In a gloomy assessment of Nigeria's economy released, the World Bank predicted that a significant transformation of the country would take ten to fifteen years.
The disclosure highlights the significant obstacles that lay ahead and demands swift and decisive measures to guide the economy back toward resilience and recovery. Speaking at the 30th Nigerian Economic Summit Group (NESG #30), Senior Vice President of the World Bank Group Indermit Gill stressed that the government must exert all of its efforts to shield the most vulnerable citizens from hardship because both their lives and the lives of Nigeria's 110 million children depend on it.
"To transform its economy, Nigeria will need to stay the course for at least another 10 to 15 years," he stated. That being said, I'm not sure if you agree or disagree with me. If it does so, its economy will change and it will start to grow faster than other countries in sub-Saharan Africa, contributing to the transformation of the continent. While completing these tasks is extremely challenging, the benefits are enormous. This is the lesson learned during the past forty years, as well as from the experiences of nations like Norway, Korea, Poland, India, and others. So once more, I could say something controversial. However, Nigeria's 2003–2007 reforms were exactly what the country needed.
However, they did not last. Everyone is harmed by the current exchange rate, and monetary, and fiscal reforms, but poor Nigerians are particularly badly hit because of the country's exorbitant food and transportation costs. "The lives of Nigeria's 110 million children and its most vulnerable residents depend on the government doing everything within its power to shield them from misery. The long-term survival of Nigeria and the future of these 110 million children depend on it continuing with the reforms. Now that the year is almost over, there are three things that Nigerian policymakers need to accomplish.
The first is to prioritize non-oil growth. This requires a competitive exchange rate, which Nigeria now has. Nigeria’s real exchange rate is at its most competitive in at least 20 years,” he said. “This is a great opportunity for the private sector. To protect the poor and maintain competitiveness, the central bank must stay focused on inflation. It should resist the lure of short-term capital inflows that might push up the Naira’s value too quickly and curb non-oil growth
Rather, it should replenish its foreign exchange reserves to act as a buffer against fluctuations in oil prices. Once more, I believe that Governor Cardoso of the Central Bank of Nigeria is doing many of these things, and we should support him. He continued, saying that the government is implementing a large-scale targeted temporary cash distribution program that has already reached between 4 and 5 million people. "The second thing is to help every vulnerable household cope with high inflation," he stated. This should be swiftly expanded to 10 million families, and if needed, possibly even more.
The World Bank added that the government needs to use the money saved by eliminating fuel subsidies to safeguard its most vulnerable populations. According to Gill, the government ought to implement an economic safety net for the most susceptible residents in the coming years, funding it with the proceeds from the withdrawal of fuel subsidies and changes in exchange rates.
The economy must become more ready for business. Furthermore, I believe that the NESG Chairman has outlined a very clear agenda for what needs to be done in this area. Over 12 million young Nigerians, including men and women, will join the workforce in the next ten years. Their ability to find work will be largely dependent on the private sector and significant private investment, both domestically and internationally, in the non-oil economy. To attract investment of this kind, the national power system must be strengthened, transportation must be improved, security must be increased, and laws controlling private enterprise must be strengthened. Failing in these areas would destroy the future of yet another generation and impede reform initiatives throughout the continent.
The elites of Nigeria—all of us in this room are elites—must band together to back these reforms. They will be granting possibly the most significant wish for their children and grandchildren—a broadly prosperous and stable Nigeria. The World Bank team in Nigeria right now is among the greatest. Here we have a first-rate country director. Your team of economists, energy experts, and operations personnel is excellent. They possess the necessary knowledge. Above all, though, particularly during trying times, they possess the experience that the situation calls for. Numerous professionals in our Abuja office have experience with comparable adjustments that have taken place in Indonesia and numerous other locations.
You ought to utilize that to its fullest. But as I got ready for this visit, the most significant thing I discovered about our team is that they have a deep love and respect for regular Nigerians. That's the one thing that stood out to me about them. The people and government of Nigeria can always rely on their backing, and this team will receive all the help they require from the World Bank Group, he said.
