Fixing the Nigerian economy was arguably PMB’s toughest challenge. The Buhari economic years witnessed double-dip recession, with unprecedented number of unemployed people and widespread poverty. Nigeria’s fiscal position became more uncertain, disruptive, and precarious. All federal government budgets from 2016 were presented with huge deficits – most often in excess of 2% of GDP – which paradoxically increased PMB’s appetite for more loans.
The 2015-2016 recession, Nigeria’s first in two decades, provided the first opportunity for the Buhari administration to institute reforms that would place the country on sustainable growth path. The administration’s feeble response to the crisis, The Economic Recovery and Growth Plan (ERGP), missed the growth and recovery projections for all four years, including its forecast of up to 5.1 million new jobs and a decline of the unemployment rate to 11.23 per cent by the end of 2020.
The slow pace of reforms and consequent weak growth led to the downgrade of Nigeria’s sovereign rating by international agencies, further undermining confidence in the economy.
PMB disbanded his Economic Management Team (EMT), led by his vice president, seemingly on account of its failure to deliver on the government’s commitment to re-build and restore the economy to a path of sustainable and inclusive growth. In its place, the Presidential Economic Advisory Council (PEAC or Council) was constituted to advise Mr. President on economic policy matters, ‘with emphasis on … government’s ambitions for sustainable job creation, inclusive economic growth, and prosperity for all’.
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However, elements of the EMT remained relevant and influential enough to determine the direction of PMB’s economic agenda and indeed, the fate of the many interventions designed, and the recommendations made by the PEAC to the president.
To deliver on its mandate, the PEAC carried out extensive immersion sessions with MDAs to better understand issues, challenges, and opportunities. In addition to the routine reviews of domestic and global policy developments, the PEAC conducted in-depth reviews of the strategies and plans of the federal government to identify and report on areas of under-performance, effectiveness of mechanisms, systemic inefficiencies, and impact.
To improve its ability to impact the economy in a comprehensive and fundamental way, focus of the PEAC expanded beyond public sector economic policy. It engaged with the organised private sector on the issues and challenges impacting on its performance.
Pursuant to its mandate, the PEAC provided creative, sometimes radical solutions for Mr. President to adopt and implement. The choice of interventions was dictated by the PEAC’s terms of reference and guided by the mood of the economy- not by what the president liked or disliked. Consequently, the PEAC’s interventions sought to strengthen institutions, block leakages, engender efficiency in service delivery, promote macroeconomic stability and generally support Mr. President’s team in accomplishing Nigeria’s economic development objectives.
In general, the PEAC told Mr. President what Nigeria should be doing but was not; what Nigeria was doing but should do more or less of, and what Nigeria should not be doing at all. The PEAC, at all times, reminded Mr. President of the benefits of reforms and the risks of inaction.
In recent weeks and months, many Nigerians had sought to know what the PEAC told Mr. President. That is certainly a legitimate demand. From a long list of interventions and recommendations the PEAC submitted, I have selected, without the prior knowledge or consent of my colleagues, to highlight the following for the satisfaction of this demand. This is only a tip of the iceberg…. only time will unveil the full story of the PEAC.
First, following the immersion sessions with MDAs, the PEAC made far-reaching recommendations on institution-strengthening to engender efficiency in service delivery and improve the capability of the MDAs in policy design and implementation. A new coordination framework proposed the creation of a Policies and Programmes Co-ordination Office (PPCO) – to be embedded in the Office of the Chief of Staff to the President – whose primary mandate would be the promotion of synchronicity of actions between government institutions (MDAs) on the national development goals. Its goal was to ensure greater coherence and consistency in the implementation of economic policy.
The PEAC was concerned that intra and inter-agency conflicts and coordination gaps had in the past rendered the delivery of several policy interventions inefficient and blunted their impact.
Second, a Poverty Reduction with Growth Strategy (the NPRGS) was uniquely designed to give teeth to Mr. President’s pledge to lift 100 million Nigerians out of poverty in 10 years. A job creation strategy sought to enhance marginalised youths’ access to economic opportunities by improving their vocational, entrepreneurial and life skills and helping them find productive employment. Creating economic opportunities for the economically marginalised demographics would represent significant implication for social cohesion and national security.
Third, reflecting on Nigeria’s fiscal challenges, the PEAC provided innovative and international best practice forms of financing development – including the establishment of The Nigeria Investment and Growth Fund (NIGF), a private equity style fund, approved in April 2021 as part of the National Poverty Reduction with Growth Strategy (NPRGS). This was a robust strategy to reduce dependence on debt for the financing of critical infrastructure, improve liquidity and generally evolve a more self-reliant financing strategy.
Fourth, the PEAC viewed the fiscal crisis as an opportunity to institute extensive PFM and governance reforms to improve fiscal efficiency, transparency, enhance value-for-money and ultimately create additional fiscal space. On this, it called for a reform of public contracting and procurement process; the decentralisation of delivery structure of Social Investment Programmes; a more effective tracking of all State-Owned Enterprises (SOEs) operations generally and in particular the NNPC, CBN and NIMASA and a reform of the finances of State-Owned Enterprises to effectively bring them within the federal government’s overall fiscal framework.
Fifth, the council had its profound worries about the government’s ‘tax, borrow and spend’ strategy and its level of indebtedness and debt sustainability. It had called for a re-assessment of the projects in the government’s borrowing plan with a view to stepping down all non-priority projects (such as a $500 million loan for the digitalization of NTA) and devolving same to the private sector, promoting public private partnerships in critical infrastructure funding, and identifying more innovative funding options – (such as private sector-led non-debt financing of infrastructure).
Sagagi was the vice chair, Presidential Economic Advisory Council
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