The Nigerian Economic Summit Group (NESG), has identified job creation as the effective solution to lifting millions of Nigerians out of poverty this financial year.
The Group also tasked the Federal Government on critical reforms that will drive significant improvement in the Nigerian economy in 2022.
The think-tank advocacy group said this on Tuesday, at the launch of its 2022 Macro-Economic Outlook, in Abuja, noting that the pre-pandemic narratives of growth, non-inclusiveness, and poor socio-economic conditions still remain.
The Outlook listed insecurity, foreign exchange scarcity, declining foreign investment inflows, sectoral rigidity, infrastructure deficit, inadequately skilled workforce, policy inconsistency, and regulatory bottlenecks among the 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,” it said.
In his remarks, the Chairman, NESG, Asue Ighodalo, said the Outlook aims to critically analyse the Nigerian economy and help create an enabling environment to catalyse economic growth.
Knotty issues
The Group noted that constraints in the government’s policy in 2021 affected productivity and increased investment risks.
In particular, it said: “The issue of foreign exchange shortage and divergence of interest rates, as well as other policy constraints, continue to limit sectoral productivity, elevate investment risks, slow down job creation, and worsen trade balance, resulting in a dearth of long-term investments required to achieve high and sustained economic growth.
“The widening fiscal deficit and other constraints that are required to quickly turn around the situation are also worrying for the country’s economic future. Therefore, there is a need for a paradigm shift in the policy environment to avoid the reversal of the current pace of economic recovery.”
It further argued that the 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.
It added that the completion and launch of the Dangote Refinery with its 650,000 barrel-capacity is expected to reduce the importation of refined petroleum products and boost foreign exchange savings.
The issue of foreign exchange shortage and divergence of interest rates, as well as other policy constraints, continue to limit sectoral productivity, elevate investment risks, slow down job creation, and worsen trade balance, resulting in a dearth of long-term investments required to achieve high and sustained economic growth.
NESG also called for reforms across three major areas –oil and gas sector full 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 warned against delay of the reforms, saying: “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.”
It stressed the need for private sector development and sectoral growth to drive inclusive development, 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.
The Group therefore urged the government and other stakeholders to leverage the opportunities in 2022 despite the issues of insecurity, foreign exchange scarcity, declining foreign investment inflows, sectoral rigidity, infrastructure deficit, inadequately skilled workforce, policy inconsistency, and other regulatory bottlenecks.
