As Nigerians head to the polls in the next three months, one salient issue on the minds of voters as a determining factor who to vote for is growing the economy.
As a matter of fact, last Thursday, the National Bureau of Statistics (NBS) released a report that said 133 million Nigerians suffer multidimensional poverty.
All this is in wake of the fact that Nigeria’s population growth has been faster than economic growth over the past several years, which spells doom for the economy if the trend is not reversed.
By all counts, getting Nigeria out of what has become deeply enmeshed poverty would mean growing the economy by double digits. How can that be achieved?
The managing director of Lancelot Ventures Limited, Mr. Adebayo Adeleke, lamented Nigerians’ high penchant for foreign-made goods in comparison to those produced locally.
He said, “Our import figure has been growing. We cannot achieve a double-digit with a consistent rise in our importation figure. We must check what we import. Our focus also should be on how to grow the real sector.
“There is a disconnect between what we produce and what we consume. There is the need to focus more on manufacturing and agriculture processing if we must achieve a double-digit growth.”
In achieving double-digit growth, the president of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ide Udeagbala, called on both the federal and state governments to urgently prioritise the need to revitalise the industrial sector for more inclusive economic growth.
Udeagbala suggested that government at the federal and state levels should create and maintain enabling environment that is investment friendly. This will entail enunciating and maintaining policies that remove bottlenecks to business investments, and address the various factors that are capable of increasing cost of doing business in Nigeria.
He noted that these are critical issues that, if addressed urgently, will help position the economy for foreign direct investment and encourage local investors into establishing industries that will enhance jobs creation and improved GDP.
President of Lagos Chamber of Commerce & Industry (LCCI), Dr. Michael Olawale-Cole, said achieving a double-digit growth requires well-coordinated fiscal and monetary policies in promoting growth-enhancing and confidence-building policies that would encourage private and foreign capital inflows into the economy.
According to Olawale-Cole, to achieve this, there is need to ensure food security; agriculture output should be sustainably boosted and continued dependence on imports discouraged. For food security, scarcity is looming large on the horizon, and if nothing smart and quick is done, it would further exacerbate the plight of the poor.
“Fuel subsidies should be removed and oil theft curtailed if not eliminated to provide fiscal space for subsidised production of goods and services as well as for infrastructure, health, and education financing.While the Central Bank of Nigeria (CBN) embarks on monetary tightening to tame inflation, it should ensure that targeted concessionary credit to the private sector is sustained for MSMEs.
“The CBN needs to initiate a gradual transition to a unified exchange rate system and allow for a market reflective exchange rate. The CBN also needs to roll out more friendly supply-side policies to boost productive sectors, bolster investor confidence and help attract foreign investment inflows into the economy.”
He added that there is a need to address structural bottlenecks and regulatory constraints that contribute to the high cost of doing business, saying a supportive and conducive investment environment is critical in facilitating private sector involvement in the economic recovery and growth process.
He further said the government should initiate moves towards having cost-reflective tariffs in the power sector as this will attract the needed investment to boost power supply and possibly end the frequent crashes of the national grid, adding, “We should also begin to initiate special-purpose interventions in boosting the deployment of renewable energy.”
The commissioner for insurance/CEO, the National Insurance Commission (NAICOM), Mr. Sunday Olorundare Thomas, while optimistic of a brighter future for the economy, stated that insurance is critical in this growth trajectory.
He said, though the nation’s economy may not have grown at a faster rate, but that there are signs of better days ahead.
According to him, MSMEs form the superstructure to stimulate mass enterprise growth and serve as a source of livelihood for the base of the pyramid population across all economies, be it underdeveloped, emerging or frontier markets.
He posited that in Nigeria, all development interventions of the current administration have had components focused on enabling micro, small and medium enterprises (MSMEs) sprout and flourish, but unfortunately, with little or no insurance content to deal with associated risks and ensure sustainability and guarding them against failure.
Thomas maintained that while some challenges still abound from infrastructure to funding, it is encouraging that the federal government, through its deliberate policy of removing 100 million Nigerians from poverty in the next 10 years, is taking on the challenges to build businesses and leverage them to create prosperity and be the driver of the nation’s future economy.
He noted that in addition to the efforts of the government at all levels, the spirit of entrepreneurship of Nigerians is driving creativity and productivity, stressing that however, the concern is that whatever gain or progress made in this sector can be halted abruptly in the face of a natural or man-made disaster which can often prove daunting to surmount without any support.
The NAICOM boss said, “Insurance is that product you buy when you think you do not need it because it may be too late to buy it when the need for it arises.”
Going into the future, he charged Nigerians in insurance adoption, stating that, this is critical to double digit economic growth in the next few years.
On his part, the president, Chartered Insurance Institute of Nigeria (CIIN), Mr. Edwin Igbiti, said, Nigerian economy has a brighter prospect for growth, especially, in the service sector, of which insurance is critical.
“The economy can witness double digit growth in the next few years, taking into consideration the entrepreneurial spirit of Nigerians. Many businesses are and will spring up and those businesses will need risk mitigation mechanism in insurance. The growth in this sector will rob off on other sectors and the economy in general,” he stressed.
According to Tope Fasua, an economist, there is need to address insecurity in the country whilst ensuring accountability on the part of government. This as he said if the right things are done, the country can achieve up to 15 per cent economic growth.
“Achieving double digit growth of 10 per cent and above is equivalent to saying that every sector in Nigeria, every individual and company will do 10 per cent more business nominally than they are doing this year. We are not talking about marking down for inflation or devaluation, we are just saying that if we add all the goods and service produced in Nigeria in a given year, it will be 10 per cent more than the previous year. What that means is that all of us should be doing 10 per cent more than we are doing this year.
“I personally want to do more than I am doing this year. I want to be able to do 20 per cent more than I am doing this year or more. Now when you say 10 per cent on the average, it means some people will do one percent whereas some will do 20 to 30 percent better. When there is a buzz going on in the economy, the economy grows.
“I think what we need to do first and foremost is to ensure security for people in the country to have confidence to move around and do business. There are many places in this country that have become no go area. There are places today that people close for business by 5pm. There are even parts of the country that people cannot go to do business on Monday. Therefore, their business is limited to Tuesday to Friday.
“There are economies here in Africa where they are doing 24/7 and are open for business at any point in time. Business stations are open throughout the day and they run shifts. In east Africa you see that a lot. If we begin to look at that alone, this economy can grow at 15 per cent. So, we don’t even have to drill down and work much harder. And if government is able to capture data of what is going on around the economy, pursue taxes properly, ensure accountability in government and ensure that monies collected on behalf of the people are spent to reboot the economy it will incentivise the economy to even do more.”
To grow the economy, the founder and chief executive of Center for the Promotion of Private Enterprise (CPPE), an economist, and former director-general of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, stressed the need for government to urgently address challenges in the power sector as well as the foreign exchange crisis.
According to him, power and foreign exchange play important roles in the growth of the country’s economy.
Calling for electricity sector reforms to improve efficiency and productivity in the sector, he said “the challenges in the electricity supply chain needs to be urgently addressed – gas to power, transmission, distribution, energy pricing, metering, and the capacity of the distribution companies. All of these are needed to improve performance and attract more investment into the sector.
“There is need to put fiscal incentives in place to boost investment in renewable energy in line with the energy mix objective of government. Such incentives could be in the areas of tax incentives and the waivers of import duty on renewable energy equipment.”
Yusuf further called for an urgent need to decentralise the national grid for ease of management and efficiency, saying there should also be a deliberate policy to attract private investment in the electricity grid.
He furthered that “there is a need for urgent steps to be taken to ensure a better macroeconomic management framework to stabilise the exchange rate, eradicate the challenge of illiquidity in the foreign exchange market and to stem the current depreciation of the naira. It is imperative to have urgent reforms in the foreign exchange market with a greater focus on supply-side strategy. There is a need to review the current disproportionate emphasis on demand management of the foreign exchange market.
“Most sectors are experiencing serious disruptions and dislocations because of the current foreign exchange policy regime. There is also a need to strengthen strategies to attract private sector capital to complement government financing of infrastructure.