…as Shettima kicks off implementation process, tasks team on expertise, discipline
Nigeria’s target of hitting a $1 trillion economy by 2030 moved a step closer on Wednesday, July 3, with the launch of a new initiative to establish an operating model and framework for Economic and Financial Inclusion by the federal government.
The initiative, launched by Vice President Kashim Shettima in his office at the State House, Abuja, is designed to combat poverty and catalyze sustainable economic growth from the ground up.
In a statement issued by senior special assistant to the president on media and information, Stanley Nkwocha, Vice President Shettima said the initiative symbolises the commitment of the President Bola Ahmed Tinubu administration to enhancing financial and economic inclusion across Nigeria.
The federal government had on April 25, 2024, unveiled the Aso Accord on Economic and Financial Inclusion, a multi-pronged blueprint designed to achieve universal access to financial services.
The accord represents a core pillar of the administration’s Renewed Hope Agenda to transform the nation into a $1trillion economy by 2030 while combating poverty and insecurity through broad-based prosperity.
Addressing members of the team and other stakeholders at the maiden meeting, the Vice President noted that the idea is to provide access to capital and eradicate poverty through legislative interventions and critical policies.
According to Shettima, at the heart of every strategy championed by President Tinubu, there has been the need to prioritise inclusive economic growth and development.
He listed some positive results the efforts have yielded including the recent upgrade of Nigeria’s credit outlook to positive by Fitch Ratings, noting that it is in recognition of the reform progress under President Tinubu.
“While such an upgrade by a distinguished institution reflects growing confidence in our economic trajectory, particularly in light of policy changes aimed at easing our debt service burden, we remain mindful of the short-term impacts of these reforms.
“Hence, we are prioritising measures to mitigate immediate effects, from the Student Loan Act, which democratises access to education, to the relentless efforts of the Federal Ministry of Agriculture and Food Security in combating food insecurity”, he said.
VP Shettima pointed out that due to the administration’s belief that its approach to inclusive growth must be strategic and sustainable, economic and financial inclusion was elevated to the agenda of the National Economic Council (NEC), where all governors of the 36 states and the FCT minister participate in crucial policy deliberations alongside other stakeholders.
He implored members of the implementation team and all stakeholders involved in the initiative to recognise the weight of their responsibility, saying what they have at hand is a vital national assignment.
The Vice President stated: “You have been entrusted with a vital national assignment, and I have full confidence that you will bring your best efforts to ensure its success.
“As we embark on this essential initiative, I call upon each of you to contribute your insights, expertise, and dedication. Only through such resolve and discipline can we forge a robust operating model that will drive economic and financial inclusion across our nation, ensuring every Nigerian has the opportunity to thrive.
“I also implore the implementation team to engage all stakeholders fully. There is no greater calling than developing solutions to alleviate the impact of ongoing economic reforms on over 30 million financially excluded Nigerians, propelling Nigeria towards sustainable and inclusive growth”.
Also speaking during the meeting, the technical advisor to the president on financial inclusion, Dr. Nurudeen Abubakar Zauro, reported substantial progress in implementing the Aso Accord on financial inclusion and a series of initiatives aimed at broadening financial access across the nation.
Dr. Zauro, while acknowledging the role of Vice President Shettima in supporting the signing of the accord and ongoing implementation, reported that discussions on financial inclusion have now reached the highest levels of government, including NEC.
“Since its signing, the operationalization of the accord has received funding from the Bill & Melinda Gates Foundation through the Lagos Business School (LBS),” Dr. Zauro said.
He further explained: “We have been setting up the operating model and legal framework to ensure that the project takes off smoothly and is aligned with the Renewed Hope Agenda. “Working on the team are also Augmentum Advisory, Banwo & Ighodalo, and Ndarani (SAN) & CO.,” Dr. Zauro said.
He disclosed that the team is planning capacity-building initiatives and “high-profile training for permanent secretaries and Commissioners of Finance to ensure that practical knowledge on financial inclusion would be injected where they are needed.”
Earlier, the Project Manager at the Lagos Business School, Prof. Olayinka David-West, commended the Tinubu administration for putting economic and financial inclusion on the front burner by signing of the Aso Accord earlier in April.
She said the team at the Lagos Business School working with its counterpart in the VP’s office and other stakeholders is looking at the legal framework for financial inclusion as well as giving the initiative the convening power, and national coordination to drive ownership across the country.
The project manager said though the Lagos Business School collaborating with other partners has over the years made deliberate efforts at entrenching financial inclusion across the country, the initiative of the present administration will serve as a gateway to successfully operationalising the policy nationwide.
Prof. David-West said the engagement with the Vice President seeks to identify the right platforms and structures aimed at galvanizing the relevant authorities to key into the initiative.
Also present at the meeting were the National President of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), Mr Fasasi Sarafadeen; Senior Lecturer, Lagos Business School, Dr Nkemdilim Iheanachor; Project Leader, Augmentum Advisory, Mr Kolajo Ajibola, and the Project Team Lead, Mr Stephen Abure, among others.
Foreign exchange (FX) inflows to the economy stood at $24 billion during the first quarter of this year (Q1), Central Bank Governor Olayemi Cardoso has said.
Speaking in an interview with Bloomberg TV, the CBN boss said the monetary policy tools employed by the apex bank have been showing positive impacts on the FX market.
According to him, the FX inflow of Q1 2024 represents about 50 per cent above the inflows recorded in previous quarters up to 2021.
“The tools are having a positive impact. So, we believe that continuing on this trajectory, liquidity will continue to grow,” he said.
The CBN data further showed that FX inflows in the quarter under review, was 136 per cent of total inflows last year. In Q1, Nigeria saw a massive spike in inflows.
This increase has been attributed to major reforms to liberalize the foreign exchange markets, enhance transparency, reduce arbitrage opportunities, promote stability and improve liquidity in the market.
According to the data obtained from FMDQ’s website, total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) increased by 41.7 per cent to $3.75 billion as against $2.64 billion in February – the highest level since March 2019 ($6.07 billion).
Inflows from foreign sources spiked by 39.6 per cent ($1.54 billion) – the highest in over four years.
The data revealed that local sources accounted for 59 per cent of total transactions, while foreign sources contributed 41 per cent of gross transactions.
Cardoso further explained that the apex bank set up a committee to facilitate more inflow of diaspora funds into the official FX market.
The committee, he added, reports directly to him with the sole objective of doubling the inflow of foreign exchange from the international monetary operations.
According to the governor, the committee efforts are yielding positive results as seen in the rise in inflow from Nigerians in the diaspora.
He said “We’ve had a recognition of the huge role the Nigerian Diasporans play in remitting tremendous amounts of money into the system over some time.
“We set up a committee which reports directly to me to double the amount of foreign exchange inflow coming from the International Money Transfer Operators who service that segment of the autonomous players.
“Capital inflows are very important. And the reason for that in the case of Nigeria, the pass-through from the foreign exchange rate into inflation is quite significant. We believe that this is an area outside of the normal day-to-day operations that NNPC and exporters will help in closing the gap. Already, it’s beginning to bring about results. Again, we are confident that with these kinds of measurements, liquidity will increase in our market.”
Going by the CBN data, the FX reserves stood at $33.91 billion as of Tuesday.
In March, the CBN said the economy recorded over $1.5 billion in FX inflow in the same month, indicating its monetary policy initiatives are effective.
The economy has continuously shown strength in forex inflows since January. The CBN data showed that in January, international trade transactions resulted in a higher trade surplus in the review period, due, majorly to improved domestic crude oil production and higher global crude oil prices.
Capital inflow into the economy also rose.
Foreign exchange flows through the economy resulted in a higher net inflow through autonomous sources.
At $32.26 billion, foreign reserves could cover 4.4 months of import for goods and services or 5.6 months of import for goods only, higher than the three months import cover benchmark.
The foreign reserves opened January last year at $36.55 billion from $36.9 billion at the end of November 2022 due to exchange rate pressure accentuated by a combination of heightened demand and slow accretion to reserves.
Other activities in the FX market showed that the trade balance improved in January 2024, on account of higher earnings from crude oil export.
The provisional data revealed a higher trade surplus of $1.99 billion from $1.86 billion in December 2023.
The total export receipts rose by 2.7 per cent ($4.96 billion) from $4.83 billion.
SIR: A key component of transforming Nigeria’s economy is the reorientation of both citizens and leaders. As management expert Peter Drucker famously said, “Culture eats strategy for breakfast.” For Nigeria to thrive, a culture of unity and patriotism must be deeply embedded within society. The National Orientation Agency has a crucial role to play in this regard.
Accurate demographic data is essential for effective planning. Nigeria’s last population census was conducted in 2006, making it imperative for another one. In addition to conducting a population census, a robust system should be established to register new births, ensuring that population data remains current. Population census should be held at least every 10 years to facilitate informed planning.
Diversification of the economy is another critical area that requires urgent attention. Sectors such as mining, agriculture, and tourism remain largely untapped, presenting significant opportunities to increase the country’s revenue base and improve its balance of trade. Diversifying the economy will also help stabilize the currency, reduce unemployment, and lower poverty rates, fostering overall economic resilience.
Improving the country’s tax revenue to gross domestic product(GDP)ratio is essential for sustainable economic growth. In 2023, this ratio stood at a mere 9.4%, which is very low by international standards. To address this, Nigeria should focus on widening its tax net, enforcing tax compliance, and possibly increasing certain taxes. These measures will enhance government revenue and enable more robust public investment.
Nigeria has a significant infrastructure deficit that hampers meaningful economic development. The lack of adequate power increases the cost of business, causing companies to lose their competitive edge. The government should Improve the road and railway infrastructure to ensure efficient movement of goods and people. Additionally, more fully operational seaports are needed to alleviate the long-standing issue of port congestion, which has caused substantial business losses due to delays in clearing goods.
The government should encourage economic activity and empower individuals to pursue innovative ventures by offering low-interest loans to aspiring entrepreneurs and small businesses. Additionally, recapitalizing banks is essential to strengthening their ability to support economic growth, especially considering the devaluation of the Nigerian currency.
The civil service, forming the backbone of governance and playing a crucial role in policy formulation, implementation, and public service delivery, requires transformation. Addressing the current challenges within the civil service is essential for enhancing governance and effectively implementing reforms. The condition of the civil service significantly impacts the economy.
Eliminating corruption and waste in governance will significantly reduce the cost of government operations. The government should champion value-for-money audits to assess the economy, efficiency, and effectiveness of transactions. Strengthening internal controls and ensuring that anti-graft agencies are effective are crucial in safeguarding public assets from theft and fraud. It should ensure that whistle-blowing policy encourages and protects whistle-blowers as it will help curb corruption.
Proper remuneration of workers is vital for improving productivity, fostering innovation, and reducing brain drain. Nigeria has experienced a mass exodus of skilled professionals in recent years. As the government concludes the process of setting a new national minimum wage, it must ensure that the minimum wage is adequate taking cognizance of current economic realities
Governments should allocate funds judiciously, focusing on critical priorities rather than indulging in misplaced spending. Adopting a scale of preference facilitates informed decision-making, enabling authorities to allocate resources strategically based on identified needs and desired outcomes.
Revamping Nigeria’s educational system is crucial. It requires aligning the curriculum with national strategic goals and ensuring access to quality education for all. This reform must prioritize equipping students with relevant skills for a modern economy, fostering innovation, and embracing technology adoption.
The security situation in Nigeria represents a significant drain on resources that could otherwise be allocated to productive endeavours. Insecurity disrupts economic activities like mining, agriculture, and tourism and deters foreign direct investment (FDI) needed for economic growth. Addressing these security challenges is paramount for Nigeria to attain sustained economic prosperity.
Despite the savings from removing fuel subsidies and adopting a floating exchange rate for the naira, Nigeria still faces significant financial challenges primarily due to the substantial of servicing its debts. These high debt servicing obligations severely constrain the government’s ability to finance crucial development projects that could stimulate economic growth and improve societal well-being. To alleviate this fiscal burden and create room for sustainable development, the government should pursue aggressive strategies for debt relief or restructuring.
Eben Joels is the Managing Partner at Stransact Chartered Accountants and Audit, the exclusive RSM correspondent firm in Nigeria. In this interview with Ibrahim Apekhade Yusuf, the multi-disciplinarian speaks on the troubling exit of multinationals from Nigeria, the hotly debated recapitalisation agenda for banks and the role of the Central Bank of Nigeria vis-à-vis the inflation crisis, rise of non-performing loans, recovery strategy to hedge the Naira against the dollar, how multiplicity of taxes and other levies across the subnational makes the whole idea of ease of doing business a mirage, amongst other sundry issues. Excerpts:
Diageo, majority shareholder of Guinness PLC, sold its 58% equity in the business to Singaporean-based Tolaram, fuelling fears in some quarters that multinationals are exiting the country. What is your thought on this, and what does it portend for the immediate future?
Diageo’s decision to withdraw from Nigeria and sell its stake in Guinness PLC to Tolaram indicates that it sees better opportunities elsewhere or perceives challenges in the Nigerian market that outweigh the potential benefits. This move might reflect a strategic shift in Diageo’s global portfolio or a reassessment of its investment priorities. Very clearly, Diageo has fashioned a more profitable way to derive income from Nigeria without having to deal with the harsh operating environment for businesses.
For Tolaram Group, they probably see this acquisition as an opportunity to solidify their presence in Nigeria. They already operate in Nigeria primarily through their subsidiaries in various industries, such as Dufil Prima Foods Plc, which produces the popular Indomie instant noodles and the Lekki Deep Sea Port project. The acquisition of Diageo’s stake in Guinness PLC indicates that they see value in the Nigerian market and are willing to invest in it. Tolaram may bring a different perspective and strategy to the table, potentially leading to changes in how Guinness PLC operates in Nigeria. It could also signal increased competition or consolidation within the Nigerian beverage industry. While Diageo’s exit raises questions about the attractiveness of the Nigerian market for multinational companies, Tolaram’s investment suggests continued interest and opportunities for growth in the region.
From available information, Kimberly-Clark, an American multinational and producer of baby products, Huggies, GlaxoSmithKline Consumer Nigeria Plc, Sanofi-Aventis Nigeria Limited and Procter and Gamble are some of the multinationals that have recently shut down their operations in Nigeria, either fully or partially. There is rumour that some of the International Oil Companies (IoCs) such as Shell, ExxonMobil and ENI are actively selling their assets to exit Nigeria. Should we be worried about the exit of multinationals from Nigeria?
The departure of multinational companies from any country, especially ones as significant as those you mentioned, should ordinarily raise concerns. Such exits can impact employment, economic growth, and overall stability. These multinationals are some of the few places where you can find best practices in recruitment, training and compensation of personnel. They are some of the few companies where graft is not enshrined. Many Nigerian-owned businesses are not committed to best practices. However, it’s essential to understand the reasons behind these exits. They are driven by various factors such as economic challenges, regulatory issues, security concerns, leading to strategic business decisions by the companies to exit the market. Addressing these underlying issues could potentially attract and retain multinational investments. The government should focus its efforts on improving the business environment, enhancing security, providing regulatory clarity, and promoting economic diversification, which can mitigate the negative effects of multinational exits and encourage future investments.
The new recapitalisation for banks has been hotly debated because of some of the clauses. Do you think the Central Bank of Nigeria means well for the banking sector?
Overall, whether the CBN means well for the banking sector depends on the balance it strikes between strengthening financial stability, promoting competitiveness, and ensuring that the needs of the economy, businesses, and consumers are adequately addressed. Open dialogue and collaboration
between the CBN, banks, regulators, and other stakeholders are crucial in navigating these challenges and achieving positive outcomes for the banking sector and the broader economy. Overall, I will be hopeful. The last round of capitalisation spurred the capital market and boosted the economy. I hope this will be the same result.
Most banks still have a high percentage of non-performing loans in their books despite measures taken by the CBN to reduce this. What can be done to make the banks solvent, so that they will not have to carry too much debt burden?
To address the persistent challenge of high non-performing loans (NPLs) in Nigerian banks, a multi-faceted approach is necessary. Firstly, banks should prioritise proactive risk management practices, conducting thorough credit assessments, and implementing stringent monitoring mechanisms to identify potential defaults early on. This involves restructuring loans for struggling borrowers and adopting robust recovery strategies to mitigate losses effectively. Simultaneously, regulatory bodies like the CBN should enhance supervision and enforcement of prudential regulations, ensuring that banks maintain adequate capital levels to absorb potential losses and remain resilient in the face of economic volatility. Additionally, improving credit information systems and promoting economic diversification away from volatile sectors can reduce systemic risks and enhance banks’ stability, ultimately mitigating their debt burden and fostering a healthier banking sector. The CBN should above all mandate regular stress testing. Mandatory reporting of impairment indicators on a regular basis should be considered.
Do you think Heritage Bank’s licence revocation is well-timed? Some think it might trigger a run on other banks, and drive panic.
The timing of Heritage Bank’s license revocation by the CBN is a critical decision with potential ripple effects. While the CBN likely has specific reasons for taking such action, including concerns about the bank’s financial stability or regulatory compliance, the timing must consider its broader impact on the banking sector’s stability. Revoking a bank’s license can indeed trigger concerns among depositors and investors, potentially leading to a run on other banks and inducing panic in the financial system. Therefore, the CBN must carefully manage communication and ensure transparency to mitigate any spillover effects and restore confidence in the banking sector. Additionally, the CBN should continue to provide reassurance about its commitment to maintaining financial stability and supporting affected depositors to prevent widespread panic and systemic disruptions.
The CBN has dissolved the Board and Management of Union Bank, Keystone Bank, and Polaris Bank. What is the difference between the case of these banks and the case of Heritage Bank?
The CBN appointed new management teams to stabilize these banks and safeguard the interests of stakeholders. In contrast, Heritage Bank has not faced a similar intervention from the CBN; rather, its license was revoked. I suspect this is because the degree of financial health and governance in Heritage Bank may be such that it cannot be salvaged.
The Naira has faced the toughest battle since it became a legal tender in Nigeria some four decades ago. The value has been completely eroded with its unprecedented crash in the foreign exchange market. Do you think the CBN is doing enough to hedge the Naira against the dollar so far, with the recovery strategy? And, can these efforts be sustained?
The CBN has implemented several measures to hedge the Naira against the dollar, including interventions in the foreign exchange market, adjusting the monetary policy rate, and introducing various forex management policies. Despite these efforts, the Naira has continued to depreciate significantly, indicating that the current strategies might not be sufficient to combat the underlying issues affecting the currency’s value. Structural economic challenges, such as dependence on oil exports, limited foreign reserves, and a high import bill, especially the continued importation of petroleum products continue to exert pressure on the Naira.
Stabilising the Naira will require a multifaceted approach that goes beyond short-term interventions. The CBN must focus on diversifying the economy, enhancing domestic production, and improving the overall business environment to reduce reliance on foreign exchange. Additionally, policy consistency and transparent communication are essential to restore confidence among investors and market participants.
Access to credit remains a big deal for businesses, especially SMEs because of the high risk quotient alright. What can be done to ease the burden of businesses to enable them to get easy access to credit at rock bottom rates?
The government and financial institutions need to adopt several strategies. Firstly, the CBN can enhance its existing credit intervention programs, such as the Anchor Borrowers’ Program and the Micro, Small, and Medium Enterprises Development Fund (MSMEDF), by increasing their funding and streamlining the application processes. These programs can be expanded to cover more sectors and offer lower interest rates. Additionally, financial institutions should be encouraged to develop tailored financial products that cater to the unique needs of SMEs, including flexible repayment terms and lower collateral requirements.
Moreover, improving the credit infrastructure in Nigeria is crucial. This includes establishing and maintaining a comprehensive credit registry system to track the credit history of businesses, which can help reduce perceived risks by lenders. Strengthening credit guarantee schemes can also provide additional security to banks, encouraging them to extend more credit to SMEs. For example, I am not aware of any credit insurance company in Nigeria. On a broader scale, fostering a stable macroeconomic environment with low inflation and consistent policies will help lower the overall risk profile, making it easier for businesses to obtain credit at more affordable rates.
The inflation rate, almost at 40 percent, has practically affected the standard of living with the excruciating cost of goods and services. What can be done to mitigate this?
A multifaceted approach is necessary. Tighter monetary policies to curb excessive money supply have not worked. Raising interest rates and increasing reserve requirements for banks has also not worked. I believe the government should focus on stabilising the exchange rate by boosting foreign reserves and reducing dependency on imports. This is the time to strengthen the agricultural sector through subsidies and support programs to improve local food production so that we can look forward to reduced food prices.
On the fiscal policy front, the Nigerian government should be more efficient in public spending and curb wastages. Investing in infrastructure, particularly in transportation and energy, can lower the cost of doing business and reduce the prices of goods and services. Implementing social safety nets and targeted subsidies for essential goods can help alleviate the immediate burden on low-income households. Encouraging competition in key sectors, like telecommunications and energy, can also drive down prices through market forces. Fostering an environment that supports local manufacturing will create jobs and boost incomes.
Among the challenges bedeviling businesses in Nigeria, is multiplicity of taxes and other levies across the subnational making the whole ideal and idea of ease of doing business a mirage. What concrete measures can be put in place to ease the affairs of businesses to boost productivity and efficiency within the business ecosystem in the country?
To address the challenge of multiplicity of taxes and levies that hinder businesses in Nigeria, a comprehensive tax reform is necessary. The government should streamline the tax system by consolidating various taxes and levies into a single, simplified tax regime. This can be achieved by implementing a harmonised tax policy across federal, state, and local levels to eliminate overlapping and redundant taxes. Establishing a centralised tax collection system would reduce administrative burdens on businesses, making compliance easier and more efficient. Additionally, providing clear guidelines and ensuring transparency in tax policies can help businesses better understand their tax obligations and plan accordingly.
Furthermore, the government can enhance the ease of doing business by improving regulatory frameworks and reducing bureaucratic red tape. By creating a more business-friendly environment, Nigeria can stimulate productivity, attract investment, and ultimately drive economic growth.
With the state of infrastructure near comatose, Nigeria is forever grappling with power outages and other intractable problems in different areas. How much does the government need to invest in infrastructure to set the country on the path of progressive growth and socioeconomic development?
The government needs to make substantial investments in infrastructure. Estimates suggest that Nigeria requires approximately $3 trillion in infrastructure investments over the next 30 years to bridge the existing gaps and support its growing population. Immediate priorities should include significant allocations towards the power sector to resolve the chronic power outages that stifle business operations and daily life. Investment in renewable energy sources, upgrading the national grid, and expanding electricity access can transform the energy landscape, fostering industrial growth and enhancing the quality of life.
In addition to power, the government must prioritise investments in transportation, healthcare, and education infrastructure. Modernising and expanding the road network, railways, and ports will improve connectivity, reduce transportation costs, and enhance trade efficiency. Similarly, upgrading healthcare facilities and educational institutions is crucial for building a healthy and skilled workforce. Public-private partnerships (PPPs) can play a vital role in mobilising the required capital and ensuring efficient project execution. By committing to comprehensive infrastructure development, Nigeria can create a more conducive environment for economic activities, attract foreign investment, and achieve sustained socioeconomic progress.
President Bola Tinubu’s administration is one year on the saddle. In your own assessment, what has he done right or wrong, and what are the low-hanging fruits he can easily pluck to set things right?
In his first year, President Bola Tinubu’s administration has taken some notable steps, such as prioritising economic reforms. He needs to show more bite in tackling corruption. His efforts to attract foreign investment through improved business policies have been met with cautious optimism. The administration’s focus on infrastructure projects, like road construction and the expansion of power generation, aims to address critical issues affecting economic growth. However, there have been criticisms regarding the pace of these initiatives and their immediate impact on the lives of ordinary Nigerians. The administration has also faced challenges in effectively managing the country’s security situation, with ongoing conflicts and insecurity still prevalent in several regions.
President Tinubu can focus on low-hanging fruits such as strengthening the agricultural sector through targeted subsidies and support programmes to boost food production. They can also focus on simplifying the tax system to reduce the burden on small and medium-sized enterprises (SMEs). They can address power shortages through quick-win projects, such as deploying renewable energy solutions in underserved areas. By concentrating on these achievable goals, President Tinubu can build public confidence and lay a stronger foundation for long-term development.
The organised labour in Nigeria called a strike recently and they have reduced their minimum wage demand to N250,000 per month while the Federal Government has offered N62,000, what do you think the minimum wage should be?
Determining an appropriate minimum wage in Nigeria requires balancing the needs of workers with the economic realities of businesses and the government. Given the significant gap between the organised labour’s demand of N250,000 per month and the Federal Government’s offer of N62,000, a middle ground must be sought. A reasonable minimum wage should consider the current inflation rate, cost of living, and the need to sustain businesses without causing undue financial strain. A new minimum wage is useless if it is not accompanied by policies aimed at boosting economic growth and productivity, which can support higher wages in the long term. Implementing measures to reduce inflation, such as stabilising the exchange rate and improving domestic production, can help sustain wage increases. Additionally, enhancing social services, such as healthcare and education, can reduce the overall financial burden on workers. By adopting a holistic approach that includes a fair minimum wage and supportive economic policies, Nigeria can work towards a more equitable and sustainable economic environment for its workforce.
Fresh graduates in Nigeria continue to complain about lack of opportunities, and that you need to know some highly placed person to get a job, what do you think we can do as a country to drive job growth for young people?
To drive job growth for young people in Nigeria, it is essential to create an enabling environment that fosters entrepreneurship and supports small and medium-sized enterprises (SMEs). We have a society where we worship big men without paying attention to their source of wealth. We define success as having a lot of cash in your bank account irrespective of whether that cash is from a criminal enterprise. Therefore the emphasis for many young people today is how to make quick money. It is not so much to develop a skill to sell. For this reason, we actually produce a ton of unemployable people. People with the wrong values.
I still believe that there is always room for merit. For example, we are a top destination for the best graduating students of most universities around us and you do not need to know anyone to work with us. You only need to be competent and be armed with the right mind set- a continuous learning mindset, and of course, the right values.
There is much talk about Tax Reform in Nigeria. If the current President will stay in office for eight years, what do you think he should focus his tax reforms on?
If President Bola Tinubu remains in office for eight years, his tax reform efforts in Nigeria should focus on broadening the tax base and improving tax collection efficiency while crashing the tax rate. Broadening the tax base should mean having a tax system that requires every Nigerian to file a tax return with the center. I will propose a Federal Income tax for individuals at a nominal rate and cause the states to share data with the Federal Inland Revenue Service. This will make the State Internal Revenue Service more efficient. I will eliminate all other taxes masking as levies for specific causes such as Education tax, Police Trust Fund, NITDA levy, etc. All these levies have taken our corporate tax rate to be one of the highest in the World. For example, Russia just increased its corporate tax rate to 25%. That is a country operating a war economy. Yet ours is about 34%. These special cause taxes that I mention are largely used to offset the administrative costs of the bureaucracy they fund or mostly stolen. I’d rather we have a lower tax rate with a wider tax base.
There are other radical tax ideas. For example, since Nigeria is a republic, I struggle with the justification to exempt the president and governors from paying taxes. This is absurd when even in a monarchy such as the UK where the King and the Prince of Wales are exempt from tax, they chose to voluntarily pay taxes to the state. If in the largest economy in the world, the United States, the President is not tax exempt, I see no reason why a relatively poor country such as ours, should exempt certain offices from taxes.
Finally, I hope the President will be bold enough to implement an Inheritance tax system for Nigeria. In most advanced countries, there is a big tax – sometimes exceeding 40% on estates when these are passed on. This tax is one of the ways these countries, as capitalist as they are, ensure that there is a redistribution of wealth in some way. The tax is only for the very rich. In the UK the threshold is estates in excess of about GBP325,000. The system offers large reliefs to anyone who chose to donate to a charitable non-profit. This is another way to grow the charitable nonprofit sector. Imagine if we say anyone inheriting assets worth N5b and above will pay 40% of that to the state or 20% if they donate a certain threshold to a charity. There are many benefits. But I hope such a system will reduce the incentive to steal humongous amounts and leave them for your heirs.
Nigeria’s economy, which was said to be the largest in Africa in 2022, is set to slip to the fourth largest in 2024. What is the cause of this, and how can this be reversed?
The slip can be attributed to several factors. Persistent issues such as political instability, insecurity, and corruption have significantly hindered economic growth. High inflation rates, depreciating currency, and inadequate infrastructure have also contributed to a challenging business environment. These factors, combined with slow implementation of economic reforms, have undermined investor confidence and stymied growth across various sectors.
To reverse this trend, Nigeria must diversify its economy beyond oil dependency by investing in other key sectors like agriculture, technology, and manufacturing. Implementing policies that promote economic stability, reduce corruption, and improve governance is crucial. Strengthening the business environment through infrastructure development, particularly in power and transportation, will attract domestic and foreign investments. Enhancing education and vocational training can build a more skilled workforce, fostering innovation and productivity. By focusing on these areas, Nigeria can create a more resilient economy, capable of sustaining growth and reclaiming its position as Africa’s largest economy
Minister of State for Labour and Employment, Nkeiruka Onyejeocha has said the efforts of the Federal Government towards promoting entrepreneurship will revamp Nigeria’s economy and reposition it on the path of steady growth, enhance job creation and reduce unemployment and insecurity.
The Minister made the remarks in her speech at the ongoing 112th Session of the International Labour Conference in Geneva, Switzerland, as a response to the Director-General’s report on the renewed social contract, outlining Nigeria’s position on the global agenda for decent work and social justice.
In a statement by her Special Adviser (Media), Emameh Gabriel, the minister reaffirmed the government’s commitment to fostering a culture of constructive social dialogue and promoting decent working conditions in Nigeria, ensuring a fair and equitable work environment for Nigerian workers.
According to the statement, the minister highlighted the government’s policies targeting food security, job creation, poverty alleviation, and social cohesion, aligning with President Bola Tinubu’s “Renewed Hope Agenda.”
Speaking on the new national minimum wage, she said: “The Federal Government is currently negotiating through its tripartite committee to review the National Minimum Wage as part of its efforts to promote decent work for workers in both the public and private sectors.”
The minister told the gathering that Nigeria has been implementing international labour standards, including promoting social justice, and boosting national productivity through the recently launched Labour Employment and Empowerment Programme (LEEP), aimed at creating jobs and equipping youth with entrepreneurship skills.
“The Government also recognise skill acquisition as a viable strategy for youth empowerment and job creation, and has identified the informal sector as the driving force of economic growth in most developing countries of the world.
“As an intentional strategy towards achieving the goals of the Renewed Hope Agenda, the Federal Government launched the Labour Employment and Empowerment Programme (LEEP) on Thursday 25th April,2024, with the fundamental vision to create jobs by training and equipping 2.5 million persons every year within the next 4 years with requisite entrepreneurship skills,” she added.
The minister emphasised the need for global cooperation to address technological challenges and build a more resilient and inclusive society for future generations.
She applauded the Director-General’s office for selecting a timely and relevant theme, which highlights the mutual interdependence between individuals and societies in promoting social unity, economic robustness, and political stability.
She observed that this year’s theme aligned with the “Renewed Hope Agenda” of President Bola Tinubu’s administration, a visionary policy framework designed to transform Nigeria into a premier investment hub on the global stage.
The minister said: “The agenda is hinged on the Core Pillars ‘4-D Diplomacy Strategy’ centred on promoting democracy, driving economic development, harnessing Nigeria’s demographic potential, and engaging with the diaspora community. The eight Priority Areas of the Agenda aims to pursue economic prosperity for the country through food security, poverty eradication, economic growth, job creation, access to capital, inclusiveness, improving the security of life and property, rule of law and fight against corruption which will help build a more just and equitable society reminding both Nigerians and the global community that Nigeria stands ready to embrace the future and conduct business in line with International Best Practice.
“The Nigerian government has provided enabling environment for social dialogue with the tripartite constituents to advance social justice and has solicited tripartite plus cooperation to align with government’s agenda in the labour sector to promote workers welfare and boost national productivity.”
The minister identified the following areas where the government has made giant strides: “Implementation of the Decent Work Country Programme III; Ratification of the 10 ILO Fundamental Conventions and most recently ratified 4 additional Conventions, including Convention 190 on Violence and Harassment; Revival of the National Labour Advisory Council, Nigeria’s highest tripartite consultative structure; Tremendous progress in the review of our Labour Law.
“Establishment of Job Centres across the country; Upgrading Skill Acquisitions Centres across the six geo-political zones; Establishment of Migration Resource Centres, as part of government’s commitment to providing good governance for Labour Migration; Reducing child labour to the barest minimum by promoting universal basic education and encouraging school enrolment of minors, especially for the girl child; Granting direct loans to farmers in the agricultural sector geared towards food security; and Provision of portable water, energy and massive road infrastructure, just to mention a few.”
Hannatu Musa-Musawa, a lawyer, is the Minister of Art, Culture, and Creative Economy. In this interview with Funsho Kareem, she explains the eight-point agenda of her ministry and how she hopes to achieve the outcomes set out by President bola Ahmed Tinubu. Excerpts:
Since your appointment as minister of Arts, Culture and the Creative Economy, what are those things that have happened in that space? A lot! I think one of those things that shows that President Bola Tinubu is an innovator is the fact that he really was committed to diversifying from our normal means of revenue, which is oil. In that diversification, he created this amazing ministry – art, culture, and the creative economy – the first of its kind in Nigeria. When I got this job, I decided to approach it from a ground zero point of view because I really felt that not much had been done in the space to create a fortifying sort of industry-specific structure. The basic things that are needed to put a foundation were not there, so we approached it from a ground zero perspective. In doing that, I came up with an eight-point agenda. That eight-point agenda hammers on making Nigeria a global creativity hub and engaging in skill acquisition for members of the industry and capacity building so that they will be able to be better positioned for job creation.
Can you break down this eight-point agenda and its operationalisation?
Policy framework is central when you talk about building a foundation. We decided to look at all the policies that are needed. The issue of culture policy, creative economy policy, and infrastructure policy. These were some things that we felt were very important. Of course, there is the issue of stakeholder engagement. Stakeholder engagement: One of the greatest things about this industry is the fact that members and players have allowed the industry to grow organically and become successful in spite of the government. Now that the government has come into place, these are the people who operate within the space. They know what needs to be done. Then, you also look at the strategic partnerships that are necessary – the PPPs. When you look at what needs to be done in this industry, the government can not do it alone. I think for the purpose of sustainability, the government should not do it alone. The issue of strategic partnerships is very key. One of the things that we looked at in terms of the potential of the industry was its ability to create an economic expansion. We came up with a very ambitious goal of trying to contribute at least $100 billion to increase the GDP by 2030 or 2031. It’s the potential to bring in economic growth.
Is that achievable?
Yes, it is achievable, but I’ll get to that later.
On the issue of infrastructure, when you talk about building a foundation, it is key. There is really no infrastructure that is able to support the growth of the industry. It is a key area on which we want to concentrate. The promotion of cultural heritage. One of the mandates of the Ministry is to give a cultural expansion. In this cultural expansion, we hope to make Nigeria the cultural hub of Africa, especially given the sort of diversity that we have. We also have a great initiative called Destination 2030, which we launched earlier in the year. Destination 2030 is a sort of branding. It is something that we want to use to reposition Nigeria in the eyes of the world. We have launched Destination 2030, and it is going to create a soft power for Nigeria. That has been launched, and we hope to be able to expand it more in the next coming months, in the next years, to really make Nigeria the focal point of global interest, especially now when you have the whole world interested in the talent and content that Nigeria has to produce. Destination 2030 is an ongoing initiative that can only be fleshed out as time goes. On the skill acquisition, through our agencies, we have been able to give capacity training to a number of youths in various areas such as arts, crafts, music, and film. We hope to continue to do so and more.
Is there a possibility that you will create hubs for talents across the country?
Yes, we are talking about creating hubs, and already, we have started. We are partnering with one of the greatest members of this industry, a young man, Mr Bayo, who created Mad House in Lagos. We are working together with him to see how we can expand those incubators and those hubs in the different festivals apart from the ones that he has already done in Lagos, which we have already keyed into. He has already started here in Abuja, it is almost finished, and the Federal Government is going to come in to partner with him on that. We are trying to see how we can put it in the six different geo-political zones first, and then we will expand that to the different states, hopefully. By the end of the administration, we will have been able to expand those incubators to every single senatorial district so that we are able to take this ability to have the skill acquisition to the grassroots within communities. Hopefully, we will be able to do that, and it is going to be based on the successes that we will have with the first six geopolitical zones. With this skill acquisition, the ministry has launched what we call CLAP – Creatively Acceleration Programme, which is a digital platform that is a convergence point for creatives. Creatives can come onto this platform and be able to partner them with areas where they are able to gain the specific skill that they need and the specific tours that are required for them to be able to build on the capacity.
Some time ago, you talked about job creation and you were very upbeat about it. What progress have you made in that direction?
When it comes to job creation, which is one of the things that we have committed to as a ministry, specifically for the younger demographics with CLAP, we will be able to get them jobs whether in Nigeria or across the world. It is a tool that we have already launched within the ministry, we are working to flesh that out as well, and hopefully, we will take it to the executive council.
As I’ve said earlier, policy is key. It is foundational. One of the main areas that we concentrated on is in intellectual property, IP, and protection. When you talk about the creative industry, you can not even start a conversation if you don’t have intellectual property protection and copyright. Last week, the Minister of Trade and Investment and I set up a committee that is going to look into ensuring that within the span of four to six weeks, we have IP protection and securitization. Already, we have a working document. IP protection cuts across the span of many ministries. You have about nine or eight ministries that are involved. So we have to get inputs from all these ministries involved in terms of what they need to be captured within the kind of documents that we are already working with. Hopefully within the next six weeks, we will present that to the executive council and ensure that we have IP securitization that is needed not only to give the protection of people in the industry, but also to ensure that people in the industry can use their IP as collateral.
When you have IP securitization, it gives confidence to investors to come into the country. For me, IP is very key.
We’ve not discussed culture here. I watched you somewhere discussing the issue of cultural heritage with passion?
Thank you. Cultural policy is important. In my ministry, we are working with a document, I think there already exists a 2020 document on cultural policy. We are cleaning that up, and I think that within the next couple of weeks, maybe three weeks at the most, we will be able to present cultural policy to the nation. We are also working with NESG. We have already signed a memorandum of understanding with NESG to work on ensuring that we present a policy that would be able to give the kind of protection and security and support that members of the industry really require.
What about incentives for industry operators?
You preempted me on that. Part of the policy framework that we want to put in place is an incentive policy. Incentive policy is very important for people in the industry, and we have already started working on that. It is just a matter of cleaning that up and presenting it to the public. The incentive policy also looks at how we can give incentives to people and rebates, tax rebates within the industry. International people who work with them in the industry will be able to come and work in Nigeria having that friendly working environment to be able to do so. I have already started talking to the Minister of Internal Affairs, Mr Bunmi Ojo. We are introducing a visa scheme for the creatives, specifically created for the creatives. That is almost at the final stages of the presentation. That is part of the incentives that we are looking at – ways we can encourage people to come into the country, bring their equipment into the country, and have some sort of rebate in relation to that. That is what we have done in terms of incentives and policy implementation.
On governance and collaboration, one of the great things that I have mentioned is that you have people in the industry who have been able to grow the industry organically. They have succeeded in spite of the government. These people have to have a voice in terms of how to create these policies. For example, when I talk to you about the culture and IP policies, we still have to go back to people in the industry to bring their input as to what they feel is needed to continue to propel the industry and the ministry forward. This collaboration is very key, and we have already done a number of stakeholder engagements, and we will continue to do so.
One of the things that I have said was always going to happen was that we were going to have an advisory council within the ministry. This advisory council, together with NESG, is part of the MoU that we have already signed with the NESG. This advisory council is going to be situated in the ministry. Very soon, that advisory council will be populated by members of the industry. The greats in the industry who know what needs to be done within the industry. Already, I have issued invitations to a number of people that I think are key to the industry, and their names will soon be announced by the government. That advisory council is very key. That also relates to strategic partnerships.
How are you proposing to handle the issue of sustainability so that in the long run, that space would not wane?
As a government, we can not be able to put a structure together if you are looking at the sustainability of it. So, we are looking at PPP partnerships. We have discussed with a number of banking institutions, people who have interest and foundations where we can get grants for people within the industry. Very soon, we will be able to announce that we have been able to gain grants from these endowment funds. This is very key. It sounds ambitious, but it really isn’t when you look at the kind of value that is created within the industry. It is just a matter of closing the lacunas and trying to bring that value back home. The numbers are there already. It is just about creating an enabling environment that would allow us to get this value economically. One of the great things that we have started and I am taking it to the executive council is an arena. We do not have one arena in Nigeria. Recently, we had a great Nigerian, Mr Amusan, who is building an arena in Lagos. We should have arenas all over Nigeria. Already in the ministry, we have started discussions as to how we can do one huge arena in the centre of Abuja and then we hope to have what we call the Abuja Creative City, which will be a one stop shop for everything creative. There, you will have your film studios, arena, and music studio.
What about the infrastructure to support what you’re planning to do?
Infrastructure is key. We need to upgrade our museums. As the capital city of Abuja, we don’t have a museum. That is a shame. So, we have to upgrade the existing museums in at least the six geo-political zones so that we will be able to bring back some of our artefacts. Infrastructure, cinemas. We are bringing back cinemas, cinemas in all the states and, hopefully, local governments if it is possible. That is already a discussion, and we are almost done with that. Heritage preservation is key. This cultural expansion we are talking about is also about the preservation of our culture, and this can be done through the cinemas, the return of our artifacts, and the loan of some of our major artefacts.
Since you started your stakeholder engagements, what sort of challenges would you say you have faced?
One of the main challenges that we faced and which we still face in stakeholder engagements is that the industry has really grown lethargic with the promises of governments. In the past, the government had done nothing to help them. This is the first time a president has found it fit to create a ministry to cater specifically to the industry. The fact that you look at IP policy which isn’t in place because there has not been a ministry that looked at the peculiar nature that is required, and the peculiar requirements needed to be put in place. In the beginning, what I faced was that industry players felt the government was on the other side, and members of the industry were over here. There was no trust. It is still going to take a lot for us to bring that trust and the only way we can do it is by giving them the legal regulatory framework that they need, the grants, the capacity building and endowments that they need as well as giving them the infrastructure that they need. Once you do that, you will be able to bring that trust back. Other than that, I have found a lot of magnanimity with the main players in the industry. They have welcomed me. Many of them don’t need us. They have succeeded on their own, but because they care about the industry, they are looking at long-term sustainability.
You talked about $ 100 billion dollars by 2030. How achievable is that?
It is doable. The numbers that we have are based on the metrics out there already. The kind of numbers coming in from Spotify, YouTube, and NETFLIX. You look at the number from the great Funke Akindele’s movie, which grossed a billion plus with hardly any major cinema. Can you imagine the numbers that can be generated if we are able to expand the cinemas? If you are able to give them IP securitization, imagine the lacunas that you would be able to breach. If you do that and you are able to give them infrastructure, you are able to draw a lot of concerts coming into the country. Nigeria’s movie industry is the second biggest in the world, but they don’t have the infrastructure and the proper backing to be able to produce good productions. The productions that we are able to gross are billions that we are talking about in Bollywood and Hollywood. If you are able to give them that enabling environment, those numbers are not very difficult if you look at what South Korea and Japan are doing. I am just looking at the movie industry, but we have the fashion industry, the music industry, and the culinary industry. Can you imagine the kind of money that we can make just by monetising our jollof or monetising our food? It is not very difficult. It is not something that can be done overnight, but we need to put in place an enabling environment that would be able to foster a certain amount of growth from 2027 to 2030.
To what extent are you collaborating with NASS in terms of legislation?
Legislation is going to play a key role. We have done a number of engagements as to how we can upgrade some of our laws. What I met was an industry and a ministry with very obsolete laws. With my background as a lawyer, I was shocked as to how outdated some of these laws were. It is shocking that there has been a ministry in the past, and the laws were just left there. What the President has done by creating this ministry is one that we have no choice but to put on our magnifying glass where it needs to be put. Almost all the laws that govern this particular industry have got to be upgraded. Law reform is going to play a huge part. That is why I said it is only when the government comes in to liaise with members of the industry that you can really get this upsurge. Members of the industry are not going to be able to put legislation through as fast as the government would.
You’ve been touting job creation as a cornerstone of your engagements?
We hope to create at least 2 million jobs by 2027. That is our hope, and I think with what we have done so far, we will be able to do that. Part of our own mandate is to engage a younger demography in almost everything that we do. This is almost all part of job creation, and I have all my agencies pursuing that goal. I have been very lucky because my agencies are now populated with members of the industry who know what needs to be done. The likes of Ali Nuhu, Obi Asika, Tola Akerele, Otunba Ajiboye, these are greats within the space, they know what needs to be done and are working overtime to ensure that they are able to achieve this economic expansion but also to create that enabling environment that people of their industry need. Job creation is very key to Mr. President, and he wants to cater specifically to that young demographic.
One of the things that you would have learnt very early as minister is that there are a lot of fault lines?
Of course, being a member of a northern extraction that has grown up more with the southern community, I do understand those fault lines. What I know is the importance of taking these fault lines into consideration. And in whatever you do, you have to localise it. We intend to work directly with the state governments to ensure that we have a cultural village or cultural renaissance in every state. At the moment, we are coming up with a template for every single state, and we are going to send that to the state governors. Once we send that to the state governors asking them to ask their own commissioners from the relevant ministries to make input as to what they want to be specifically captured within their states. I hope to do a tour of every state. It is a tour we hope to do very soon within the next two months. We will take that template to every single state, and we would invite the state governments to work with us hand in hand to put up a cultural experience, whether a cultural village where they will have their museums. We will be working closely with the National Economic Council, NEC.
Data from the International Monetary Fund has shown Nigeria’s economy is expected to rise to at least $1.852 trillion in Purchasing Power Parity terms by 2029.
The IMF’s prediction shows a noteworthy growth path for the country’s economy over the next five years.
The country’s GDP in PPP terms has been on the increase, projected to rise from $1.36 trillion in 2023 to $1.852 trillion in 2029.
The data shows a consistent growth trend, with a notable increase of 5.5 per cent expected in 2029.
IMF also forecast Nigeria’s share of global GDP based on PPP to reach 0.78 per cent by 2029, indicating a slight increase from 0.77 per cent in 2023.
The steady growth in Nigeria’s PPP brings a glimmer of hope that the country’s economic trajectory is on the path of growth.
Nigeria, the fourth largest economy in Africa, has faced significant challenges in recent years, including a recession in 2020 caused by the COVID-19 pandemic and a decline in oil prices.
However, the data suggests that Nigeria’s economy is gradually expanding, though slowly, and is expected to continue this trend over the next five years.
The country’s share of global GDP has remained relatively stable, fluctuating between 0.775 per cent and 0.778 per cent from 2024 to 2028.
GDP is the most commonly used single measure of a country’s overall economic activity.
PPP is a theory in economics that suggests that in the long run, exchange rates between two currencies should adjust to equalize the prices of a basket of goods and services in each country.
In other words, it implies that a unit of currency should have the same purchasing power across different countries.
The trend of Nigeria’s GDP in PPP terms over the past few years indicates a steady recovery and growth.
In 2024, the country’s GDP in PPP terms stood at $1.44tn, increasing to $1.51tn in 2025, and $1.587tn in 2026. The growth continued in 2027, with a GDP (PPP) of $1.67tn, and $1.759tn in 2028.
With this trend, Nigeria could regain its position as Africa’s largest economy, overtaking South Africa.
Bismarck Rewane, the chief executive officer of Financial Derivatives Company has projected that Nigeria could regain its top place as Africa’s biggest economy by 2028 if it follows its reforms rightly.
Ahead of the one-year anniversary of the President Bola Tinubu’s administration, economic and finance experts yesterday examined the scorecards of the government, with most agreeing that the government has laid the foundation for economic rebound.
Experts said despite the obvious challenges that came with many of the reforms, the macroeconomic changes initiated by the government were necessary and unavoidable.
They explained that reforms for long-term sustainable economic growth, like the one promised by Tinubu, take time to fully materialise, calling for patience and support for the macroeconomic reforms.
Many experts, however, said the government appeared to be losing its initial momentum. They said the government should rededicate itself to re-energising the key sectors of the economy.
Experts who spoke yesterday included Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf; Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe; Managing Director, APT Securities and Funds, Mallam Garba Kurfi; Managing Director, AIICO Capital, Mr. Femi Ademola and Managing Director, HighCap Securities, Mr David Adonri among others.
Yusuf said the performance review of one year of the current administration requires proper contextualisation as there were significant legacy issues which posed serious challenges, especially from a macroeconomic point of view.
According to him, at the time the government assumed office, the fiscal space was very tight with the Central Bank of Nigeria (CBN) assuming the role of a major financier of government operations and CBN’s ways and means financing rose to levels which were unprecedented in the country’s history.
He said there were also legacy of incredibly dysfunctional foreign exchange market riddled with roundtripping and all manners of malpractices, which created major distortions in the economy, as well as fuel subsidy regime which created opportunities for corruption and bleeding of the country.
He said Nigeria was at a point when oil subsidy was obviously unsustainable and the state of affairs in the country’s oil sector was a major disincentive to investors, with the oil sector becoming hotbed of corruption of huge proportion.
He noted that the huge backlog of matured foreign exchange (forex) obligations was in excess of $7 billion, which created a major liquidity crisis in the economy and undermined investors’ confidence.
He said the government over the one-year period has made significant progress in restoring some sanity to the oil producing areas, which were hitherto plagued with vandalisation of oil production facilities with incredible impunity.
“The truth is that reforms take time to be conceptualised and executed. It could take even longer time for the results to be felt. But my view is that the reforms were necessary to pull back the economy from the brink.
“Much has been achieved with fiscal consolidation. Government revenue had improved significantly following the reforms. There was also the tax reform initiatives.
“The point to stress is that much of the first year was devoted to corrective reforms which were in many instances also painful. But the reforms were inevitable because you can’t build something on nothing. Fixing the economic fundamentals were crucial for economic sustainability,” Yusuf said.
He, however, noted that the government has not shown enough agility in terms of the speed of delivering mitigating measures to ease the pains of the reforms.
“There is also need to address the volatility in the foreign exchange market. Frequent swings in the exchange rate is very detrimental to business because of the uncertainty that comes with it.
“The CBN should also address the frequent changes in exchange rate for import duty computation. This rate should actually be fixed at N1,000 per dollar or even less to subdue current inflationary pressures,” Yusuf said.
Amolegbe said the government’s reforms were well intended and necessary to restore the economy to the path of growth.
He said the government, at the cost of popularity, took painful decisions which showed leadership courage and commendable long-term view of the economy.
“To my mind, the first duty of any new government is to steady the ship of state by ensuring a rancour-free transition and continuity in desirable policies while stating clearly its own policy objectives and rallying the populace to support same. This isn’t always as easy as it sounds as our recent history has shown. So, in this regard, I will score the administration quite high.
“Also, political leadership always entails keeping an eye on the next election and taking actions that are popular with the electorate. This sometimes means kicking the can down the road regarding taking tough economic policies decisions. This administration has shown guts in bulking this trend and focusing on policies that are in the long term interest of this country economically, rather than what is politically expedient at this time. For this, I also give them kudos,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.
According to him, while the decision to remove fuel subsidies as well as liberalise the forex market have led to serious hardship to the populace and have unsettled the economy on the short run, but ultimately history will adjudge them as the right steps to have taken.
He noted that while some might argue about implementation strategy and timeline for the removal of the subsidy, none can argue that it’s not the correct decision to take.
“Our fiscal balance sheet as a nation is already looking better and states that used to owe staff salaries are now paying as and when due,” Amolegbe said.
He, however, noted the need for government to improve in its efforts on security, infrastructural development, agriculture and trades going forward.
“We also look forward to efforts to utilize the capital market more in the financing of its programmes. Overall I will score the administration well above average on the economic and financial front,” Amolegbe said.
Kurfi said the removal of oil subsidy and the streamlining of the forex market were policies that would take the economy to the next level.
He added that the government’s educational reforms such as student loan programme and additional internal funding of institutions would impact positively on the country’s human capital development and reduction of poverty.
According to him, with students’ access to loans and institutions being able to apply additional funding for their development, there would be increased opportunity for all Nigerians to acquire necessary education while also reducing industrial crisis in the educational sector.
Kurfi however said the government “needs to do more in terms of security and energy”.
Ademola said one year was a short period to appraise the government but many of the reforms were in the right direction.
According to him, while economic indicators are not at the right places now with high inflation, interest and forex rates, the government should be commended for keeping the country standing.
“If we check economic fundamentals which may not be visible to the public, the government should be commended for keeping the country standing. The economic reforms-the removal fuel subsidy and foreign exchange subsidies, were in the right direction to strengthen the economy and allow the country to continue as a going concern.
“The government appears to have started well with road infrastructure as can been in the Federal Capital Territory (FCT) and some other states. However, they have not really done anything in one of the most priority sectors of the economy, power,” Ademola said.
He lamented that security has also not improved significantly despite the promises of the government, noting the need for urgency in addressing some of the signs of governmental failure.
“While there is still time to do a lot before the expiration of the tenure of this administration, the citizens are not ready to wait until very late on. They want to see actions immediately,” Ademola said.
Adonri said the government has lost its momentum and many of its programmes being distorted by conflicting policies.
According to him, the market reforms initiated at the beginning of the administration were unarguably the right steps in correcting the economic imbalances that had plagued the economy for long. However, their implementation has been distorted by conflicting public policies and the inability of the government to restore firm order to the rural economy.
“While the naira has been floated, the forex cannot be said to be deregulated as it lacks a modern market structure that eliminates administrative interventions. CBN remains an overlord in the forex market where it allocates hard currency rather than being a participant like every other socioeconomic element in the country. In spite of continuous tightening of monetary policy, inflation has continued to rise indicating non responsiveness to monetary policy tools and neutralization by expansionary fiscal policy,” Adonri said.
He noted the challenges facing production and trade sectors of the economy noting that insecurity has crippled domestic production while trade policies by government are geared towards income generation rather than trade facilitation.
He decried government’s continuing debt accumulation amid challenging macroeconomic environment.
“For the laudable market reforms to work, first and foremost, insecurity must be eliminated. Secondly, fiscal interventions must be stepped up to close the supply gap which underpins Nigeria’s galloping inflation. Finally, fiscal and monetary policies must be realigned so that imbalances can be expeditiously dealt with,” Adonri said.
Pollination emanated from insects worth more than 75% of global crops, a service valued at up to $577 billion annually, according to IPBES 2016 report. Dr. Soladoye Iwajomo an expert in Bird Migration cited this at a forum in Lagos, organised by Nigerian Conservation Foundation to celebrate World Migratory Bird Day, (WMBD 2024). He said that ‘75% of food that we consume as human is dependent of insects.’
With the theme ‘Importance of Insects for Migratory Bird’, he urged the society to consider the perspective of the activities and the processes through which these species maintain ecosystems.
Speaking, on the vital role insects and birds play in growing the economy using the market value as a yardstick to value the ecosystem services, Dr . Iwajomo who is also a senior lecturer, Zoology Department of University of Lagos, stated that birds and insects have tremendously contributed to growing the economy.
With the theme ‘Importance of Insects for Migratory Bird’, he urged the society to consider the perspective of the activities and the processes through which these species maintain ecosystems.
“For example, if we take the cost of a tuber of yam or the cost an apple. What processes have gone on to give rise to that apple . So, the cost of that apple or tuber of yam represents the cost of the processes that have gone on to produce the apple. In a way, we can say the value of pollination, the value of Seed dispersal, is the cost of the different crops and food items in the ecosystem.
“Insects form a major part of the diet of migratory birds although foraging plasticity is common to enable them cope with these environmental changes. Insects are particularly important during breeding periods when protein requirements increase. Insects are rich sources of protein. And fat is crucial for muscle development and feather quality,” he said
He noted that preserving insects will preserve migratory bird populations. This, he said, is essential for maintaining ecosystem balance and supporting human livelihoods.
The schools in attendance include D’Cherub School, Badore, Aja, Watercress School, Satellite Town, Rodan High School, Badore, Gbara Community Senior Secondary School, Okin Aja Community Secondary School, and students from Unilag.
Meanwhile, bird migration is a regular seasonal movement between breeding and non-breeding grounds, following well established routes.
While motivating representatives from various secondary schools across Lagos State, as well as other participants, he proffered the planting and replanting of native or indigenous trees that support insects species and which can have positive impact on migratory bird population
In addition he stated that pesticide usage must be regulated: Green spaces are critical for biodiversity conservation in urban areas: Sustainable agricultural practices should be adopted: climate change mitigation strategies should be put in place
Every year millions of birds migrate between Europe and Africa. An estimated 2.1 billion individuals of different species make this journey annually according to a research published by Steffen Hahn,Silke Bauer and Felix Liecht S.Habw
“The Palaearctic-African migration system is therefore an important migration system due to the number of birds travelling between Europe and Africa twice each year. Migratory birds thus form strong links between the two continents and contribute to pest control, nutrient transport, seed dispersal and pollination. Knowing the number of migrating birds is crucial if the contributions of this links are to be appreciated. We estimate that today approximately 1800 bird species migrate globally.
The conservation of migratory birds is highly dependent on the accuracy of the underlying estimates of breading population sizes and this has important implications for manifold research topics including those related to climate change, human, health and biological conservation.”
Birds migrating to sub-Saharan Africa must cross the Mediterranean Sea and Sahara Desert twice. Only birds that are in good body conditions on account of access to high quality food can make such energetically costly journey” he retained.
The Director General of Nigerian Conservation Foundation, Dr Joseph Onoja, expressed optimism over the students’ increased knowledge, and according to him, the world migratory bird day will serve as probably pivotal points for everyone us especially the young ones, so it will spur inspire them to be environmentalists, ecologists, and Conservationists as the case may be so they can continue to study this magnificent phenomenon on migration both on birds, sea creatures and insects and so on and importance role they play on human survival…
With a robust financial sector that boasts various financial products and options, coupled with advancements in identity technology, Nigeria can leverage a Consumer Credit Scheme (CCS) recently approved by the Federal Government to reflate the economy. The Scheme, which starts with civil servants, according to experts and stakeholders, will stimulate local industries, leading to job creation and economic growth. This is because of its potential to help clear companies’ backlog of unsold inventories, forced by consumers’ weakened purchasing power due to the biting effect of inflation. It will also push immense possibilities into the hands of Nigerians if diligently implemented and identified challenges addressed. CHIKODI OKEREOCHA, OKWY IROEGBU-CHIKEZIE, DANIEL ESSIET and EKAETE BASSEY report.
It’s an intervention resonating with stakeholders in diverse sectors and Nigerians. The Federal Government’s approval of a Consumer Credit Scheme (CCS), to allow working Nigerians and small business customers to purchase products or services and spread the payment, is widely acknowledged as a much-needed, timely response to the prevailing economic challenges most Nigerians currently face.
Recall that in what will probably go down as the most significant commitment by the President Bola Tinubu-led administration to improving the quality of life for hardworking, gainfully employed Nigerians, the Federal Government, on April 21 2024, launched the takeoff of the first phase of the CCS for workers across the country.
The President’s Spokesman & Special Adviser, Ajuri Ngelale, in a statement issued about a fortnight ago, explained that the scheme was in line with the president’s directive to expand consumer credit access to Nigerians. He said the initiative, in collaboration with financial institutions and cooperatives nationwide, aims to broaden consumer credit availability.
Already, the Nigerian Consumer Credit Corporation (CREDICORP), a federally-owned entity charged with boosting consumer credit availability to 50 per cent of Nigeria’s working population by 2030, is set to commence operations and has urged eligible Nigerians wishing to access loans for important purchases to apply via its portal for consumer loans before Wednesday, May 15, 2024.
Following the rollout of the initiative, the preponderance of opinion is that the scheme came at a time the purchasing power of most Nigerians has been declining and essential product prices soaring. The government’s aim, therefore, is to latch on the initiative to alleviate economic hardship through accessible and affordable consumer credit.
This explains why the intervention appears to bode well for stakeholders from diverse sectors and indeed, ordinary Nigerians who have naturally thrown their weight behind the scheme, apparently because of its obvious benefits to various stakeholders, including consumers, businesses and the economy generally.
“The CCS is meant to reflate the economy and help boost demand for goods and services. It aligns with the social mobility and economic stability paradigm by enabling citizens to access goods and services upfront and pay responsibly over time,” President of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Gabriel Idahosa, affirmed.
Reeling out some of the scheme’s benefits, Idahosa said it enables ordinary Nigerians to access essential purchases such as homes, vehicles, education, and healthcare upfront while paying responsibly. “This accessibility enhances the quality of life for citizens, allowing them to pursue their aspirations and maintain ongoing stability despite economic challenges,” he stated.
He also said the scheme will increase the demand for goods and services and stimulate local industries, leading to job creation and economic growth. “The scheme’s implementation will foster a conducive environment for businesses to thrive, contributing to overall economic development. It empowers individuals to build credit histories through responsible repayment, unlocking more opportunities for a better life,” he told The Nation.
The LCCI chief further said by promoting financial responsibility and providing access to credit, the scheme serves as a pathway to social mobility, allowing hardworking Nigerians to improve their economic status and achieve their long-term goals. “Consumers’ ability to access credit easily allows a well-managed economy to function more efficiently and stimulates economic growth,” he emphasised.
Idahosa also stated that for ordinary Nigerians, if the scheme is well developed and implemented, it will improve the standard of living and economic prosperity of the people. He added that as the cost-of-living crisis deepens and stretches household incomes, low-income Nigerians can seek consumer credit to help them get by.
Moreover, the provision of consumer credit, according to Idahosa, can help consumers meet their financial commitments during periods of temporary financial difficulties if they are gainfully employed.
A Research Fellow at the UK-based University of Salford, Dr Destiny Idegbekwe, is no less excited about the scheme’s prospect of reflating the economy and pushing immense possibilities into the hands of Nigerians. While pointing out that Nigeria’s middle class is fast disappearance, he expressed optimism that the CCS will herald the rebound of the middle class.
“If there’s anything that’s happening to Nigeria at the moment, it’s the fast disappearance of the middle class. What you have now is the very rich and the poor,” Idegbekwe told The Nation noting, however, that “The CCS will boost the middle class. The middle class would be stronger if there’s a consumer credit scheme to ensure that the working class can have their basic needs such as car financing, home ownership, and even going on holidays.”
According to him, the introduction of such a scheme in Nigeria would help lower the country’s poverty rate and aid in closing the wealth gap by reviving the middle class/ working class. “There are so many things we’re not enjoying in life as Nigerians because we cannot afford them.
Why real sector operators are upbeat
According to experts, the CCS can help improve the sales and productivity of manufacturers and promote locally made goods as long as they are affordable, tailor-made to consumer needs and financial situations, and sold responsibly.
For example, Idahosa said many big-ticket items, such as cars or technological products, are too expensive for most people to pay for at once. He, however, said with a credit scheme, paying for these items over time is possible. Furthermore, the scheme provides access to consumer spending data and the types and quantities of manufacturing goods purchased for investment decisions.
Agriculture sector also
The Secretary of the Agricultural Fresh Produce Growers and Exporters Association of Nigeria (AFGEAN), Adetiloye Aiyeola, expressed a similar sentiment. While welcoming the launch of the Consumer Credit Scheme, he told The Nation that in his opinion, “It has the potential to benefit the agricultural sector in several ways.
Aiyeola said, for instance, that the intervention will help increase access to credit for agricultural workers and this could lead to investments in improved inputs, equipment, and technology, all of which will help boost productivity. “Additionally, this will increase the demand for agricultural products which will strengthen the market for farmers,” he added.
A common thread that runs through the enthusiasm of real sector operators over the scheme’s capacity to deliver on its promises is the belief that Nigeria’s financial system is very sound and sophisticated enough to handle any volume of transactions in Nigeria and worldwide.
This, according to them, is evident in Nigerian banks making waves in many climes worldwide, competing favourably. “Our banks are well-branded and have high ratings from international rating agencies like Fitch, S&P, and Moody’s,” Idahosa said, for instance.
He also stated that the recent spike in the size of consumer lending, estimated at N1.5 trillion, persistent rise in inflation, and squeezed consumer income, among other things, shows that Nigeria is ready and ripe for a Consumer Credit Scheme.
“With the right policy and implementation approach, the scheme is good with numerous benefits for the country,” he emphasized, noting that with the overall economy creating a high demand for goods and services and increasing productivity and employment creation, the scheme is expected to further deepen financial inclusion.
It will also reduce the risks to the payment system, promote a cashless policy, and develop an e-commerce sector in the country.
For the scheme to succeed
But it is not the first time the Federal Government has rolled out a credit scheme albeit unsuccessfully to empower Nigerians. The LCCI President, recalled, for instance, that there had been several previous poverty alleviation and credit schemes in Nigeria, most of which were, sadly, riddled with fraud and corruption.
Idahosa, while noting, for instance, that the last schemes were established by the last administration with good intentions to empower the youth, women, and Small and Medium Enterprises (SMEs), said unfortunately, such schemes did not record a good repayment profile.
His words: “From the times of the People’s Bank of Nigeria (PBN) under the military government of Ibrahim Badamosi Babangida’s Structural Adjustment Programme (SAP) in 1989 to initiatives like the Anchor Borrowers Programme (ABP), we can always remember several previous poverty alleviation and credit schemes in Nigeria.
“There is also the most recent National Social Investment Programmes (NSIP) under the Federal Ministry of Humanitarian Affairs and Poverty Alleviation (which were recently suspended and under special investigation for corruption.”
Idahosa, therefore, insisted that “The current initiative should focus on strengthening Nigeria’s credit reporting systems through the CREDICORP, by ensuring that economically active citizens have dependable credit scores. I’m of the view that the government should learn from the failures of its predecessors.”
Sharing his perspective on what may have led to the failure of previous schemes, and what needs to be done to make it work this time around, Paul Mgbeoma, a Lawyer, said at first, most businesses in Nigeria were not established to run on a credit scheme model. Rather, most of them were established to run on the pay-and-take-your-item or pay-for-your-service-as-it-comes model.
He, therefore, suggested that to prepare businesses and the private sector generally to key into the scheme this time, “It would be the case of businesses going back to draw up new models to key into this new Federal Government scheme. They will have to establish their business in a way that it will allow people to buy, then pay in instalments or allow people to buy and pay later depending on the model.”
The legal practitioner regretted that at the moment, most businesses in Nigeria do not operate such a model, as such, there will be a problem with the modelling. “Currently, I’m in the UK and I know that most Western countries are built on the credit system in such a way that you enjoy your life today and keep paying for your enjoyment probably until you die.
“So you look out for the mortgage, you pay for 50 years. You look out for car finances; you pay for many years because they were developed in that form. So, in the UK and the US, yes, it’s well established and they have enabling laws for all of these,” Mgbeoma told The Nation.
Flowing from the above, Mgbeoma questioned the law via which the latest CCS scheme was introduced while expressing reservations about its eventual success. He argued that for the initiative to be recognised and binding, the President must collaborate with the National Assembly and sponsor an executive bill to establish a law supporting the scheme.
His words: “First of all, under what law was the scheme introduced? If there’s no law backing it up, the President needs to work with the National Assembly and possibly have an executive bill sponsored to that effect. I doubt whether any private business owner will give civil servants goods on credit merely because the President feels it is a lofty idea that is good for the masses.”
Mgbeoma pointed out that Nigeria is a capitalist economy and businesses are in business to make a profit. “No business wants to start running after civil servants or anybody for that matter to come and pay for goods taken on credit.
“Using banks as an example, the volume of non-performing loans in Nigeria was one of the reasons that the Asset Management Corporation of Nigeria (AMCON) was created by law. Despite this, AMCON is still struggling to recover bad loans purchased from banks to date,” he said.
Lessons from UK, US credit culture
As Mgbeoma and indeed, other experts pointed out, the UK and the US already boast robust consumer credit culture, well established and with the enabling laws. “So, in the UK and the US, it (credit scheme) is well regulated to make sure that people follow the standard rules and regulations and consumers are protected in the long run,” Mgbeoma said.
Idahosa corroborated him, noting, for instance, that in most developed economies like Germany, France, the UK, and the US, there are significant increases in buy-now-pay-later spending due to high inflation and the rising cost of living.
Offering more insight into how the system works in the aforementioned climes, he said consumer credit schemes in the US and the UK operate almost similarly in many aspects, but there are also differences based on regulatory frameworks, market dynamics, and cultural factors when compared with Nigeria.
He also said consumer trust in government frameworks can also be a factor of differentiation. “Both the US and the UK have regulatory bodies overseeing consumer credit to ensure fair practices and protect consumers.
“In the US, this is primarily the responsibility of the Consumer Financial Protection Bureau (CFPB), while in the UK, it’s overseen by the Financial Conduct Authority (FCA),” Idahosa said.
He further explained that both countries have credit reporting systems that track individuals’ credit histories. His words: “In the US, there are three major credit bureaus (Equifax, Experian, and TransUnion), while in the UK, the main credit reference agencies are Experian, Equifax, and TransUnion (formerly Callcredit).”
The LCCI chief also said consumer credit in the US and the UK includes various types of loans and credit products such as credit cards, personal loans, mortgages, and auto loans, pointing out, however, that these products may have different terms, interest rates, and eligibility criteria.
Idahosa offered more explanations: “The US and the UK have consumer protection laws to regulate lending practices, ensure transparency, and protect consumers from unfair or deceptive practices. These laws may include requirements for clear disclosure of terms and conditions, limits on interest rates and fees, and provisions for dispute resolution.
“Both countries also have regulations governing debt collection practices to prevent harassment and abuse by creditors or debt collectors. Both countries also promote financial literacy and education initiatives to help consumers make informed decisions about borrowing and managing credit.”
The LCCI boss, however, said in Nigeria, “Our credit bureaus are still evolving. We believe that with the advancements made in identity technology, we can become more confident about the workings of credit schemes in Nigeria.
“We need a very strong consumer protection agency with technological capabilities to track consumer abuse while dealing with service providers in Nigeria’s private and public sectors.”
Will Nigeria borrow a leaf from other climes that have imbibed a credit culture? Will the newly established CREDICORP live to its billing of strengthening Nigeria’s credit reporting systems and also achieve its target of boosting consumer credit availability to 50 per cent by 2030?
While some of these posers eloquently speak to the fact that Nigeria’s road to a vibrant consumer credit scheme capable of helping to reflate the economy will certainly not be a stroll in the park, aggressive awareness and sensitization of the private sector and Nigerians generally is one of the starting points.
Idahosa alluded to this thinking when he said the private sector’s readiness for the scheme largely depends on their awareness and understanding of the CCS. “If they (private sector operators) are well-informed about the scheme’s objectives, mechanisms, and potential benefits, they will likely be prepared to key into it,” he told The Nation.
He also stressed that effective communication by the government and relevant agencies is crucial in ensuring that the private sector comprehensively understands the scheme, adding that private sector entities, especially financial institutions, will also assess the risks of participating in the CCS.
According to him, financial institutions will consider factors such as the creditworthiness of potential borrowers, the stability of the economy, and regulatory frameworks governing consumer credit. “Mitigating these risks through collaboration with the government and CREDICORP will be essential for their willingness to engage,” he stated.
Furthermore, private sector organisations, Idahosa said, will evaluate how participating in the CCS aligns with their business objectives and strategies.
“If they see opportunities for growth, market expansion, and enhanced customer relationships, they are more likely to participate in the scheme actively. Demonstrating the potential synergies between the CCS and their business goals can encourage their willingness to engage,” he added.
Apart from a lack of public awareness and stakeholders’ buy-in and understanding, other hurdles that may stand in the way of the scheme’s success in Nigeria include poor infrastructure and technology gaps, trust and credibility, rising rate of fraud, and lack of effective prevention measures.
Also, there are risks of misrepresentation of consumer credit. Irresponsible and exploitative selling practices of lenders can also lead to the risk of over-indebtedness, which negatively impacts consumers, the economy, and financial stability.
Other possible challenges include access and distribution channels, late payment and default rates, attitude towards debt and perception of financial burden.
However, to address these challenges, experts say that there must be adequate awareness and education of consumers, investment in technology and infrastructure, and the development of a comprehensive regulatory framework that will provide an anti-abuse rule that aims to curb credit claims inconsistent with the policy intent.
Although Dr Idegbekwe does not hide his optimism over the capacity of the CCS to turn the fortunes of Nigerians and the economy around, he expressed reservation about its efficacy due to what he termed as Nigeria’s lack of a national standard database.
His words: “Nigeria doesn’t have a good data management system, a good data management system that can track people to know where they are at different points in time. Immediately you come into the UK or US, they know that you are there, and they know when you came in, they know your address. The data also shows if you have a loan.
