• Wednesday, May 29, 2024
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BusinessDay

Six steps to get Nigeria’s economy out of the woods

Professional services company Deloitte has outlined ways to make quick wins for authorities in charge of Nigeria’s economy.

In its recent publication, “Setting the Stage for Economic Transformation in Nigeria”, Deloitte mentioned economic diversification and adequate FX management as some of the low-hanging fruits to steady Africa’s largest economy.

“The current administration will be tasked with the responsibility to implement strategic reforms with long-term gains, albeit with some short-term pain,” Deloitte wrote in the publication.

It said its Advisory Council had outlined other critical success factors of the administration, including leadership accountability, strategic communication with Nigerians, the appointment of qualified and committed leaders, the establishment of a strategic coordinating organ to ensure alignment of fiscal and monetary policies, and the establishment of a Presidential Performance and Delivery Unit to coordinate the delivery of major initiatives.

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The low-hanging fruits for the administration to tackle within the next four years include:

Improving the business environment to encourage private sector participation:

In the case of Chile, the private sector played a pivotal role as the driving force behind the country’s economic transformation. By addressing these economic factors, Nigeria can create a conducive business environment that encourages private sector participation and boosts investment inflows and productivity.

Economic diversification:

Nigeria’s over-reliance on the oil sector makes it vulnerable to fluctuations in crude oil prices. Therefore, the new administration should seek to boost GDP growth by diversifying the economy and promoting non-oil sectors such as agriculture, manufacturing, and service sectors.

Removal of bottlenecks that constrain production & export activities:

Trade openness through incentives for local production and reduction of tariffs in specific industries with the potential to generate foreign exchange should be encouraged.

Effective foreign exchange management:

Continued management of the foreign exchange market towards a liberalized regime solely dependent on market forces. This will aid cost structuring, promote long-term planning across key sectors, and reduce uncertainties among investors.

Reduce Nigeria’s infrastructure deficit by leveraging partnerships with the private sector:

Collaborating with private enterprises through public-private partnerships (PPPs) can bring significant benefits while mobilizing private capital and expertise. These partnerships can address infrastructure gaps, promote economic growth, and create jobs. This strategic approach bridges the infrastructure gap and drives sustainable development.

Regulatory reforms to create a more business-friendly environment that encourages Foreign Direct Investment (FDI):

Introduction of transparent and business-friendly policies to boost investor confidence. In addition, streamlining the bureaucratic procedures, especially concerning the repatriation of capital, bolsters Nigeria’s attractiveness to FDI.