The United Nations Conference on Trade and Development (UNCTAD), Centre for the Study of the Economies of Africa (CSEA) and renowned economists and development experts yesterday, in Abuja, said Nigeria’s economy calls for serious concerns unless urgent actions are taken.
With the population standing at about 211 million in 2021, high unemployment rate, poverty and widening fiscal deficits, the concerns for most of the stakeholders were that the weak state of the Nigerian economy poses danger for other African countries.
Nigeria’s demographic dividend and its economic might is critically important for the socio-economic recovery of sub-Saharan Africa, if not for the African continent as a whole,’ UNCTAD’s Africa Director, Paul Akiwumi, said at a high level policy dialogue in Abuja.
Akiwumi and other stakeholders at the event were of the opinion that data-driven and evidence-based policy formulation and implementation remained key for Nigeria’s transformational growth and for inclusive growth and development.
Worried about the oil dependent economy, Akiwumi noted that Nigeria’s many structural and systemic challenges require urgent attention, adding that by improving the productivity of labour through training and technological catch-up, Nigeria’s total GDP, as well as its GDP per capita could be improved.
“Nigeria is an extractive sector-driven economy, where oil and natural gas account for more than 80 per cent of the country’s exports. This structural economic rigidity poses inherent labour market challenges and offers little flexibility to absorb job seekers in the national economy.
“This is because extractive sectors by their nature are capital intensive and generate a relatively small proportion of employment.
“The Nigerian economy, which is dependent on natural capital and the export of raw or unprocessed commodities, is subject to the vagaries of external shocks- be they economic, political or health related. Due to the impact of the COVID19 pandemic, Nigeria’s economy is expected to face the most severe recession in decades: GDP dropped by nearly four percent in 2020 and the recovery for 2021 and 2022 remains sluggish.
“This slow pace of economic expansion is particularly troubling when compared to the country’s rapid population growth rate,” he said.
Also speaking at the event, which was tagged ‘Fostering Productive Capacities in Nigeria for Industrialisation, Export Diversification and Inclusive Growth,” Executive Director, CSEA, Dr. Chukwuka Onyekwena said Nigeria has been negatively affected by persistent structural weaknesses, stressing that rising inflation, budget deficits, rising debt to Gross Domestic Product ratio, worsening social economic indicators, including unemployment and poverty remained of critical concerns.
“These micro-associated challenges reflect fundamental structural vulnerabilities that existed. Exports concentration is very high with oil and natural gas comprising 95.7 per cent of merchandise.
“The share of the manufacturing sector to GDP is at nine per cent. So Nigeria clearly has weak productive capacity, which increases its vulnerability to external shocks,” Onyekwena said.
Calling for political will that would urgently address the weak economy, Onyekwena noted that although Nigeria is a leading economy on the continent, its productive capacity performance is worrisome.
Speaking on ‘Productive Capacities of Nigeria in a Comparative Perspective,’ an Economist, at the Nigerian Economic Summit Group (NESG), Dr Oluwaseyi Vincent insisted that Nigeria clearly has significant room for improving its productive capacities, stressing that there was the need to implement government policy on pharmaceutical production to support a more robust manufacturing sector.
Vincent said: “It is also important to harness comparative advantage opportunities. With many African countries exporting raw materials, Nigeria has numerous opportunities to fill existing gaps. The nation can position itself to benefit from the AfCFTA by enhancing productive capacities.”
To him, achieving spending commitments on health must continue to be a priority while further ICT development remained sacrosanct to human capital and better institutions.
He noted that ICT promotes an enabling environment for entrepreneurship through institutions even as the implementation of government policies hold significant promise for raising productive capacities.
Vincent canvassed greater global competitiveness in manufactured goods to ensure that Nigeria transforms into a knowledge-based economy with universal health coverage.
Professor, International Economic Relations, Covenant University and Consultant, ECOWAS Common Investment Market, Prof Jonathan Aremu, who also spoke at the event, noted that while the expectations of what the AfCFTA could or should do are very high, domesticating and implementing the agreement as expected remain key.
According to him, positioning Nigerian Business for AfCFTA would involve an array of public and private actors involved in AfCFTA implementation.
Aremu said the flow of benefits from AfCFTA relies on private firms successfully navigating between national, regional and continental policy frameworks to take advantage of the AfCFTA enlarged markets.
“The distributional impacts of the AfCFTA will however, vary across countries and societal groups – across sectors, between skilled and unskilled workers, formal and informal traders and on female and male workers,” Aremu said.
