Economy: Tinubu Unveils N2trn Stabilisation Plan Amid Funding Challenge
* Targets 2m bpd crude production
*Inaugurates presidential economic coordination council
*Declares mere 4.5GW power capacity shameful for Nigeria
*Nigeria’s economy can be turned round in few months, says Dangote
Deji Elumoye in Abuja
President Bola Tinubu, yesterday, unveiled a N2 trillion accelerated stabilisation and advancement plan targeting the revival of the economy in a record six months amid funding challenge.
The president made public the plan while inaugurating his Presidential Economic Coordination Council (PECC) drawn from different sectors of the society and the economy at the State House, Abuja.
Tinubu had on March 27, 2024, announced the constitution of the PECC, which he personally chairs, with members drawn from the federal and sub-national governments, the National Assembly, as well as the private sector.
Curiously, the president made no mention of the possible source of funding for the initiative that is billed to gulp some N2 trillion.
Therefore, some of the questions arising from this, include: “Where is the funding coming from? Is it from the budget? Is this plan from the budget, being an appropriation act of the national assembly or extra-budgetary?
“If it is extra-budgetary, is it going to the national assembly for approval? This is very instructive because right now, the government is believed to be finding it difficult to fund its budget. Where then will the funds for this stabilisation come from?
But, while speaking at the inauguration ceremony, Tinubu recalled that he declared a state of emergency on food security and outlined plans to increase oil production, improve power generation, and leverage infrastructure development to boost agriculture and electricity supply.
According to him, “We have a challenge thrown at us and all of us will have to be careful. I believe today is America’s 158th of their independence while we are celebrating our 25 years of progress of democracy. We have to look back at how we have navigated ourselves and look forward to better economic navigation.
“I can give instructions as the president from my office but I believe so much, deeply in the organised private sector. The partnership to drive the economy of this country, for reforms and stabilisation that is necessary, give the incentive where we must and leave the market to control the pricing mechanism and the consumption.”
Commenting on the challenges facing nation’s energy sector, the president canvassed for collaboration to increase Nigeria’s grid electricity, saying, “In the face of it, we have the challenge of energy security, we need to work together to include power, oil and gas to increase our own grids electricity. We are determined to do that with your cooperation, collaboration and recommendation.”
He acknowledged the nation’s shameful electricity generation capacity of about 4.5 gigawatts and pledged to increase oil production to two million barrels per day within the next few months, while removing barriers to investments in the sector.
His words: “As a nation, it is so shameful that we have about 4.5 gigawatts. We must increase our oil production too to 2 million barrels per day within the next few months, remove all barriers hindering investments into the sector to enhance competitiveness. We’ve had a challenge thrown at us and all of us will have to be careful.
“I am ready to listen to you in all of that. You have seen us from close quarters but we are one. We feel the market pinches differently the price of food stuff and all of that. I believe Bismarck Rewane will be able to make additional suggestion on what we are lacking and what we should do to stabilise this economy,” he assured members of the council.
Tinubu acknowledged the challenges faced by the market, particularly in terms of food prices, and expressed his willingness to listen to the private sector leaders for their recommendations on stabilising the economy.
He also highlighted the government’s plans for a manufacturing stabilisation fund and support for Micro, Small, and Medium Enterprises (MSMEs), saying, “The manufacturing stabilization fund, MSMEs, too, and other fiscal measures have been narrated. I just want to say thank you for responding to this call.”
Expressing his gratitude to private sector leaders like Aliko Dangote, Tony Elumelu, and Mr. Kola Adesina, among others for their participation, the president said “it is Nigeria that is calling, not a Bola Tinubu. And the hope of the entire nation hangs on you people.
“The partnership to drive the economy of this country, for reforms and stabilisation that is necessary, give the incentive where we must and leave the market to control the pricing mechanism and the consumption,” he said.
Tinubu, however, announced measures, which would run concurrently with the National Construction and Household Support Programme, to stabilise the economy, enhance job creation, and foster economic security.
The measures under the Economic Stabilisation Programme are as follows:
(1) Energy Security
The Energy Security Initiative, which includes power, oil and gas, aims to:
*Increase on-grid electricity to be delivered to homes and businesses from about 4.5 gigawatts to 6 gigawatts in six months;
*Increase oil production to 2 million barrels per day within the next 12 months; and
*Remove barriers to entry for investments into the sector to enhance competitiveness.
(2) Agriculture and Food Security
Under this plan, the aim is to:
*Increase staple crops grown by small-holder farmers from 127 million MT in 2023 to 135 million MT this year;
*Bolster production by partnering larger-scale commercial farmers;
*Support qualified farmers with satellite imagery for land use planning, crop rotation, and monitoring of agricultural expansion.
(3) Health and Social Welfare
In the health and social welfare sector, the federal government shall:
*Make essential medicines available at lower cost for 80-90 million Nigerians;
*Expand healthcare insurance coverage for 1 million vulnerable people via a Vulnerable Group Fund in collaboration with state governments;
*Redeploy 20,000 healthcare workers to provide services to 10-12 million patients in areas, where they are most urgently needed;
*Power up 4,800 primary healthcare centres (PHCs), second tier, and third tier hospitals using renewable energy sources.
(4) Fiscal Measures
Some of the interventions to improve access to finance for the housing sector, MSMEs, and the manufacturing sector are:
*Youth-owned enterprises: Support for new and existing youth-owned enterprises across all 36 states of the Federation, creating 7,400 MSMEs within the next 6-12 months;
*MSME support: A six hundred and fifty billion naira (N650 billion) facility will provide lower-cost short-term facilities to youth-owned businesses, manufacturers and MSMEs across various industries; food processing, pharmaceutical, agriculture, and wholesale and retail trade. This financing will be based on their current and future receivables, company rating, and market demand for products;
*A Manufacturing Stabilisation Fund will rejuvenate up to two hundred and fifty companies and deliver lower cost (9.0%-11.0%) long-term facilities to large, medium-scale, and light manufacturers that produce finished goods for domestic and export markets;
*Sub-national Matching Fund: A Grow Nigeria Development Fund consisting of a single-digit interest rate loan portfolio with the Bank of Industry and a matching fund agreement with sub-national governments to grow MSMEs;
*Expanding the Bank of Industry’s Rural Development Programme: A fund to support rural economies in developing 300 new MSMEs for each state, including the Federal Capital Territory (Abuja), resulting in 11,100 new rural-based MSMEs across the Federation;
*Mortgage Finance Acceleration Facility: A facility that delivers affordable housing for all segments impacted by the cost-of-living challenge. This will support the construction of an additional 25,000 housing units.
These fiscal measures will improve access to finance for MSMEs and, in the process, create 4.7 million direct and indirect jobs over a six to 12-month period.
Stressing the significance of the task ahead, Vice-President Kashim Shettima, who is the Vice-Chairman of the Council, stated that Tinubu was committed to proffering solutions to the nation’s economic challenges and not apportioning blame.
”I want to emphasise that when there is a will, there is always a way, and the president does not believe in apportioning blame. He believes in preparing solutions,” Shettima said.
Speaking after the inauguration, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who led some members of the Council including Minister of Budget and Economic Planning, Senator Abubakar Bagudu; President of Dangote Group, Alhaji Aliko Dangote; and Chairman of Heirs Holdings Limited, Mr. Tony Elumelu, to brief newsmen, gave a breakdown of the areas to benefit from the N2 trillion emergency funding to include health, agriculture, energy/power and others.
According to him, “The President has just inaugurated the Presidential economic Coordination Council and that is a body that is made up of the President’s Economic Management Team.
“The Legislature, represented by the leaders of the National Assembly; the Senate President and the Speaker of the House of Representatives, as well as very importantly, the sub-nationals, represented by the chairman of the Nigerian Governors Forum, and, of course, the elite of the private sector.
“They were presented with the outcomes of Mr. President’s review of the accelerated stabilisation and advancement plan and that was an emergency plan to cover the next six months, which Mr. President had directed that a combination of his own Economic Management Team and the sub nationals, the governor’s level, and the private sector put together for his consideration.
“The song of that very important exercise is that a N2 trillion package involving N350 billion funding for Health and Social Welfare; N500 billion funding for Agriculture and Food Security; N500 billion for the Energy and Power sector and general business support of about N650 billion.
“In addition to a range of policy measures and tax measures, there is a range of executive orders which Mr. President has signed and which are being gazetted to ease the cost of doing business at this particular time.
“There are a number of funding, which will reduce the cost of interest rate for certain sectors in economy with small and medium scale in particular but also larger companies there is a line of credit that will allow them to fall cheaper than the elevated rate.
“This plan is a means of stabilising the economy and get business growing again, we know what has happened since the micro economic measures, which are necessary and have been implemented in a determined and consistent manner led to elevated cost for industries and for individuals,” he said.
Edun also emphasised that the focus of the President was on food security, food production and nutrition security, saying, “The commitment to providing food at an affordable price and in available quantity is upper-most on President Tinubu’s mind at this particular time.
He mentioned Tinubu’s commitment to reducing the losses in the crude oil sector as well as getting crude oil production and sales up to two million barrels per day.
Chairman of Heirs Holdings, Mr. Tony Elumelu, on his part, said the president’s target of two million barrels of crude oil production per day target is achievable.
He underscored the need to improve power generation in the country, saying, “All of these is about creating prosperity for our people, it is all about creating economic hope and creating jobs for our young ones.
“So we hope that with the private sector working with the federal government, things will begin to improve. That is the aspiration, and about the money approved now for disbursement are all targeted to achieving better life,” he said.
President of Dangote Group, Alhaji Aliko Dangote, pledged the support of the private sector in investing in job creation for Nigerians.
He emphasised the place of policy implementation, adding that personalities of members of the PECC were equipped enough to advise the government on right policies.
“The Council will advise the government on the kind of policies to roll out, most of this things we have them and they’ve already been discussed over and over again and I think with the choice of people in the committee, they are good enough to advise government to know how to implement policies. The private sector will support the government to invest heavily and create jobs.
“Governments do not create jobs, but they give us the right policies. You can see the interventions in gas sector. Getting the OB3 to work will give the country additional $2 billion. What I keep saying is that our own issues are not that bad, this economy can be turned around within a few months and I think we are on that way.”
The 31-member PECC, also has President of the Nigerian Senate; Chairman, Nigeria Governors’ Forum; Governor of the Central Bank of Nigeria; Ministers of Agriculture and Food Security; Aviation and Aerospace Development as members.
Others include Ministers of Communications, Innovation and Digital Economy; Industry, Trade and Investment; Labour and Employment; Marine and Blue Economy; Power; State, Petroleum Resources; State, Gas; Ministers of Transportation and Works.
The PECC, which also comprises 13 key members of the organised private sector, joining for a period not exceeding one year, subject to the President’s directive include Alhaji Abdulsamad Rabiu, Ms. Amina Maina, Mr. Begun Ajayi-Kadir, Mrs. Funke Okpeke and Dr. Doyin Salami.
Other PECC members from the private sector are Mr. Patrick Okigbo, Mr. Kola Adesina, Mr. Segun Agbaje, Mr. Chidi Ajaere, Mr. Abdulkadir Aliu and Mr. Rasheed Sarumi.
