•World Bank: Economic policies hurting ordinary Nigerians
•Projects 3.3% economic growth for Nigeria in 2024, 3.6% next year
• Bagudu: FG determined to stay the course, deepen implementation of revised national devt plan
•Oyedele: New tax regime may take effect January 2025
•CBN reaffirms commitment to subduing inflation
•MAN wants manufacturers’ constraints addressed
Deji Elumoye, Emmanuel Addeh, James Emejo in Abuja and Nume Ekeghe, Dike Onwuamaeze in Lagos
President Bola Tinubu yesterday called for increased cooperation among government agencies, the private sector, and international partners to boost economic growth, enhance competitiveness, and maintain stability in the country.
The call by the President comes on the heels of emerging positive economic indicators, suggesting that recent reforms by the administration are beginning to yield results.
Addressing the 30th Nigerian Economic Summit organised by the Nigerian Economic Summit Group (NESG) and the Ministry of Budget and Economic Planning in Abuja, Tinubu, who was represented by Vice President Kashim Shettima, outlined his administration’s Renewed Hope Agenda, designed to create an environment that fosters sustainable economic growth and shared prosperity.
The president’s declaration came on a day the Senior Vice President, World Bank Group, Mr. Indermit Gill, lamented that there is currently much sufferings among poor and vulnerable Nigerians particularly youths, amid high inflation and economic reforms.
He said even though the people desire good schools, decent healthcare, jobs, and safe conditions to reach their potential, the high inflationary conditions and policy choices have limited their ambitions.
Also, speaking at the summit, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the federal government was determined to stay the course and deepen its implementation of the Revised National Development Plan by incorporating the Renewed Hope priorities.
However, yesterday, President of the Manufacturers Association of Nigeria (MAN), Mr. Francis Meshioye, declared that Nigeria’s economy would remain on downward trajectory until the binding constraints hindering the competitiveness of its industrial sector are addressed.
Tinubu, while declaring the summit open, said: “As a nation, we must prioritise economic diversification,” reaffirming his administration’s commitment to focus on sectors that could offer inclusive and sustainable growth, such as agriculture, manufacturing, and the digital economy.
The President, who was represented by Vice President Kashim Shettima, addressed key economic challenges, detailing ongoing efforts to improve infrastructure, streamline regulations, and enhance the ease of doing business in Nigeria.
According to him, “We are currently completing key infrastructure projects such as roads, railways, and power plants that will enhance connectivity and productivity.
“We are harmonising regulatory processes to reduce the bureaucratic hurdles that have long stifled entrepreneurship and innovation”.
Tinubu also highlighted recent economic measures, including the removal of fuel subsidy and the unification of foreign exchange rates, as part of a broader strategy to stabilise the macroeconomic environment.
“These are all part of a broader effort to restore balance to the economy and ensure long-term stability,” he explained.
Addressing the critical issue of economic inclusivity, the President said: “Our competitiveness is not just about improving our standing on global indices. It is about ensuring that the Nigerian economy is inclusive—where small and medium-sized enterprises can thrive alongside large corporations, and where every citizen, regardless of location or background, can benefit from economic opportunities.”
Tinubu assured that, “with the right policies, the right partnerships, and the right level of commitment, Nigeria can emerge stronger, more competitive, and more resilient than ever before.”
However, the World Bank Vice President noted that oil wealth, which should benefit all Nigerians, had “primarily benefited the elites for too long”, adding that “while the elites are also affected by current reforms, they have built buffers over time”.
However, he expressed concern that ordinary Nigerians, who have been hurt by past policies, lacked such buffers, adding that their welfare should be top priority for the government.
The World Bank Vice President said Nigeria is once again at a crossroads, stressing that current reforms—including exchange rate unification and removal of fuel subsidies—are essential for breaking from the past.
However, he said the government must protect the most vulnerable citizens during the transition and prioritise non-oil growth, as well as maintain a competitive exchange rate.
Gill said supporting vulnerable households are critical steps, pointing out that the country’s elites must unite to support ongoing reforms as they will “ultimately benefit their own children and grandchildren”.
He reaffirmed World Bank’s commitment to support current efforts, adding that “Nigeria can count on our full commitment to help the country through these challenging but transformative times”.
He commended the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, whom he said was putting the country on the right course.
Gill further urged the federal government to increase its cash transfer programme to 10 million households from five million presently as well as make economy more businesses ready.
He also stressed the need for the current administration to sustain current reform efforts in the interest of the economy. He said while Nigeria’s reforms from 2003 to 2007 were on the right path, they were not sustained.
Gill said, “Today, the government must stay the course for at least another decade to transform the economy and unlock Nigeria’s potential as a regional growth engine. Implementing reforms is difficult, but the rewards are immense.”
Giving a historical perspective to the country’s predicament, he said, “I want to offer some perspectives from afar and remind you that many of the issues Nigeria faces today first emerged over 40 years ago when oil prices began to collapse in the early 1980s after the boom of the 1970s. It’s important to revisit this history, as those who ignore its lessons are bound to repeat them in more painful ways.
“There are three crucial aspects of oil. First, it is an exhaustible asset. Second, it is a volatile commodity, with some of the most unstable prices in the market. Third, it is a national asset, meaning its benefits should be shared across all segments of society and generations.
“Over the last 40 years, oil has come to dominate Nigeria’s economy. Economic growth, exchange rates, and the stock market have all moved in sync with oil prices. But this wasn’t always the case. Poor fiscal and exchange rate policies during the oil boom of the 1970s made this happen.”
He said, “Despite the massive increase in oil wealth, Nigeria’s fiscal deficit shot up to between 7 per cent and 10 per cent of GDP, and the current account deficit also ballooned, along with external debt. Instead of insulating Nigerians from oil price volatility, the government amplified it. This was the first mistake.
“When oil prices began to fall in the early 1980s, the value of the Naira fell too. But instead of letting the exchange rate adjust, Nigeria decided to prop up the Naira, tightening foreign exchange controls and import licensing requirements.
“This created a large gap between the official and parallel exchange rates, making it harder for ordinary Nigerians to buy dollars compared to the well-connected elites. This was the second mistake, leading to two negative outcomes: businessmen began chasing import licenses at the official exchange rate, and agricultural and manufacturing exports were decimated.
Between 1970 and 1982, the production of major cash crops like cocoa, rubber, cotton, and groundnuts fell between 30 per cent and 65 per cent. By the mid-1980s, cocoa was the only significant agricultural export left, and even that had shrunk by 50 per cent.”
Gill said, “As a result, Nigeria became an oil-dependent, undiversified economy with a rent-seeking society. Some of you may recall that Nigeria attempted a serious reform in 1987, reducing fiscal deficits and attempting to return to a market-determined exchange rate. But by then, external debt had already strangled the economy, a lesson worth repeating. A short period of poor oil wealth management, benefiting a handful of elites, had painful consequences for the rest of Nigeria’s population for an entire generation.
“Now, let me share a more uplifting story. Between 2003 and 2007, Nigeria managed its oil wealth well. The country introduced fiscal and exchange rate reforms, improved transparency in oil revenue allocation, and renegotiated its Paris Club debt.
“The payoff was immense: Nigeria received its first-ever sovereign credit rating and attracted significant foreign direct investment. People started talking about ‘Africa rising’ with Nigeria leading the charge. But Nigeria didn’t stay the course, unlike Norway, which successfully implemented similar policies and has sustained them over time.”
Earlier, Bagudu, reiterated the effectiveness of recent government reforms, stating that, “there are significant pieces of evidence that reforms and investments are working.
“These governance and institutional reforms have helped to improve our macro-economic performance. Our GDP has been enhanced from 2.98 per cent growth in first quarter of 2024 to 3.19 per cent in quarter two of 2024, inflation is trending downwards while external reserves are improving,” he stated.
The Minister also appealed for public support, saying, “we seek cooperation and understanding of the broad spectrum of the citizenry as there is indeed light at the end of the tunnel.”
He said the aspiration to attain the desired objective for Nigeria’s development necessitated the revision of the National Development Plan, 2021-2025, addressing the challenging dynamics of the macroeconomy and incorporating the 8-priority areas and the Renewed Hope agenda.
The minister said Revised NDP 2021 – 2025, focuses on strategic sectors that will spur growth in the short to medium term, addressing the current macroeconomic instability, particularly the exchange rate, inflation, and unemployment, and achieving sustainable economic growth and development.
He said the government also identified the need to address overreliance on oil revenue, infrastructure deficit, revenue shortfalls, insecurity, rule of law, education, and human capital development as critical to economic growth and development.
Bagudu, said, “In this context, we mapped out strategies to reposition the economy by introducing reform measures. These reforms come with temporary hardships, but we are confident they are necessary for the growth and development of our dear country.
“Implementing these governance and institutional reforms has helped improve our macroeconomic performance. Our overall GDP has been enhanced from 2.98 per cent in Q1 2024 to 3.19 per cent in Q2 2024, compared to 2.31 per cent in Q1 2023 and 2.51 per cent in Q2 2023.
“Inflation is trending downwards from 33.40 per cent in July 2024 to 32.15 per cent in August 2024, while our external reserves are US 39.07 billion as of September 19, 2024. Our external trade balance improved to N6,945.4 billion in the second quarter of 2024.”
He said, “These are testaments to the efficacy of the government reform agenda. The economy is moving in the right direction, and the decline has been arrested. Therefore, we seek cooperation and understanding of the broad spectrum of the citizenry as there is indeed light at the end of the tunnel.”
The minister pointed out that meet the people’s aspirations, the country must grow faster and more inclusively, adding that it was not time for the blame game but for action and boldness.
He said, “Innovation must be given pride of place, as we have undertaken in the last 15 months. While we are on the right trajectory, more is needed.
“I invite you, as partners, to reflect and provide more input because we recognise that our commendable achievements are not only a result of the boldness and resilience of our leader, President Bola Ahmed Tinubu, but also because of our willingness to dialogue and collaborate with all stakeholders.”
Bagudu, among other things, said that the summit deliberations was expected to develop practical recommendations in those thematic areas supporting implementing government policies and programmes.
He said the summit, modelled after the World Economic Forum, has remained one of the biggest platforms for dialogue among top policymakers and corporate leaders.
The minister also pointed out that three decades of partnership between the federal government and NESG had provided a veritable platform for interrogating public policy and proffering enduring solutions to the country’s socio-economic problems.
Moreover, Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, said the federal government planned to commence implementation of a new tax regime in the country by January 2025.
Speaking at a panel session on “Fiscal and Monetary policy Reforms: Removing Barriers to Private Sector Investment”, he said new tax laws had been drafted, and now awaiting passage at National Assembly.
He clarified that the proposed implementation timeline of the law was dependent upon its passage by the legislature.
Oyedele said the federal government was intentional in reducing tax burden on businesses, adding that there were unnecessary complications where over 200 unofficial taxes and 60 tax agencies existed.
He said the proposed tax regime will introduce transparency over taxes collected and how they are spent, and address compliance gap of about 75 per cent.
He said the new tax regime will also benefit small businesses and manufacturers by reducing their operating costs.
Also, speaking on the panel session, Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability Directorate, Mr. Philip Ikeazor, said there were lots of innovation in global banking sector adding that Nigeria can’t be left out.
Represented by CBN Director, Banking Supervision Department, Adetona Adedeji, the deputy governor said the central bank is currently doing a lot to target inflation as high inflationary environment will defeat economic gains so far recorded since the commencement of reforms.
He said the apex bank was also trying to avoid a hyper-inflation through monetary measures, including successive hikes in the benchmark lending rates.
Ikeazor said, “Whatever policy we roll out is for good of the economy”, and urged the manufacturing sector to “bear with us” at least, in the mean time as the was also mindful of the need to support growth.
He said the Naira was gradually begining to find its true value and reaching equilibrium as a result of Cardoso’s policy interventions.
In his welcome address, Chairman of the NESG, Niyi Yusuf, called for continued efforts to strengthen the economy.
He said, “The task before us is to forge decisive reforms that will drive us out of the economic challenges facing us. Since COVID-19, our economy has shown resilience but still fragile. We must take additional steps to make sure that gains in FDI and foreign exchange markets are not reversed.”
Meanwhile, President of MAN, Mr. Francis Meshioye, yesterday, declared that Nigeria’s economy would remain on downward trajectory until the binding constraints hindering the competitiveness of its industrial sector are addressed.
Meshioye, made this assertion when he addressed a press conference on the association’s 52nd Annual General Meeting (AGM), with the theme “The Imperatives of an Intentional Development of the Nigerian Manufacturing Sector.”
The AGM, which would take place from October 22 to October 24, 2024, at the Lagos Oriental Hotel, would feature the President and CEO of the Africa Finance Corporation (AFC), Mr. Samaila Zubairu, as the distinguished guest speaker at the MAN’s 4th Odutola Annual Lecture.
Meshioye said: “We need to urgently address the binding constraints that make our local industrial products uncompetitive, otherwise, the economy may continue on the downward trend with no certainty on when it will rebound.”
According to him, “it is a very worrisome fact that the (manufacturing) sector that should propel job creation, productivity, and economic growth is enmeshed with series of challenges that constantly limit its contribution to the Gross Domestic Product (GDP).”
Meshioye added that the choice of the theme for this year’s AGM was a testament to the MAN’s resolve to birth a thriving manufacturing sector.
According to him, “the theme was couched with a deep reflection on the growth trajectory of the manufacturing sector in Nigeria.
“The high and rising cost environment continues to shrink profitability and, in many cases threaten the existence of many operators in this critical sector of the economy.”
He added that as a critical stakeholder in the Nigerian economy, MAN, “shall continue to play our role of presenting the government with policy inputs and options.
“We shall continue to partner with governments with a view to co-creating innovative solution that will free the Nigerian economy from its lacklustre performance and place it on the path of productivity, sustainable growth and development.”
Responding to questions from journalists, Director General of MAN, Mr. Segun Ajayi Kadir, said the Presidential Advisory Committee on Fiscal Policy and Tax Reform, which is chaired by Mr. Taiwo Oyedele, has done a great job with many positive recommendations.
Ajayi-Kadir, however, tasked Tinubu to muster political courage far much than what was required to remove petrol subsidy in order to be able to implement the recommendations on tax reforms.
He said: “We have entered the implementation stage and the MAN is represented on the implementation committee.
“If all of the recommendations are implemented Nigeria will have one of the best tax regimes that you can think of on the African continent.
“It will be just because those who are poor will pay little or no taxes. The rich will have to pay more and the poor will have to pay less.
“So, all of must encourage Mr. President to finish the work that he started. He needs even more political courage to do this than the fuel subsidy removal.
“Because he is going to affect the high earning citizens of Nigeria who must necessarily make sacrifice for the poorer ones.”
Ajayi-Kadir also stated that the Nigerian Electricity Regulatory Commission (NERC) and the DISCOs were wrong in raising electricity tariff by more than 250 per cent in one single swoop for Band “A” customers because no business could survive such a steep increase in its cost.
He said that that the fact that the tariff hike was wrong could be seen from the disposition of the federal government to give a discount of 50 per cent to universities and hospitals.
“If it had been acceptable government would not have been doing that.
“And manufacturers are also even deserving of the same privilege as these institutions because we create jobs. We pay taxes and we are responsible for increasing Nigeria’s non-oil exports. So, we are eminently qualified to receive government’s attention.
“Already some of our members are agitated and worried about the survival of their businesses. Some of them are even saying that we should shut down and allow our workers to go home.
“May be government will listen. But that will be very bad. We have 2,500 members and you will imagine us shutting down. It will not be what government wants and it is not in line with President Tinubu’s ‘Renewed Hope Agenda.’
“MAN has offered that 100 per cent increase may be acceptable. But do not hit us with over 250 per cent increase in tariff.
“Nobody survives that especially when what we are talking about is about 40 per cent of our cost structure depending on how power intensive an organisation’s operation is.”
MAN further disclosed that the opening ceremony of its three-day Made-in-Nigeria Exhibition would be on Tuesday, October 22, 2024.
It said the exhibition would be a convergence of industry players, government officials, marketers, as well as consumers to experience a new exposure to quality products that are made in Nigeria and ultimately attract patronage of locally manufactured goods.
“More than 100 exhibitors will be showcasing their products and we look forward to receiving more than 10,000 visitors,” he added.
Also, the World Bank yesterday projected that Nigeria’s economy will grow by 3.3 per cent in 2024, with an even stronger growth forecast of 3.6 per cent in 2025 to 2026, as the country’s macroeconomic and fiscal reforms begin to show positive results.
These projections were released yesterday by the bank in the Africa Pulse report titled: “Transforming Education for Inclusive Growth.”
The bank highlighted that Nigeria’s inflation, which peaked at 34.2 per cent year-on-year in June 2024, eased to 33.4 per cent in July and further to 32.2 per cent in August.
The report attributed the inflationary spike to the effects of a weakened naira earlier in the year and the removal of the petrol subsidy in the second half of 2023.
While inflation has been slowing down, a recent 40-45 per cent increase in petrol prices in September, it said threatens to reverse this disinflationary trend it states. Despite this, the consolidation of reforms is expected to boost Nigeria’s growth in the coming years.
The report stressed that central banks in countries grappling with double-digit inflation, such as Nigeria, Angola, and Sierra Leone, will likely maintain high monetary policy rates for an extended period to manage inflationary pressures.
It stated: “Central banks in countries that still have double-digit inflation and weakened domestic currencies such as Angola, Nigeria, and Sierra Leone will keep monetary policy rates higher for longer.
“And in fewer cases, they may increase their policy rates, particularly in countries where inflation rates still have not peaked. Broadly, currency weakness, slow fiscal adjustment, and cost pressures are among the factors driving these countries to keep a tighter stance for a longer period.
“For instance, Ethiopia, Ghana, and Nigeria are among the worst performing in Africa this year, and their currencies continue weakening while demand for foreign exchange remains pressing. Measures to mitigate social unrest associated with the high cost of living in Angola, doubling of the minimum wage and Nigeria partially reinstating fuel subsidies are putting pressure on their public finances.”
However, in the broader Sub-Saharan Africa region, the report projected to see moderate growth of 3 per cent in 2024, up from 2.4 per cent in 2023.
Despite this recovery, it stated that is not enough to lift millions out of poverty, with growth per capita expected to be a sluggish 0.5 per cent, compared to an average of 2.4 per cent between 2000 and 2014.
The World Bank warned that challenges such as conflict, climate change, and soaring debt service costs continue to undermine progress in the region.
World Bank Chief Economist for the Africa Region Andrew Dabalen said: “African governments are making strides to stabilise their finances and close budget gaps. But high debt burdens are limiting investments in critical areas like education, health, and infrastructure, which are essential for long-term, inclusive growth.”
The report highlighted that 34 per cent of government revenues in Sub-Saharan Africa will be spent on debt servicing in 2024, leaving little room for productive investments.
Some countries, the report said, are showing brighter prospects, with Côte d’Ivoire, Senegal, Uganda, and Tanzania expected to achieve growth rates above 5 per cent in 2024, driven by private consumption, investment, and infrastructure development.
The report underscored the critical need for Sub-Saharan African countries, including Nigeria, to invest in human capital to drive sustainable growth.
Nigeria’s rapidly expanding working-age population, it explained, presents both an opportunity and a challenge.
Dabalen reiterated in the statement that Africa’s working-age population was expanding faster than any other region, driven by progress in child survival over the last two decades, and that Sub-Saharan Africa spends less on education per capita than any other region.
To achieve universal education by 2030, the authors of Africa’s Pulse estimate that education systems would need to absorb about 170 million more children and adolescents requiring an estimated 9 million new classrooms and 11 million new teachers.
Dabalen added: “Looking ahead, Africa’s youth will need to be well educated and appropriately skilled to access better jobs and take advantage of new digital and green economy opportunities. Evidence-based planning and smart spending will be crucial to expanding access while improving learning and employment outcomes.”
Furthermore the report stated that currently, seven in 10 children in Sub-Saharan Africa do not have access to pre-primary education, and fewer than 1.5 per cent of youth aged 15 to 24 are enrolled in vocational training, compared to 10 per cent in high-income countries and that closing these gaps is vital for unlocking Sub-Saharan Africa’s economic potential and driving sustainable, inclusive growth.
“Supporting entrepreneurship and new start-ups, allowing small businesses to grow, and attracting larger and established firms is also essential so that skilled graduates find meaningful job opportunities when they try to enter and advance in the workforce,” the World Bank report said.