Economic recovery plan to increase crude production to 2.5mbd

BETWEEN now and 2020, the Federal Government intends to ramp up crude oil production to 2.5 million barrels per day, privatise selected public enterprises and assets, revamp local refineries to reduce petroleum product imports by 60 percent as well as increase electricity generation to 10 gigawatts.

These are some of the ambitious intentions of the Economic Recovery and Growth Plan (ERGP) released by Federal Ministry of Budget and National Planning in Abuja on Tuesday, which it said differs in several ways from previous strategies and plans.

The plan explained that ERGS “is anchored on focused implementation which is at the core of the delivery strategy over the next four years;

“Builds on existing sectoral plans such as the National Industrial Revolution Plan and the Nigeria Integrated Infrastructure Master-plan;

“Signals a changing relationship between the public and private sector based on close partnership;

“Utilizes the value of the merger of budget and planning functions into one Ministry to create a better and stronger link between annual budgets and the ERGP; and

“Provides for strong coordination with the States to ensure that the federal and sub-regional governments work towards the same goals.”

Looking at some details of the over 200-page plan, government intends to achieve GDP growth rate of 2.2 percent in 2017; 4.8 percent in 3018; 4.5 percent in 2019; and 7.0 percent in 2010.

In addition, the ERGP will reduce unemployment to 16.32 percent this year, 14.51 percent in 2018; 12.90 percent in 2019; and then bring it down to 11.23 percent in 2020; while creating 1.5 million additional jobs this year; 3.8 million in 2018; 4.3 million in 2019 and 5.1 million jobs in 2020.

This “is the only viable option if Nigeria is to restore its economy to a path of sustainable and inclusive growth, create sufficient jobs to reduce unemployment and poverty, improve social inclusion, and remain on course to achieve international development targets, such as the UN SDGs”, the document noted.

Exports of goods and services are projected to grow by 29.95 per cent in 2017 following an initial recovery in oil exports and growth in non-oil exports (mainly agriculture and agro-processing).

The planned expansion in oil output – from an estimated 1.8 mbpd in 2016 to 2.2 mbpd in 2017 to 2.5 mbpd by 2020 –will boost exports.

The ERGP targets an average 16.5 per cent growth in total exports from 2017 to 2020 from oil and non-oil exports.

Over the same period, imports are rising by 4.0 per cent per annum; the higher growth in exports results in a positive trade balance for Nigeria by 2020.

The ERGP noted that consolidated Federal Government revenues declined from N3,362 billion in 2013 to N3,199 billion in 2015.

The sharp decline in oil prices and up to 60 per cent fall in crude oil exports due to sabotage and attacks on oil export terminals and pipelines have reduced overall revenues.

Non-oil revenues increased from N1, 357 billion in 2013 to N1, 967 billion in 2015, but this remains low as a share of GDP when compared to other emerging economies: Nigeria’s peers raise an average 16 per cent of GDP from non-resource taxes; Nigeria raises just 3 per cent (2015).