Medium-Term National Development Plan: A Herculean Task?


Tuesday, August 31, 2021 / 1:05 PM / by United Capital Research / Header Image Credit: Ecographics

The Federal Government has disclosed plans to unveil the Medium-Term National Development Plan (MTNDP) 2021-2025 in Oct-2021. The development plan is coming 10 months after the expiration of the Economic Growth Recovery Plan (ERGP) 2017-2020. The ERGP was introduced in 2017 with the aim of restoring growth, investing in people, and building a competitive economy. The plan also proposed a GDP growth rate of 7.0%, inflation rate of 9.9%, oil production of 2.5mbpd and unemployment rate of 11.2%. However, at the end of 2020, available data showed that the government failed to achieve these goals as real GDP growth stood at -1.9% y/y, inflation rate at 15.8%, oil production at 1.4mbpd and unemployment rate at 33.3%. Although we note the pandemic may have exacerbated the subdued performance.

That said, the Federal Government is set to make amends with the introduction of a successor, the MTNDP. The plan is aimed at lifting millions of Nigerians out of poverty and ensuring economic stability, development, and good governance. The macroeconomic goals of the plan are to attain a broad-based five-year average economic growth of 3.8% and a more competitive non-oil sector with less dependence on the oil sector. The estimated real GDP growth during the period is believed to be adequate to lift 10 million people out of poverty. In addition, the plan projects creation of 25 million new jobs with 10 million from direct growth impact and 15 million from skill-acquisition and other interventions, ensuring that poverty rate falls to 31.0% by 2025 compared to 40.0% in 2020. The ultimate goal is that by the end of 2025, Nigeria has laid the foundation for a strong institutional structure and systems driving the efficient implementation of at least 60.0% of the targets in the MTNDP.

Looking ahead, we remain pessimistic about the likelihood of achieving the goals and objectives set forth. Given Nigeria's history of government failure to fully implement its economic reforms goals, as well as MTNDP's short timeline, this is not far from a "herculean task". In addition, we note the historical trend of elaborate policy documents not backed up with the political will for implementation (e.g., ERGP, NPRGS etc.)

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