Onome Amuge
A new report by the NTU-SBF Centre for African Studies, has shown that Nigeria has the potential to achieve not only economic growth, but also 7% GDP growth and become one of the top 20 economies in the world.
The report outlines a path for the country to achieve this, with a focus on economic stabilisation through a range of reforms, including the phasing out of fuel subsidies, tightening monetary policy, and establishing a flexible unified exchange rate regime.
The Singapore-based centre stated this in a report presented by Amit Jain, the author, at a ceremony held in Victoria Island, Lagos, on Monday, November 27, 2023. The 150-page report, titled “Back to Growth: Priority Agenda for the Economic Revival of Nigeria,” offers a detailed 10-year roadmap for Nigeria’s economic growth and development where it argued that these measures are necessary to achieve the economic reformation that is needed to put the country back on a path of sustainable growth.
In his keynote address, Jain, the director of the NTU-SBF Centre for African Studies, laid out a set of reforms that could help Nigeria get back on track to sustained economic growth. These reforms include a focus on economic stabilisation, attracting Foreign Direct Investments (FDIs), removing barriers to business growth, and investing in infrastructure and human capital. He emphasised the importance of carrying out these reforms sequentially and in a coordinated manner to maximize their impact. He noted that while the reforms may be difficult to implement, they are necessary for the country’s long-term prosperity.
Jain identified four key factors that are likely to influence Nigeria’s economic performance in the next decade: the price of oil, fiscal stability, infrastructure development, and investor confidence. He noted that while the global price of oil is largely out of the country’s control, it can take steps to improve its fiscal situation, develop infrastructure, and attract investors. He further argued that these measures are essential for sustained economic growth in Nigeria.E
Jain went on to identify three key conditions that must be met for Nigeria to achieve sustained growth: a focus on macroeconomic stability, an emphasis on productivity, and an emphasis on shared prosperity.
Dwelling on this, he said, “Firstly, if international trade and the financial markets remain favourable to Nigeria, it would
be able to borrow at concessional rates. Secondly, Nigeria’s demographic dividend will not
be felt unless the working-age population has the right skills to exploit opportunities in a
changing world. Third, and perhaps most important, is governance. Good governance is
critical to ensuring durable economic growth. It would help improve the business climate
and repair the social contract between citizens and the state that has been damaged over
the years.”
As outlined in the report, over the next two years, Nigeria should prioritise economic stabilization. The report suggests ending fuel subsidies, tightening monetary policy, adopting a flexible unified exchange rate regime, and curbing oil theft. These measures are expected to stabilise the country’s finances and prevent a deterioration of the financial situation.
Once the country has achieved stability, the report recommends shifting the policy focus to structural transformation. This, it noted, will require removing barriers to private enterprise and addressing the power shortage.
“Ending fuel subsidy, tightening monetary policy, migrating to a flexible unified
exchange rate regime, and curbing oil theft should stop a bad financial situation from
worsening,”Jain noted.
According to the report, once economic growth has been revived, it is important to focus on ensuring that the growth is sustained over the long term. This will require addressing a number of structural challenges, including improving the business climate, investing in human capital, and increasing productivity. The report also suggests that increasing the productivity of the agricultural sector and encouraging the development of the services sector are critical to sustaining growth.
Jain believes that if the recommendations outlined in the report are implemented, Nigeria could achieve an annual GDP growth rate of 7 per cent and become one of the top 20 economies in the world.
Doyin Salami, an economist and CEO of KAINOS Edge Consulting Limited, argued during the panel session that for Nigeria to experience the kind of growth outlined in the report, the government must make deliberate investments in education. Salami believes that this is essential to building a knowledge-based economy that can compete globally and drive long-term growth.
Salami stated that, in order for Nigeria to see economic growth that outstrips population growth, the country must invest in education. He explained that Nigeria’s future economic prosperity depends on the agro-industry, and that the government must restructure its imports to encourage domestic production. Salami suggested that diversifying the economy and improving infrastructure are also critical components of achieving long-term growth. He also emphasised the importance of a holistic approach to reform, with education at the center.
According to Funke Opeke, CEO of MainOne, the government still has a lot of work to do to create the necessary infrastructure, access to new technologies, and incentives for growth in the digital economy. Opeke noted that the full potential of the digital economy can only be realised if the government takes specific steps to invest in the right skills.
The telecom expert also emphasised the importance of improving access to broadband and other digital infrastructure, as well as developing policies that encourage innovation and investment in the sector.
On his part, Farouk Gumel, Union Bank’s Chairman, pointed out that Nigeria’s growth challenges have little to do with policies or recommendations, but rather with implementation. He stressed the need to get more Nigerians, particularly small and medium-sized enterprises (MSMEs), bankable in order to achieve the desired economic growth.
Gumel noted further that MSMEs are a key driver of economic growth and must be supported through policies and initiatives that encourage access to finance, training, and other support services.
