Tinubu blames global economic shocks for excruciating reforms in Nigeria

• Okonjo-Iweala Seeks Increased Intra-African Trade

The global economic shockwaves necessitated the implementation of the excruciating economic reforms embarked upon by the Federal Government, President Bola Tinubu has said.

Speaking on Friday day at the opening ceremony of the 2024 African Caucus Meeting, Tinubu submitted that the government is currently undertaking bold economic policies to propel Nigeria’s economy out of the downturns occasioned by multiple shocks in the global economy.

He also called for global cooperation among African countries to tackle shared economic challenges and take advantage of opportunities.

Tinubu, who spoke through Vice President, Kashim Shettima, noted that although Africa is grappling with numerous challenges across economic, humanitarian and social spheres, countries on the continent must take necessary measures to translate opportunities in natural resources and human capital into growth, innovation and collaboration.

The theme of this year’s meeting, ‘Facilitating Intra-African Trade: Catalyst for Sustainable Economic Growth in Africa’, reflects the collective commitment of member countries to moving the continent forward economically.

In his keynote address titled, “A Shared Vision for Africa’s Growth’, President Tinubu outlined ongoing efforts by his administration to address the global economic challenges.

He urged African countries to improve the quality of life for people across the continent by ensuring that democracy, good governance and economic institutions work together.

The President said: “As a government, we have initiated bold economic reforms aimed at steering our economy away from the downturns caused by multiple shocks in the global economy toward a path of recovery and resilience through significant economic transformation.

“Our reform efforts have been strategically focused on fostering fiscal and monetary efficiency, driving sustained long-term economic growth, and catalysing job creation in alignment with the SDGs’ priorities.

“We remain committed to optimising our economic potential, delivering favourable outcomes for our citizens, and ensuring the overall sustainable development of the regional economy. Our efforts are yielding positive results, with improved macroeconomic stability and increased investment.”

President Tinubu further drew attention to the need to enhance international tax cooperation to combat illicit financial flows and ensure multinationals contribute fairly to economies on the continent.

Seeking global cooperation in this regard, he said: “We need enhanced international tax cooperation to combat illicit financial flows and ensure that multinationals contribute fairly to our economies. We must also foster global economic cooperation to tackle shared challenges and leverage opportunities.

“However, we must also acknowledge the need to take responsibility for our own development by undertaking the difficult structural and fiscal reforms required to boost long-term growth and enable reinvestment into our economies through infrastructure and effective social spending.”

In his welcome address, Chairperson of the Caucus and Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said: “Based on available data, 41 African countries are set for stronger growth of up to 3.8 per cent from about 3.4 per cent in 2022 and rising to 4.3 per cent in 2025. These exceed the global average of about 3.2 per cent.”

On his part, Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, disclosed that the African monetary authorities have the responsibility to formulate policies that enhance trade among countries on the continent.

He explained: “We can achieve this by fostering a financial landscape that encourages collaborative research and development (R&D) to support our industries and generate economic wealth for our growing populations.”

The CBN chief noted that decisions on currency convertibility, cross border transactions, payment systems, cross border movements of Africans, goods and services, as well as financial policy, will be instrumental to determining the success of the AFCTA.

On the home front, Cardoso hinted that the CBN’s reforms have brought significant outcomes as volatility in the foreign exchange market has reduced measurably and inflows have also increased significantly.

He added: “Interbank market activities have deepened while rates have begun to converge around the standing facilities band. While challenges remain, the direction of travel is clearly positive. The challenges in the operating environment present significant hurdles. It is crucial that monetary and fiscal policies provide robust responses to mitigate the risks of rising inflation and the lingering effects of adverse supply shocks, which have significantly impacted our economies.”

The African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, Ambassador Albert Muchanga, noted the importance of domestic resource mobilisation.

“We must see the African market as a viable channel for domestic resource mobilisation to address the issue of the continent’s sustenance,” he noted.

Speaking virtually, Director General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, provided a comprehensive analysis of Africa’s economic situation and potential.

She emphasised the need for greater regional integration, saying: “According to UN data for 2021, only 13 per cent of Africa’s goods trade was internal, compared to 21 per cent for Southeast Asia, 39 per cent for the U.S, Mexico and Canada, and 60 per cent for Europe.”

Also, Deputy Secretary-General of the United Nations, Amina Mohammed, stressed the importance of trade facilitation, a Pan-African payment and settlement system, as well as increased access to energy and connectivity.

She also addressed the challenges of public investment, saying, “last year, an extraordinary 48 per cent of government revenue in sub-Saharan Africa alone went to meeting debt payments.”

On his part, Prime Minister of Rwanda, Dr. Edouard Ngirente, who emphasised the transformative potential of the AfCFTA, said: “We stand at a crucial moment in Africa’s economic history. With coordinated efforts and unwavering determination, we can unlock the vast potential of intra-African trade and secure a prosperous future for our continent.”

He called for concrete actions to remove trade barriers, harmonise regulations and create a truly integrated African market.

He stressed that these efforts would not only boost trade but would also drive innovation, create jobs and improve living standards across the continent.

Also, a member of the UK House of Lords and keynote speaker at the event, Lord Paul Boateng, expressed worry that Africa has regressed in diversification and competitiveness over the last 20 years.

“This has diminished the continent’s resilience to shocks and external volatility. From five per cent of global trade at independence, it has now declined to three per cent.

“We need to adopt aspects of the technological revolution that we are late to, such as blockchain technology and artificial intelligence, which have the potential to transform trade on the continent,” Boateng stated.