By Reinier Starink and Zehan Teoh
“The ERGP had determined US$195.98 billion in private investments required to achieve its target of unlocking sustained inclusive diversified growth for the maximum welfare of Nigerians”
The second largest economy in Africa after South Africa, Nigeria is a uniquely diverse country comprising 371 ethnic groups with over 520 spoken languages. Its economy, however, was dependent on revenues from oil exports and thus had been adversely impacted by the decline in global oil prices in 2014 to 2016.
This resulted in the country experiencing a recession in 2016, leading the government to formulate the Economic Recovery and Growth Programme (ERGP) 2017-2020 to transform the economy. The ERGP requires US$245.13 billion to implement and had determined US$195.98 billion in private investments required to achieve its target of unlocking sustained inclusive diversified growth for the maximum welfare of Nigerians.
With this agenda in hand, the Nigeria’s Ministry of Budget and National Planning, tasked with overseeing the ERGP, appointed PEMANDU Associates to synthesise its plan into realistic implementable initiatives, looking to our experience in deploying our proprietary BFR methodology in effecting economic transformation in countries such as Malaysia, Oman, South Africa and India.
Specifically, they sought help in mobilising private sector investments in six sectors identified as the economy’s most productive. The sectors were then clustered into three workstreams based on their relevance to each other: Manufacturing & Minerals Processing, Agriculture & Transport and Power & Gas.
“The initial interactions with the CEO and leadership of PEMANDU Associates was reassuring and gave a lot for the team to anticipate as to how the Labs would be run, and how this would constitute a key developmental experience for the country, the team members and the Lab participants. The CEO’s inspirational approach was therefore commendable.
The Labs provide extensive involvement of most stakeholders to co-create solutions rather than have the solutions developed by a small team of consultants or just involving the stakeholders for consultation only over a few hours.
Towards the end of the project, the PEMANDU Associates project team and PEMANDU Communications, that assisted with preparing for the Open Day, appeared very outcome-oriented and this was positive. The communications team indeed appeared very positive in their approach and this was commendable.”
– Folarin Alayande, Co-ordinator, ERGP Implementation Unit/Senior Special Assistant to the President (SSAP, Economic Recovery and Growth Plan (ERGP)
Overcoming challenges, bridging gaps
Challenges in crafting a three-feet plan for these clusters for Nigeria, as with most countries in the world, were multi-faceted, stemming from the polarity in expectations between the public and private sectors. Governments typically have a record of amending policies and plans, while the private sector are generally motivated by the bottom line, hence may be cautious in participating in grand government plans.
This was a specific challenge tasked by the Nigerian government to PEMANDU Associates to decrypt. Drawing from PEMANDU’s previous experiences in mobilising private investment, such as the US$444 billion in investments facilitated and identified under Malaysia’s Economic Transformation Programme and the 775 projects valued at US$96 billion identified in the Urban Development Lab in Andhra Pradesh, we found that most economies in the world are dependent on the public sector to spur investments and expenditure.
Our role in Nigeria was to develop and enable a programme that would ensure the government continuously works with the private sector to own, initiate and implement transformational projects that would yield positive multiplier outcomes for the economy.
Thus, for much of the first half of 2018, the PEMANDU Associates project team was stationed in Abuja to conduct the necessary groundwork and undertake Wave 1 of the ERGP Focus Labs.
Under this project, PEMANDU Associates helped the Nigerian government identify US$22.5 billion in private investments which could be unlocked from the implementation of 164 projects, paving the way for the creation of 513,981 jobs.
This was done by encouraging the private sector to take a proactive participation in the ERGP Focus Labs. This proved to be a unique value proposition to the industry captains and with the support of the government who sent key decision-makers to the labs, it generated positive interest amongst the private sectors.
A total of 500 participants from both the public and private sectors, comprising the relevant stakeholders from the three workstreams, were brought together under one roof for six weeks.
Given the existing polarities, the exercise was expectedly met with its fair share of scepticism, with some private sector stakeholders turning up with their products with sales in mind, while some expected to garner public investments. Some, were taken by surprise at the level of involvement required of them, having been used to government-led economic initiatives. So, the challenge was to shift expectations and mindsets from ‘What is in it for me’ to ‘How can I contribute in terms of planning for my sector’.
Nonetheless, the presence of public sector decision-makers in the Labs, and the participants’ determination to achieve tangible results allowed them to put aside their cynicism and work towards to common goal. The private sector became the engine of the labs and the shift in conversation was a remarkable breakthrough.
“We would like to especially commend the management and project team of PEMANDU Associates for organising and facilitating the smooth conduct of the ERGP Focus Labs of the Federal Government of Nigeria, particularly the Agriculture/Transportation Projects.
Our company, Trucks Transit Parks Ltd, benefitted immensely from the programme in the following ways:
– highlighting to the government the social necessity that the project seeks to address;
– bringing to the notice of the government challenges faced by our company in progressing the project;
– assisting us to more properly package our project for fast-tracking by the government;
– enabling us identify certain inherent challenges to attracting investments into the project; and
– putting us in direct liaison with key regulators.
This would not have been possible if not for the professional approach of PEMANDU Associates’ hard-working team.”
– Jama Onwubuariri, Director, Trucks Transit Parks Limited, ERGP Focus Lab member
Getting to work
Once participants were on board, the next challenge was identifying and prioritising initiatives. Projects were categorised to their level of readiness and conversations were created to discuss their business model; from how to grow, plan and finance, with each project put under scrutiny.
These buckets of conversation separated projects ready for implementation and acceleration from projects under incubation. Creating relevant conversations which engaged participants successfully retained participants throughout the whole six weeks of the Labs, producing frank, transparent conversations.
The outcome of the Labs and its in-depth, implementable programmes were presented during an Open Day in Abuja in May 2018.
The Open Day, which was attended by the public and private stakeholders as well as the media, served to communicate the ERGP Focus Labs initiatives to the public.
Together with the Labs, the exercise served to inject greater transparency into the government’s initiatives, representing a good start for the Nigerian government to win over the hearts and minds of the country’s people in its bid to transform the economy.
In applying our 8-step Big Fast Results (BFR) Methodology, the approach in its start will always be met with a degree of cynicism. As experienced in previous projects, however, these sceptics are very quickly won over when they witness how the methodology works, our flexibility to adapt to client needs, all the while staying focused on meeting a clear set of deliverables.
Key to success in any of our BFR consulting projects has always been the team’s commitment to understand the country’s dynamics, the unique relationship between the private and public sectors, its tipping point, diversity and issues. The BFR Methodology has always allowed PEMANDU Associates to take a collaborative approach with participants to steer the conversation towards a true outcome guided by an objective. Leadership commitment and participation is always a mainstay in allowing incredible sharing of knowledge resulting in implementable outcomes.
Nigeria has today completed Steps 2 (Lab) and 3 (Open Day) of 8 and now has a clear plan for the first phase of its ERGP. The Government will now need to set these action plans into a detailed programme by way of a Roadmap for implementation. Coupled with the discipline of action and rigorous monitoring, the Nigerian Government has set itself on the path of transformation. And while the public and private sectors have painstakingly converged to realise this programme of change, the ultimate stakeholders who stand to benefit from this work are the people of Nigeria.