Numerous studies have raised immense concerns about Nigeria’s economic situation. The United Nations Conference on Trade and Development (UNCTAD), Centre for Study on the Economies of Africa (CSEA), as well as many economics and development experts at a conference that took place in Abuja have expressed their concerns over this prevailing economic situation, calling for the enactment of urgent actions. With a high standing population of about 220 million the unemployment rate, prevailing poverty ratio and widening fiscal deficits that have ravaged the country have been a major concern of stakeholders who believe that the weakened state of Nigeria’s economy poses danger for the economies of other African countries.
UNCTAD’s Africa Director, Paul Akiwumi, while discussing the impact of Nigeria’s economic crisis on the continent at large during the high-level policy dialogue, noted that Nigeria’s economic strength and demographic dividend is immensely important for the economic recovery of the Sun-Saharan Africa, and the entire African continent. Akiwumi, like the numerous stakeholders agreed that the data-driven and evident-based policy implementation was pivotal for the economic transformation and inclusive growth and development in the country. He also raised concerns on the economic dependency on oil, noting that while Nigeria’s economic challenges need immediate attention, it was imperative to improve the productivity of labour through enhanced training and technological development which will in turn also see Nigeria’s GDP per capita improve.
Nigeria’s economy, an extractive sector-driven one.
Akiwumi described Nigeria’s economy as an extractive sector-driven one with oil and natural gas, making up at least 80 percent of the economic exports. He further explained that the rigidity of Nigeria’s economic structure poses an inherent problem in the labour market, offering little or no flexibility for employment in the national economy as a result of its capital-intensive nature. Moving forward, he added that the dependency of the country’s economy on natural capital and the exportation of raw commodities subjects it to the vagaries of external economic, political and health related problems. Nigeria’s economy is now expected to hit an all-time low, with a intense recession due to the impact of the Covid-19 pandemic and while the country’s GDP decreased by nearly 4 percent in 2020, there has been no significant recovery process.
The executive director of CSEA, Dr. Chukwuka Onyekwena, speaking at this event which was tagged “Fostering Productive Capacities in Nigeria for Industrialization, Export Diversification and Inclusive Growth”, stated that Nigeria is negatively impacted by a prevailing weakness in the structure of the economy. He emphasized that the budget deficits, rising inflation, increased debt to GDP ratio, poverty and unemployment were concerning indicators. According to him, the micro challenges that the economy faced were indications of fundamental vulnerabilities in the economic structure.
Low productive capacity reflects Nigeria’s vulnerability to external shock.
Onyekwena was also critical about Nigeria’s weak productive capacity, noted that the share of the manufacturing sector to the GDP is at 9 percent, reflecting the country’s vulnerability to any form of external shock. He noted that while Nigeria boasts of a leading economy in the continent, it still lacked an efficient productive capacity performance. He however appealed to the government to urgently address this problem. Also, Dr. Oluwaseyi Vincent an Economist at the Nigerian Economic Summit Group stressed that Nigeria possessed enough room to significantly enhance its productive capacity if the government policy for pharmaceutical production was implemented to further aid the manufacturing sector.
Vincent noted that it was immensely important to overtly harness the comparative advantage opportunities. He said that while numerous countries presently invest in the exportation of unprocessed materials, Nigeria could fill the existing gap by positioning itself as a huge beneficiary of the AFCFTA by further improving its productive capacity. To Vincent, ICT and health developments would be important to human capital, as ICT enhances an enabling ambience for entrepreneurship through institutions, as the governmental policies hold potentials to also improve the productive capacity of the country.
Government must implement and domesticate AFCFTA agreement.
He however canvassed for a global competitiveness in manufactured products, so as to ensure that Nigeria transforms into a knowledge-based economy. A Professor of International Economic Relations at Covenant University and Consultant at ECOWAS Common Investment Market, Jonathan Aremu asserted that despite true high expectations of AFCFTA, the government must also implement and domesticate the agreement. He also stated that the imminent success of the AFCFTA was solely reliant on the abilities of the private firms to successfully navigate between the national, regional and continental policy frameworks in order to take advantage of the expanded market.
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