Ezekwesili Advises Nigeria’s Next President to Launch Macroeconomic Consolidation Programme
* Harps on need for structural reforms
Ahead of the 2023 general election, the Convener/Chairman, FixPolitics, and Founder School of Politics, Policy and Governance (SPPG), Dr. Obiageli Ezekwesili has advised the incoming the president to launch a macroeconomic consolidation programme to re-balance the economy.
She said this was important in order to tackle the present realities in the economy such as interest rate, forex and commodity pricing.
Ezekwesili, who disclosed this yesterday, at the 5th Anniversary of the Caladium Lagos SME Boot Camp organised in partnership with fedhaGap, said the macroeconomic consolidation programme she proposed would be tough economic policy measures that would bring some level of hardship, which would last for a short period of time, adding that such policy would greatly reposition the economy and place it on the path of growth.
“If the person who will be our president really does the right things about the economy, Nigerians should prepare themselves for difficult times maybe for the first one year of the administration.
“There is nothing in African or Nigeria economy that puts us in the realm of exceptionalism,” she stated.
She remarked that the Gross Domestic Product (GDP) contracted to 2.25 per cent as a result of the effects of inflation, and foreign exchange pricing, “because when you denominate in naira, you have to convert into current price levels.”
Ezekwesili further explained that in terms of economic growth, three things are happening: forex, inflation and economic growth levels are having impacts – stating that the three were affecting the pace at which the economy was expanding.
“It means that as our GDP is contracting, we are not growing as we should,” she added.
The former World Bank vice president, advised the federal government to put in place measures to kick start economic growth, through sound monetary policy, fiscal policies combined to giving back macroeconomic stability.
She added: “You need macro-economic stability which means less inflation, less variability in exchange rate, the type of challenges we have with access to foreign exchange rate.
“There are many sectors that need serious reforms in order to enable them function and create the impetus for economic activities within them. Whether you are talking about health, education, power, aviation, tourism and agriculture, they need structural reforms.
“Structural reforms are critical for growth. You need to have more friendly environment in terms of regulation, (regulatory framework and bureaucracy) that stands on the way that prevents businesses from being productive should be addressed, because they matter at jumpstarting growth from a level that is sufficient to enable the expansion of the economy, not just contraction of the GDP.
“For as long as we don’t have the supply of foreign exchange in our economy on the basis of what we earn, the question is what are we selling to the world? We are simply selling oil to the world. The crude oil we are selling to the world, we are not selling at the scale we used to sell, because average export levels, reduced significantly and we are not meeting our OPEC quota.
“As long as that is the case and it is your dominant source of forex, you are not attracting sufficient levels of foreign direct investment, in terms of capital inflows, your base of US Dollars or any other currency that you have is tinning down.
“The issue of oil production needs to be addressed, we need to meet the OPEC production quota. We need to pay attention to the remittances from the citizens, it is an important part of the inflow that we will put into the economy, we need pay attention to the talents of our citizens, such as the creative industry, technology ecosystem.”
Earlier in his remarks, the Caladium Lagos SME Boot Camp coordinator, Ayo Bankole-Akintujoye, said they started the boot camp as part of efforts to support SMEs to be able to scale and acquire business management skills that would make them more sustainable.
He hinted that a lot of SMEs only have technical skills across the various sectors, which he noted makes it difficult for them to manage their business, finance and people.
Bankole-Akintujoye added: “Asides that we infused micro grants whereby we fund them through Feragap a technology platform which we use to finance their transactions with large enterprises because the demand of those large transactions can be so high from a capital stand point.
“We have recorded tremendous successes, having over 5000 active communities of SMEs. Also, seeing some of our SMEs who were unregistered, unstructured to become structured and become recognized brands.”