WITH less than two years to the terminal date of the three-year period which the ERGP is expected to run, the signs are becoming clear that it will achieve its objective of stimulating growth in the local economy, with trickle down benefits to ordinary Nigerians.
The cardinal objective of ERGP is to serve as a catalyst for economic recovery through activation and rapid development of the non-oil sector. This is to achieve a diversified economy, for the purpose of guaranteeing sustainable growth and development, as well as growth in the Gross Domestic Product (GDP). The idea behind the programme is to move away from over-dependence on oil as the economic mainstay, which has seen the country’s economic fortunes periodically fluctuate according to the vagaries of international oil prices.
The vision of ERGP is restoration of economic growth, investment in people and building of a globally competitive economy, for the ultimate benefit of bringing about prosperity and happiness to all Nigerians. These are based on the principles of equity, justice and fair play, irrespective of ethnicity, religion, or political persuasion.
The government took the first major step of actualising ERGP when it organised Malaysian-style focus labs from March 12 to April 22, this year, in Abuja. The event, which was held in the format of a workshop, brought together investors, financiers, experts and top government functionaries at the level of decision makers for the purpose of identifying and eliminating impediments that could scuttle ERGP.
Besides identifying possible obstacles to the realisation of the goals of the economic plan, the event, the main driver of ERGP, was held to unlock potential for investment and drive growth in the three broad areas it focuses on, which are agriculture and transportation, manufacturing and solid minerals development, as well as power and infrastructure.
The focus labs were the first of their kind in the country. Apart from the general problems that affect basically every investor in the country, like poor infrastructure, lack of access to credit and regulatory policies that are sometimes detrimental to economic growth, the event afforded participants opportunity to get a listening ear to some problems that were peculiar to them, with the unprecedented benefit of having bespoke solutions designed to solve those problems.
During its initial introduction, the Chief Consultant, B. Adedipe Associates Limited, Biodun Adedipe, said, “With such an approach, a strong message will gradually and steadily shift focus from politics and political patronage to true governance. If the right metrics are measured and the scorecards will count, Nigeria may begin to emerge from the rhetoric to actual greatness.”
He warned against branding the plan as Buhari’s, rather a Nigerian plan, saying he was confident that if well executed from the outset, most of the country’s interest groups would buy in and take ownership.
Benefits of focus lab
The immediate fallout of the focus labs was that they would unlock $22. 5 billion worth investments by 2020, from the 164 projects that were identified at the event as having high potential, out of which $10 billion investment projects are ready for immediate development. Vice President Yemi Osinbajo, who took part in the focus labs, said the identified projects are forecast to create more than half a million jobs for Nigerians up until 2020. This is a demonstration of the far-reaching impact of ERGP focus labs in unleashing a brighter future for the country.
There is a consensus in Nigeria today that lack of adequate power supply has remained the main cog in the wheel of the country’s economic growth and development over the years. The recourse to alternative sources of power by organizations has kept the cost of production perennially high, with attendant high cost of goods and services. The belief is that once the problem of power is solved, the country would be on the road to economic growth.
The ERGP seeks to address once and for all what has been the greatest impediment to economic development by not only encouraging private participation in the power sector, but also offering incentives to those involved in the sector.
In its determination to address the problem of poor infrastructure in the country, the federal government appropriated a budget provision of N2.86 trillion as capital expenditure to finance infrastructure projects in 2018, with power taking a significant portion of that amount. The figures for 2016 and 2017 were N1.2 trillion and N1.44 trillion, respectively.
Osinbajo said at this year’s Nigerian Economic Summit that in terms of actual capital spend; the government has spent a total of N2.7 trillion on capital projects that cover investments in rail, roads, power and dams – the highest by any government in the country.
For a long time, lack of adequate power has slowed down economic activities in the Aba area of Abia State that is known to be the industrial capital of the South East. The area that is famously known for ‘Aba-made’ products has virtually been without power, forcing small scale industries to rely on electricity generating sets, with the consequence of very low capacity utilization. That is about to be a thing of the past.
Geometrics Power Limited, the company that is handling the Aba Independent Power Project (IPP) that covers nine local government areas in what is known as the Aba Ring Fence, is one of the companies that participated in the Abuja focus labs. The company’s participation in the progamme now places it in good stead to deliver uninterrupted power to the area. And the benefits of that participation are not difficult to fathom.
On a national scale, completion of the Aba IPP according to stakeholders, will boost power generation in the country and take it significantly higher than the seven thousand megawatts that was achieved as at middle of this year (About five thousand megawatts are currently being distributed.).
On a regional level, regular power supply in Aba will trigger the growth of many businesses in a long value chain, with positive impact on job creation and raising of the standard of living of people in different parts of the country, which is what the ERGP seeks to achieve.
It will bring about resuscitation of the shoe industry in Aba, which has remained moribund for a long time. This will in turn revamp the hide and skin business in faraway places in the northern part of the country, like Sokoto, where the main raw material comes from. There is also the aspect of the potential boost to the business of transporters of the raw material from the north to Aba.
The businesses of boutique owners in different parts of the country who sell shoes that are made in Aba, will receive boost especially with the current campaign for patronage of Aba made shoes, which is the increase in local content that ERGP seeks to encourage.
Restoration of power to the Aba industrial zone will boost transport and hospitality businesses, because of the expected influx of businessmen from different parts of the country to the area. Expansion of the shoe industry in Aba will lead to creation of more jobs in the industry, as skilled youths who are currently idle will be usefully engaged. Involvement of more people in the business will expectedly raise the standard of Aba-made shoes to be able to compete with imported ones, thus opening up an avenue for export, for the much needed foreign exchange.
The focus labs also opened up more opportunities to investors in the agro-allied sub-sector of the agricultural industry. For instance, participation at the event has enabled Harvest Food and Agro Processing Limited, located at Ajua, in Obafemi Owode Local Government Area of Ogun State, to increase capacity utilization from 25 per cent to 45 per cent.
The company previously processed 150 metric tonnes of cassava tubers into 30 metric tonnes of starch, and had 69 employees. It did business with 100 farmers on a daily basis. Today, it has raised its starch production to 90 tonnes daily, with an increase in staff strength to 85, and deals with 200 farmers daily.
Alhpa Six Limited is another agro-allied company that participated in the Abuja focus labs. The company is involved in integration, development, production and conversion of cassava into glucose and maltose, which are the major raw materials for alcoholic and non-alcoholic beverage manufacturers, as well as confectioneries.
The benefits it derived from participation at the event are two-fold. Firstly, the company is now in a position to develop its 3, 000 hectares of land for production of cassava, which would be taken to a nearby processing plant for conversion to maltose. Secondly, it would send the byproducts from the processing to a ranch it is also building, for raising of livestock. The project, which is estimated at $28 million will, when completed, employ over 390 workers.
The agricultural sector is one of the success stories in the objective of making the ERGP achieve economic diversification, with the government ensuring a steady increase in allocation to the sector in the past three years. The government has so far spent about N103.8 billion on the sector.
The government has, through the Anchor Borrowers Programme (ABP) that is handled by the Central Bank of Nigeria using 13 banks, given credit amounting to N120.6 billion to 720, 000 smallholder farmers for financing of small holder farms. These farmers cultivate about 12 commodities that include rice, wheat, soya beans, cassava, cotton, groundnut, poultry, etc, in the 36 states of the federation and the Federal Capital Territory.
About N82 billion out of the N120.6 billion credit under the ABP went to 350, 000 rice farmers. This has seen an increase in rice cultivation from 2.5 metric tonnes in 2015 to four metric tonnes in 2017, making the target of ending rice importation in 2019 realizable.
The government’s fertilizer programme has seen the establishment of 11 fertilizer blending plants in an effort to improve local blending of the major agricultural input. This has been with the collaboration of the Kingdom of Morocco. Today, the price of a 50 kilogram bag of fertilizer has dropped drastically, from N13, 000 to between N5,000 and N7,000.
The ERGP has brought about a remarkable increase in economic activities in the different sectors of the nation’s economy, especially in key areas such as infrastructure development, power, agriculture, transportation, as well as small and medium scale enterprises.
There is an agreement among investors, especially those that participated in the Abuja focus labs, that the programme will achieve its objective of stimulating economic growth, boosting local production and enabling the country to achieve self-sufficiency in food production and for export, thus raising the standard of living of Nigerians.
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