Nigeria stands at yet another pivotal moment in its history as on the 29th of May 2023, a new administration was officially handed the wheels to steer this ship – Nigeria to success. We dare say, the new administration laid out an ambitious roadmap for the nation’s future. Bola Ahmed Tinubu will effectively become Nigeria’s fifth president since Nigeria regained democracy in 1999. His inauguration has been met with mixed feelings because over two terms, his predecessor, President Muhammadu Buhari failed in his core agenda to tackle corruption, and the administration was highlighted by insecurity and slow-paced economic growth, severe economic crunch, FX instability, inflation, and social challenges.
It is the hope of Nigerians at home and abroad, and all other well-wishers in the international community that the Tinubu/Shettima administration sticks to its agenda for the nation. These plans, carefully crafted to address key sectors of the economy, aim to propel Nigeria towards sustained economic growth, job creation, poverty reduction, and social development.
In this piece, we will be sharing our experts’ view on the most critical areas of priority for the economy viz-a-viz the administration’s proposed economic development strategies.
The Tinubu/Shettima’s Plans for Nigeria
The new administration’s plans for Nigeria span four objectives viz:
- GDP Growth
At the heart of the administration’s plans lies the objective of achieving a remarkable average real GDP growth rate of 10%. By implementing comprehensive economic reforms, attracting foreign investments, and fostering an enabling business environment, the administration aims to unleash the full potential of Nigeria’s economy. Nigeria’s new leaders believe that this will ignite the engine of prosperity for the country and contribute gradually to achieving its planned GDP growth rate of 10%.
- Job Creation
Recognizing the urgent need to tackle unemployment, the administration aims to drive down the number of unemployed individuals from 21.5 million in 2022 to 11.9 million in 2026. By investing in key sectors such as agriculture, manufacturing, and infrastructure, and promoting entrepreneurship and skill development programs, the administration intends to create a conducive environment for job growth and economic empowerment.
- Exchange Rate Stability
To ensure a stronger and stable Naira, the administration plans to review the current exchange rate regime. This step is crucial for attracting foreign direct investment, encouraging export competitiveness, and maintaining price stability in the economy. Through a careful assessment of monetary policies and collaboration with the Central Bank of Nigeria (CBN), the the new administration aims to establish a favourable exchange rate system which will contribute to building confidence in the Naira.
- Investment to Fuel Growth and Development
To realize its economic goals, the administration recognizes the importance of attracting substantial investments into key sectors of the economy. By providing incentives for both local and international investors, implementing robust regulatory frameworks, and improving infrastructure, Nigeria will become an attractive investment destination. This influx of foreign-direct investment and better utilization of local capital will stimulate growth, create jobs, and foster technological advancement.
- Poverty and Social Protection
To alleviate poverty and strengthen social protection, the administration plans to expand the current National Social Investment Programme. Also, by increasing access to affordable housing, improving healthcare services, and enhancing social welfare programs, the government aims to uplift the lives of the most vulnerable Nigerians and promote inclusive development.
To achieve the objectives, the administration has outlined several key policies across various sectors to achieve the above-stated objectives. Here are some highlights:
1. Agriculture Policy: This administration intends to establish grain reserves, commodity boards to regulate crop prices, and expand access to finance for farmers. These initiatives will boost food security, enhance agricultural productivity, and support the growth of agribusinesses.
2. Education Policy: The administration will invest in education infrastructure, develop accreditation standards for institutions, and introduce a student loan regime. These measures will improve the quality of education and increase access to learning opportunities for all Nigerians.
3. Power Industry: Expanding generation and transmission capacities, implementing a renewable energy plan, and channeling gas resources to power generation are key steps toward achieving reliable and sustainable power supply.
4. Oil & Gas Industry: Measures such as protecting oil infrastructure, incentivizing indigenous participation, implementing the Nigeria Gas Master Plan, and phasing out fuel subsidies will help optimize the potential of Nigeria’s hydrocarbon sector while ensuring socio-economic benefits for its citizens.
5. Transportation: The administration aims to develop a nationwide highway system, review railway legislation, utilize multiple seaports, and enhance waterway transportation. These initiatives will improve connectivity, facilitate trade, and boost economic growth.
6. Security: By adopting an intelligence-driven security approach, redefining military doctrine, and establishing an integrated identity database, the administration seeks to enhance national security and maintain peace and stability.
Our Experts’ Position on the Economic Plans of the New Administration
Considering the state of the Nigerian economy, and our antecedent as a nation, experts have highlighted four key priority areas that the new administration should focus on.
- The topmost priority is to attract and retain investments into key sectors in Nigeria. While investment is a main factor that drives output and income growth, Nigeria has struggled to attract significant investments into key sectors relative to peer countries. Investment as a share of real GDP averaged 15% in the last 7 years while Foreign Direct Investment (FDI) inflows remained below US$1billion during the period. The new administration will need to address key challenges facing the business environment such as infrastructure deficit, poor power supply, FX challenges and policy inconsistency.
- The second priority is to pursue macroeconomic stability and industrial reforms. The World Bank macroeconomic stability index shows a deteriorating situation in the last few years. A combination of high inflation, depreciating exchange rate, wide exchange rate premium and a tough fiscal stance have made the economy highly vulnerable to shocks and weakened economic recovery levels. To achieve this, the new administration needs to make the pursuit of macroeconomic stability and industrial reforms a topmost objective.
- Readministering fuel subsidy should be another major priority for the new government. The subsidy element of the budget is a major factor that limits investments in the midstream and real sectors of the economy resulting in less than sufficient allocation to infrastructural programmes. Besides, the subsidy regime is associated with issues of corruption, and lack of transparency and accountability. This is obvious because despite the huge amount spent on subsidizing petroleum products, Nigerians still experience scarcity, and the product is currently sold above the government regulated price in many parts of the country. Hence, the new administration should focus on implementing subsidy removal, and provide means of palliatives to mitigate the effects of the removal on the public and allow for an efficient free market price mechanism in the downstream sector of the petroleum industry.
- The final key priority is that the new administration should ensure social inclusion and security for all. The administration can ensure social inclusion and security for all by investing in education, healthcare, and infrastructure. It can also promote economic development and create jobs. Additionally, the government can work to reduce poverty and inequality. By taking these steps, the government can create a more just and equitable society for all Nigerians.
To read more on our experts’ position and projection for the first year of the Tinubu/Shettima administration, see here.
For us, we believe that these economic priorities are the blueprint, for the next four or more years, of the economic administration of Nigeria, and these early wins will play a major role in ensuring the sustained success of the nation’s economy. The Tinubu/Shettima’s Administration has presented a vision of economic prosperity, social development, and inclusive growth. With strong focus and particular attention to some critical sectors such as agriculture, education, power, transportation, and security, the administration aims to unlock Nigeria’s vast potential and create a brighter future for its citizens. However, the success of the administration’s plans lies in the effective implementation of their strategies and the collaboration of all stakeholders, including the government, private sector, civil society, the Nigerian people, and even international forces.
May Nigeria succeed!