Economists outline ways to ease Nigeria’s economic woes

Adeola Adenikinju, president of the Nigerian Economic Society (NES), has highlighted some policy reform recommendations to ease the economic woes in Nigeria.

Speaking at a recent virtual event theme ‘One year of Tinubunomics: Analysis of impacts and lessons’, Adenikinju said the implementation of effective social transfer programmes in leveraging technology to target beneficiaries should benefit the poor.

“The N8,000 that the government initially wanted to give Nigerians was reversed because the middle class said it was too small but that same N8,000 monthly to some people in Nigeria is a lot of money and some are even dying because they can’t afford N1,000 to buy drugs. I think it was a great mistake to eliminate such a plan and it’s important that we find a way to assist the poor in any reform,” he said.

“From the government’s renewed hope agenda and its core strategies, Tinubunomics is not a fully liberal or market-based system. However, the key elements of Tinubunomics include a strong government and fiscal system where the government can play an active role in the economy,” he said.

He added that the dominant rule of the fiscal system needs the support of monetary policy in creating the objective of maximising welfare of creating jobs and growth. It indicates guided rules for the market and the ability to achieve the impossible trinity: low interest rate, low inflation rate, and a stronger naira.

Adenikinju, in his presentation, highlighted that the conceptual issues and success factors in implementing reforms are the need to fully understand the socio-economic environment, the stylised facts, and structural constraints.

“Deep conceptual understanding of the economy and the binding constraints; proper timing, sequencing, and phasing of reforms; proper understanding and communication of reforms by the reform leaders are also required,” he added.

Another key solution he highlighted is that policy implementation should recognise the importance of adopting well-thought-out policy sequencing to minimise the bunching of multiple negative effects of major reforms on the economy within the same period.

“It should be based on a thorough analysis of the likely economic and social impacts of reform policies and the appropriate mitigating factors,” he said.

He added that the government needs to find a way of unlocking huge fiscal finance resources from moribund and non-performing national assets in collaboration with the Ministry of Finance Incorporated (MOFI) with knowledge of how to monetize these assets to generate flow of money into the country.

“Diversification is very important. We should focus on policies to transition the economy away from a one-resource-based economy to economic diversification, reducing dependence on crude oil revenue, and meeting domestic demand for goods and services while reducing imported equivalents or substitutes,” he noted.