At Nigeria’s Employers Summit, sponsored by Nigeria Employees Consultative Association, the Director General of Nigeria Country Department of the African Development Bank Group (AfDBG), Mr. Lamin Barrow, asserted that provision of the lowest level of infrastructure required for Nigeria’s development will take 300 years owing to the poor rate of investment it has. He highlighted macro-economic instability, logistics deficiencies, low productivity, insufficient power supply and inadequate access to credit for SMEs as major limitations of the non-oil sectors in the nation’s economy.
Acceleration of domestic resource mobilization, he stressed, is needed as an essential policy to change the narrative. Priorities should also be placed on improvement of tax collection and tax administration, enhancement of the effectiveness of public investment programmes, and repairing loopholes in tax collection. It was further stated that the contribution of the agricultural sector to the Gross Domestic Product (GDP) of the country is significant as it secures sustainable revenue generation that fosters the transformation of the economy.
$518 million initiative to support smallholder farmers.
However, it was stated that labour productivity in the sector has been stagnant at $5,500. Despite having arable land and a favourable climate in various parts of the country, Nigeria is a net importer of food. Its annual food import bill, between 2010 and 2020, averaged $6.4 billion, while its food exports during the same period estimated an averaged $1.2 billion. Accelerating the development of agro-industrial value chains requires the unlocking of the sector’s opportunities; development of agricultural value chains and introducing food and agribusiness firms of the private sector to rural areas.
To achieve this goal, the African Development Bank in collaboration with the Islamic Development Bank and the International Fund for Agricultural Development is set to support implementation of Special Agro-Industrial Processing Zones (SAPZ) Program worth $518 million in 7 states, including the Federal Capital Territory (FCT). This initiative will help the evolvement of smallholder farmers into prosperous agri-business through different measures which consist of market linkages, improved access to finance and other inputs, and technology transfers.
Investments should be made in renewable energy generation.
Speaking on infrastructure, Mr. Barrow said that Nigeria suffers major infrastructure deficits which impedes it’s diversification of production in the non-oil sectors. The World Bank’s Public Expenditure Review Report of 2022 asserted that the requirement to meet the massive infrastructural needs of Nigeria is $3 trillion by 2050. Changing the narrative requires mobilisation of the private sector for its development and service delivery which would likewise lead to a reduction of the financial challenges on Federal and State Governments.
Also, investments in the energy sector is one of the crucial needs in the country. During the first half of 2022, with a total of 13GW installed generation capacity, the average power distributed was about 4GW. Provision of reliable and affordable energy services will increase the competitiveness of Nigerian industries and speed up the integration of the nation into regional and global supply chains. There should be huge investments in renewable energy generation, particularly solar, while employing the $25 billion Desert-to-Power initiative focused on provision of electricity for about 250 million people across the Sahel and the northern parts of the country.
The private sector should be equipped with vibrancy & competitiveness.
Additionally, the Country Director General of AfDBG stated that a private sector with vibrancy and competitiveness can enhance acceleration of a diversified economy and improve exports. However, in Nigeria, many private sector firms are challenged with implicit taxes, even as they provide their electricity, dig boreholes for water, and repair roads in their neighbourhoods. Also, ensuring a unified exchange rate management system is a critical reform the new administration that will boost transparency in the allocation of foreign exchange and access to it.