* Nigeria sees 2017 GDP up 2.19 pct y/y
* Sees average yearly GDP growth of 4.62 pct until 2020
* Aims for 15.74 pct inflation this year, from 18.7 in Jan
* Targets oil production of 2.5 mln bpd by 2020
* Cbank aims to have "market-determined exchange rate
By Chijioke Ohuocha and Paul Carsten
LAGOS, March 7 Nigeria unveiled a sweeping
economic recovery plan on Tuesday, including measures to reduce
its dependence on oil and to relax foreign exchange
restrictions, in a drive to pull Africa's largest economy out of
its first recession in 25 years.
The Economic Recovery and Growth Plan 2017-2020, released by
the budget ministry, sees gross domestic product (GDP) growing
an average of 4.62 percent a year until 2020, and hitting 7
percent that year. Growth this year is put at 2.19 percent.
Economists welcomed the measures, which also include selling
assets and hiking a luxury goods tax, though some expressed
doubts that Abuja could meet the ambitious targets it has set.
The plan could smooth talks with the World Bank on a loan of
at least $1 billion and with the African Development Bank on a
credit of $400 million.
The central bank will aim to achieve a market-determined
exchange rate regime, the plan said. But it did not specify
whether this would mean allowing the naira to float freely - a
key requirement for international lenders - or keeping the
current system of dollar injections to address shortages.
Under the plan, the government also aims to ramp up oil
production to 2.5 million barrels per day. Production in
February stood at 1.65 million barrels per day, according to a
Reuters survey of OPEC crude oil output.
President Mohammadu Buhari's government hopes this will
boost export earnings and government revenues by an additional
800 billion naira ($2.63 billion) a year.
Nigeria wants to become a net exporter of refined petroleum
products by 2020, shifting away from its current reliance on
imports of fuel, with limited domestic refining.
The government also expects to earn 35 billion naira ($115
million) from the sale of some assets, including oil joint
ventures, and reducing stakes in other oil and non-oil assets.
The document "provides a refreshingly honest analysis of the
country's economic problems and outlines a variety of sensible
reforms," wrote John Ashbourne, Africa economist at Capital
Economics in London, in a research note.
"We're sceptical, though, that Abuja will be willing or able
to fully implement the ambitious programme," he said, noting
that there could be a lack of political will to push through
some of the more painful reforms, while other targets such as
increasing tax will require more than the measures proposed.
Nigeria has been in negotiations with global lenders for
more than a year to secure loans that could amount to over $2
billion. So far it has only received $600 million from the ADB,
with further loans contingent on its economic reform plans.
In the plan, the government said it would review and
possibly lift a ban on accessing foreign exchange for 41 goods
and services - potentially good news for manufacturers.
The plan forecasts inflation of 15.74 percent in 2017 and
12.42 percent next year. If achieved, this could alleviate
widespread frustration with living costs. In January inflation
hit 18.7 percent, its highest level in more than 11 years.
Nigeria, long criticised for its low levels of taxation, now
aims to increase its overall tax to GDP ratio to 15 percent by
2020 from 6 percent now, partly by improving tax collection and
also by hiking a luxury goods tax to 15 percent from 5 percent.
In the farm sector, another pillar of the economic plan,
Nigeria wants self-sufficiency in rice by 2018 and in wheat by
2019 or 2020. It also hopes to be a net exporter of rice, cashew
nuts, groundnuts, cassava and vegetable oil by 2020.
($1 = 304.5000 naira)
(Editing by Gareth Jones)