Macroeconomic

Projections for the

MTNDP(2021-2025):

Visioning, Growth Diagnostics and Projections

March 24, 2021

Presentation of the Central Working Group

by

Professor Adeola Adenikinju

University of Ibadan1

Context Setting

2

Background

Existing Plan

Document/PeriodSuccessor Plan/Period

Methodology for the

new Plans

The Past/Present The Future The How

Economic Recovery and

Growth Plan (ERGP)

2017-2020

Vision 20:2020

Medium Term National

Development Plan

(MTNDP)

2021-2025

Agenda 2050

2021-2050

Macroeconometric

Model

Input Output Model

*Dynamic Computable

General Equilibrium

Model

*Systems Dynamics

(iSDG)

3

01 0302

This describes the vision of

Nigeria in the medium to long

term as well as underlying

assumptions and targets. The

visioning document sees Nigeria

among top 10 countries in the

world by 2050

This presents the macroeconomic

projections for the Medium Term

National Development Plan (2021-

2025)

This identifies and prioritises the

binding constraints to Nigeria’s

economic growth process

This presentation summarises three key reports of the Central Working Group

Background

Macroeconomic FrameworkThe Vision Document Growth Diagnostics and

Binding Constraints

4

Visioning of Nigeria

5

Nigeria’s vision in the medium and long term

Medium Term

2021-2025

Long Term

2030AGENDA 2050

The Reforming Nigeria –

Driven by Made in

Nigeria

Nigeria becomes a leading

industrialising country and

reforming nation in Africa that

focuses on building its State

Capacity and capabilities

The Competitive

Nigeria- Driven by

Inclusive Growth and

Shared Prosperity

Nigeria becomes a socio-

politically cohesive nation that

is resilient to global shocks,

achieves the SDG and lifts 100

million people out of poverty

The Dominant Nigeria –

Driven by Africa’s Most

Competitive Leaders &

Workforce

Nigeria becomes a socio-

economically advanced and

industrialised nation. Africa’s

most open, competitive,

economically diversified and

inclusive economy

6

Vision of Nigerian Economy of the futureIn the Medium to Long Term, we envision a Nigerian Economy that is:

• Less reliant on oil and gas for revenue and foreign exchange

• Focus on Agricultural Transformation and Food Security

• Guarantee energy sufficiency in power and petroleum products

• Advanced Transportation and Other Infrastructures

• Highly Industrialised, technologically advanced and diversified

economy

• High quality Health and Educational outcome and Productivity of

Nigerians

• Enhance Social Inclusion and Reduce Poverty

• Low Corruption and robust Governance structure

• Guarantees security of life and property for all Citizens

• A Private Sector led economy

7

Domestic Growth

Constraints

8

Domestic Growth

Constraints

Market Failure: This entails inefficient distribution of goods and services in Nigeria.

Key issues are information externalities and coordination externalities.

Government Failure: This looks at several inefficiencies that are occasioned by

government interventions. Areas of focus are macroeconomic instability, weak

institutions, corruption and hostile business environment, including security.

Low levels of private investments: Issues relating to uncertainty, challenging

business terrain, regulatory lapses among several factors have limited the growth of

private sector investments in Nigeria. Key issues here are high cost of finance, low

private savings & poor financial intermediation.

Low Social Returns: Low labour productivity, human capital deficiencies and low

quality of infrastructure have been major constraints to Nigeria’s economic growth

over the years. Areas of focus are low human capital and poor infrastructure.

Addressing key domestic growth constraints is crucial to realization of a

strong, reliant and prosperous Nigeria

9

Macroeconomic Projections for the MTNDP(2021-2025): Results

10

Share of GDP (%) 2021 2022 2023 2024 2025

Private Consumption Expenditure66.01 62.77 61.46 60.92 61.01

Gross fixed capital formation 27.07 28.62 29.03 29.50 29.61

Public Investment2.52 3.00 2.82 2.73 2.68

Private Investment25.46 26.60 27.26 27.88 28.08

Domestic Saving 25.21 27.77 29.08 29.89 30.10

Private Saving28.58 31.41 32.27 32.49 31.95

Private Consumption Expenditure66.01 62.77 61.46 60.92 61.01

Real Sector Indicators

7.9 7.9 7.8 7.7 7.6

92.1 92.1 92.2 92.3 92.4

2021 2022 2023 2024 2025

Oil GDP Non-Oil GDP

Oil & Non-Oil Component of GDP

– Percentage

Sector Share of GDP –

Percentage

24.6 24.4 24.3 24.2 23.8

28.0 28.6 29.3 29.8 30.2

47.37 46.94 46.39 46.03 46.03

2021 2022 2023 2024 2025

Agric GDP Industrial GDP Services GDP

Real Sector – Growth Performance

0.82

2.27

(1.92)

1.9

3.7

5.6

2017 2019 2021 2023 2025

Real GDP Growth rate –

Percentage

-1.37

2.2

3.08 3.41 3.072.22

3.273.75

4.73

5.85

2021 2022 2023 2024 2025

Oil GDP Non-Oil GDP

Growth Rate of Oil &

Non-Oil Sectors –

Percentage

2021 2022 2023 2024 2025

Agriculture GDP Growth Rate (%) 2.12 2.46 3.07 4.1 3.87

Industrial GDP Growth Rate (%) 13.9 5.94 6.83 6.74 7.41

Services GDP Growth Rate (%) -3.05 2.25 2.47 3.81 5.62

Private Consumption Expenditure Growth

Rate (%)

1.94 2.12 4.09 4.26 5.06

Gross fixed capital formation Growth Rate

(%)

-0.23 6.26 6.6 7.04 8.26

Private Investment Growth Rate (%) -0.44 3.86 6.28 7.01 7.24

Public Investment Growth Rate (%) 31.43 9.17 10.24 10.65 11.79

Development Indicators

Nigeria’s Unemployment Rate (%)

20

23.1

25.9

23.9 23.522.2

20.8

19.3

2017 2018Q3 2020 2021 2022 2023 2024 2025

50

52.653.2

55.1

57.1

59.1

2020 2021 2022 2023 2024 2025

Total Full Employment (Million)

55.2

55.5

55.7

56

56.2

56.5

2020

2021

2022

2023

2024

2025

Life Expectancy at Birth (Years)

62.7

63.7

64.364.6 64.7

64.5

2020 2021 2022 2023 2024 2025

Adult Literacy Rate (%)

Development Indicators

2024202320222020 2021

53%

51.9%

50.5%

49.2%

47.7%

46.2%

2025

Nigeria’s Poverty

Rate (%)

External Sector

0.70 0.83

0.95 1.11

1.33

2.33 2.50

(0.81)

2.94

3.22

2021 2022 2023 2024 2025

FDI , inflows (BoP)

FPI, Inflows

0.41%

1.36%

0.43%0.44%

0.46%

0.49%

1.30%

-0.38%

1.21%

1.19%

FDI as a share of GDPFPI as a share of GDP

Foreign Capital Import (N'Trilion)

15.936.7

18.528.5

Foreign Debt (N'Trilion)

24.2

2021 2022 2023 2024 2025

Foreign Debt - Share of GDP (%)

9.28 9.60

11.21 11.79

12.39

2021 2022 2023 2024 2025

External Sector

9.91%

10.88%

11.10% 11.07%11.03%

10.16%

9.70%9.28%

9.06% 9.02%

Exports – Share

of GDP

Imports – Share

of GDP

2021 2022 2023 2024 2025

2021 2022 2023 2024 2025

17.0

21.0

24.0

26.8

30.0

17.4 18.7

20.0 21.9

24.5

(0.2)

2.6 4.4

5.4 6.1

2021 2022 2023 2024 2025

Exports Imports Current Account Balance

86.1%

Share of oil in exports

Trade Sector (N'Trilion)

84.0%

81.8%

77.9%

72.3%

Monetary/Financial Sector

23.3 21.5

23.424.7

25.7

19.720.5 20.6 20.9

21.6

2021 2022 2023 2024 2025

Broad money Credit to the Private Sector

Financial Market Indicators (Share of GDP)

39.541.0

49.9

59.2

69.1

33.3

39.0

44.0

50.0

58.0

2021 2022 2023 2024 2025

Broad money Credit to Private Sector

Financial Market Indicators (N’Trilion)

Fiscal Sector

4.4

5.5

6.67.5

8.8

10.4

12.6

13.9

15.1

16.3

2021 2022 2023 2024 2025

Revenue Expenditure

Federal Government Revenue & Expenditure (N’trillion)

17% 25% 28% 29% 36%

83% 75% 72% 71% 64%

2021 2022 2023 2024 2025

Independent Revenue Oil Revenue

Composition of Federal Government Revenue

Composition of Federal Government Expenditure

67% 63% 65% 65% 64%

33% 37% 35% 35% 36%

2021 2022 2023 2024 2025

Recurrent Expenditure Capital Expenditure

Fiscal Sector

6.0

7.1 7.37.7

7.4

3.53.7

3.43.2

2.7

2021 2022 2023 2024 2025

Fiscal Deficit (N'Trilion) Fiscal Deficit (% of GDP)

Fiscal Deficit

1.50

2.50

3.50

4.50

5.50

6.50

7.50

2021 2022 2023 2024 2025

Revenue Government

Growth Rate of Revenue and Expenditure

(%)

IGR would replace FAAC as the main revenue source for States while status quo remains for LGAs

77%

79%

54% 55%55%

54%51% 46%

19%

16%

29%27%

27%

28%

32%

37%

4%

6%

16%17%

18%

17%

17%

17%

2018 2019 2020 2021 2022 2023 2024 2025

FAAC IGR Other Revenue

Composition of States’ Revenue by Sources

(N'Billion)

Composition of LGAs’ Revenue by Sources

(N’Billion)

5,392

3,959

4,688

2,3522,644

3,095

3,722

4,475

94%94%

88%89%

90%90%

90%89%

2%

2%

3%

2%

2%

2%

2%

2%

5%

5%

9%

8%

8%

8%

8%

9%

2018 2019 2020 2021 2022 2023 2024 2025

FAAC IGR Other Revenue

2,196

1,665

1,924

1,1211,298

1,528

1,780

2,024

States would face fiscal stress and mounting domestic debts

States’ Recurrent Expenditure

(N'Billion)

States’ Domestic Debt

(N’Billion)

1,042906

811

9851,146

1,304

1,511

1,751

2018 2019 2020 2021 2022 2023 2024 2025

3,939

3,252 3,260

1,931 2,1162,482

3,1783,493

97% 97%

95% 94% 94%95% 95%

95%

3% 3%

5% 6%6%

5%5%

5%

- 500.00

1,000.00 1,500.00 2,000.00 2,500.00 3,000.00 3,500.00 4,000.00

2018 2019 2020 2021 2022 2023 2024 2025

Non-Debt Recurrent Expenditure Debt Recurrent Expenditure

States’ Capital Expenditure

(N'Billion)

-

4,000

8,000

12,000

16,000

20,000

24,000

28,000

2018 2019 2020 2021 2022 2023 2024 2025

(800.00)

(600.00)

(400.00)

(200.00)

-

200.00

400.00

600.00

2018 2019 2020 2021 2022 2023 2024 2025

States’ Budget Deficit

(N’Billion)

LGAs would continue to spend more on salaries and other recurrent expenditure

LGAs’ Total Expenditure

(N’Bilion)

Composition of LGAs’ Budget Deficit

(N’Billion)

49.26 36.10

301.93

402.99

502.25

630.40

703.99

748.78

2018 2019 2020 2021 2022 2023 2024 2025

81%

58%

76%79%

78%78%

78%77%

19%

42%

24%21%

22%

22%

22%

23%

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

2018 2019 2020 2021 2022 2023 2024 2025

Recurrent Expenditure Capital Expenditure

1,7198 1,7311,690

9691,053

1,199

1,364

1,546

• Trade,

telecommunications are

the leading sectors.

• Manufacturing,

Construction, Crude

Petroleum & Natural Gas,

Education, agriculture

rank top ten sectors.

• Some of the leading

sectors trade, agriculture

education, will help

address poverty, and

gender related issues.

1.6

1.5

1.4

1.3

1.3

1.2

1.2

1.1

1.1

1.1

1.0

0.9

0.9

0.9

0.9

0.9

0.8

Trade

Telecommunications

Food, Beverage and Tobacco

Textile, Apparel and Footwear

Professional, Scientific and Technical…

Construction

Education

Crude Petroleum and Natural Gas

Crop Production

Human Health and Social Services

Livestock

Fishery

Public Administration

Other Services

Forestry

Chemical, Chemical Products and…

Arts, Entertainment and Recreation

Sectors that can drive Nigeria’s significant potentials

Different weight

assigned

Output

= 29.5%

Income

Employ

ment

Linkages

= 20.5%

= 36.4%

= 13.6%

23

24

Key Findings and Policy Implications

Enable, resource and promote key sectors identified by the

IO model

• Some required direct investment

• Others need policy support

Promote private sector participation in the economy

• Macroeconomic stability

• Policy and regulatory stability

Provide enablers of development

• Infrastructure (power, transportation, energy, ICT, etc)

• Institutions (governance, security, legal frameworks, etc)

Policy Focus next 5 Years

Strengthen intersectoral, interregional linkages

• (rural-urban, urban-urban) linkages

Improve government financing to enable the State play a

developmental role

• Governments at all levels must be resourced to play

developmental role

Thank you

25