The African Development Bank (AfDB) at the weekend projected Nigeria’s economic growth to remain around 6.8 percent in 2013, which aligns with the growth expectations for the country,by both the National Bureau of Statistics and the World Bank.
But it said this growth projection would only be possible if those structural reforms that had helped spur non-oil output, which had in turn driven Nigeria’s high growth figures in recent years are sustained. The Agricultural Transformation Agenda, if successful would also help push up growth figures, the bank said.
The bank has also suggested that government should quickly set up an independent body to fix the budget oil benchmark, so that the rancour between the executive and the legislature in the process of fixing this price is stopped, and the budgetary process made more efficient.
The pronouncement came from Ousmane Dore, ADB’s Resident Representative in Nigeria, ahead of the bank’s report on Africa’s Economic Outlook which is being expected by June this year. Dore spoke with journalists in Abuja on the bank’s views on the economy, as well as its activities in the country.
“What we are saying is that the current set up where every year when the budget is presented, you have negotiations, and sometimes a very thorny one, like the 2013 budget, because the House has one reference price, the Senate, the executive proposed one, is not healthy. So the suggestion is that you can institutionalise this process in a way that you have an independent body of experts that will look at all technical factors and come up with a rule based policy that is not subject to political wrangle,” he noted.
Meanwhile, AfDB has so far invested over $3.75 billion (N588 billion) on concessionary terms in all sectors of the country’s economy, as of February, 2013.
The bank however applauded government’s effort at ensuring prudent macro-economic management of the economy over the past few years, which had encouraged high growth figures.
The bank also commended the authorities for containing inflation to single digits within the first two months of the year, which it observed, was helped by the tight monetary measure of the Central Bank of Nigeria (CBN) and the fiscal measures of the government. It believes that single digit inflation forecast for the year is possible, if the authorities continue implementing the appropriate policies.
On the fiscal side, the bank observed that government has moved from the pro-cyclical to counter cyclical macro fiscal policy since 2011 with budget execution consistently in tune with the fiscal responsibility law, which has helped the deficit to remain within the 3 percent of GDP range.
But the worry, according to the Dore, is that even the high growth and solid macroeconomic performance has not translated into job creation or employment growth, but rather unemployment has remained stuck at double digit level, while poverty levels are rising. “This is worrisome,” the bank’s country representative said.
ONYINYE NWACHUKWU, Abuja