Six Areas Nigeria Must Address to Achieve Inclusive Economic Growth

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Monday, July 05, 2021 / 10:00AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV


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Nigeria's quest for achieving inclusive economic growth for a population estimated at over 180m hinges on six critical areas receiving top priority. These are education, infrastructure, an enabling environment for employment opportunities, development driven poverty alleviation approach, subsidizing productive activities and fiscal & monetary policy alignment.

 

Mr. Johnson Chukwu the Group Managing Director of Cowry Asset Management made this point while discussing "Addressing the Constraints to Inclusive Economic Growth in Nigeria".


Education

In the area of education, he called for robust investments in all levels from primary, secondary, and tertiary from the Federal, State, and Local Governments.

 

He noted that Nigeria needs a skilled and competitive workforce to compete for jobs across all the key sectors of the economy and at the global level.

 

Chukwu decried the fact that Nigeria has over 10m out-of-school children which is a social crisis in itself and also emphasized the need for girl-child education in the country.

 

Infrastructure

Nigeria according to him has a huge infrastructure deficit from road, rail, waterways, power to even broadband and investments in these areas will unlock economic activities across the nation.

 

He acknowledged some of the steps taken by the current administration but harped on public-private partnerships to attract more investments in infrastructure.

 

These investments he believed will drive industrialization and manufacturing that will lead to a productive economy.

 

Enabling Environment for Employment Opportunities

Providing further perspective he stressed the need for the government to create an enabling environment that can attract investments into the economy.

 

From guaranteeing security to improving the ease of doing business in the country, he called for concerted efforts to partner with the private sector to create economic opportunities.

 

With unemployment soaring at 33.1% he emphasized the need for the government to take seriously the issue of job creation. 


On other socio-economic developments in the country  and the tough choices the government has to take, Mr Johnson Chukwu provided the following insights;


Development Driven Poverty Alleviation Approach

On the socio-economic issue of poverty alleviation which nations like China, India and Brazil have achieved significant impact, he called for a "Development Driven Poverty Alleviation Approach", that looks at critical reforms that lead to investments in infrastructure, key sectors, and human capital development that can achieve sustainable jobs improving the per capita income of citizens.

 

This for him is much better than the "Relief Poverty Alleviation Approach" which is handout based and not strategic in economic empowerment that can lift millions out of poverty.

 

He said the National Committee on Poverty Reduction Chaired by Vice President Prof. Yemi Osinbajo, SAN should opt for the "Development Driven Poverty Alleviation Approach" to fast-track the goal of lifting 100m Nigerians out of poverty by 2030.

 

Nigeria Should Subsidize Productive Activities

As the debate on whether Nigeria should  continue with subsidizing the price of petroleum products and electricity or remove them the GMD of Cowry Asset Management asserted that the focus should be to subsidize "productive activities".

 

He argued that this will create more jobs and free up resources for investments in critical sectors of the economy, that can lead to double-digit growth.

 

Speaking further he cited the example of N5bn that is spent daily on petroleum price subsidy, Chukwu said if it is removed about N2trn will be saved that can be invested in infrastructure, to boost economic growth.

 

It can also be channeled to enhancing value addition to agro products and extractive activities that can translate to improved export value for the country.

 

Fiscal & Monetary Policy Direction

Understanding the importance of a fiscal and monetary policy alignment in achieving a productive Nigerian economy, he called on the former to prioritize an enabling business environment, identifying key growth sectors in the economy with the provision of favorable tax regimes and trade tools.

 

For the latter he urged the monetary policy authorities to ensure stability through the exchange rate, interest rate and inflation rate.


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