Bold economic policies and a vigorous reform drive revive and revitalise Nigeria’s economic growth momentum and help transform its immense potential to wealth.
As sub-Saharan Africa’ s largest economy and Africa’s biggest oil exporter with the largest gas reserves on the continent, it may come as a surprise to learn that Nigeria’s economic growth in recent years has also been driven by growth in agriculture, telecommunications and services. In 2017, under President Muhammadu Buhari administration and direction, the nation managed to emerge triumphantly from the recession brought on by the crash in oil prices and production, but, as the National Bureau of Statistics (NBS) has since pointed out, improved oil performance was by no means the sole cause for Nigeria’s economic recovery.
The optimisation and implementation of policies and reforms in agriculture, manufacturing and trade sectors has been key to securing the boost in the nation’s economic growth. President Buhari explains: “We rolled up our sleeves, and went to work. We invested massively in agriculture, focused on mining, and gave manufacturing some incentives. We launched the Economic Recovery and Growth Plan (ERGP), kept our focus, husbanded and utilised funds judiciously, and gradually, the economy started to respond, until it eventually came out of recession.” By 2018, GDP growth had increased to 1.9% and was more inclusive; currently GDP has an estimated growth projection of 2.3% in 2019 and 2.6% in 2020.
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Empowering Nigeria’s Economy
In April 2017, Buhari launched the Economic Recovery and Growth Plan (ERGP) 2017-2020. Its primary objective was to restore growth and build a globally competitive economy through investment in infrastructure and the creation of an enabling business environment. Under an umbrella framework, incorporating 60 national development strategies, the ERGP focuses upon infrastructure, industrial and power sector development and is committed to the investment in human capital, while moving the nation away from an import dependent predicament.
The plan also hinges upon the promotion of Science, Technology and Innovation (STI) to push the nation towards a more knowledge-based economy. Over the past few years, power, road and rail projects have been built, industries have decentralised the power supply by leveraging off-grid solutions, including climate friendly solar-based systems while expanding national accessibility to broadband. Campaigns, such as the ‘Made in Nigeria’ scheme, have also been key to diversification and industrialisation; promoting local products as an alternative to imported products in order to guarantee authentic sustainable economic growth in the long-term.
Governor of the Central Bank of Nigeria, Godwin Emefiele, has secured the stability of the naira through efficient handling of governmental exchange rate and currency policy. In Governor Emefiele’s own words: “At the CBN we consider ourselves agents of development. While we use both our traditional policies (monetary and exchange rate) to support the structural rebalancing of the Nigerian economy, our development finance initiatives are targeted at directly boosting domestic productive capacity and creating jobs.” The Investors and Exporters (I&E) forex window launched in April 2018, allows investors and exporters to purchase and sell foreign exchange at the highest market rate and in February 2019, had attracted US$50 billion into the economy. CBN has consequently been able to increase its loans for governmental schemes, such as the Anchor Borrowers Programme, Commercial Agricultural Credit Scheme and the Real Sector Support Facility.
Reforms To Revive Growth
“Improving the business environment is at the heart of the Buhari Administration’s reform agenda,” states Vice President Yemi Osinbajo. “Our focus remains firmly on ensuring that SMEs operating in Nigeria find it easier to do business.” In 2017, Nigeria moved up by an unprecedented 24 places in the Ease of Doing Business rankings; working its way up towards its goal to become a top 100 ranked economy by 2020, and one of the top 70 doing business destinations by 2023. President Buhari’s deliberate appointment of a cabinet of economic (and technocrat) ministers aims to ensure the promotion of transparency while aligning itself with diversification strategies in fiscal management and in encouraging private sector investment.
In August 2015, President Buhari implemented a Treasury Single Account (TSA), consolidating 20,000 government bank accounts into a unified, transparent system; the government has also carried out a number of institutional and governance reforms which have secured the implementation of the Integrated Financial Management and Information System and the Integrated Payroll and Personnel Information System, while the ratification of the Secured Transactions in Movable Assets Act 2017 has provided favourable circumstances for SME loans. The Federal Inland Revenue Service (FIRS), Executive Chairman, Babatunde Fowler drives diversification of the nation’s economy through the implementation of initiatives which improve tax compliance and collection. “The only way to improve the standard of living of the people is to continue to create an environment good for business and good for living,” states Fowler. “Key to this is convenience and transparency.”
Further reforms have been implemented by the Presidential Enabling Business Environment Council (PEBEC) for a new electronic platform integrating tax authority and Corporate Affairs Commission (CAC). According to the PEBEC report on the Ease of Doing Business 2019 outlook, over the past three years there have been over 140 reforms that aim to remove bureaucratic constraints to doing business in Nigeria. The report states that: “Nigeria was ranked among the top 100 countries in business dynamism and as one of the most entrepreneurial countries in the world, according to the World Economic Forum.” The World Bank of Doing Business has recently announced that out of 190 countries, Nigeria is amongst the top-20 improvers in doing business.
In September 2019, President Buhari put together a star cast eight-man economic advisory team. According to presidential spokesperson, Femi Adesina the Economic Advisory Council (EAC) will: “advise the President on economic policy matters, including fiscal analysis, economic growth and a range of internal and global economic issues, working with the relevant cabinet members and heads of monetary and fiscal agencies.” This will encourage the conversation to open up, deepen and think outside the box for solutions in securing Nigeria’s rapid economic growth.
Economic confidence has found fertile and solid ground in Nigeria and, as the economy stretches, grows and strengthens under Buhari’s administration, an auspicious outlook of a continued prosperous, transparent and thriving future is being positively projected.