Government urged to implement institutional reforms

Price Waterhouse Coopers (PwC) has stressed the need for Nigeria to unlock her dead assets, stating that the country holds as much as $900 billion worth of dead capital in residential real estate and agricultural land.

PwC stated this in its economic alert titled, ‘Nigeria’s Q4 2020 GDP: Are we out of the woods?’ released on Tuesday.

According to Nigerian the Institute of Builders, the value of the Federal Government’s abandoned properties is projected at about N230 billion.

It stated that the government must seize the opportunity to relentlessly implement key institutional reforms that promote ease of doing business and strengthen the resilience of the domestic economy to externally induced macroeconomic shocks.

One way to do this according to PwC is to consistently ensure policy alignment between the fiscal and monetary authorities.

In real terms, Nigeria’s economy expanded by 0.11 per cent year-on-year in Q4 2020 compared to -3.62 per cent and 2.55 per cent recorded in Q3’2020 and Q4’2019 respectively.

The growth rate officially signaled Nigeria’s exit from the recession of the last two quarters. Despite this, full-year 2020 growth stood at 1.92 per cent (2019: 2.27 per cent), though significantly lower than the -3.5 per cent projected by the IMF in its World Economic Outlook January 2021 report.

There are emerging risks, which could threaten the economic recovery, including, a new wave of Coronavirus; OPEC agreement; widespread insecurity; and foreign exchange illiquidity.

PwC identified 10 themes that will shape Nigeria’s economy in 2021. Some of these include unlocking dead assets; harnessing the power of the diaspora; and driving export growth through services.

According to the report, Nigeria is the largest recipient of remittances in Sub-Saharan Africa accounting for over a third of flows to the region, stating that the country’s biggest export is human capital.

It noted that two-thirds of the global economy is made up of the services sector which is higher value-added than physical goods.

The economic alert revealed that Nigeria’s creative and cultural industries (CCI) presently play an important role and will probably generate $1billion in export revenue in 2020. Nigeria’s exportation of Nollywood, technology, and financial services are good exports to invest in, among others.

“Overall, given the fragile economic recovery impacted by the pandemic, it is imperative that governments across all levels (federal, state, and local) continue to put measures in place to attract foreign direct investment for business expansion, job creation, and robust economic growth. Also, the widespread security threat needs to be nipped in the bud, if we are to win foreign investors’ confidence,” it stated.