Over the last decade, by its sheer resilience, the Nigerian economy has survived two recessions and a once in a lifetime global pandemic. In addition, headwinds have manifested in the fallouts of global financial crises as well as new shifts in international arrangements which have sparked tensions and wars, such as the War in Ukraine. For an economy such as ours that is heavily vested in agriculture, extreme weather resulting from climate change has exacerbated domestic tensions due to scarcity of shared resources, even as these changes further undercut global harvests, lowering food production, increasing shortages, and causing prices and instability to rise.
As a whole, the global economy has been slow to resolve and adapt to these new conditions. Supply chains remain unreliable. Production is suppressed. Trade costs have increase. Political tensions spread. During this period, the nation’s average economic growth has been positive, but not robust enough to translate into significant improvement in the socio-economic condition of the people.
Nigeria is home to over 36.9 million MSMEs, comprising 96.7% of all businesses in Nigeria. 67% of these businesses are youth-owned. MSMEs contribute over 45% to the country’s gross domestic product (GDP), with 98.8% of them in the micro cadre. They account for nearly 90% of the jobs in the country. Therefore, as MSMEs grow, they create more jobs, which leads to prosperity for more, and less insecurity across the country. With business climate reforms, our job is to unlock the constraints faced by these businesses and support them by making it progressively easier for MSMEs to start and grow their businesses so they can thrive and scale.
It is an undeniable fact that over the past two terms of the current Administration of President Muhammad Buhari, under the auspices of the All Progressives Congress (APC), unprecedented strides in improvement of the nation’s infrastructure stock has been made with the delivery of over 1,000 kilometers of roads and bridges, rail networks, airport terminals and more.
Importantly, for the first time in Nigeria, soft infrastructure was also prioritized with an ease of doing business intervention coordinated through the Presidential Enabling Business Environment Council (PEBEC) Chaired by His Excellency, the Vice President. The Council partners with stakeholders from all arms and levels of government and the private sector to reduce the costs and time of doing business by removing bureaucratic and legislative bottlenecks, facilitating access to justice and enhancing transparency, particularly through the use of technology. The over 180 reforms implemented to date, with particular emphasis on six sectors/sub-sectors disproportionately populated by our youth, (agribusiness, creative sector, light manufacturing, tech, transport and logistics and decentralized power), have earned us some level of trust from the private sector stakeholders as well as renewed credibility with informed international audiences. However, our work has not been without its challenges.
Building on this foundation, the President-elect, Asiwaju Bola Ahmed Tinubu and the Vice President-elect, Senator Kashim Shettima are set to quickly and decisively address the most pressing constraints directly affecting MSMEs in the next Administration. These challenges include insecurity, infrastructure deficit, inflation, and foreign exchange problems (now compounded by Naira scarcity) by improving productivity and trade facilitation, among other regulatory policy and implementation reforms.
We are aware that these challenges are manifold, but we are confident that they are not insurmountable. The antidote to insecurity, and to the type of inflation we are currently experiencing, is increased productivity and competitiveness, with stable, predictable policies -for example, a single, transparent foreign exchange rate for both domestic and foreign transactions.
The next Administration will urgently address fiscal, monetary, and trade reforms to effectively increase domestic production, thus serving to curb inflation, and to ensure better macro-economic stability by accelerating inclusive growth and job creation across Nigeria – key enablers for MSMEs to deliver prosperity for all.
In 2022, the largest contributors to Nigeria’s GDP in the first three quarters were the Services sector, which grew by 7.1% mainly thanks to ICT and professional services, the Agricultural sector, which experienced weak productivity levels with a growth of 1.8%, and the Industrial sector, which remained in the contraction territory, posting negative growth of – 5.7% over the same period. Yet, these sectors are where the jobs are. They are, therefore, the top priority of the next Administration.
No modern economy has developed without a strong industrial base, and Nigeria is not likely to be different. Therefore, productivity and competitiveness are essential if Nigeria is to increase exports, and take maximum advantage of the African Continental Free Trade Area through a strong industrial base. The next Tinubu-led Administration is already committed to aggressively supporting non-oil exports to earn desperately needed foreign exchange and revenue for the economy.
The antidote to insecurity, and to the type of inflation we are currently experiencing, is increased productivity and competitiveness, with stable, predictable policies
Till then, we shall continue to strive towards a reformed regulatory environment by deepening the implementation of Executive Order 001 on transparency and efficiency of public service delivery to businesses, which has recently been codified, along with other important reforms such as the legislation of a Single Window for trade facilitation, under the Business Facilitation (Miscellaneous Provisions) Act, 2023. This Act will ensure sustainability of existing reforms and act as a springboard for catalytic interventions in this area by the next progressive Administration. Then, we shall quickly extend bridges of collaboration based on mutual respect to our business owners so they can trust the process to grow with renewed confidence.
Clearly, the economic performance of any nation is directly linked to the pace of reforms. We shall prioritize proper coordination of our economic policy, and implement key reforms with intentionality in the short term to medium term and beyond.
Practically speaking, this will mean a single-minded pursuit of growth-promoting, employment-creating, and poverty-eradicating policies, with renewed vigour, as outlined in our manifesto “Renewed Hope 2023: Action Plan for a Better Nigeria”.
Dr Oduwole is Special Adviser to the President on Ease of Doing Business and Executive Secretary to the Presidential Enabling Business Environment Council (PEBEC). She is Economic Adviser to the Presidential Campaign Council of the All Progressive Congress.