Nigeria’s ambition to build a $1 trillion economy by 2030 is achievable if critical policies are implemented within the next three years, Oluwaseyi Odufuwa, a financial analyst has said.
Odufuwa, who is also the managing director of Capital Plus Ltd., made this assertion in an interview with NAN in Lagos on Wednesday, noting that sustainable finance was crucial for long-term economic growth.
“President Bola Tinubu has emphasised the need for Nigeria to reach a one-trillion dollar economy by 2030. This goal is attainable within the next six years, though some economic experts have expressed scepticism based on the current economic trends,” he said.
Odufuwa, an investment banker with over 20 years of experience, said that the $1 trillion target was realistic if Nigeria adjusted its monetary and fiscal policies.
He noted that Nigeria’s gross domestic product (GDP) currently stands at $253 billion, with a growth rate of 3.2 percent in the second quarter of 2024, compared to 2.51 percent in 2023.
He added that while the 2024 budget benchmarked growth at 3.76 percent, the current growth rate of 3.1 percent, though not ideal, is a sign of progress.
Odufuwa emphasised that to achieve a $1 trillion economy, Nigeria must increase its GDP growth rate to a minimum of six percent annually. He outlined several key policies that the government should prioritise to meet this target.
Odufuwa stressed the need to curb inflation, particularly headline and food inflation, noting that both remained high in recent years.
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“Food inflation accounts for 40 percent to 41 per cent of headline inflation.
“Headline inflation has only dropped to 33.4 per cent year-on-year, which is still high.
“If we tackle food insecurity, inflation could fall to around 28 per cent or 29 percent, boosting food sufficiency and freeing up the foreign exchange (FX) from food exports, which in turn will grow the GDP,” he explained.
Odufuwa also called for a reduction in the revenue-to-debt servicing ratio to create more liquidity in the foreign exchange market and support infrastructure development.
He highlighted that while the ratio had dropped from 97 per cent to 63 per cent, the global standard, according to the World Bank, is 22.5 percent.
“If the government sustains this downward trend, more funds will be available for capital projects, which will, in turn, stimulate economic growth and increase the GDP,” he added.
The expert pointed out that the government must meet the Organisation of Petroleum Exporting Countries (OPEC) target of increasing oil production to two million barrels per day from the current 1.4 million barrels.
He acknowledged that insecurity in oil-producing regions had been a barrier but noted that achieving the two million barrels per day mark would generate over one billion dollars per month.
The analyst said that this would ease pressure on the naira and spur economic growth.
Odufuwa called for the rebasing of Nigeria’s GDP, which was last done in 2014 when it increased from 270 billion dollars to 510 billion dollars representing a 90 percent rise.
He mentioned that the National Bureau of Statistics (NBS) was considering another GDP rebasing, which, if done, could significantly boost the country’s current GDP.
Diversifying the economy, he criticised Nigeria’s reliance on oil and called for a stronger focus on agricultural exports, which currently contribute 16.8 percent to the GDP, amounting to $42 billion.
“Nigeria needs to increase its agro-export capacity to earn more FX and stimulate growth,” he said.
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