar for his efforts but implore him to appreciate that our challenges are too many, our situation too precarious to be resolved with the plan as it is. It requires more hard work and deep thinking to develop a more robust and detailed plan that will help us to ‘unravel the Nigeria Paradox’