The last three years have been anni horribilisfor the Nigeria economy--virtually everything that could have gone wrong, did. In the face of mounting social tension, Nigeria's Vice-President Yemi Osinbajo released the anticipated economic recovery plan while President Muhammadu Buhari was receiving treatment abroad. Vinesh Parmar analyses the plan to see if it can do the trick and if the state can actually implement it.
The principal objectives of the Economic Recovery & Growth Plan (ERGP) are just as it says on the can --"recovery" first, then, hopefully "growth". The Nigerian economy contracted by a disheartening 1.5% last year, the worst performance since the "bad old days" of 1991.
The figures punctured a sense of optimism since a recalibration of the nation's GDP showed it to be the biggest economy in Africa a few years ago. (South Africa is now back to its accustomed slot at the top of the African economic tree.)
The recession, rising inflation, a fall in the value of the naira, declining oil and gas prices, Boko Haram continuing to thumb its nose at the authorities and a general feeling of simply drifting as President Muhammadu Buhari seemed to be becoming increasingly withdrawn, all added to the gloom.
Over the past year, various trade organisations, workers' unions, academics, the media and leading politicians have been calling for urgent action to stem the downward slide. There have been dire warnings that the social fabric has reached breaking point and a firm and decisive hand is required to steady the nation.
Vice-President Yemi Osinbajo's response has been the ERGP. The broadbrush strokes centre around increasing national productivity as an immediate target and jacking up diversification on a more sustained basis. The grand vision is to catapult growth by 7.8% by 2020, bringing 15m more people into work.
The fine details
The plan details an increase in output of Nigeria's most important commodity, oil, from 1.6m barrels a day (bd) to 2.5m bd. The ambition of producing at capacity will rely on the proposed sale of pipelines in the Niger Delta and successful peace talks with rebels who have caused havoc in the region, bombing pipelines and sabotaging operations. Osinbajo, who has provided vigorous leadership in Buhari's absence, has been neading the pacification process.
Central to the plan is not only an increase in the volume of oil produced, but refining too. Petroleum products account for 15% of imports, squeezing...