…targets 4.6% economic growth rate
…8.5% growth in manufacturing
The federal government has finally released an ambitious economic growth and recovery plan with which it plans to work the troubled economy out of recession- after postponing its release several times.
The release comes as a huge relief to the business community which has always asked that the government comes out with a clear economic framework that they can tap into. The release of the plan will significantly aid business planning and strategy formulation and also act as a catalyst for attracting foreign investment inflows into the country.
The Economic Recovery and Growth Plan (ERGP), a Medium Term Plan for 2017 to 2020 targets to grow the economy by 4.6 percent on average over the plan period, from an estimated contraction of 1.54 percent recorded in 2016.
Real GDP growth is projected to improve significantly to 2.19 per cent in 2017, reaching 7 per cent at the end of the plan period in 2020.
With the ERGP, government hopes it would significantly cut down soaring inflation from the present high of almost 19 per cent to single digits by 2020.
It is also projected that the exchange rate would stabilize as the monetary, fiscal and trade policies are fully aligned. Government says this outcome will be achieved through policies that seek to remove uncertainty in the exchange rate and restore investors’ confidence in the market.
According to the document released on Tuesday by the Ministry of Budget and National Planning, the plan also targets strong recovery and growth in the manufacturing, SMEs and services sectors, particularly in agro-processing, and food and beverage manufacturing.
“Ongoing strategies to improve the ease of doing business will boost all manufacturing sector activities,” the government assures.
Overall, the ERGP estimates an average annual growth of 8.5 per cent in manufacturing, rising from -5.8 per cent in 2016 to 10.6 per cent by 2020.
It also has an ambitious aim of achieving 10 GW of operational capacity by 2020 and to improve the energy mix, including through greater use of renewable energy. The country is projected to become a net exporter of refined petroleum products by 2020.
The ERGP has three broad strategic objectives that will help achieve the vision of inclusive growth; including restoring growth, investing in the citizens and building a globally competitive economy.
With the ERGP, government also foresees a strong recovery and expansion of crude oil and natural gas production as challenges in the oil producing areas are overcome and investment in the sector increases.
Crude oil output is forecast to rise from about 1.8mbpd in 2016 to 2.2mbpd in 2017 and 2.5mbpd by 2020. Relentless focus on electricity and gas will also drive growth and expansion in all other sectors.
Government further anticipates that with the implementation of the Plan, it would be able to reduce unemployment from 13.9 per cent in the third quarter of 2016 to 11.23 per cent by 2020.
“This translates to the creation of over 15 million jobs during the plan horizon or an average of 3.7 million jobs per annum. The focus of the job creation efforts will be youth employment, and ensuring that the youth are the priority beneficiaries.”
BusinessDay gathered that the federal government would immediately commence the implementation of the plan while President Buhari would do the ceremonial launch on his return from medical leave.
However, sources at the Ministry of Budget and National Planning say the government has already begun the implementation of aspects of the plan in the proposed 2017 budget, which is yet to be passed by the National Assembly. Full implementation of the plan will go into effect once the budget is passed.
By Onyinye Nwachukwu, Abuja
