March 8, 2017/Cordros Research
Click here to read full report
The Ministry of Budget and National Planning, on behalf of the Federal Government of Nigeria (FGN), has published on its website, Nigeria’s Economic Recovery and Growth Plan (ERGP).
A Medium Term Plan for 2017-2020, the ERGP is developed for the purpose of restoring economic growth following the severe challenges experienced in the last two years. The Plan will further the Strategic Implementation Plan (SIP), a short-term intervention plan developed in 2016 to focus on three policy goals: tackling corruption, improving security and re-building the economy.
We are not surprised by the fact that the ERGP is robust, and its deliverables are very promising. The fact that the Plan builds on the previous, comprehensive, but poorly implemented plans, such as the National Industrial Revolution Plan (NIRP) and the Nigeria Integrated Infrastructure Master Plan (NIIMP), is very encouraging. The World Bank and other international lenders seek this Plan in considering Nigeria’s loan request. Having recently closed the deal on Eurobond, the Finance Minister stated recently that the country seeks to borrow at least USD1 billion from the World Bank and another USD1.3bn from China’s Export-Import Bank. Foreign financing is estimated at USD3.5 billion in the 2017 budget.
The risk, however, borders on implementation. Here, we refer primarily to the “political determination”, which was deliberately left out in the section that discussed the downside risks to the achievement of the targets envisaged in the medium-term Plan. It was stated in the document that “more than ever, there is a strong political determination, commitment, and will at the highest level”. We like therefore that the Plan concedes that by, “doing nothing” or simply “introducing basic macroeconomic reforms”, the economy would either (1) continue to contract in the short term and growth would be close to zero by 2020 or (2) recover modestly with real GDP growth of approximately 3.8% by 2020, respectively.
The ERGP is a 140-page document. In this note, we have extracted key sections of the document which we think will be of interest to you.
