Experts seek evaluation, as govt present’s ESP scorecard

Nigerian economy

‘Nigeria leading others in SDGs achievements’

Clara Nwachukwu

Experts have called for proper monitoring and evaluation of the Federal Government’s economic plans to determine their real impact on the economy and on Nigerians.

Mid-last year, the Government initiated a 12-month economic plan, which it felt would boost Nigeria’s efforts across all the social sectors in Bouncing Back from the negative effects of the COVID-19 pandemic, which had almost crippled the global economy.

The call for evaluation follows the expiration of the National Economic Sustainability Plan (NESP), which they felt did not record significant success even as the Office of the Vice President had earlier in the month presented a scorecard showing a litany of achievements.

According to Vice President Yemi Osinbajo, whose office directly supervises the execution of the NESP, such achievements include: over 2 million jobs saved, created, with the release of 100% budget component of ESP funds; and 1. 3 million jobs retained through Payroll Support.

Others are 36 states received N50billion; 7 local airlines receive N2.84billion; over 6 million farmers enumerated to benefit from agriculture sector support; and Presidential approval of fertilizer subsidy for over 1 million farmers.

But in separate interviews with Sustainable Economy, a professor of Finance and Capital Market at the Nasarawa State University, Keffi, Nigeria, Joseph Uwaleke, and Managing Director, Cowry Asset Management, Mr Johnson Chukwu, noted that while the NESP is a well-thought out plan, there is no corresponding level of achievements across target areas.   

Success for them would have been visible from a stronger growth rate in the first quarter (Q1) 2021 gross domestic product (GDP) report, than the 0.51% recorded, which they believe is as a result of poor implementation of the NESP

Specific weaknesses

For Uwaleke, being a 12-month plan developed to take Nigeria out of the economic crisis on account of the COVID-19 pandemic, implementation was key “…there should be a sense of urgency in implementation, and I don’t think the implementation moved as fast.”

Perhaps a better result would have been made with a buy-in from the states government and the private sector, as he says: “If you look at all the targets in terms of implementation you would tend to think that it is progressing rather slowly. This also required the operation of not just the Federal Government agencies, but also the states, because in the case of agriculture for example it is the states that control and release the land. So the cooperation of the states government and of course the private sector was required to drive the ESP.”

He adds “Implementation of that plan would have ensured that the growth rate is stronger than what it is now because the whole plan targeted a growth rate of more than 2%, and we actually needed to do a rate of more than 2.6% above the population growth rate for it to have the desired impact on the masses or the people.”

Taking up the issue of slow growth, Chukwu observed that Agriculture in particular, which held high hopes, also fell below expectations. “For instance, the government said they will engage in a mass agricultural programme, but if you look at the first quarter GDP of 2021 compared to the fourth quarter GDP of 2020, you will observe that the agriculture sector grew at a slower rate of about 2.4% compared to about 3.48% the preceding quarter.”

He continued: “Beyond that, we saw food inflation rate 22.38% at the end of June year-on-year. These are indications that the expected mass agricultural programme has not been effective to the extent that whatever plans the government may have had must have been distorted by the insecurity in the country.”

In regards to other proposals in the NESP, especially massive infrastructure development, including construction of roads, provision of solar systems for 5 million homes as well as building 300 homes yearly, all failed to meet the targets.

For Chukwu, the government does not really have the funds to execute these projects and should have sought private sector participation.

Specifically, he called for a review of the Land Use Act to enable the acquisition of land for large holders’ and commercial farms.

He adds: “Government has no business talking about mass housing when all they just need to do is to deal with the land issues and infrastructure, the private sector will build those houses. The government can subsidise those private sector houses by providing the land free and it then becomes its equity contribution, and the houses would be sold at highly subsidised rates to the average Nigerians.”  

Furthermore, the asset manager called for the removal of subsidies on petrol, power and fertilisers, as these are a huge drain on the nation’s resources. “The key thing is that we need to completely recalibrate our fiscal framework and rejig what the government is spending money on and how it is generating revenue.”

Despite the shortcomings, the experts believe the NESP did have some high points especially in the area of health, which Uwaleke argues is the reason Nigeria did not witness uncontrollable crises on account of the COVID-19.

“The aspect that I feel that has achieved some tremendous progress is the area of health, and that has gone very far, which is why the country did not experience serious crises as a result of the COVID. If you check the GDP growth rate for quarter one of 2021, the health sector is expanding and that is a reflection of the attention the government has given to health, but the other sectors a lot of them are still in the negative territory including manufacturing.”

A plan of positives

Despite the noticeable shortfalls in the Sustainability Plan and indeed the International Monetary Fund (IMF), raising an alarm that Nigeria’s ability to achieve the Sustainable Development Goals (SDGs) and set targets may have been pushed back by six years due to prevailing circumstances, the Federal Government thinks otherwise.

The Senior Adviser to the President on SDGs, Mrs Adejoke Orelope-Adefulire, argued that Nigeria is leading other African countries in terms of achievements in a response to Sustainable Economy enquiry on missing SDG targets, and attributed the misses to lack of funding and impact of the COVID-19 pandemic.

She wrote in a text message: “Yes, targets have been pushed backwards by 6 years not because we didn’t do what we are expected to do. No funding, Covid-19 and other factors are responsible. This is not peculiar to Nigeria, Africa but the World. In fact Nigeria is leading amongst other Countries in Africa.”

Similarly, the Senior Special Assistant to the Vice President on Media & Publicity, Mr. Laolu Akande, believes that the NESP achieved more successes than given credit for even though the target of N2.3 trillion estimated to be spent under the plan has not yet been fully achieved.

In a statement, which contained an account of stewardship across sectors sent to Sustainable Economy, Akande said: “The Federal Government appropriation part of that total being N500 billion has been completely released by the end of May, making it possible to attain several objectives of the ESP directly supporting a few million Nigerians.”

Prof. Osinbajo was also quoted as saying that the 100% release of funds appropriated in the budget for the programme was commendable, and urged the Central Bank of Nigeria (CBN) to expedite action on the release of funding components of the ESP that are dependent on financing from the bank.

“I know that if we were able to infuse N2.3 trillion into the Nigerian economy, we will not have the employment figures that we have today, we will not have the problems that we have today, they will be significantly reduced. Even with what we are able to do with the budget, growth figures at least indicate that things have not degenerated as badly as many had thought.

“So, you can imagine what we could have done if we were able to fully implement what we thought we would be able to implement. Unfortunately, this hasn’t been the case,” he said.

On infrastructure development, Akande’s statement also credited the Minister of State for Budget and Planning, Prince Clem Agba, as saying that the “construction/rehabilitation of 3,707km Federal roads across the federation under Federal Roads Maintenance Agency (FERMA) is at 65% completion.”

In his breakdown, Agba said the economic cluster received N202.462 billion, which represents 100% of the appropriation while N61.589 billion also representing 100% appropriation was released for the creation of jobs for youth and women.  

Also, “The Social Intervention Programme and Support to Persons of Concern received N34.957 billion; WASH Programme and Energy Support to Vulnerable Communities received N22.315 billion; support for building a resilient health system received N116 billion; support for the operations of Security Forces was put at N15.674 billion, and the 36 States of the Federation received N50 billion,” the Minister explained.  

On his part, accounting for the N5 billion released to support local airlines, ground handlers and other aviation allied businesses, the Aviation Minister, Mr. Hadi Sirika, was quoted: “7 scheduled operators, comprising Dana, Overland, Airpeace, Azman, Aero, Arik and Max Air received N2.84 billion. 20 non-scheduled operators, comprising Cargo and Private Jet Services received N949, 909,000; 5 ground handling operators, including NAHCO, SAHCO, Presion Aviation, Batuke Resources Ltd and Swissport Int’l Ltd. received N233,333,000. The National Association of Nigerian Travel Agencies received N196 million; Airport Car Hire Association of Nigeria (ACHAN) received N196 million; 7 In-Flight Catering Services Operators received N233,333 million, and Aviation Fuel Operators received N233,333 million.”

Similarly, the Managing Director, Rural Electrification Agency (REA), Ahmad Salihijo Ahmad, said the Solar Power Naija Programme under the ESP was progressing steadily with more communities to be connected under the Niger Delta Power Holding Company (NDPHC) 100,000 solar connections, among other components of the programme.

He also said the Agency under the Energy for All initiative has completed the connection of 200 Primary Healthcare Centres and 104 schools across the country to solar power with plans to connect more schools and health centres.

Although the target of N2.3 trillion estimated to be spent under the plan has not been achieved just as yet, the Federal Government appropriation part of that total being N500 billion has been completely released by the end of May, making it possible to attain several objectives of the ESP directly supporting a few million Nigerians.

Regarding the Social Housing Scheme, the Managing Director, Family Homes Fund, Mr Femi Adewole, said the scheme is progressing steadily as the financing agreement between the Family Homes Fund and the CBN has been finalized, while the Ministry of Finance has provided the necessary guarantee for the project.

He added that the disbursement request for N30 billion to finance a total of 29,600 homes will be submitted to the CBN for processing.

In the area of Agriculture for Food and Job Plan, the Technical Assistant to the Minister of Agriculture and Rural Development (FMARD), Dr Andrew Kwasari, said the construction of 340km of rural roads across the federation have been completed.

He added that the clearing of 3,200 hectares of land in 8 States have been completed, while the President has granted approval for fertilizer subsidy to over 1 million farmers already enumerated under the Agriculture for Food and Job Programme.

It is unclear what will become of the unrealised targets in the NESP, but both Uwaleke and Chukwu differ on what should happen next.

While Uwaleke urges a roll-over of the targets in the 2021 budget and subsequent economic plans such as the Economic Recovery and Growth Plan (ERGP), and the Medium Term Expenditure Framework (MTEF) in view of its lofty provisions, Chukwu insists there is no need due to paucity of funds.

“If you want to understand and appreciate the severity of Nigeria’s fiscal challenges, consider that in 2020 that total Federal Government revenue was only N3.478trillion at the end of November, whereas debt service/ interest payment on existing loans as at 2020 November was N3.1trillion. Government spent additional N4trillion on recurrent expenditure (non-debt); and of that N4trillion, you can assume that about N3.7trillion was borrowed. If you add that to the fact that the government had to spend about N1.6trillion and that’s how we ended up with about N5trillion on borrowing last year,” Chukwu argued.

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