Introduction
This Plan was formulated against the backdrop of several subsisting development challenges in the country and the need to tackle them within the framework of medium- and long-term plans. These challenges include low and fragile economic growth, insecurity, weak institutions, insufficient public service delivery, notable infrastructure deficits, climate change and weak social indicators.
Hence, the Plan seeks to invest massively in infrastructure, ensure macroeconomic stability, enhance the investment environment, improve on social indicators and living conditions, implement climate change mitigation, adaptation and resilience strategies, amongst others.
Specifically, the Plan aims to generate 21 million full-time jobs and lift 35 million people out of poverty by 2025; thus setting the stage for achieving the government’s commitment of lifting 100 million Nigerians out of poverty in 10 years.
The country can achieve these targets through high quality economic growth and a more inclusive economy, leveraging its young workforce, and enhancing implementation capacity at national and subnational levels. With effective implementation, Nigeria will progress significantly on the path of unlocking its potentials in all sectors of the economy for a sustainable, holistic and inclusive national development.
Review of Previous Development Plans
This Plan builds on the foundation developed in Vision 20:2020 and the Economic Recovery and Growth Plan (ERGP). Lessons from the previous plans have guided the development of this 2021-2025 plan. Vision 20: 2020, introduced in 2009, was Nigeria’s long-term economic transformation blueprint. It aimed broadly at improving the living standards of its citizens and placing the country among the top 20 largest economies in the world. Other objectives included achievement of fiscal prudence, low inflation and increased availability of infrastructural facilities to spur economic growth.
While some progress was made in achieving the Vision 2020 goals, the country’s ranking, in terms of the size of the GDP, only improved marginally from 30th to 27th position during the period, as against the Vision’s target of becoming one of the world’s top 20 economies. A look at how the economy fared in terms of meeting its growth objectives showed mixed results and, in part, revealed why the target of becoming one of the top 20 economies in the world was not met.
The Nigerian economy grew by 7.8% in 2010 but slowed from 2015 onwards because of the negative impact of exogenous shocks especially from the global oil market. In 2016, historic terms of trade shock exacerbated by reduced oil production and prices as well as structural constraints, took a major toll on the Nigerian economy ahead of the design and implementation of the Economic Recovery and Growth Plan (ERGP). The ERGP, a Medium-Term Plan for 2017-2020 was developed to restore economic growth and achieve a more diversified and inclusive economy, following the economic recession. Macroeconomic and structural policies as well as relatively higher oil prices supported Nigeria’s exit from the 2016 recession.
Growth performance, while below the ERGP’s targets, was broadly in the right direction through 2017- 2019 spurred by the implementation of the ERGP, increased oil prices and a recovery in agriculture and services. In 2020, the economy was hit by triple shocks of the pandemic, fall in global crude oil prices and social conflicts. In response, the government undertook proactive measures to limit the impacts of these shocks on the Nigerian economy.
Anchored on the government’s Economic Sustainability Plan (ESP) during this period were policies comprising palliative measures, increased petroleum product prices and electricity tariffs, and fiscal and monetary policy support to various sectors. The fiscal and monetary stimulus packages contributed to the country’s exit from recession in the fourth quarter of 2020 from the recession that occurred in the second and third quarters.
Plan Formulation Process
The government recognizes the need for a well thought out plan to guide the attainment of the Plan’s objectives. It was in this context that on 9th September 2020, President Muhammadu Buhari inaugurated the National Steering Committee (NSC) for the preparation of this Plan and Nigeria Agenda 2050. This Plan and Agenda 2050 succeed the Economic Recovery and Growth Plan, 2017 – 2020 and Nigeria Vision 20:2020 Economic Transformation National Development Plan 2021-2025 07 Blueprint, both of which terminated in December 2020. The Committee was co-chaired by the Honourable Minister of Finance, Budget and National Planning, Dr (Mrs) Zainab Ahmed, for the Public Sector and Mr. Atedo Peterside for the Private Sector. The institutional framework had two levels below the NSC, which were the Central Working Group (CWG) and the Technical Working Groups (TWGs). The CWG coordinates the work of the 26 TWGs. The Planning process entailed:
- a participatory process involving a wide range of stakeholders was adopted to harvest inputs into the formulation of the plan. To ensure that the new plan remains a truly National Development Plan, all the 36 states of the Federation and Federal Capital Territory Administration as well as representatives of the Local Government Councils and Organised Private Sector, Youths, labour Unions, Traditional and Religious organisations, amongst others, were all involved in the preparation process.
- a data-driven approach, as well as assessment tools, were used in developing the plan. The outcomes of the assessment were then further validated and reviewed to ensure robustness.
- The Plan built an inclusion lens to every analysis and recommendation to drive broad-based economic development.
- Finally, implementation considerations are built on existing institutional structures and focused on ensuring applicability, while strategic measures were linked to clear indicators and targets to facilitate monitoring.
Vision, Mission and Objectives
Vision
To make Nigeria a country that has unlocked its potential in all sectors of the economy for a sustainable, holistic, and inclusive national development.
Mission
To effectively guide the implementation of programmes and policies that promote rapid multi-sectoral growth and development of Nigeria’s economy.
Objectives
The associated broad objectives of the Plan are to:
- establish a strong foundation for a diversified economy, with robust MSME growth, and a more-resilient business environment,
- to invest in critical physical, financial, digital, and innovation infrastructure, (3) to build a solid framework and enhancing capacities to strengthen security and ensure good governance, and
- to enable a vibrant, educated, and healthy population.
- investing in the social infrastructure and services required to alleviate poverty, and
- promoting development opportunities across States to minimize regional economic and social disparities.
Macroeconomic outlook
The National Development Plan, 2021-2025, aims at accelerated, sustained inclusive and private sector-led growth. Critical macro-structural issues in the areas of concentric economic diversification, fiscal space to support higher economic and social expenditures and a stable macroeconomic environment remain. The robust macroeconomic framework developed for the plan enabled the projections in the areas of real sector, fiscal, monetary, and external sectors.
The macroeconomic framework recognized that sectors have differing potentials for growth and thus identified and leveraged on those sectors with the highest potentials for stimulating the growth of the Nigerian economy. Generally, the projections in the macroeconomic framework informed the design and strategic orientation of the Plan. To this end, the overall target of the Plan is to achieve (1) a broad-based real GDP growth rate of about 5% on average during the plan period; (2) increased employment generation of about 21 million jobs; and (3) through an inclusive growth in lifting 35 million people out of poverty over the plan period (2021-2025).
This will set the stage 08 National Development Plan 2021-2025 for achieving the government’s target of lifting 100 million Nigerians out of poverty in 10 years under the National Poverty Reduction and Growth Strategy (NPRGS). The expectation is that, barring debilitating negative domestic and external shocks, and with macroeconomic stability and effective implementation of policies, programmes and projects, the Plan will result in improved growth of the economy, notable employment generation and poverty reduction and enhanced welfare and living standards of the citizens.
Size of the Plan
To accomplish the objectives, the Plan provides for the implementation of major infrastructure and other development projects across the six geopolitical zones and the opening up of opportunities for the rural areas to ensure balanced development and increased competitiveness.
Government acknowledges that these critical infrastructure projects which also aim at income and employment generation and poverty reduction require massive capital investment and urgent implementation across the country. Consequently, the resources requirement for the implementation of the plan are significant. Specifically, the attainment of the objectives of the Plan will require an investment commitment of about N348.1 trillion. It is estimated that the government capital expenditure during the period will be N49.7 trillion (14.3 percent) while the balance of N298.3 trillion (85.7 percent) is expected from the Private Sector.
Of the 14.3 percent government contribution, FGN capital expenditure will be N29.6 trillion (8.5 percent) while the Sub-National Governments’ capital expenditure is estimated to be about N20.1 trillion (5.8 percent). The successful implementation of this Plan will therefore be heavily dependent on a strong partnership between the private and public sector.
The country is moving along the path of the reforms required to unlock local content development, subnational concentric economic diversification, competitiveness, growth, and making moderate, incremental progress in poverty reduction and other human development indices in the medium-term. Furthermore, this Plan recognizes the youth population as a key driver of economic growth. Consequently, greater opportunities for young people, women and inclusion are featured in the integrated themes across the plan.
Therefore, besides programmes and project implementation, the government will create an enabling investment climate and business environment, underpinned by a highly capable, motivated and well-resourced world-class public service. The rejuvenated public service will drive open, transparent and high-performance governance at all levels.
Financing the Plan
Provisions have been made in the Plan to ensure funding of the programmes and projects. In this direction, the financing strategy of the Plan seeks to: i) identify various funding sources for the plan and map out strategies to ensure that the expected funds are realised; and ii) ensure that adequate finance is available for implementing the Plan.
To finance it, Nigeria will generate revenue by broadening the tax base and enhancing the capacity of the private sector through creating investment opportunities and deliberate policy engagements and incentives. Funding sources including domestic borrowing, concessional foreign borrowing and securitisation will be explored. In addition, financial vehicles such as growth funds, securitization and public-private partnerships (PPP), will be set up.
Of particular significance is a new initiative, the Nigeria Investment and Growth Fund, which will invest in commercially viable projects in sectors that will (i) promote growth; (ii) enhance local valueaddition through backward, forward linkages; (iii) create employment opportunities; promote technological innovation and learning; and (iv) promote exports and exports diversification.
An additional source of financing for the Plan which is private sector-driven is the Infrastructure Corporation of Nigeria (InfraCo). Although it is a private sector initiative, it has the support of the Government. Additionally, there will be focus on fiscal discipline through institutional compliance with the fiscal responsibility act, deliberate policy, and drastic reduction of inefficiencies in governance.
Other measures that will be implemented National Development Plan 2021-2025 09 include a deliberate policy to address inflation of contracts and high cost of projects with consequences for defaulting officers, and privatisation of some public enterprises that can be self-financing.
Plan Implementation
The success of this Plan will depend, to a large extent, on the establishment of a strong implementation mechanism and framework that promotes performance and accountability. The requisite mechanism and framework for the implementation of the government’s activities will encompass robust coordination by the Planning arm of the Ministry of Finance, Budget and National Planning. To this end, the Budget and Planning Arm will be strengthened and enhanced to ensure continuity and professionalism in plan development, budgeting and execution.
The Ministry also has the National Monitoring and Evaluation function and will coordinate with the state governments on the plan execution to involve data, monitoring and evaluation. This will require enhanced capacity for effective oversight, tracking and funding. To this end, a Development Plan Implementation unit (PIU) that reports to NSC headed by the VP, with the HM/HMS Budget and National Planning as Vice Chair, will be established in the Budget and Planning Arm to promote overall coordination with the MDAs, private sector operators, CSOs, amongst others.
The National M&E framework will be fully operationalized and Coordinated by the Budget and Planning Arm, for deliberate alignment of the National Budget with the Plan and deployment of technologies to drive a result-based implementation of the Plan in the country. It will equally focus on strengthening the national M&E system to ensure that reliable, timely statistics are generated for the assessment of the implementation of government policies and programmes.
The implementation framework will be supported by a financing strategy, a strengthened national economic management, citizen engagement and legislative changes. National economic management will be strengthened through the coordination of monetary, fiscal, trade, technology and industrial policies in a manner that recognizes and resolves any trade-offs or indeed, tensions, across these policies to maintain macroeconomic stability and the optimal growth trajectory.
The government will also seek to develop an efficient communication strategy to create awareness among the stakeholders and their engagement in the implementation.
Structure of the Plan
The Plan is structured around seven cluster areas, namely: (1) Economic growth and Development (2) Infrastructure (3) Public administration (4) Human capital development (5) Social development, (6) Regional development and (7) Plan Implementation, Communication, Financing, Monitoring and Evaluation.
Under these cluster areas are chapters dealing with all aspects of the Nigerian economy, ranging from Agriculture and Food Security, Integrated Rural Development, Manufacturing, Oil and Gas, to Business Environment, Women and Gender Equity, Poverty Alleviation, Governance, Defence and Security, Environment and Climate Change, among others. There are 38 chapters in the Plan.
All the sectoral chapters contain information on the review of sectoral performance as context, a statement of objectives and targets, challenges and opportunities of the sector, planned strategies, policies and measures. Finally, each of the 38 chapters has information on the planned investments to be made to achieve both the sectoral objectives and overall targets of the Plan.
