Buhari approves ₦2.3trn for an economic plan and here’s all you should know about it

Global leveller – COVID-19 – has done more in 2020 than any other killer in the world. If we started a debate on how economies have been affected this year alone, we might fill more pages than an encyclopaedia. For a country like Nigeria, the effects are even more devastating; remembering how many feed from hand to mouth and the number of the people who depend on those who feed from hand to mouth.

Some businesses were lucky enough to survive the plague, so many others have closed shop. But respite might have come for Nigerians and businesses who mostly look up to God for survival.

During the First Year Ministerial Performance Review Retreat, President Muhammadu Buhari, through Vice President Yemi Osinbajo ordered the speedy release of ₦2.3 trillion as economic sustainability plan fund.

The president, at the end of the two-day retreat in Abuja, said he had directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, and the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to ensure a timely release of the proposed ₦2.3 trillion for the implementation of Economic Sustainability Plan (ESP) as well as funds for capital projects.

In June, The Nigeria Economic Sustainability Plan (NESP) was approved by the Federal Executive Council (FEC) after it was developed by the Economic Sustainability Committee (ESC), inaugurated by President Buhari during the lockdown in March.

The NESP was also created as a development plan that responds robustly and appropriately to the challenges posed by the COVID-19 pandemic with a mandate to:

– Identify fiscal measures to enhance oil and non-oil government revenues and reduce non-essential spending;

– Create a financial stimulus package for the Nigerian economy;

– Articulate specific measures to support the 36 States and the FCT, and very importantly;

– Support for MSMEs and the creation of jobs.

The NESP will be funded as follows:

• ₦500 billion from Special FGN Accounts

• ₦1.1 trillion from the CBN in the form of structured lending

• ₦334 billion from external bilateral/multilateral sources

• ₦302.9 billion from other funding sources

The NESP was also developed as a 12-month, 2.3 Trillion Naira ‘Transit’ Plan between the Economic Recovery and Growth Plan (ERGP) and the successor plan to the ERGP, which is currently in development.

How will the money be spent?

The design and implementation of the NESP are driven by the following principles: promotion, development and reliance on local contents, economic stimulation, job preservation and creation, and pro-poor/vulnerable focus.

In a statement by the federal government in June, the NESP will focus on mass agricultural programming, infrastructural development, business support for MSM’s, technology, expansion of national social investment and support of state government.

Let’s go deeper: 

  1. Mass Agricultural Programme (MAP)

Between 20,000 and 100,000 hectares of new farmland will be cultivated in every State, as well as support offtake and agro-processing, with low-interest credit – creating millions of direct and indirect job opportunities.

2. Infrastructure

a. Extensive Public Works and Road Construction Programme

Does 774,000 ring a bell? Well, Festus Keyamo made the number even more popular when it caused a controversy. But, the plan is to recruit a minimum of 1,000 young Nigerians per local government.

There will also be an extensive focus on the construction and repair of major and rural roads using locally available materials like limestone, cement and granite. The roads component will include the acceleration and expansion of the scope of the Road Infrastructure Tax Credit Scheme (RITCS).

b. Mass Housing Programme (MHP)

Housing schemes in Nigeria has always ended up favouring the rich. Many Nigerians cannot afford those houses. But the NESP aims to deliver up to 300,000 homes every year.

c. Installation of Solar Home Systems (SHS)

This aims to reach 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. Solar equipment manufacturers will be required to set up production facilities in Nigeria, to provide the materials required.

d. Investment in Healthcare Infrastructure

This will be done through a special intervention fund, as well as by tapping into an existing World Bank facility (REDISSE Programme), to support COVID-19 interventions in the States.

Informal Sector Support

This will take the form of low-interest loans, and the easing of procedures for registration, licensing, obtaining permits, etc. Mechanics, tailors, artisans, petty traders and all other informal business people will be supported to grow their businesses.

Business Support for MSMEs

This will take the form of payroll support to designated sectors so that they can keep their employees and help maintain jobs, and also loan restructuring and a moratorium for existing debt. Also, low-interest loans to boost local manufacturing and production across critical sectors, including but not limited to the pharmaceutical, aviation, hotels and the hospitality industry, private schools, road transportation, technology companies, and the creative industry, amongst others.

A Guaranteed Offtake Scheme for MSMEs will function by making the government a key purchaser of specific priority products made by MSMEs, like PPE, face masks, face-shields, processed food, pharmaceuticals, etc.

Technology

Underpinning the implementation of the NESP will be a focus on digital identification of every Nigerian. It is imperative that every Nigerian has a unique digital identity. The Public Works Programmes, for example, will, apart from the focus on providing employment, also help advance the financial inclusion and digital identification agenda. Broadband connectivity will also receive a boost, helping to create jobs and opportunities, especially for young people. Also, a national programme will be launched to identify and create job opportunities in digital outsourcing.

Expansions of the National Social Investment Programmes

The implementation of the NESP will see an increase in the number of cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and microloans through the MarketMoni and TraderMoni schemes. The pre-existing conditional cash transfer will also be extended to cover a larger number of extremely poor and vulnerable Nigerians.

Cut Non-Essential Spending

The President has approved the implementation of the Report on the Rationalization of government agencies. The NESP will also target a reduction in average production costs of crude oil. Also, the Integrated Personnel and Payment Information System (IPPIS) will be expanded to cover all Federal Government MDAs. Non-critical and administrative capital spending will be eliminated, including the purchase of vehicles (except for ambulances, fire-fighting vehicles and other essentials).

Support for State Governments

The NESP offers opportunities for State Governments to collaborate with the Federal Government on Affordable Mass Housing, Agriculture, Off-Grid Power Projects and other projects in the Plan. It also provides for the negotiation of suspension of ISPO payments by States, a moratorium on deductions in respect of bailout loans, and encourages States to attain the conditions outlined by SIFTAS and other World Bank programmes, in order to access external support.

The ESC will also monitor implementation of the Plan while the Vice President will regularly brief the President on progress made.

The questions

That’s the plan but will the actors play out the plan like it has been laid out? Will failed systems, gerrymandering, nepotism not take over the plan and leave ‘poor and vulnerable’ looking up to God like they usually do?

Remember we already saw a glint of how politics will influence the plan in the Keyamo-HORs drama.

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