Unpacking Nigeria's recovery plan

Nigeria's economic recovery plan, outlined in the Economic Recovery and Growth Plan (ERGP), aims to stabilize the country's macroeconomic environment by focusing on lower inflation, stable exchange rates, and sustainable fiscal and external balances by the year 2020. Bukar Kyari, Chairman of the Nigerian Economic Summit Group, discussed the implications of this plan on businesses in the country during an interview with CNBC Africa. The ERGP emphasizes several key principles, including addressing constraints to growth, leveraging the power of the private sector, promoting national cohesion and social inclusion, and allowing markets to function efficiently. By recognizing the importance of market forces and upholding core values like dignity of labor, the plan aims to create a conducive environment for business growth and investment. One significant aspect of the plan is its potential to attract fresh investments, particularly in sectors like agriculture. However, effective implementation and follow-through are crucial for the plan to translate into tangible benefits for the economy and its people. The document is being closely scrutinized by international development agencies like the World Bank and African Development Bank, which could influence their decisions to support Nigeria financially based on the credibility and feasibility of the plan. In terms of monetary policy, Kyari emphasized the importance of market-driven mechanisms to enhance the value of the Naira and boost investor confidence. He suggested adopting a strategy similar to the Egyptian model, which involved reaching out to the IMF for financial support and floating the currency. The Egyptian experience demonstrated that such bold measures could lead to currency appreciation and increased investor interest in the country's economy. Furthermore, Kyari proposed exploring options such as asset sales and refinery investment to bolster dollar supply and stimulate economic growth. By selling underperforming assets or refineries to willing investors, Nigeria could attract foreign capital and expertise to revitalize its industrial sector. However, challenges related to repatriation of profits and contractual obligations need to be addressed to instill confidence in potential investors. Overall, Nigeria's economic recovery plan holds promise for revitalizing the economy and attracting investments, but effective implementation and strategic monetary policies will be crucial in achieving sustainable growth and stability in the long run.