The high recurrent expenditure of the Federal Government as opposed to capital expenditure constitutes a major threat to the country’s aspiration of becoming one of the top 20 economies by 2020.
The Chairman, Central Working Group for the review of first National Implementation Plan of the Vision 2020 strategy, Mr Moses Akpobasah, stated this during an interview shortly after submitting the NIP review report to the Minister of National Planning, Dr. Shamsudeen Usman.
The CWG is made up of senior public servants at the federal and state levels, as well as technocrats and representatives of the private sector.
The first phase of the NIP (2010-2013) was geared towards accelerating development, competitiveness and wealth creation for all.
Nigeria’s vision 2020 has an overall macroeconomic target of $300bn Gross Domestic Product by 2013, 86.8 per cent growth in per capital GDP from $1,075 to $2,008, which is premised on an average GDP growth of 11 per cent.
Others are a projected investment of N32tn of which the Federal Government is to commit N10tn; states, N9tn; and the private sector, N13tn.
The 2013 budget makes provision for an aggregate expenditure of N4.987tn, representing an increase of 6.2 per cent over the N4.697tn appropriated for 2012.
This is made up of N387.97bn for statutory transfers; N591.76bn for debt service; N2.38tn for recurrent (non-debt) expenditure, of which N1.717tn is the provision for personnel cost, while overhead cost is projected at N208.9bn and a total of N1.62tn has been provided for capital expenditure.
Akpobasah said, “The plan is performing well, Nigeria has also progressed towards the destination of vision 2020. We were the 41st country in 2009 but now we are the 39th country, which means we are moving towards the 20th largest economies in the world.
“One of the problems is excess expenditure on recurrent items. If you want to generate fast growth, you must do more investment, there must be greater capital investment and we are urging the government to do more in that direction so that a higher proportion of government revenues are allocated to capital projects.”
The Federal Government, according to Usman, will soon begin the consideration of the report of the first National Implementation Plan of the Vision 2020 strategy.
Usman said the review would cover the first three years of the plan (2010 to 2013), and help to provide critical inputs for the development of the second NIP, covering 2014 to 2017.
He said, “We set up this CWG to review the progress that we have made in implementing the plan and achieving the vision. So what they have reported is step-by-step and area by area against the target that we set for achieving the vision and that are the report they have given me.
“I will process this to the Federal Executive Council and after I get a certain approval in terms of the recommendations, then we will make these recommendations public.”
Usman had last year while setting up the CWG said the review of the NIP became imperative due to the dynamic nature of the global economy as the parameters and assumptions upon which the plan were anchored were likely to change.
He listed the recent slowdown in economic performance of advanced countries, volatility in international oil and commodity prices, as well as civil disturbances as some of the global and domestic challenges facing the Nigerian economy.