Review of NEEDS & Development of NEEDS 2

1. Review of NEEDS & Development of NEEDS 2 Presented by Senator Abdallah Wali Hon. Minister/Deputy Chairman National Planning Commission

2. Outline • What NEEDS sets out to Achieve • We Achieved our set Targets • Overview of Economic REFORMS • Sectoral Performance • Current Development Challenges • Development of NEEDS 2 Medium Term Plan[2008-2011]

3. NEEDS sets out to ACHIEVE • Employment Generation • Poverty Reduction • Wealth Creation, and; • Value Orientation.

4. Source: National Bureau of Statistics Note: * Estimates • Economic Performance under NEEDS generally surpassed expectations: • GDP, Oil & Non-oil sector growth as well as inflation did better than set targets

7. Macroeconomic Performance • Stable exchange rate -convergence of parallel and DAS exchange rates achieved • External reserves grew by about 446% from US$7.68 billion in 2004 to US$42 billion at the end of 2006 [NEEDS Target: 26% 2004 - 2007] • Phenomenal growth in net inflow of Foreign Direct investment and portfolio investment • Reduction in the external debt;

8. Sectoral Performance & NEEDS Source: National Bureau of Statistics Note: 2006 & 2007 Provisional Figures • Efforts at moving the economy away from reliance on oil yielding fruit

9. Sectoral performance & NEEDS • Targeted incentives to the agricultural sector propelling growth • The manufacturing sector has similarly experienced phenomenal growth also exceeding set targets • Growth has averaged about 10% over the period exceeding the targeted 7% annual growth for the period • Significant growth despite insignificant growth in capacity utilization • Commerce 44 initiative better positioning non-oil export growth

10. Growth achieving NEEDS Goals……………………EMPLOYMENT GENERATION • Greater employment opportunities Quick employment generation survey [Sectoral Growth] 2004[%] 2005[%] Agriculture 23.90 13.01 Communication 3.18 43.75 Education 7.32 17.79 Solid Minerals 5.50 6.44 Source: National Bureau of Statistics Note: Survey of 500 companies employing 10 persons and above

11. Employment generation…cont’d • Manufacturing beginning to create more job opportunities given reforms and incentives • Targeted incentives boosting manufacturing export, creating more job opportunities

12. Employment generation…cont’d • Significant increase in the number of educational and Health institutions have similarly created more jobs • Power sector also expected to create more jobs on consolidation of reform of the sector and commissioning of the NIPP in 2007

13. Poverty Reduction & Wealth Creation • 2006 Core Welfare indicator survey indicates that the living standards have improved • Access to water 84.4% [2006] • Access to Electricity 54.1% • Progress made in reducing poverty incidence Poverty incidence level 65.6%-1996 -Estimated population 102.3million Poverty incidence level 54.4% -2004 -Estimated population 126.3million Present population figure: 140million NEEDS Target:Access to drinking water 70% of population Source: National Population Commission -2006 census figure

14. Poverty Reduction & Wealth Creation….cont’d Economic Growth and Multidimensional approach to poverty alleviation and wealth creation • Surge in capital market activities -tackling poverty, creating wealth • Positive developments in the Health sector releases productive energy into the economy • Prevalence rate of malaria steadily declined • HIV/AIDS prevalence has also declined

15. Poverty Reduction & Wealth Creation….cont’d • Increased access to education reducing poverty, creating wealth • Target of increasing Adult literacy rate from 57% to 65% was achieved • Focused Federal Government polices have also encouraged school enrollment & completion rate • Establishment of virtual poverty fund to support the attainment of the MDG’s target of reducing poverty by 50% by 2015

16. Poverty Reduction & Wealth Creation….cont’d • Privatization & Divestment Policy • 110 transactions concluded between 1999-2006 • Over $4 billion was realized from sale of enterprises between 2005 and 2006 • 21 port concessions completed • Paved way for reduction in financial burden of government

17. Poverty Reduction & Wealth Creation….cont’d PENSION REFORM • Introduced to address the gap occasioned by unfunded pension schemes in the public sector • Financial burden of government has been reduced since the adoption in 2004 • Fund now nearing N100billion

18. Value Orientation Curbing Corruption and Graft • Appreciation that corruption and Graft will be punished being deeply instilled

19. Value Orientation…cont’d • Activities of NAFDAC & Standards Organization of Nigeria awakening Producer/Dealer responsibility to consumers

20. Value Orientation…cont’d PUBLIC SERVICE REFORMS • Reforms extended to virtually all aspects of the Public Service, including Military and Police • Initial 9 pilot MDAs number of Departments was reduced by 35% • 8000 ghost workers discovered & removed • Rightsizing of the civil service

21. Value Orientation…cont’d Public Service reforms….SERVICOM • Institutionalizing the culture of service delivery in a timely, effective and transparent manner in the public sector • Improvement in performance of some public organizations CAC, NIPOST, FCT • Establishment of ministerial servicom units

22. Current Development Challenges • Reducing poverty in the context of growing population • Growth without a commensurate increase in employment • Large and expanding ‘survivalist’ informal sector • The Niger-Delta challenge • Bridging –Human & Physical infrastructure gaps • Deepening reforms at the sub-national levels • Linking S&Tand research innovation to real sector performance

23. Development of NEEDS 2Pr o g r e s s So F a r • Development of NEEDS 2 at advanced stage • BROAD Based consultation on going • Drafting of NEEDS 2 has commenced • Experts commissioned to prepare position papers on NEEDS 2 • Interministerial NEEDS 2 secretariat • Sub-zero draft on NEEDS 2 • Call for memoranda

24. Development of NEEDS 2Pr o g r e s s So F a r…cont’d • Joint Planning Board [JPB] meeting • Retreat for Core Drafting Team • Zonal Consultations

27. THE STRATEGIC FRAMEWORK To reduce poverty 30% 2011 Employment Generation 10million jobs Wealth creation (10% GDP growth rate) Production Service Delivery and macro economic stability Regional Dev Peace and Security Human infrastructure Physical infrastructure Cross-cutting issues: Re-orientation of attitudes, Gender, HIV/AIDS, Environment, Science & Tech, Nat. Emerg preparedness

28. NEEDS 2…..Where we are goingM e d i u m T e r m O u t l o o k [2008-2011]

29. NEEDS 2….. …..Where we are going….cont’d Assumptions: Key Macro Economic Projections • Continuation of economic reforms • Macroeconomic stability • Favourable political environment and peaceful transition • Major improvement in infrastructure • Weather remains clement • Favourable international oil market conditions • Single digit inflation rate • Aggregate investment to grow by 9-10% on annual basis

30. NEEDS 2….. …..Where we are going….cont’d Expected GDP growth and Sectoral performance REAL OUTPUT PROJECTION [2008 – 2011] Source: National Bureau of Statistics/NPC

31. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Agriculture Targets • Agriculture to grow at an average of 11% • Zero Percent in food imports by 2011 • Generate at least $3billion in agricultural exports by 2011

32. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Agriculture • Strategies • Progressive elimination of food imports & Strive towards food security/surplus • Sustaining of Presidential initiatives on agriculture • Fast Tracking credit at rural level and NACRDB Capitalization • Building of partnerships between financial institutions and farmers to facilitate channeling of credit

33. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Manufacturing Targets • Increase growth rate in manufacturing from 9% to 10% by 2011 • Capacity utilization in manufacturing to rise from 55% to 80% by 2011

34. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Manufacturing Strategies • Provide targeted incentives to deepen linkages between production units and research institutes/universities • Government procurement policy to support local goods • Redress the electricity problem • Closer collaboration between Manufactures and banks to ensure effective access to SMIES funds by manufactures

35. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Infrastructure [Energy] Targets • Raise Electricity generation to over 17000MW by 2011 • Raise electricity Per capita consumption from about 150KWh to over 500KWh • A minimum investment Stream of $12.729 billion to meet the power projection

36. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Energy Strategies • Development of alternative form of energy • Adoption of private public partnership approach and the frontier shift strategy • Introduction of appropriate electricity pricing framework

37. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Information and Communication Technology [ICT] Targets • Increasing teledensity to 0.5% of National Population • Broad band service for at least 75% of residents of all state capitals • 25 million and 90 million fixed and GSM Telephone lines

38. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies -ICT Strategies • Enforcement of service obligations and contractual grades of service by telecom operators • Restructuring of curricular of secondary and tertiary education • Encourage local production of ICT component and sub-system through fiscal incentives to manufacturers.

39. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Oil & Gas Targets • Increase crude oil reserves to 40 billion barrels and production capacity to 4.5 million barrels per day • Gas reserves and termination of gas flaring by 2008 • 70% Local content component by 2011

40. NEEDS 2….. …..Where we are going….cont’d Key Sectoral Targets & Strategies - Oil & Gas STRATEGIES • Sustain implementation of competitive and transparent bidding/allocation of oil blocks and continuation of the EITI • Strengthen production sharing contract (PSC) and explore alternative funding schemes • Implementation of oil and gas policy • Fast track long-term financing of local content and cost effective pricing of gas for local consumption

41. NEEDS 2….. …..Where we are going….cont’d Targets –Education • Target • Increase enrolment by 6% annually at the basic education level • Attainment of teacher/pupil ratio of 1:35 in primary school • 100% transition from primary to junior secondary school • Raise access to quality tertiary education from 1.3m to 2.5m students • ICT training for 50 percent of educators nationally • Increase enrolment of girls by 50% in the 6 States

42. NEEDS 2….. …..Where we are going….cont’d Strategy –Education • Sustain implementation of the Universal Basic Education programme • Implementation of the Child Right Act to facilitate universal access to education • Review curricular and courses taught at universities • Science and Technology, especially ICT to be promoted and mainstreamed into the educational system • Value orientation to be emphasized at all levels of education

43. NEEDS 2….. …..Where we are going….cont’d Targets –Health • Reduce infant mortality rate currently at 113/1000 live births • Lower under five mortality rate currently at 201/1000 live births • Decrease mortality rate currently at 1000/100,000 live births

44. NEEDS 2….. …..Where we are going….cont’d Strategies –Health • Strengthening the Public Health Centers, including routine immunization • Sustain the promotion of community consumer enlightenment • Fostering effective collaboration and partnership of all health stakeholders • Implementation of the National Policy on Health research

45. NEEDS 2….. …..Where we are going….cont’d Targets –Employment Target • Create 10 million new jobs by 2011 • Average annual growth of 2.5million jobs to be created yearly • Jobs to be created in both the formal and informal sectors of the economy

46. The reform programme is now Irreversible The benefits transcends the life of this administration Sustenance of the reforms via NEEDS 2 promises a brighter future for the nation

47. Thank You for your Attention