Nigeria’s Gross Domestic Product (GDP ) to revenue has been seen as lacking ambitious being the lowest in the world according the International Monetary Fund (IMF).
He also noted that Nigeria has the poorest performing economy in the world, with a projected growth rate of 2.8% for 2019, compared to her neighbors such as Ghana, Ethiopia, Benin Republic and Senegal are growing at the rate of 7%.
He attributed the current economic challenges to over dependence on oil, and the result of the oil price shock of 2015 and the Niger Delta security crises which reduced oil production from 2.2m barrels per day to less than 800,000 barrels per day.
The IMF Africa region director described the 2.8% growth as “ Well below Nigeria’s potentials” adding that the negative impact of the various crises combined to impact negatively on the economy.
“ This is the economy that should be growing at 6-7%”
The IMF said Nigeria government need to quickly build up its infrastructure,
He said, “Nigeria, Angola and South Africa currently records a weakest economic outlook with an average below 3 percent, and this amounts to nothing compared to the resources in these countries”
“The persistent effects of conflict on economic activity as well as the sharp drop in oil prices and other ongoing adjustment have slowed down the growth of the nation”, he added.
He explained that there is need for the government to prevent and control the effects of conflict by ensuring programs that promote building of social capacity, inclusive growth”
Government also need to focus on policy initiatives that can guarantee growth and economic diversification, according to the IMF Africa Director
“ Government needs to generate resources that are required to invest in the health sector, education and infrastructure. Secondly, you need reforms that will ensure uninterrupted energy supply, but also more important , you need to encourage more private sector investments by improving the business climate which will help in diversifying your economy, away from over reliance in oil”
Siddharth Kothari, Economist African Department, IMF stressed that with economic growth at 1.9 percent in 2018, non-oil revenue mobilization of 3.4 percent of GDP, Nigeria still remain one of the lowest performing economy in the world adding that the current level of growth is insufficient for the government to provide the infrastructural and developmental need of the country.
“The Nigeria economy growth rate is insufficient for the government to meet the infrastructural and developmental need of the people, hence there is need for to introduce more means of revenue generation as well as promote policies to boost economic activities”, he said.
“The Nigeria government should focus on addressing structural challenges in order to boost diversification, business environment, governance, power sector reforms, public investment efficiency, health and education”.
The Minister of Finance, Zainab Ahmed, reacting to the latest World Bank report, putting Nigeria’s population at 201m , disclosed that Nigeria government has no immediate plans to control its population
The Minister who was represented by the Permanent Secretary, Mohammed Kyari Dikwa, said such policy can only be adopted after all stakeholders agree to it.
He however noted that President Muhammadu Buhari has given nod for the setting up of a Presidential Committee on Revenue generation that is working on modalities for strengthening internally generated revenue, including the non tax revenues.
CBN Governor, Godwin Emefiele identified unemployment and underemployment as the major challenges facing the country in the area of human capacity development adding that majority of the “young people are employed but below their capacity “
He revealed that the CBN has embarked on tight monetary policy since the 3rd quarter of 2016.
Emefiele who was represented by Joseph Nnana, Deputy governor, Central bank of Nigeria, said that the identified constraints to the Nigeria economy include high unemployment rate, poverty as well as under-employment among others, adding that a higher segment of the Nigeria population are found in the informal sector which does not allow for optimal performance.
“The informal sector is overwhelmed as it employs a higher number of the nigeria population, the informal sector does not allow the young Nigerians to perform optimally on the job. Also, poor infrastructure affects the governmental policy space for inclusive growth”.
Speaking on the terms of the money market, Nnana assured that the bank will continue to maintain a positive interest rate that will attract external investors, adding that the monetary authority is not in haste to influence the exchange rate.
Source: By Anthony Ailemen