Nigeria’s well-known economic challenges have been exposed by the COVID-19 crisis, but the country has a chance to put it right when the dust settles on the pandemic by giving a larger role to the private sector, experts said Wednesday.
The experts, who spoke during the 2nd edition of the MTN-BusinessDay Digital Dialogue, outlined the direction Nigeria’s economy needs to take to shake off the corrosive impact of the pandemic and also prepare the country for life after the virus has ended.
The webinar, organised by BusinessDay, Nigeria’s premier source of financial and business intelligence, in conjunction with telecommunication giant MTN Nigeria, was moderated by Enase Okonedo, professor and dean, Lagos Business School.
During the webinar titled “The National Economic Emergency: What should policymakers in Nigeria do to avert a potential depression and get our economy on the road to recovery post COVID-19?”, most of the suggestions revolved around a more private sector-driven economy with less government intervention and more investment in infrastructure, particularly health and education, not only by the government but also by private sector.
“The Covid-19 pandemic is a wake-up call for Nigeria to implement the right mix of reforms,” said Kyari Bukar, former chairman, Nigerian Economic Summit Group (NESG).
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Bukar hopes this health crisis caused by the pandemic pushes Nigeria “to open the economy up to the private sector and reduce government’s stranglehold and over-regulation in some sectors of the economy”.
One of such sectors is the oil and gas sector, the country’s cash cow which contributes around half of the government’s annual revenues. The Petroleum Industry and Governance Bill, a piece of legislation that’s mainly supposed to stimulate more private sector investment into the oil and gas sector, has stalled for decades while other countries have since moved to capitalise on Nigeria’s fiscal inertia.
Imo Itsueli, former chairman of state oil company, NNPC and founder of Dubri Oil, who knows more than many about Nigeria’s oil sector, said the economy should be allowed to run the show while the government sets the rules.
“There are many things we have not done well and continue to do badly in the oil and gas sector,” Itsueli said.
He said that Nigeria has continued to produce below 2 million barrels of oil a day because it lacks investments required to ramp up production. The investments have stalled because the country has failed to enforce the required reforms that will attract investments. The failure to stimulate investment has come at the cost of economic growth which has been negative in per capita terms despite an exit from recession in 2016.
The economy could contract by as much as 3.4 percent in 2020, according to estimates by the International Monetary Fund (IMF). That would be the most in three decades, as Nigeria’s already frail economy is hammered by the COVID-19 pandemic which is sending shock waves across the world.
According to Atedo Peterside, founder of Stanbic IBTC Bank and chairman of the ANAP Foundation COVID-19 Think Tank, Nigeria made five crucial mistakes in the fight against the pandemic.
These mistakes include underestimating the coronavirus threat, allowing international flights to come in and not shutting the country’s airspace on time, and the country’s limited testing ability.
The other two mistakes are having a large informal and disorganised society which makes it difficult to track people as well as the inability to look after the poor and handicapped in society, estimated at 80 million people.
These mistakes can be corrected if “we have a general elite consensus that we need to take care of the poor”, Peterside said.
“It is important to look after the poor at this time than anything else,” he said.
He warned that the pandemic fight is not a money fight; it is beyond throwing money to incentivise businesses to jumpstart the economy.
Chidi Odinkalu, professor of Law and former Executive secretary, Nigeria’s Human Rights Commission, was critical of the government’s role in curtailing the spread of the pandemic.
“Nigeria has lacked leadership at this critical time and that is clear with our lack of well thought-out strategy to manage the spread of the virus,” Odinkalu said.
He asked for the presidential task force to be disbanded because it’s full of politicians and propagandists.
“It won’t persuade people to take the government seriously. The task force should have more representation of technocrats and health experts,” he said.
LOLADE AKINMURELE & FRANK ELEANYA
