Review of NEEDS & Development of

NEEDS 2

Presented by

Senator Abdallah Wali Hon. Minister/Deputy Chairman

National Planning Commission

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]

NEEDS sets out to ACHIEVE

Employment Generation

Poverty Reduction

Wealth Creation, and;

Value Orientation.

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

WE ACHIEVED OUR SET TARGETS NEEDS PERFORMANCE ……Targets & Actuals 2003-2007

INDICATOR [%] 2004 2005 2006 2007*

Target Actual Target Actual Target Actual Target Actual

GDP Growth Rate 5.00 6.58 6.00 6.51 6.00 5.67 7.0 7.87*

Oil Sector Growth 0.0 3.3 0.0 0.5 0.0 -4.5 0.0 2.61

Non-oil Sector Growth 7.3 7.72 8.5 8.52 8.3 8.86 9.5 9.33

Poverty Incidence 5.0 5.4 5.0 - 5.0 - 5.0 -

Inflation 10.0 15.0 9.5 11.6 9.5 8.5 9.0

GDP Growth [NEEDS Targets & Actuals]

6

665

7.876.515.676.58

0123456789

2004 2005 2006 2007*

Year

Per

cen

t

Target Actual

Oil Sector Growth Rate [NEEDS] Target Vs Actual

0.53.3

23.9

-4.5

2.61

-10-505

1015202530

Years

%

Target

Actual

3.3 5.11

7.3 7.72

8.5 8.52 8.3 8.869.5 9.33

0123456789

10

%

2003 2004 2005 2006 2007*

Year

Non-oil Sector Growth Rate [NEEDS] Target Vs Actuals

Target

Actual

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;

Sectoral Performance & NEEDS

SECTORAL CONTRIBUTION TO GDP (%) 2004 2005 2006 2007

Agriculture 40.98 41.19 41.77 41.63 Petroleum [Crude Petroleum & Natural Gas] 25.72 24.26 21.93 20.82 Solid Mineral 0.26 0.27 0.28 0.28 Telecommunication & Post 1.20 1.45 1.82 2,23 Manufacturing 3.68 3.79 3.79 4.01 SECTORAL GROWTH RATE Agriculture 6.50 7.06 7.17 7.51 Petroleum [Crude petroleum & Natural Gas] 3.30 0.50 -4.5 2.61 Solid Mineral 10.85 9.53 9.57 9.61 Telecommunication & Post 28.97 28.81 31.98 32.09 Manufacturing 10.00 9.61 9.71 9.77 Source: National Bureau of Statistics

Note: 2006 & 2007 Provisional Figures

Efforts at moving the economy away from reliance on oil

yielding fruit

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

Growth achieving NEEDS Goals ……………………EMPLOYMENT

GENERATION

Greater employment opportunities Quick employment generation survey [Sectoral Growth]

2004[%]

2005[%]

Agriculture 23.90 13.01Communication 3.18 43.75Education 7.32 17.79Solid Minerals 5.50 6.44Source: National Bureau of Statistics

Note: Survey of 500 companies employing 10 persons and above

Manufacturing beginning to create more

job opportunities given reforms and

incentives

Targeted incentives boosting manufacturing export, creating more job opportunities

Employment generation…cont’d

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

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 incidencePoverty incidence level 65.6% -1996

-Estimated population 102.3million Poverty incidence level 54.4% -2004

-Estimated population 126.3million

Present population figure: 140million

Source: National Population Commission -2006 census figure

NEEDS Target: Access to drinking water 70% of population

Poverty Reduction & Wealth Creation

Economic Growth and Multidimensionalapproach to poverty alleviation andwealth 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

Poverty Reduction & Wealth Creation….cont’d

Poverty Reduction & Wealth Creation….cont’d

EDUCATIONCore Welfare Indicator Survey 2006

Adult Literacy Rate 64.2%

Youth Literacy Rate 76.5%

Access to primary school 74.6%

Access to Secondary School 46.3%

Focused Federal Government polices have also encouraged school

enrollment & completion rate

Target of increasing Adult literacy rate from 57% to 65% was achieved

Increased access to education reducing poverty, creating wealth

Establishment of virtual poverty fund to support the attainment of the

MDG’s target of reducing poverty by 50% by 2015

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

Poverty Reduction & Wealth Creation….cont’d

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

PENSION REFORM

Curbing Corruption and Graft Appreciation that corruption and Graft will be punished being

deeply instilled

Value Orientation

264

365 367

27

451

110

399

1140

100

200

300

400

500

No. of Cases

2000 2001 2002 2003 2004 2005

Year

Corruption & Graft Cases Handled by EFCC & ICPC

EFCC

ICPC

Activities of NAFDAC & Standards Organization of Nigeria awakening Producer/Dealer responsibility to consumers

Value Orientation…cont’d

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Number

1999 2000 2001 2002 2003 2004 2005 2006

YEAR

NAFDAC -Food & Drug Control 1999-2006*

Number License applicationsreceived

Imported fake /substandarddrugs impounded

New licenses/NAFDACnumbers granted

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

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

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&T and research innovation to real sector performance

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

Joint Planning Board [JPB] meeting

Retreat for Core Drafting Team

Zonal Consultations

Development of NEEDS 2Pr o g r e s s So F a r…cont’d

WORK PLAN FOR THE PRODUCTION OF NEEDS-2 S/N DATE ACTIVITIES OUTPUT 1. 19/03/07

to 29/03/07

Synthesis of stakeholders inputs for NEEDS-2 development as advertised in the media

Reference materials that would enable further improvement on NEEDS-2 sub-zero draft

2. 30/03/07 to 20/04/07

Core Drafting Team and inter-ministerial NEEDS Secretariat to fine-tune the NEEDS-2 sub-zero draft

Zero draft NEEDS-2

3. 24/04/07 to 26/04/07

Validation of the NEEDS-2 zero draft by relevant Ministries and Governor of CBN. Consultation with the NDDC & Relevant commissioners of the Niger Delta Region

Zero draft NEEDS-2

4.

27/04/07 to 29/04/07

Final Retreat for Core drafting team to incorporate comments and fine tune the zero draft NEEDS-2 document

Improved zero draft NEEDS-2

5. 30/04/07 to 02/05/07

Consideration of zero draft NEEDS-2 document by The President, Economic Management Team and The Federal Executive Council [FEC]

Draft NEEDS-2

6. 03/05/07

Public consultation on NEEDS-2 in Lagos

Draft NEEDS-2

7. 04/05/07 Public Consultation on NEEDS-2 in Owerri

- Ditto -

8. 05/05/07 Public Consultation on NEEDS-2 in Asaba

- Ditto -

9. 07/05/07 Public Consultation on NEEDS-2 in Kaduna

- Ditto -

10. 08/05/07 Public Consultation on NEEDS-2 in Bauchi

- Ditto -

11. 10/05/07 Public Consultation on NEEDS-2 in Makurdi

- Ditto -

12. 11/05/07 to 17/05/07

Synthesizing of document and production of final draft NEEDS-2

- Ditto -

13. 18/05/07 Presentation of final draft NEEDS-2 to The President

- Ditto -

14. 19/05/07 to 28/05/07

The President hands over final Draft NEEDS 2 document to the incoming administration

-Ditto-

THE STRATEGIC FRAMEWORK

To reduce poverty 30% 2011

Wealth creation (10% GDP growth rate)

Employment Generation 10million jobs

Production

Human infrastructure

Physical infrastructure

Peace andSecurity

Service Delivery and macro economic stability

Regional Dev

Cross-cutting issues: Re-orientation of attitudes, Gender, HIV/AIDS, Environment, Science & Tech, Nat. Emerg preparedness

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

GDP Growth Rate [2003- 2011, Actual growth & Projections]

11.711.510.5

9.3

6.58

6.237.8

5.67

0

2

4

6

8

10

12

14

2004 2005 2006 2007 2008 2009 2010 2011

Year

Pe

rce

nt

2004

2005

2006

2007

2008

2009

2010

2011

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

SECTOR 2008 2009 2010 2011

Agriculture 10.63 10.91 11.09 11.18

Solid Minerals 7.89 8.85 9.70 9.99

Manufacturing 12.66 13.25 13.86 14.31

Building & Construction 10.20 10.92 11.54 11.63

Transport 6.11 6.92 7.67 8.03

Communication 10.97 11.29 11.72 12.09

Government Services 9.91 10.07 10.11 10.12

Distribution 12.21 12.88 13.53 14.05

Others 14.38 17.53 20.46 19.63

Total 9.30 10.50 11.50 11.70

Source: National Bureau of Statistics/NPC

Expected GDP growth and Sectoral performance

REAL OUTPUT PROJECTION [2008 – 2011]

NEEDS 2….. …..Where we are going….cont’d

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

Thank You for your Attention