Nigeria’s Federal Government economic blueprint, the 2017-20 Economic Recovery and Growth Plan (ERGP) released in March 2017, which recognizes the power of free markets and envisions an economy that would be largely driven by the private sector, has been described as mere rhetoric.
The Economist Intelligence Unit (EIU), a member of The Economist Group, says the professed preference for markets in the document is not backed by commitments to scrap many of the existing policies and practices that clearly hinder unfettered exchange, including capital controls, energy pricing regulations and international trade restrictions.
In a July Nigeria country report released by the London-based EIU and seen by Businessamlive, the ERGP document is seen as not having details to suggest that government is serious in embarking on market-oriented structural reforms.
“Indeed, despite the rhetoric, there is little in the ERGP’s details to suggest that Nigeria’s rulers are about to embark on market-oriented structural reforms,” it said.
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The ERGP is specifically aimed at addressing the country’s huge infrastructure deficit, attaining food security and promoting industrialisation, driven by small and medium-sized enterprises.
The programme also seeks to secure macroeconomic stability, create 15 million jobs and increase real annual GDP growth to seven percent by 2020. It offers a vision of an economy that is largely driven by the private sector, recognising the power of free markets.
The report maintained that since the restoration of civilian rule in 1999 successive Nigerian governments had paid lip service to the idea of market reforms with little and slow progress.
“We expect this to remain the case. State management of scarce resources enables politicians and other members of the political elite to direct the flow of these resources not only for personal gain but also to favour specific geo-ethnic and political constituencies,” the EIU said.
It explained that policymakers in Nigeria are afraid that market reforms will push up consumer prices, thereby stoking wider unrest at a time when the government is already struggling to maintain political stability, adding that there is also opposition to reforms from members of the middle classes whose living standards are dependent on government-subsidised goods, such as petrol and electricity.
Equally, sections of the private sector that rely on state handouts and protectionist policies are seen not keen on structural reforms.
“Policy development and implementation will also continue to suffer from a lack of co ordination and poor relations between the various tiers of government.”
The report stated that restructuring of the oil sector will also remain on the policy agenda but will move at a similarly slow pace to the ERGP.
“There has been some recent progress on a new law paving the way for the restructuring of the state-owned Nigerian National Petroleum Corporation (NNPC), but implementation will be challenging given the opacity and corruption that has surrounded the behemoth entity for decades,” it noted.
The report also maintained that many other contentious issues in the oil sector also have to be resolved, including fiscal terms and revenue management. The oil companies, workers and local politicians (not to mention the various militant groups) will all pull in different directions.