Donald Kaberuka, President of the African Development Bank Group (AfDB) says he is quite bullish about the Nigerian economy, an assessment, he says is also shared by the bank.
In an exclusive interview, Kaberuka tells BusinessDay that the AfDB projects that the Nigerian economy could record as much as 7 percent growth in 2014, pushed by ongoing reforms in the power, agriculture sectors, among others.
“I’m very bullish about the Nigerian economy and it’s not just my view, it’s a shared assessment. I think the government is tackling some of the most important bottlenecks. In particular, I just want to salute some of the reforms in the power sector which are attracting private money into energy.
“That is something which we support very strongly and for this we put in $280 million of our own for partial guarantees. I think reform in the power sector, the things the government is doing in agriculture, and agribusiness are quite commendable. Those two for me are really fundamental.
“So, the projections I’ve seen for 2014 are above sub-saharan average because the average for sub-saharan in 2014 is about 6.2 percent. I think Nigeria will be much higher, in anycase, above 7 percent. So the country has to continue on that path,” he says.
Apart from the AfDB, other entities have expressed stronger growth for the Nigerian economy during the year. The UN Economic Commission for Africa (ECA), for instance ,lists Nigeria among West African nations to witness a GDP growth of 6.9 per cent in the 2014 fiscal year. The International Monetary Fund (IMF) forecasts 7.4 percent for the year.
But AfDB is concerned that even though government efforts are commendable, over-dependence on oil poses a real threat to the economy.
He says, “In longer term, however, the challenge Nigeria faces is really one of the dependence on the hydrocarbons- whether it is in terms of budget, exports to greatly reduce its reliance on oil. I think there is a general agreement here.
“Not only because that sector does not create much jobs but because of the development of shale gas which could reduce the output in Nigerian oil.
“And that is why I like what is happening in agriculture, and I was here sometime last year for the Nigerian Economic Summit and I listened to all these people who work in agribusiness. And one thing I saw here which I think is really dramatic, is to see young people, educated, graduates going into farming, you are into something big. So I want to support those two because these are jobs that will be created.”
Kaberuka says he would also like to see government focus more on infrastructure, as he disclosed that his bank’s intervention for Nigeria this year would, among other ongoing projects, focus on agribusiness, infrastructure as well as the newly created Mortgage finance scheme.
“There are many things to be done in Nigeria of course and across many sectors. But for me, I like to see government focus on infrastructure, in particular power, and then support the agriculture sector. This is where the jobs will come from. There are many things we shall do but if I can focus on these two things I think I can be optimistic about this country,” he adds.
