Economy: Osinbajo projects 3% growth with ₦2.3trn stimulus, private sector commitment

File Photo of Nigeria's Vice President Yemi Osinbajo at his State House office, Abuja, during a virtual roundtable dialogue organised by the Justice Research Institute.

Vice President Yemi Osinbajo has described the the Economic Sustainability Plan (ESP) with a stimulus package of N2.3 trillion, which is just about 1.5 per cent of Nigeria’s Gross Domestic Product (GDP), as the best the Federal Government could do given existing realities in the economy.

Osinbajo made the call weekend at the virtual edition of the Presidential Policy Dialogue of Lagos Chamber of Commerce and Industry (LCCI).

According to him, “Government developed the Economic Sustainability Plan with a stimulus package of N2.3trillion to give fillip to the economy across various sectors. The size of this stimulus which is just about 1.5 per cent of national income is not as large as we would have liked it to be but it was the best we could do given existing fiscal and monetary constraints. Based on the assumption of the price of crude averaging out at $30 per barrel throughout the year, we anticipate an economic growth of about -0.59 per cent in 2020.

“You would already be familiar with details of the Economic Sustainability Plan. In essence, it is intended to boost production, prevent business collapse, and provide liquidity. It will also promote the use of labour-intensive methods and direct labour interventions in key areas like agriculture, light manufacturing, housing construction and facility maintenance while increasing infrastructural investment in roads, bridges, solar power, and communications technologies. It is intended to do all this while extending protection to the poor and other vulnerable groups in our society.”

On the plan of government to address the disruptions on the economy by the novel Coronavirus (COVID-19) pandemic and the role that the private sector could play, the Vice President said: “These opportunities are the building blocks that will enable our medium-term goals to be achieved and make our long-term goals achievable.

“This is a drive we hope to continue into the medium term as we build up the economy over the next few years. We do need foreign direct investment to complement our domestic efforts but it is the success of our own investments that will attract such inflows. Investors are already aware of Nigeria’s huge market and its great potential, but they will only ‘want in’ when government by its own positive interventions and the private sector by its success stories show them what is possible to do here.

“No doubt, the task ahead is challenging. Nevertheless, government is focused on doing its bit so I call on the private sector to play its part and join us in this noble venture. We know that this will be a difficult year but expect that with our combined effort growth will resume to the order of about three per cent by the end of next year. We can do this working together.”

On the Ease of Doing Business reforms of the Federal Government, Osinbajo maintained that the commitment of the President Muhammadu Buhari to providing an enabling environment for business to thrive remained strong.

“In this regard, we have made some strides in improving the ease of doing business in Nigeria. Through the Presidential Enabling Business Environment Council (PEBEC), a lot has been achieved to fast-track processes, reduce bottlenecks and improve transparency across Government MDAs.

“As a result, we have moved 35 places upward in the World Bank’s Ease of Doing Business rankings. We have continued to scale up our business reform initiatives across regulatory agencies.

“Of course, there is still a lot more to be done. Our aim is to continue to improve our national ranking in the World Bank Doing Business Index Ranking to below 100 in the coming years. It is also very important to reduce the harassment and extortion of businesses by various government agencies,” the vice president added.

Osinbajo explained that as the Federal Government consolidates efforts designed to ward off a deep recession and effect significant changes in the economy, opportunities abound across different sectors in ESP for the private sector to lead the charge for Nigeria’s economic growth and development.

The vice president said ESP which is now being implemented by the Buhari administration is driven by the desire “to adapt to the challenges and make required changes in order to come out stronger than before.”

“I take this opportunity to encourage the private sector to be proactive in leading the charge against recession and poverty in our country. The Federal Government is not under any illusion that it can do this on its own.

“The opportunities that now exist in the short term in agriculture, infrastructural development, housing construction, in renewable energy, digital technology development, mining, financial inclusion, healthcare and pharmaceutical manufacturing, call for the private sector to take the bull by the horns and make them a reality.

“The priority of the Federal Government in response to the economic challenges caused by COVID-19 is to ward off a deep recession by an admixture of stimulus measures to support local businesses, retain and create jobs and ameliorate the circumstances of the most vulnerable,” he said.

In his remarks, the Minister of Industry, Trade and Investment, Niyi Adebayo, said the current focus of the Federal Government in the manufacturing sector “is on prioritising local production especially in the importation of machinery that utilize local materials.”

Earlier, LCCI President, Toki Mabogunje, commended the Federal Government’s “spirited effort” regarding its managing of the Nigerian economy, adding that members of the chamber and private sector players are willing to collaborate with the Buhari administration.

Idowu Sowunmi