World Bank and leading chief executives of businesses in Nigeria have tapped fiscal discipline, policy shift, and youths as keys to bailing out the Nigerian economy from recession and stimulating growth in Africa’s biggest economy.
Speaking at the 26th edition of the Nigerian Economic Summit (#NES 26) on Monday, Shubham Chaudhuri, World Bank country director for Nigeria, said the World Bank could not fill Nigeria’s fiscal gap alone as a lot of what was needed to be done by the Nigerian government was required prior to the pandemic.
He stressed the need for fiscal discipline, arguing that Nigeria does not have a debt problem but a revenue issue.
Nigeria’s domestic and foreign debt profile is surging, reaching N31.009 trillion on June 30, 2020, according to the Debt Management Office (DMO). The World Bank and the International Monetary Fund (IMF) have both said the debt is not a problem as it is still within the threshold of 30-40 percent of the GDP. However, Nigeria’s debt service in the second quarter was 71 percent as against 99 percent in the first quarter, and many analysts do not see this as sustainable.
Moreover, government revenue has been down due to the slowing economy and poverty, including leakages across many states. The crude oil provides 70 to 80 percent of Nigeria’s revenue, but oil prices have been down since 2016. Brent Crude price was $45.80 per barrel as of 1.41pm on Monday. Coronavirus has worsened the country’s profile, plunging the country into a second recession in five years.
Ari Aisen, resident representative for Nigeria on IMF, said macro stability and ensuring that investors feel confident to invest are key factors that would improve Nigeria’s fortune economically.
He pointed out that structural reforms should start as soon as possible to promote durable macro stability.
According to Funke Opeke, CEO of MainOne Cable, a Lagos-based communications services company, Nigeria needs a policy shift that would ease the deployment of digital infrastructures across the country.
“All we need is a National Agenda for the deployment of digital infrastructures to all sectors of the economy,” she said, noting that technology adoption has continued to grow in the Nigerian economy, but cautioned that the economy needs more of consumers than producers.
On his part, Asue Ighodalo, chairman, Nigerian Economic Summit Group, said Nigerians at various levels must shun nepotism, greed, and corruption in order to achieve projected targets.
“Let this 26th Summit be the one where we collectively resolve to shun off greed, nepotism, corruption. It is time that we are brave with facing our realities with strength, purpose, and integrity,” Ighodalo said at the 26th edition of the Nigerian Economic Summit (#NES 26) on Monday.
China has shown Nigeria what a serious country can do when it looks back on its history and resolves never to fail its citizens, he said.
Nigeria went into recession in the third quarter of 2020 as GDP contracted in two consecutive quarters. Growth slumped by 3.62 percent in Q3 2020 with major sectors in a deep slump. COVID-19 has been the biggest factor, but major economic policies such as exchange rate management and border management have been flagged by analysts.
Ighodalo pointed out that the Chinese economy has not contracted since 1976 despite trade wars and now pandemic because the leaders have been able to make the best use of their history, human and materials resources to grow their economy and improve the welfare of their people.
Doyin Salami, the chairman of, Presidential Economic Advisory Council, said Nigeria must expand supply, and not manage demand.
“Where we are today in Nigeria is a mentality of poverty. We are managing demand, whereas we should be looking at expanding supply. Nigeria must increase the supply side of her economy,” Salami said.
Chidi Ajaere, CEO of GIG Group, said policy summersault is one of the greatest fears of investors seeking to invest in Nigeria.
Businesses in Nigeria can only be great as much as the government allows it to be, he noted, stressing the need to change Nigeria’s doing business metrics for the better.
Obiageli Ezekwesili, a senior economic advisor at Africa Economic Development Policy Initiative, said only 10 percent of the nearly 200 million young Nigerians who enter the labour market annually would find anything that the International Labour Organisation defines as a decent job. She stressed the need for the government to tap the potential of young people to re-fire the economy.
Ndidi Nwuneli, CEO of AACE Foods and co-founder of Sahel Consulting, noted that the cost of transporting food is too high in Nigeria, stressing the need to improve logistics to stimulate the economy.
“It is cheaper to move a container of potatoes from the UK to Nigeria than to move it from the North,” she said.
President Muhammadu Buhari, on his part, said the Federal Government is promoting a policy that the government buys only locally assembled cars.
Buhari, who was represented by Vice President Yemi Osinbajo, said the private sector needs to play a key role in implementing the national priorities and economic agenda.
“And the private sector must contribute towards the articulation of economic strategies that will support trade and investments,” Buhari said.
He defended a new policy in the draft 2020 Finance Bill, which seeks to slash duties and levies on imported vehicles, stressing that the government plan is to cut down on the present high transportation costs with attendant effect on the entire economy.
Zainab Ahmed, minister of finance, said the current administration is factoring in short- and long-term plans to reverse the current recession, expressing optimism that the economy would bounce back positively in the first quarter (Q1) of 2021.
She cited concerns of the coronavirus pandemic and Nigeria’s commitment to OPEC quotas as key factors that launched Nigeria into economic decline, noting that there are still silver linings in Nigeria’s economy with agriculture, telecommunications, food, and beverages, as well as construction showing resilience.
She stated that the Federal Government, on the back of the Covid-19 pandemic, unveiled the Economic Sustainability Plan to stimulate economic growth, direct labour interventions to support fragile economic situations.
“The present administration is aware of the current economic realities and is working round the clock to reverse the current economic realities. To achieve this, we have the Economic Sustainability Plan to cushion the effects of the pandemic,” she said.
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