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An idea conceived by the former President Olusegun Obasanjo in 2006, and a policy document in 2007, the draft document of the Vision 2020 was finally launched in 2009 with the aim of positioning Nigeria as one of the top 20 economies in the world by 2020 in 11 years (2009-2020).
With a vision of making the country be a large, strong, diversified, sustainable and competitive economy that effectively harnesses the talents and energies of its people and responsibly exploits its natural endowments to guarantee a high standard of living and quality of life to its citizens, the Vision 20: 2020 rests on three pillars which are:
- Guaranteeing the productivity and wellbeing of the people.
- Optimizing the key sources of economic growth and;
- Fostering sustainable social and economic development
This article is inspired by the column which appeared on Punch Newspaper titled: “Vision 2020: Momento of a Failed Project”. It therefore aims to give a detailed report card of how Nigeria has performed under the three pillars while comparing the key data in 2009 with the ones in 2018 and 2019 as the need be.
Top 20 Economies in the World by 2020
With an estimated GDP value of $496.12 billion in 2020, Nigeria will be ranked 27th position out of the 194 countries in the world in 2020 according to the estimates from the IMF. This represents a nominal GDP growth rate of %11.5 from the estimated nominal GDP of $444.92 billion in 2019. As at 2018, Nigeria ranks 31st with a nominal GDP of $397.27 billion.
Illustration 1: Top 20 Economies in the World (2020)
This therefore explains the failure of the Vision 2020 in making Nigeria be among the top 2020 economies in the world. The reason for this is not far-fetched as there is lack of continuity in government policies especially when there is a change of government. For example, the Present administration came up with the Economic Recovery and Growth Plan (ERGP) as a policy is focused on restoring the growth of Nigeria as well as diversify the economy of the country. This is somewhat similar to the Vision 2020, but without the aim of putting Nigeria in the league of the top 20 economies in the world.
Guaranteeing the Productivity and Well-being of the People
The key data used in comparison here are the National Poverty Index (NPI), Gini Coefficient and Human Development Index (HDI).
The poverty index measures the percentage of people living in poverty and it is obtained from the National poverty head count. The higher it is, the higher the rate of poverty in a country. With a poverty index of 53.5% in 2009, the percentage of people living on less than a dollar in a day was 53.5% of the population of about 155 million citizens. This represents roughly 82 million citizens within the poverty line (Below $1.90). By 2017, the percentage of citizens living below the poverty line ($1.90) was already 61.2% and by 2018, the World Bank classified Nigeria as the poverty capital of the world.
The Gini Coefficient is a measure of income inequality in a country over a particular period of time and its value ranges 0 to 100%. The higher the coefficient, the higher the inequality in the country. In 2009 therefore, Nigeria’s inequality rate was at 43% and by 2017, this coefficient was already at 48.1%. In 2019, Gini coefficient of Nigeria moved up by 0.07% to 48.8%. This means that the inequality net of Nigeria widened over the period of 8 years as there is now a higher inequality rate than in 2009 when the Vision 2020 was birthed.
The Human Development index is used to measure quality of life of citizens as well as their wellbeing over a given period of time. It measures the level of social development in a country and countries are ranked using different indices such as school enrolment, quality of healthcare, access to potable water, level of immigration and emigration, etc. Nigerian was ranked 158 out of 182 countries in 2007 with Human Development Index value of 0.511 behind Uganda (0.514) thereby making it last on the list of countries with classified as Medium Human Development. However, with Human Development Index value of 0.532, Nigeria ranked 157th (behind Zimbabwe and Syria with HDI values of 0.535 and 0.536 respectively) out of 189 countries in 2018.
Optimizing the Key Sources of Economic Growth
Key variables under this section are contribution of the manufacturing sector to GDP and oil revenue as a percentage of total revenue.
The contribution of the manufacturing sector to the GDP is measured as Manufacturing sector GDP as a percentage of the total nominal GDP. According to the data obtained from the CBN, the contribution of the manufacturing sector to the GDP 2.59% in nine years from 7.16% in 2009 to 9.75% in 2018. In Q3, 2019, the manufacturing sector contributed 12.34% to the nominal GDP. This shows that the manufacturing sector is growing and serves as a positive score card to the Vision 2020. This also reflects the diversification policies of the different administrations within the 10 years under review.
Oil revenue as a percentage of total revenue measures the proportion of total revenue that is earned from the sale of crude oil. In 2009, oil revenue was N3.19 trillion representing 66% of the total federally collected revenue of N4.84 trillion. By 2018, the share of oil in the total revenue already dropped to 58% which is good for the economy as it shows that the country is gradually diversifying its earnings potentials away from crude oil. This is also in line with one of the key strategies of the Vision 2020 which aims to diversify the economy of Nigeria away from crude oil by 2020.
Fostering Sustainable Social and Economic Development
The key data used in appraising this pillar are capital expenditure as a percentage of GDP, Corruption Perception Index and Ease of Doing Business Index.
Capital expenditure (CAPEX) as a percentage of GDP is defined as the proportion of GDP that is spent on capital projects. The international benchmark for capital expenditure as a percentage of GDP is 70% and in 2009, Nigeria’s capital expenditure as a percentage of GDP was 2.6% (CAPEX at N1,152.8 billion). However, this figure further declined to 1.30% in 2018 even though capital expenditure increased to N1,682.1 billion. The reason for this is because GDP increased more than the proportionate increase in capital expenditure during the period.
The corruption perception index is an index which ranks countries based on the perceived levels of corruption in their public sector. It is based on a score between 0 and 100 inclusive. The higher the score, the lower the level of corruption and the lower the score, the higher the level of corruption. In 2009, Nigeria was ranked 130 out of 180 countries, with a corruption perception index of 25 representing a decline of 2 points from 27 points in 2007. However, with a score of 27 points, the country was ranked 144 out of 180 in 2018. This shows that the level of corruption reduced in the world as countries had high points to the extent that Nigeria with a score of 27, was still ranked 144. That said, Nigeria’s level of corruption can therefore be said to have decreased based on the data on corruption perception index.
Published by the World Bank, the ease of doing business is an aggregate figures that include different parameters (such as construction permits, tax payment mechanisms, accessing finance, business registration, etc) which define the ease of doing business in a country. In 2009, Nigeria was ranked 118 (out of 181 countries) in ease of doing business, behind Costa Rica (117) and ahead of Russia (120). By 2019, it ranked 146 (out of 190 countries) with a score of 52.89 while Russia is ranked 31 with a score of 77.37. However, the 2020 ease of doing business report ranked Nigeria 131 which is an improvement from the 146 position of 2019. This can be attributed to the establishment of the Presidential Enabling Business Environment Council which is aimed to improve Nigeria’s business environment and lift the country up in the World Bank rankings. And impressively, Nigeria has moved and risen by 39 places since 2015. Compared to 2009, this is however still Negative.
Summary and Conclusion of the Report Card
With a score card of 4 out of 10 marks, it is clear that the vision 2020 did not live up to expectation and the reason for this has been established earlier on. While an improvement to the key sources of growth are positive for the economy, they are not reflecting on social indices such as the poverty index, HDI and Gini Coefficient and as such, leaves the citizens of the country in a worse off situation than they were in 2009. Hence, there is an urgent need for review of existing laws that enjoins an incoming administration to continue with the growth policies of previous administration based on the recommendation of the experts and economic agencies. This is because certain policies can have good intentions but with the discontinuation of the policies by the next or present administration, then the country will be left worse off. That said, we hope the ERGP will be able to achieve all its objectives to translate to an improvement in the well-being of the ordinary citizens.
Download the Economic Transformation Blueprint of the Vision 20: 2020 Here
Download the 2009 Human Development Report Here
Download the 2018 Human Development Report Here
Download the 2019 Ease of Doing Business Report Here
Download the 2009 Ease of Doing Business Report Here
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