Nigeria will follow through on the reforms proposed in its economic blueprint for life after oil, rather than be distracted by next year’s elections, key government officials said Friday, at a private equity summit organised by Lagos-based legal firm, Udo Udoma and Belo Osagie (UUBO).
“We are staying focused on implementing the reforms we have set out to achieve in the Economic Recovery and Growth Plan (ERGP) in order to sustain the positive gains made in the past year,” Udoma Udo Udoma, minister for budget and national planning, said.
Some of the policies proposed by the ERGP include the adoption of market principles in resource allocation, reducing a longstanding over-reliance on oil revenue by boosting non-oil revenue- particularly taxes – and stimulating private sector-led infrastructural development.
Okechukwu Enelamah, minister of investment, trade and industry, predictably backed Udoma.
“The good work we have started in implementing key reforms must continue,” Enelamah said, finding comfort in Nigeria’s improvement on the World Bank Ease of doing business, having moved 24 rungs up the ladder to 145 from 169, and the positive impact of the Investor and Exporter Window on foreign exchange availability.
“Politics must not get in the way. There will be a lot of noise amid the electioneering, but the private sector must not get carried away (as the need to consolidate the fragile economic recovery last year heats up),” Enelamah told BusinessDay on the sidelines of the summit.
After sliding into its first full-year economic recession since 1991 in 2016, Africa’s largest economy has gone on to post two straight quarters of growth, in the second and third quarters of 2017, on the back of a rally in global oil prices and some relative stability in the oil-rich Niger-delta which have eased acute dollar shortages and spurred investor confidence.
A barrel of Brent crude for March settlement sold for $68.5 as of Friday, January 19, according to Bloomberg data, the highest in three years, as OPEC supply cuts help drain a supply glut that dampened prices.
Powered by the oil rally, the economy is expected to expand an average of 2 percent in 2018, according to a BusinessDay survey that looked at World Bank and IMF projections as well as local forecasts.
Amid the flurry of positive macroeconomic indicators, whether it’s the stock market rally, the significant increase in external reserves or the stable exchange rate, the worry going into 2018 has been that the economy may be relegated to the background as government focuses on scoring political points ahead of the 2019 elections.
President Muhammadu Buhari, who has spent most of the last year nursing an undisclosed ailment, has signalled his ambition to run next year.
Pre-election years in Africa, and Nigeria specifically, are typically marred by uncertainty, with investors hitting the brakes in wait of how the environment shapes out.
Udoma however says things will be different this year given the urgency to get the economy back on the path of sustainable growth, saying, “Investors should not slow down now because the country is headed the right direction.”
