Last week Nigeria’s Federal Executive Council approved a N2.3 trillion Economic Sustainability package as its response to the COVID-19 pandemic. The plan is geared towards putting Nigeria’s economy on a deep, strong and concrete pedestal to withstand the shocks from COVID-19.
The National Economic Sustainability Plan, NESP, is also a package that will give bearing to the Nigerian economy as it braces up to sail in the stormy waters expected after COVID-19.
The approval followed the recommendations of the Economic Sustainability Committee headed by Vice President Yemi Osinbajo. President Muhammadu Buhari had set up the committee in March this year, to work out measures to sustain the country’s economy, which, like the economies of other nations, has been hit negatively by the covid-19 pandemic.
With the mandate to turn the economic challenges of COVID-19 into opportunities for Nigeria, the Osinbajo led Committee, among things, developed a clear economic sustainability plan in response to challenges posed by the COVID-19 pandemic.
After about 10 weeks of rigorous work, which included consultations with state governors under the umbrella of the National Economic Council, officials of ministries, department and agencies, critical stakeholders and experts on economic matters, the committee designed the National Economic Sustainability Plan, NESP and submitted it to President Buhari on June 11.
Standing on three pillars of real sector measures, fiscal and monetary measures as well as implementation strategies, the NESP outlines various policies, programmes and projects that will be followed and executed to attain its goals.
For the real sector measures, the focus is on the creation of jobs in agriculture and its value chain, food security, housing, renewable energy, infrastructure, manufacturing and digital economy. It is hoped that small businesses will leverage on these measures and remain afloat even as they drive local productive capacity and encourage innovations in the various sectors.
The fiscal and monetary measures in the NESP include ways to increase government revenue, optimize expenditure and enshrine a regime of prudence with an emphasis on achieving value for money.
The aim is to ensure maintenance of enabling business environment for local production and enterprise through careful regulatory interventions. It is also to galvanize external sources of funding, rationalize existing debt obligations and boosting investments in strategic sectors affected by the COVID-19 pandemic as well as support the financial viability of state governments.
The National Economic Sustainability Plan emphasises the centrality of implementation for its success. It urges each minister to be responsible for supervising the implementation of components of the plan situated in their ministries through a ministerial implementation committee chaired by the minister.
The committee in each ministry is expected to ensure synergy between stakeholders, especially the public and private sectors. It is also the responsibility of the committees to drive the execution of specific projects, coordinate the entire sector value chain and ensure resolution of bottlenecks that could inhibit implementation.
Part of the implementation strategy of the NESP is the cutting down of non-essential spending. For instance, the plan stipulates the elimination of non-critical and administrative capital spending, including the buying of vehicles, except for ambulances, fire fighting vehicles and other essentials.
The NESP also targets reduction in average production cost of crude oil, while seeking to expand the Integrated Personnel and Payment Information System, IPPIS, to cover all federal government ministries, departments and agencies.
Briefing State House correspondents after the plan was approved at the cabinet meeting, Minister of Finance, Budget and National Planning, Zainab Ahmed, said it was developed as a 12-month transit plan between the Buhari administration’s economic blueprint, the Economic Recovery and Growth Plan, ERGP 2017-2020 and its successor plan, which is being developed.
The N2.3 trillion NESP will be funded through a N500 billion stimulus package that is already provided for in the amended 2020 Appropriation Act and sourced from Nigeria’s special accounts.
Other sources of funding for the NESP are the 1.1 trillion Naira from the Central Bank of Nigeria, in the form of structured lending, N334 billion from external and multilateral sources as well as N302 billion from other funding sources.
The conceptualization and design of the National Economic Sustainability Plan is a timely response of Nigeria to the economic challenges of the COVID-19 pandemic. It gives confidence to Nigerians that government is prepared to keep the ship of the country’s post COVID-19 economy afloat in the uneasy global waters that will come even when a vaccine has been invented to contain the virus.
With carefully outlined implementation strategy, there is no doubt that Nigeria is standing up to the economic challenges of COVID-19. The NESP is also a plan that looks beyond the pandemic and has prepared the country for the global recession that may come after the COVID-19.