Dike Onwuamaeze
Nigeria’s 2023 budget would lack the capacity to alter the trajectory of the Nigerian economy by creating jobs until the federal government begins to allocate spending efficiently and generate revenue innovatively.
This observation was made by Proshare in its 2023 Macro Economic Outlook titled “the Many Faces of Nigeria in 2023: Understanding the Economics of Change.”
It stated: “Although the 2023 budget is anchored on fiscal consolidation and changing macroeconomic realities, analysts believe it lacks the capacity to alter the trajectory of the Nigerian economy, albeit the assumptions are not out of place.
“For analysts, growth will only be impressive and job-creating when the government, the largest spender, allocates spending efficiently and generate revenue innovatively.”
Proshare also stated that Nigeria’s development planning would not be able to deliver impressive outcomes that could address the pressing challenges of the country until its economic managers begin to rethink economic policies and planning around three key anchors of policy, projects, and programmes (PPP).
Proshare said consistent lack of alignment among anchors in Nigeria’s national planning had been weakening the linkage of plans to annual budgets, adding that “a different outcome would require a much different approach. Analysts say a PPP approach to the formulation of medium-term would offer better outcomes.”
It noted that current economic policies in Nigeria are defined by three plans- the long-term plan, the medium[1]term framework, and the short-term budget cycle.
“Whereas development planning in Nigeria predate the country, dating back to the colonial period, the approach to formulating and implementing the plans has so far failed to adequately address the pressing challenges of the country.
“Nigeria has implemented tens of development plans to accelerate economic growth, improve living standards, and tackle legacy challenges in the country, including extreme poverty, youth unemployment and underemployment, rising inequality, and other macroeconomic challenges.
“Arguably, analysts believe the improvement in the Nigerian economy has been unimpressive, including periods when development plans were implemented.”
It also stated that the time has come for the federal government to grant the state governments greater role in developing the national plans.
It said: “Having adopted plans that rest principally on the federal dominance structure, there is a call to give greater roles to sub-nationals in national planning and implementation for inclusive implementation and broad-based monitoring and evaluation.
“There has been no justification to maintain the centralised implementation mechanism in achieving the long-term agenda.”
The Proshare, however, stated that a variety of factors would be critical in determining the outcome of large and small businesses in 2023.
“We project that the Nigerian economy would record a 2.9 per cent growth rate in 2023. The Agricultural sector is expected to grow at 1.97 per cent under the impact of the floods last year as well as insecurity in the farming areas. The industrial sector is expected to continue to contract on the back of rising interest rates, higher electricity costs, and new import duties proposed in the Finance Bill.
“The services would continue to make the largest contribution to the country’s GDP although growth in the telecoms sector would be moderated by the new duties contained in the 2022 finance bill.
“The Monetary Policy Rate (MPR) is expected to reach 18 per cent by year-end as the MPC continues to tamp down rising inflation, but real returns would remain negative.”
