Three areas Nigeria needs to address to achieve inclusive economic growth
Monday July 5, 2021 / 10:00 am / Ottoabasi Abasiekong for WebTV / Header image credit: WebTV
Nigeria’s quest to achieve inclusive economic growth for an estimated population of over 180 million hinges on three critical priority areas. It is about education, infrastructure and an enabling environment that creates employment opportunities for the citizens of the country.
Mr. Johnson Chukwu, Managing Director of Cowry Asset Management Group, highlighted this point while discussing “Addressing the Constraints of Inclusive Economic Growth in Nigeria”.
On education, he called for strong investments at all primary, secondary and tertiary levels from federal, state and local governments.
He noted that Nigeria needs a skilled and competitive workforce to compete for jobs in all key sectors of the economy and globally.
Chukwu denounced the fact that Nigeria has over 10 million children out of school, which is a social crisis in itself, and also stressed the need for girls’ education in the country.
According to him, Nigeria has a huge deficit in road, rail, river, electricity and even broadband infrastructure and investments in these areas will help unlock economic activities across the country.
He acknowledged some of the measures taken by the current administration, but insisted on public-private partnerships to attract more investment in infrastructure.
These investments, he said, will spur industrialization and manufacturing that will lead to a productive economy.
Environment conducive to employment opportunities
Offering additional perspective, he stressed the need for the government to create an enabling environment that can attract investment into the economy.
From ensuring security to improving the ease of doing business in the country, he called for concerted efforts to partner with the private sector to create economic opportunities.
With an unemployment rate rising to 33.1%, he stressed the need for the government to take the issue of job creation seriously.
Development-focused approach to poverty reduction
On the socio-economic issue of poverty reduction, on which countries like China, India and Brazil have achieved significant impact, he called for a “Development-Focused Poverty Reduction Approach” , which examines the essential reforms that lead to investments in infrastructure, key sectors and human capital development to create sustainable jobs by improving the per capita income of citizens.
For him, it is much better than the “poverty alleviation approach” which is based on distribution and not strategic in the economic empowerment that can lift millions of people out of poverty.
He said the National Poverty Reduction Committee chaired by Vice President Prof. Yemi Osinbajo, SAN should opt for the “development-oriented poverty reduction approach” to accelerate the goal of getting out. 100 million Nigerians out of poverty by 2030.
Nigeria should subsidize productive activities
While debating whether Nigeria should continue to subsidize the price of petroleum products and electricity or remove them, Cowry Asset Management’s GMD asserted that the focus should be on subsidizing ” productive activities ”.
He argued that this will create more jobs and free up resources for investments in critical sectors of the economy, which can lead to double-digit growth.
Further speaking, he cited the example of the 5 billion naira spent daily on the oil price subsidy, Chukwu said that if it was removed, about 2 billion naira would be saved and could be invested in the oil prices. infrastructure, to stimulate economic growth.
It can also be channeled towards improving the added value to agricultural products and extraction activities, which can result in improved export value for the country.
Fiscal and monetary policy direction
Understanding the importance of aligning fiscal and monetary policies to achieve a productive Nigerian economy, he called for the former to prioritize an enabling business environment, identifying key growth sectors of the economy with supply favorable tax regimes and business tools.
For the latter, he urged the monetary policy authorities to ensure stability through the exchange rate, the interest rate and the inflation rate.
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