Economic recovery and growth plan

Economic recovery and growth plan

We celebrate the fact that the Economic Recovery and Growth Plan has finally seen the light of the day and a cursory look at the document conveys a distinct impression of a job well done and for that we would wish to congratulate the authorities. The expectation is that now that the document has been released, it would live up to its billing by contributing in facilitating and hastening the steps of the country as it attempts to exit the recession, which by all account should happen this year if we keep fidelity by diligently doing what we should do like getting Budget 2017 come to live in the shortest possible time and also satisfy the requirements of the multilateral financial institutions; IMF that insists that for us to deal with them we need to craft a recovery and growth plan.

There are a number of issues arising from the plan which we would wish to foreground to alert us of the pitfalls ahead which we must muster ingenuity to navigate as we are all co travellers in the country’s drive to bring about badly needed growth in the economy to impact the misery index in the land which is beginning to have ugly manifestation as the recent mass protest must be considered a deadly pointer.

We are first of all concerned regarding the possibility of having this plan implemented despite the fact that it has been observed in the document that focused implementation is at the core of the delivery strategy of the plan over the four-year duration of the plan which is anchored on the fact of political will at the highest level of government to have the plan implemented. We also concur that the scenario to have the plan implemented has radically changed following the merger of the Budget and the Planning functions which we have recommended for so many years and which gratefully has now been implemented. But we are not so sure about the indication that a delivery Unit would be established at the Presidency to guarantee focused delivery. We are particularly concerned that this would amount to undue and unnecessary multiplication of bureaucracy which is one of the shortcomings of governance in the country for which all attempts have been made to streamline such bodies to reduce the burden of recurrent expenses as it constrains the availability of funds for allocation for capital expenditure. Our take is that the Ministry of Budget and planning retaining its monitoring and evaluation role should be able to perform this function even if a separate Unit should be created for emphasis regarding the importance placed on delivery of the objectives of the plan.

But a greater concern regarding implementation is from the perspective of the time available to implement the plan factoring in the recently released election calendar by INEC. We have been informed that primary elections for the 2019 elections would commence from the third quarter of 2018 and it’s common knowledge that once politics is in the air little or scant attention is paid to governance. Therefore for a four-year plan with commencement date for implementation which is this year and for which there is barely at best one more year left does not have much chance of gaining traction by way of effective implementation. And the experience has been that even if the incumbent party is returned after the elections that sufficient momentum must have been lost as to almost assure that it would be an unusual occurrence for the plan to be dug up for focused implementation again.

And while we are discussing this four year plan you might be reminded that we have another three year plan; the Medium Term Expenditure Framework (MTEF) which was supposed to provide the beacons for the implementation of Budget 2017 languishing in deafening whimper! It would appear that even as we have been hearing of the MDAs going to the Assembly to defend their budget that the role of the MTEF whose approval should to all intents and purposes precede Budget 2017 preparation is hardly being mentioned and would appear to have been conveniently forgotten. And when you recall this country’s record with implementation of such plans; Vision 2010, Vision 20:2020 which in my assessment still remains today the document which all such future efforts must be benchmarked in terms of its completeness and overall professional packaging, and many other such plans you can only struggle to suspend doubt that this new plan would fare better in this respect.

There is also some doubts regarding the extent of inclusiveness which attended this plan formulation from the perspectives of involvement in plan preparations. Usually the monetary authorities are also carried along and indeed participate in such an exercise but it does not appear that this has been the case this time around as there has not been any specific proposal regarding monetary policy thrusts in the plan. We read of the push to relax restrictions with a view to a market driven regimen and the goal for single digit inflation rate by the year 2020 from the current rate of over 19 per cent, which has just been reported to have dropped to 17.8 per cent against the background of drop in the price of food and non-food items. Well this has remained the target of monetary authorities for some time now and in point of fact the rate of inflation remained single digit for a long time in the immediate past until the onset of recession. It is also a bit worrisome that part of the measures included in the plan is a review of some of the items which were denied access to the official foreign exchange window by the Central Bank as a means of stabilizing the macroeconomic environment with the statement of the intention to have this policy stance reviewed. It is surprising that such a measure which strictly should be work in progress could find its way as one of the strategies to be included in a four year plan! Also the desire for coordination of monetary and fiscal policies to ensure that they complement is also considered one of the strategies for the attainment of macroeconomic stability and worthy of inclusion in the plan.

Often for such a documents there is separate consideration for debt policies particularly as we would seem to have commenced rapid accumulation of these debt in our determination to exit the recession but which if not circumscribed by a policy framework might see the country slipping back to the dreaded debt peonage of yesteryears. It is however reassuring that we have been informed that the sub-national governments have been carried along in the plan preparations and that even some of the state governments have commenced the implementation of some of the strategies in the plan. The State governments in the country are notorious for noncompliance with such policy measures. A case in point is the Fiscal Responsibility Act in which the states are expected to toe the line for guidance with the preparation of their annual budgets and which to a large extent is being observed in the breach.

The plan includes the statement of a vision in which an attempt is made to document the expected state of economic affairs following the plan implementation but there was no specific articulation of a Vision Statement such as is often committed to memory to help to keep the imperatives of the plan in people’s consciousness. And usually for such plans for completeness an attempt is often made to articulate a Mission Statement which has not been included here. Some of the targets in the plan are most certainly ambitious. For instance the target to grow job opportunities during the plan period to create 15 million jobs which translates to over 3 million jobs a year is ambitious going by our very recent experience, to cut fuel import by 60 per cent by the end of 2018 and become a net exporter by 2020 should also be seen in the same context. But it is music to the ears to read of the intention to leverage on Science, Technology and Innovation and to build a knowledge based economy over the plan period because that is clearly the way of the future.

 

Boniface Chizea

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