Nigeria is still lagging in its vision of being among the top 20 largest economies in the world by 2020, as the country is currently ranked 26th largest economy with respect to its Gross Domestic Product (GDP).
Based on the most recent nominal GDP data from the World Bank, the country was the 26th largest economy in the world in 2016.
In 2010 when the vision 20:2020 was created, Nigeria was the 30th in terms of GDP, which showed an improvement between 2010 and 2016.
The Financial Derivatives Company Limited (FDC), revealed these in its latest bi-monthly economic bulletin obtained on Monday.
According to the report, a look at how the country has fared in terms of meeting its broad objectives showed mixed results.
Firstly, it pointed out that the country’s aim to achieve rapid growth has not materialised, adding that while the Nigerian economy grew by 7.8 per cent in 2010, economic growth has slowed and contracted by 1.5% in 2016. It however grew marginally by 0.83 per cent in 2017.
“In a similar vein, the country has not been able to achieve significant improvements in terms of records of social development.
“Nigeria’s progress on the Human Development Index (HDI) is also not encouraging. Between 2010 and 2015, Nigeria’s HDI increased to 0.527 from 0.5 in 2010.
“In comparison to other economies, its ranking has not significantly improved. In 2010, it ranked 153rd among 188 economies; in 2015 it was 152nd. In a similar vein, the country’s gini coefficient, which measures income inequality, widened to 48.8 in 2013 from 43 in 2009.
“These statistics demonstrate that the economy has not fared noticeably better after the adoption of the Vision 20:2020 in 2009,” it added.
Continuing, the FDC report, pointed out that the reason for the poor performance was not farfetched, saying the federalgovernment did not appear to have takenany concrete action towards the Vision 20:2020 goals.
For example, according to the report, the country allocated 6.54 per cent of its total annual expenditure to the educational sector in the 2009 budget.
By 2010, when the vision’s implementation was intended to have commenced, the sector’s allocation had declined to 5.4 per cent. This was despite the plan’s strategy of investing in human capital.
“However, in line with the strategy to develop infrastructure, the government increased its allocation for capital expenditure from 29 per cent of the total budget in 2009 to 34 per cent in 2010.
“Although this increase was commendable, relative to GDP, the total capital expenditure in 2010 was 2.5 per cent, much below the international benchmark of 70 per cent,” it added.
The Economic Planning Minister, Mr. Udo Udoma, had disclosed that infrastructure spending has declined to 0.5 per cent of GDP as at 2017.
Furthermore, even though the vision did well by identifying some fundamental constraints (weak institutions and epileptic power supply) to growth and tackling them, little progress has been seen in this regard.
Nigeria’s institutions have remained weak and largely corrupt. Its corruption perceptions index (CPI) has only improved slightly in the six years following 2010.
In 2010, Nigeria’s CPI was 24 points (out of 100 – the closer to 0, the more corrupt) while it was 28 in 2016.22 Similarly, the country’s rank in terms of enforcing contract deteriorated.
The index, reported by the World Bank, measures time and cost to resolve a commercial dispute and the quality of judicial processes.
Nigeria’s rank has declined from 90th (out of 181 economies in 2008) to 96th (out of 190 economies in 2017).23
“This suggests persistent weakness in the country’s institutions. In the same vein, there has been no significant improvement in the country’s power situation.
“On the average, on grid power supply was approximately 3,608MWh/hour in 2017. As at 2011, it was about 3,500MWh/hour.
“Meanwhile, the country’s population has grown faster by approximately 17.3 per cent between 2010 and 2016,” it added.
Nigeria has had two different administrations since the adoption of Vision 20:2020, each having its own economic growth plan.
Under President Jonathan the Transformation Agenda was the focus. With President Buhari, it is the Economic Recovery and Growth Plan (ERGP) and the focus seems to be squarely on the ERGP as opposed to the Vision 20:2020.
However, it is noteworthy that the three plans have been predominantly based on the bedrock of driving economic expansion and an inclusive growth, that is, growth that advances equitable opportunities for every section of the society.
Given a similar objective by the ERGP which is currently running, the implementation of the necessary reforms by the present administration could still lead to an achievement of the vision 20:2020 objectives.
It urged the federal government to harmonise the ERGP strategies with the Vision20:2020 objectives.
“Strong growth (more than other economies above Nigeria on the GDP ranking) could help the country overtake others and get to the 20th position.
“The government would have to significantly increase its infrastructural spending to drive growth in other sectors such as agriculture and manufacturing,” it stated.