NESG Pushes for Reforms, Tough Policies to Revamp Economy

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By Dike Onwuamaeze

The Nigerian Economic Summit Group (NESG) has urged the federal government to muster the political will to initiate economic reforms that will launch the country on a path of sustainable development.

The group also warned that Nigeria is at a crossroads and cannot afford the business-as-usual approach, which will only lead to further job losses, pull millions of citizens into poverty and worsen an already fragile economy.

These were the messages members of the NESG and other economic experts that included Chairman of the Presidential Economic Advisory Council, Dr. Adedoyin Salami, delivered to participants during the virtual launch of the group’s Economic Outlook for 2021.

The report predicted that the economy would grow by 2.9 per cent in 2021 under the best scenario environment.

The group, however, stated that the economy would grow by 0.9 per cent if the government continued with business as usual approach to governance and could even record a negative growth of -2.5 per cent under a worst-case scenario.

The worst-case scenario, according to the NESG, mirrored the path of complete economic and policy recklessness and negligence while the business as usual assumed that Nigeria will continue with the current path.

But the best case scenario, it said, marked a complete departure from business as usual approach to the higher path of vision, commitment and tough policy choices on investment.

The NESG also emphasised macro-economic stability, policy and regulatory consistency, sector reforms and human capital development as four priority areas essential in delivering high inclusive growth for Nigeria over the next few years.

“The Nigerian economy needs more than a simple rebound – the economy needs a high, robust and sustained growth that delivers a significant reduction in unemployment and poverty,” it said.

The Chairman of the NESG, Mr. Asue Ighodalo, who delivered the welcome address during the event, stated that the economic outlook in 2021 will be epileptic and marked by uncertainties, which will be fuelled primarily by the threat of the second wave of COVID-19 pandemic.

Ighodalo, therefore, urged the government and the private sector to work together in order to meet the challenges that would militate against the economy

He said: “Policies that will lift us up must be designed and effectively implemented. We must create a level playing field and an environment that attracts patient capital. The ongoing consideration of the Petroleum Industry Bill, and hopefully, its enactment soon gives us an opportunity to say to the world that we have put our foot strongly on the growth ladder.”

Ighodalo noted that a lot more needed to be done to get Nigeria on the positive inclusive growth that could deliver on reduction in unemployment, poverty and builds up infrastructure.

“In crafting policies and charting our growth, perhaps the government needs to take a step back and revisit those policies that have not worked or that have not worked properly in the past few years,” he added.

According to him, the impacts of well-thought and clearly-implemented policies will be obvious as employment starts rising and poverty is reducing and jobs are created as non-oil exports begin to increase while inflation drops, culminating in exchange rate stability and rebuilding of critical infrastructure.

He listed other pointers of sound economic policies to include more children being able to go to school and receiving qualitative education, functional hospitals and the repositioning of the country as attractive investments destination.

Speaking during the launch of the economic outlook as one of the discussants, Salami said Nigeria needed investments to attain sustainable economic growth.

He said if the economy must outpace the country’s current population growth of 2.5 per cent, it must grow at six per cent annually for people to feel it, adding that attaining this level of growth will necessitate taking difficult decisions to implement urgent reforms.

Salami said: “The reforms that are necessary should not be predicated on reforms that are costless. Reforms by their very nature mean a departure from where you are currently. This implies that some cost must have to be borne. If we do not reform and reform deeply and sustainably, then we will not get the kind of growth that we need.

“Let us be very clear, we must not be satisfied as a country merely to exit recession. We will exit it because that is what all the forecasts said, but we have to look at the level at which we exit the recession. So, there is a need for reforms, deep and sustained and sustainable reforms. And it has to go to resource utilisation.

“We really need to look at the effectiveness of our public spending. That for me is a very major element. It is extremely important. Giving where we are and where we are going, we really must take a look at how effective is the current spending profile that we currently have,” Salami said.

He also advised the federal government to review obstacles hindering investment inflows to Nigeria and set annual targets for foreign direct investments inflows.

The Head of Research at the NESG, Dr. Olusegun Omisakin, in the presentation of the outlook noted that significant reforms are expected to drive Nigeria to the path where “growth is driven by investments and address some of the policy concerns that have weakened the economy over the years.

Omisakin said the NESG looked at global developments, domestic oil production, capital expenditure, policy efficiency and investments to arrive at its projected growth rate for 2021.

He said: “This is good news because growth in the GDP means that businesses will rebound and the magnitude of contraction for sections that did not grow will reduce significantly.”