Interview: Jumoke Oduwole
What is being done to support the economy as it recovers from the Covid-19 pandemic?
JUMOKE ODUWOLE: In July 2020 Nigeria implemented the Economic Stability Plan (ESP). The 12-month, N2.3trn ($6.1bn) stimulus package included initiatives to support a wide variety of sectors and mitigate the economic ramifications of the health crisis. We have already seen the positive effects of the ESP on the economy in the months since, such as the acceleration of the construction of 794.4 km of roads and bridges across the country. Investments are also being made in the energy sector, with a target to install solar panels in 5m homes by 2023.
Supporting the workforce was a central pillar of the government’s response. As part of its effort to save up to 1.3m jobs, federal officials extended payroll support to 100,000 micro, small and medium-sized enterprises (MSMEs), and over 100,000 artisans. Moreover, in February 2021 it was announced that MSMEs could apply for a one-time grant as part of the N15bn ($40.1m) MSME Grant and Guaranteed Offtake Scheme. Around 1.7m households are expected to benefit from this initiative.
Other support measures include the enhancement of the Export Expansion Grant to help exporters expand their international businesses, the introduction of a public works programme to generate jobs, and the N75bn ($200.3m) Youth Investment Fund. We are confident that these interventions will place the economy on the path of growth in 2021.
To what extent has the pandemic opened opportunities for economic diversification?
ODUWOLE: Companies across the spectrum had to adjust the way they conducted business after the outbreak of Covid-19. The crisis enabled the transformation of the economy, with well-established sectors such as telecommunications consolidating even as the use of newer innovative services like e-commerce and mobile payments spiked. Industrial and agricultural exports are expected to benefit from the African Continental Free Trade Area (AfCFTA), which went into force on January 1, 2021. The agreement will move the economy away from an overdependence on export earnings from oil to more secure and sustainable foreign exchange revenue streams. Importantly, the AfCFTA aligns with Nigeria’s Economic Recovery and Growth Plan, as both focus on industrialisation, export orientation and economic competitiveness. As such, there is a clear impetus for all levels of government to deliver concrete, ambitious and much-needed policy interventions to ensure the country reaches its potential.
How could the AfCFTA facilitate reforms aimed at improving the business climate?
ODUWOLE: The AfCFTA is an important tool to help the government accelerate the pace of muchneeded structural, fiscal and monetary reforms. The implementation of the agreement also underscores the urgency of closing the infrastructure gap to make Nigeria more competitive on a global scale. Deliberate steps outlined in clear action policies are needed to promote effective public services that are aligned with national and regional priorities in trade facilitation and improving the business environment.
Between 2016 and 2020 Nigeria moved up 39 positions in the World Bank’s ease of doing business index to 131th out of 190 countries. Moreover, in October 2019 the World Bank again recognised Nigeria as one of the top-10 most-improved countries in the index. These changes enhanced Nigeria’s competitiveness, with the World Economic Forum’s “Global Competitiveness Report 2019” noting improvements in ICT adoption, public sector performance, corporate governance and labour. These improvements were a result of our efforts to improve the regulatory environment, government transparency and trade.