For three days, players in the public and private sector gathered in Abuja to brainstorm and proffer solution to the many challenges of the Nigerian economy. They have been doing this for 23 years now and some sceptics say that it has not changed much in the Nigerian economy. Organisers of the of the Nigeria Economic Summit, the Nigeria Economic Summit Group (NESG) disagree, noting that these annual discussions have done much good to Nigeria and that the economy would have been much worse off without these annual discussions.
The annual summit has become Nigeria’s version of the World Economic Forum (WEF). Representation from the public sector was at the highest level as the Vice President, Yemi Osinbajo personally declared the event open on behalf of President Muhammadu Buhari. In fact, it is to the credit of the importance that the government attaches to the summit that Osinbajo, who just returned from London to attend the FT Africa Summit around 3 a.m that morning still made time to personally declare the summit open.
As has been in the past, the summit provided a great platform for discussion of the different challenges facing the Nigerian economy. It was a time for the public sector to tell the private sector what they are doing to tackle those challenges and for the private sector to tell the public sector what they think they should be doing. The Economic Recovery and Growth Plan (ERGP) was the major focus of the 3-day summit which had the theme ‘Opportunities, Productivity and Employment; Actualising the Economic Recovery and Growth Plan.’
It was interesting to find out that the Federal Government has now set up an implementation committee for the ERGP, its economic blue print to turn around Nigeria’s economy and achieve an ambitious seven percent economic growth by 2020. The International Monetary Fund (IMF) only sees Nigeria growing at less than three percent by 2020, well below the ambitious projections by the Federal Government.
However, the Federal Government is taking steps in achieving this ambitious growth target. The President now has four special advisers who are now working with the ministries and parastatals to see to the implementation of the ERGP. Their first task has been to ensure that the 2018 budget is largely in line with the ERGP by insisting that only projects supported by the ERGP will be funded in the 2018 budget. This has largely been done, and the 2018 budget, which I understand is largely ready, will conform with the aspirations of the ERGP.
Also in line with the implementation of the ERGP, the government is planning Malaysian style economic focused labs with the private sector in the next few weeks. This was disclosed by the Minister of Budget and National Planning, Udoma Udo Udoma. These labs will be sector specific and bring together public and private sector players to brainstorm and provide practical workable solutions to Nigeria’s economic problems as it relates to their specific sectors. Udoma emphasized the major aim of these labs are to attract private sector capital to finance some of the solutions that will be agreed at these labs. Udoma admitted that the country’s narrow escape from recession shows that the government and private must closely work together to sustain that growth.
But players in the private sector noted that the Nigerian experience has been that it is one thing to know the solutions and it is a totally different challenge to ensure that the identified solutions are executed. It is not just lack of execution but even when there is an execution, the speed of execution is also a challenge, an issue that John Rice, Vice Chairman, GE, who was part of a three-man panel at the opening session that included the Vice President Osinbajo noted. He emphasized on the need for speed when executing agreed policy actions or initiatives or granting approvals.
Rice also raised the issue of the country’s perennial challenge, electricity supply, warning that it would be impossible to have sustainable and inclusive economic development without improvement in electricity supply. He cautioned against the tendency to lump all infrastructure into a single basket, noting that some infrastructure, are more important than others. Electricity Infrastructure, he said, is one of the important infrastructure that the government has to pay attention to and ensure it gets right.
Not surprisingly, the public sector representatives at the summit also agreed that they are concerned about the challenges in the power sector. Vice President Osinbajo expressed concern about the power gridlock especially the inability of Distribution Companies (Discos) to absorb generated power. He offered hope that the Nigeria Electricity Regulation Commission (NERC) will this October issue guideline on ‘independent metering’ which will allow licensed players in the private sector to install metres to electricity consumers. He said that this could be a game changer in the industry and help bridge the metering gap in the country which has led to many Discos rejecting generated power because they cannot collect money from the consumers.
Minister of State for Budget and National Planning, Zainab Ahmed later disclosed government plans to review the privatisation exercise starting with the Discos. She said that the plan is for the government to sit with the Discos and then jointly decide to sell some their stakes to a third party that has the technical capacity and the capital to invest expanding distribution infrastructure across the country. She says that the Discos are too leveraged to undertake the investment. She also disclosed that part of this process will also be the review of the current tariff structure, which the Discos have continued to insist is below their cost of producing power.
But the proposed approach the government is adopting is going to be controversial as most Discos will likely argue that they would not be this leveraged and undercapitalised if they had been allowed to charge a ‘market reflective tariff’ for power supply. Discos are obviously the whipping boys in the power supply chain and so will not get much public sympathy if the government goes ahead with its plans, a plan that will only work if there is ‘market reflective tariff’ in place, something that is not politically popular.
In one of the breakout sessions, the issue of Apapa traffic gridlock was a key discussion point. It emerged that inter-agency disagreements are preventing the government from providing a solution to the Apapa nightmare. The Nigeria Ports Authority (NPA) does not have control over the roads and inland water ways that lead to the ports. The Ministry of Works as well as the Nigeria Inland Water Ways Authority, an agency under the Ministry of Transport that have control over the road and inland water ways do not consider access to Apapa ports a priority or just do not have the budget to deal with it.
The recommendation was for the government to declare a state of emergency on inter-modal transportation into and out of the ports across the country. What this means that every decision around ports will be given priority attention. The President and Vice President is responsible for making this happen. It means that files relating to access to the Ports will be given priority consideration, the finance ministry will release funds as priority and all licenses and permits required to make the ports work will be given priority.
This will force all concerned agencies to come together and resolve the issues that has made Apapa the signpost of a failed governance system. Will government accept this recommendation? The ‘body language’ of government officials makes me doubt if this will happen soon. Sitting faraway in Abuja, they look unmoved by the daily chaos that has become Apapa, which has now become significant bottleneck to economic recovery.
Of course, education and human capital development was also one of the issues that came up for discussion. How do you convert the millions of unemployables living among us into existing opportunities? How do create opportunities for the to 90 percent of graduates who leave tertiary institutions each year without being absorbed by the labour market? How do you tackle the social stigma of saying I am not a graduate but a ‘painter’? Can we really create 15 million jobs by 2020, one of the ambitious goals set in the ERGP? Panellists suggested government goes into partnership with the private sector as well as leverage of technology to equip with the skills they need for tomorrow’s job opportunities.
Conversations at the three-summit were intense and sometimes emotional. ‘Laoye Jaiyeola, CEO of NESG outlined three things that he would like to see achieved by the next summit in 2018. That there is significant and noticeable improvement in the government’s speed of execution and granting of approvals, a significant improvement in the ease of doing business in the country which the different executive orders signed by Vice President Osinbajo seeks to achieve and finally that 14 economic bills at the National Assembly get passed and signed into law by the President. My feeling is that these are very ambitious wishes but if they are achieved, then the seven percent economic growth by 2020 could be achieved. But then the lethargy in the public sector means that I would not be surprised if we end up discussing the same issues at the next summit in 2018.