Sanya Adejokun, who was at the Nigerian Economic Summit, reports the resolve of participants at the summit to join hands with the government in giving the economy a fillip.
THE Nigerian Economic Summit is an annual event that brings together chief executives/top level operators from the private sector and very senior government officials to discuss how best to develop the economy and monitor the progress that is being made. The main focus is the short to medium term policy direction while giving priority to the national interest in the context of the evolving global economy. It is interesting to reflect that a substantial proportion of the recommendations made by the NES over the past 10 years have since become part of government policy and have been or are being implemented by the Federal Government.
Unfortunately, implementation has fallen short of expectation and so the impact on the economy has been less than desirable. In essence, while the concepts produced have been clearly articulated, the implementation has left much to be desired, particularly with respect to the co-ordination of all the elements in the planning process. These shortcomings have meant that the average Nigerian has seen little meaningful benefit from the ‘sacrifices’ they have been asked to make. A concerted effort must, therefore, be made to re-examine policies and review the implementation process while continuing to pursue new reform measures in the context of Nigeria’s role in the global economy.
The 23rd Nigeria edition of the summit held between October 12 and 14, 2017 was filled with the usual rhetoric and talk show that have characterised the summit since its debut in 1993 with the focus on “Opportunities, Productivity and Employment”. In his opening remarks Mr Kyari Abba Bukar, Chairman of NESG, described the summit as the most robust and credible platform to interrogate national policy direction. Mr Bukar said since its first summit in 1993, the NESG has evolved into a leading advocate for national economic growth.
Bukar highlighted as achievements of the NESG, the liberalisation of the telecommunications sector, pension reforms, privatisation of some critical public enterprises and the development of the public-private partnership framework for infrastructure.
He said the 23rd summit was focused on the actualisation of the Economic Recovery and Growth Plan of the Federal Government, which was critical for Nigeria’s economy. The NESG Chairman also shared that through the National Assembly Business Roundtable (NASSBER), the following bills are being looked into; National Transport bill, Federal Roads bill, Federal Road funds bill, Federal Ports & Harbour bill, National Payment systems bill, Company and Allied Matters Act (amendment) and Investment Securities Act (amendment).
The Minister of Budget and National Planning, Senator Udoma Udo Udoma, in his remarks, believed the NESG summit was a useful platform for the public to engage private sector, to fast-track economic development. He admitted that there has been remarkable progress in the relationship between the public and private sector, since the first summit in 1993. The Minister noted that the second quarter of 2017 GDP economic report, which showed Nigeria emerged from recession with a 0.55 per cent growth, was a signal that the economy was on the right path. This, according to him, marked a halt in the economic slide which started in 2014.
Udoma said the Economic Recovery and Growth Plan (2017-2020), launched by President Muhammadu Buhari, was an ambitious economic agenda with a growth target of seven percent by 2020. The Budget and National Planning Minister also shared that special implementation units (SIUs) had been set up to ensure it does not go the way of other plans.
Although the summit had one major theme, there were however, many other sub-themes and side events among which were financing small and medium enterprises, power oil and gas, sports development and the signing of a memorandum of understanding between Nigerian Governors’ Forum (NGF) and Nigerian Economic Summit Group.
Vice President Yemi Osinbajo in his opening speech said the annual summit “occupies a special place in our national economic dialogue. It is at once a statement of the priority that we attach as a government to close collaboration between the government and the private sector and at the same time an opportunity for us all to engage in meaningful discussions on the economy. Our policy of partnering with the private sector is also borne out of reality. While the Federal Government on its part is determined to build a modern economy, its ability to do so is limited by the fact that its annual budgeted expenditure of N7 trillion is only a small part of a multi trillion-naira economy. The private sector is clearly the bigger contributor to the economy. It thus follows that the private sector must be enabled and encouraged to play its decisive role if our development efforts are to succeed.”
According to the Vice President, several issues were raised at last year’s economic summit and in keeping with the government’s commitment to keep faith with the work of the summit, several significant actions had been taken by the Federal Government in response to the issues raised.
He enumerated them to include the country getting out of recession and reduction of inflation figure from about 18 per cent in January 2017 to about 16 when the summit commenced and an improved situation of foreign exchange. Osinbajo said foreign exchange reserves rose to about $33 billion while end users had increased access to foreign exchange partly due to increased export earnings and remittances as well as the introduction of a dedicated transparent window for Investors and Exporters (NIFEX).
“Third, another issue of great concern last year that has been resolved was the loss of a significant amount of oil production. At some stage last year, we were losing up to one million barrels a day of crude oil production but thanks to the series of engagements we had with stakeholders in the Niger Delta on the New Vision for that region, production has been restored to nearly two million barrels per day. At the same time, the debt overhang preventing required additional investments in the oil sector has been addressed through the plan to pay off Joint Venture cash call arrears. There is renewed confidence in the sector and we are already seeing significant investments.”
He added that there have also been new power sector initiatives. According to him, for a variety of reasons including shortage of gas, limitations in transmission capacity and financing constraints, power supply was in the region of about 3000MW.
“We tackled these issues and although still vastly inadequate, power supply has moved up to 7000MW. We are at the moment dealing with the constraints in distribution, with two notable policy interventions.
“The National Electricity Regulatory Commission in August issued the eligible customer directives and will this month issue directives on independent metering. The eligible customer regime allows a willing-seller/willing-buyer arrangement in the sale of power. While the independent metering directive allows independent entities aside from registered power distribution companies to sell and install meters to customers and be paid directly as collections are made from metered customers. This will break the distribution gridlock and there is good cause to believe that we will achieve the 10,000MW envisaged in the ERGP.”
One important take-home of the 23rd Economic Summit was that Federal Government has finally concluded that it would bring in new investors into the power sector by selling part of its 49 per cent shares in distribution companies.
Minister of State for Budget and National Planning, Mrs Zeinab Ahmed said “you know that the power sector is privatised and that there are private investors holding a large percentage of the shares. We also know that the privatisation that was done was warped in the sense that the companies that bought the companies are heavily indebted to the banks such that if those banks are not being supported, they could go under because of the weight of the power sector debts.
“Because of this, the companies are not able to put in additional investments. Government has now realised that there is a need to restructure the ownership. This could be a process that would see governments ceding some of its shares to be sold to investors that have the capacities to invest to the level that will.
“We cannot terminate the earlier privatisation contracts because there are consequences to doing that. We are not happy that the growth of the sector post-privatisation is very slow but there are laws.”
Although many have criticised the annual summit as a mere talk show, the Nigerian Economic Summit Group, organisers of the annual summit has itself admitted that “the result of advocacy is difficult to, exclusively, arrogate to any one organisation or individual, since other organisations and individuals have also urged the same or similar policy initiatives, there can be little doubt that the summit process, which the NESG has anchored, has been the most significant driver for the evolution of many of the reform initiatives that the Federal Government has largely accepted and been gradually implementing over the years. There is hardly any major reform policy that the government has implemented over the past five to eight years or is currently in the course of implementing which cannot be traced to one summit recommendation or the other.”