January 20, 2020

Vision 20:2020, Finance Act and Nigeria’s economic reform

Vision 20:2020, Finance Act and Nigeria’s economic reform


DESPITE the barrage of economic policies by successive governments on the need to diversify Nigeria’s GDP, there still persists, a continued and large dependence on oil revenue with a corresponding less dependence on fiscal policy and other contributors to the Nigeria’s GDP.

However, going by the economic theory of being an intermediate state, in which Nigeria has inadvertently aligned itself with, the outcomes of economic reforms under these states are capable of episodic reform but incapable of driving industrial transformation.

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Economic reform and socio-economic cum transformation agenda are two underpinning factors that serve as barometers for measuring the success or otherwise of every government in terms of its mandate to transform its society.

That perhaps, accounts for the reason why it is inherently a trans-governmental agenda that every successive government adopts and modifies, so as to suit its government and serve as a road map to its manifestoes.

Analyzing Nigeria’s compliance with the MDGs 2015, it would be admitted without any shade of doubt that Nigeria is abysmally lagging behind and thus one of the unlucky nations whose resources have been mismanaged by political marauders. It is no longer a news that Nigeria is at the vanguard of the countries with the most populous out-of-school children with over 13.2 million in number as estimated by the United Nations Children’s Fund, UNICEF. On gender equality, is on record that, women make 49 per cent of the population but less than five per cent in the legislative arm of government; more so, more than 60 per cent of the out-of-school children are females.

Right from the period of attainment of self-government to the intermittent military interregnums, Nigeria has been grappling with different economic agenda with a view to better the lives of its citizens.

With a chequered history of botched economic reforms, which over the years, have come in either structural, institutional, micro or micro reforms, governments have made some vainglorious attempts to cause economic resuscitations in areas like privatization, banking, civil service, trade policy, holistic review of capital adequacy, deregulation of capital market among others.

By the ushering in of democratic government in 1999 after a distorted and chequered political interregnum summing up to two decades of economic reformlessness, the new government was caught up with the reality of looming economic crisis, a seeming trepidation necessitated by the decline of oil price in the global market which glaringly exposed Nigeria to unprecedented economic volatility.

Amidst the economic apprehension, the ruling elite in 1999 dispensation, felt the need to set in motion an economic reform agenda, thus, causing a cabalistic consent and adopt an informal elite consensus on power rotation between the regions of the country.

The political settlement theory which best explains the Nigerian situation is such that harnesses the gravitational link between the interaction forces of external pressures and the domestic power configuration. With the political settlement approach, the trajectory peregrinations of Nigeria’s economy have been characterized by episodic or sporadic reforms, thereby driving bursts of economic growth and diversification rather than innovative industrial evolution.

From the Olusegun Obasanjo’s botched economic reforms christened National Economic Empowerment and Development Strategy, NEEDS, which was strictly birthed by the collapse of crude oil prices at the global market in 2001 to the dead-letter seven points agenda of the late President Yar’Adua, Nigeria has literally remained an economic dysfunctional laboratory and baseline used for experimentation of underdevelopment in the hands of successive political jobbers. Pitiably, I must confess, that Nigeria remains backwardly transformed even with another series of economic rape by the President Jonathan’s economic agenda tagged transformation agenda.

Rather than attributing it to be a norm for every successive government, the Buhari’s administration has conjured that the past administration failed economically. Its Economic Recovery and Growth Plan, ERGP, though a short term approach, aims at diversifying the economy to set it on a path toward sustained and inclusive growth for the periods between 2017-2020. Some appreciative levels of modest success have been recorded by ERGP; in terms of Voluntary Asset and Income Declaration Scheme,(VAIDS, which so far has boosted the tax system, sustained recovery from recession and growth in GDP to 1.94 per cent as at Q4 of the year 2019, decline by 9.1 per cent of oil and gas sector to the Nigeria’s GDP; though still accounts for the largest contribution, but a corresponding increase in the quotas of other sectors as a result of diversification.

In conclusion, Nigeria’s economic reform has been a distorted and episodic one. External constraints have negatively gravitated and romanced with the domestic political permutations of successive governments which have been the bane to the success of our economic reforms. The Buhari led administration is, therefore, enjoined to further strengthen this short-term economic plan ERGP, with a view to translating it to a more robust economic agenda.

To this end, it is proposed that the government, specifically, should legislate on this plan id est National Economic Recovery Plan Act, which I believe shall transform the Economic Recovery and Growth  Plan from being a mere growth agenda to a development agenda that will have a culminating positive effects both at the nation down to the grassroots level.

This way, successive government will brush aside politics and adopt it as a law or at best, build upon the legislation, so as to fine-tune a working modality toward our journey to economic prosperity.

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With the enactment of the Petroleum Industry Act to the recently enacted Finance Act, it is believed that the Federal Government still owes Nigerians more in its course to transforming the nation.