The report suggested critical reforms in areas that would drive significant improvement in economic outcomes for Nigeria
The Nigerian Economic Summit Group (NESG) has suggested critical areas of reforms which will drive significant improvement into the Nigerian economy in 2022. The group at the launch of its 2022 Macro-Economic Outlook in Abuja noted that the pre-pandemic narratives of growth, non-inclusiveness and poor socio-economic conditions in the country still linger.
According to the outlook, insecurity, foreign exchange scarcity, declining foreign investment inflows, sectoral rigidity, infrastructure deficit, inadequately skilled workforce, policy inconsistency and regulatory bottlenecks are parts of many issues that dented improved economic outcomes.
“Going into 2022, Nigeria has the opportunity to build on current growth performance by initiating tough economic reforms that would remove the constraints on the expansion of sectors of the economy and enhance their capacity to create more jobs and lift millions out of poverty,” the outlook said. According to the nation’s statistics bureau, Nigeria exited recession in the fourth quarter of 2020, recording its first growth in three quarters after coronavirus-linked lockdown was lifted across the country.
The economy sustained its recovery momentum in 2021 as the real Gross Domestic Product (GDP) expanded by an average of 3.2 % in the first three quarters of the year. The group noted that any removal of subsidy on petrol as stipulated in the new Petroleum Industry Act (PIA) would significantly impact all facets of the economy – particularly households’ welfare, cost of business operations and government finances. The group also said the completion and launch of the Dangote Refinery with its 650,000 barrel-capacity is expected to reduce the importation of refined fuel products and boost foreign exchange savings.
It said the volatility of exchange rate and pressure on commodity prices will persist while insecurity, if not tamed, could discourage the inflow of much-needed investments into the various sectors of the Nigerian economy. The report also suggested critical reforms in areas that would drive significant improvement in economic outcomes for Nigeria. The group called for reforms across three major areas, including the long-awaited oil and gas sector deregulation and fuel subsidy removal; foreign exchange management and sector-specific reforms that can drive significant inflows of stable investments such as Foreign Direct Investment into the economy.
It advised that the pace of reform needs to be accelerated for a number of reasons, including the increasing rate of insecurity and social vices. “The heightened insecurity and social vices in several parts of the country are direct fallouts from the social exclusion suffered by many citizens,” it said. “Therefore, the government cannot afford to procrastinate on implementing these reforms as further delay could offset the gains from the recent rapid economic recovery. The urgency of now should be the watchword.
“The launch of the National Development Plan (2021-2025) provides a veritable starting point for the government to initiate reforms that can change the development paradigm in Nigeria. There is need for private sector development and sectoral growth to drive inclusive development, it said, adding that the effectiveness of the plan hinges on the need for the government to provide a supportive business and policy environment that will sustain interest and confidence in the Nigerian Economy. “As the general elections of 2023 approach, there is the possibility that the space for implementing crucial reforms in Nigeria will be narrow. “But the political elite should note that prioritizing the populace’s interests should take the front burner on their agenda, before and after the elections. “This will not only narrow the existing trust deficit between government and the governed but will also ensure that much-needed reforms attract little or no opposition from all stakeholders.”