NESG urges government to promote non-oil sector to maximise AfCFTA gains
The Nigeria Economic Summit Group (NESG ) has urged the Federal Government to take more interest in promoting the country’s non-oil exports to reap maximum benefits from the African Continental Free Trade Area (AfCFTA) agreement.
Chairman of the group, Mr Asue Igohdalo, made the call during a virtual launch of NESG report titled “NESG Macro-Economic outlook 2021,” monitored via zoom.
Ighodalo said that Nigeria needed to create innovative economic ideas that could spur growth and prosperity.
He said that the country should encourage non-oil exports to improve export earnings and reduce pressure on the external reserves.
” 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.
“Promoting non-oil exports will become an imperative if Nigeria is to benefit maximally from AfCFTA.
“Unlike developed countries where economic performance was adversely affected by lockdowns rather than commodity prices, the recovery of the Nigerian economy will hinge not only on easing lockdowns, but also on the performance and the health of the global oil market
“The Nigerian economy needs a high, robust and sustained growth that delivers a significant reduction in unemployment and poverty ” he said.
The NESG chairman predicted favourable economic growth for the country in the foreseeable future.
“Premised on the assumptions of rapid increase in oil price (above 50 dollar per annum) and domestic crude oil production, as well as rapid increase in government capital expenditure, we expect the Nigerian economy to exit recession with a growth rate of 2.9 per cent.
“We anticipate that the economy will become strong and resilient in 2025 by posting a 7.5 per cent growth.
” Other key indicators are expected to show up positive signs, such as, inflation rate nearing a single digit by 2025, a steady decline in the rates of unemployment and underemployment, and a rapid increase in government revenue over the next couple of years,” he said.
He, however, projected that the economy would most likely remain in recession beyond 2021 if crude oil prices fall below the 2021 budget benchmark of 40 dollars per barrel.
“Premised on the assumptions of a sharp fall in oil prices (below the 2021 budget benchmark of 40 dollars per barrel) due to the rapid spread of the new strain of COVID-19, shortfall in domestic oil production and a decline in capital expenditure, we expect the Nigerian economy to remain in recession until 2022.
” Afterwards, the economy is expected to recover with less than two per cent growth rate per annum.
” We also expect other key economic fundamentals to perform poorly, such as, inflation maintaining a double-digit per annum, huge decline in government revenue growth, as well as very high rates of unemployment and underemployment,”
He said that investment would play a pivotal role in achieving sustainable economic growth in the country.
Ighodalo urged the government to consider key sectors the could yield favourable dividends for investment.
“To achieve our best-case scenario, investment, which is an important component of aggregate demand, will play a crucial role.
” Nonetheless, the size of the sectors receiving these investments matter.
” We therefore propose a theory of change that highlights four key priority areas that are important in attracting significant investments and, in turn, improving Nigeria’s socio-economic outcomes over the short term to medium term.
“These priority areas are: macroeconomic stability, policy and regulatory consistency, sector reforms and human capital development,” he said.