By Omoh Gabriel, Business Editor
The Federal Government will in the 2007 fiscal year introduce the second phase of the National Economic Empowerment Development Strategy NEEDS meaning that the first phase of NEEDS ends this fiscal year. The hint of the pending introduction of phase 2 of NEEDS was dropped on Wednesday by President Olusegun Obasanjo at the just concluded 12th Nigerian Economic Summit, NES12 when in his opening address he said “The challenge for us is to evolve a mechanism that will enable us increase and sustain the level of growth achieved so far for the benefit of our citizens. The preparation process of Phase 2 of NEEDS has equally commenced and it is aimed at consolidating the gains of NEEDS1 with a direct focus on employment generation. I urge that the private sector should position itself to participate actively in the process”.
The President however did not give details.
But Professor Charles Soludo, the Governor of Cental Bank of Nigeria and one of the President’s Economic management team in his power point Presentation at the summit disclosed that NEEDS 2 will begin in 2007 and terminate in 2011, a five year development plan circle.
According to Soludo ‚ÄúNEEDS 2 will commence in 2007 and terminate in 2011″ a five year development plan circle. Soludo said that the reforms embodied in the NEEDS document are likely to be sustained due to ownership by the populace in Nigeria. The ‚Äúreform process in Nigeria‚Äù he continued ‚Äúis not an event but a process, a long one to serve Nigerians‚Äù.
Stating the need for the second phase of NEEDS the Minister of Finance another member of the President‚Äôs economic management team said ‚ÄúThe achievements of GovernmentÃìs fiscal reforms have improved significantly the conditions for Private Sector development. For instance, macroeconomic stability has created an environment within which the Private Sector is more confident to invest and Nigeria is a more attractive destination for Foreign Direct Investment (FDI) – net FDI inflows increased from 5.1 per cent of GDP in 2003 to 6.3 per cent in 2004″.
She said “Overall, fiscal reforms have played an important role in enabling the economy to record increased economic growth rates since 2003. Over the past three years real economic growth has averaged about 7.6 per cent per annum, which is a significant increase on the average real growth rate of about 3 per cent achieved over the previous two decades”.
Continuing She said “While the three years of economic reform have achieved a great deal, they are not enough to compensate for the decades of economic policy mismanagement that we suffered in Nigeria. We still face a number of problems, particularly with the provision of infrastructure (power, roads, and water) and in the weakness of our social indicators (education, health) when compared internationally. These factors place binding physical and human constraints on Nigeria̓s Private Sector, thereby weakening its competitiveness.
“Simply put, resolving these problems will require significant increases in Government expenditure over time. Government will, of course, continue to focus on structural and public expenditure reforms to ensure the most productive use of Government resources. However, the need for increased expenditure is inescapable and will place significant pressure on fiscal policy in the years to come. Government must continue to adhere to the rules articulated in the draft Fiscal Responsibility Bill and the Central Bank of Nigeria will need to be proactive to ensure that it can manage the liquidity situation so as to ensure monetary policy stability. In this regard, we made provisions in the 2006 budget to fund the cost of new treasury bills.
“In the coming years Government will intensify efforts to diversify our economy away from oil. In terms of fiscal policy, as Government increasingly targets the non-oil primary fiscal deficit, alternative sources of revenue wilt have to be developed. The Private Sector will need to get used to the idea that it has to pay tax, and become adept at using transparent and democratic processes to pressure Governments at all levels to spend public funds on the priorities needed to grow the economy. I would like to conclude by reminding you of the words I used at the start of this lecture: the need for us all to unite to ensure that we do not let down
the next generationof Nigerians.Despite the beneficial results that GovernmentÃìs economic reforms have delivered in such a short space of time we still have challenges of sustaining the reforms through appropriate legislation. We still have a number of bills pending in the National Assembly, and we appeal to Parliament to pass the bills.
It is the responsibility of us all to work against those whose selfish interests would undermine economic reform. The economic policy environment created by the leadership of President Olusegun Obasanjo gives us a unique opportunity to unleash our nation̓s potential Рlet us seize it”.
File : Obasanjo 10/06/06
