EBS in Africa

Economic Updates

National Development Plan

The federal government of Nigeria has recently approved a 5 year National Development Plan (NDP) to cover the period from 2021 to 2025. The development plan is set on six pillars – economic growth and development, infrastructure, public administration, human capital development, social development and regional development. Nigeria’s Minister of Finance Zainab Ahmed has said that the plan has an investment size of N348.7 trillion over the five-year period. The plan which appears to be quite ambitious, given the recent and ongoing experience of insecurity, projects an average real GDP growth rate of five percent per annum over the plan period. If this is realized, is it good enough when the population growth rate may be near 3 percent. As we have earlier asked, is a 2 percent real per capita GDP growth rate strong enough to drive away human insecurity?

Nigeria’s economy entered a COVID 19 induced recession in 2020, reversing three years of recovery. Of course the blame for the recession fell mostly on the sharp decline in crude oil prices on account of falling global demand and on containment measures to fight the spread of the pandemic.

Various sectors including aviation, other transportation, tourism, hospitality, restaurants, manufacturing and trade were gravely affected by the pandemic to more than offset the demand-driven expansion observed in the financial and ICT sectors. As a result real GDP declined by 1.8 percent in 2020. As we indicated recently, even before 2020 the economy did not appear to be sure-footed, growing rather slowly at 0.8 percent, 1.9 percent and 2.2 percent in 2017, 2018 and 2019, respectively. These do not look like very strong growth rates, do they? So how are we confident that we can pick up stronger speed, when 2021 is all but over and 2022 into 2023 are election years when governments have tended to focus more on politics than economics.

All things considered, we are pleased that the plan considers Human Capital development as one of its six pillars. In this we hope the nation can identify critical sectors, including ICT to focus on in training and readying the national workforce for the battle ahead in the global marketplace.

Contributed by: Oyekunle Adesiyan

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