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NES 2020 : Talk of Growth Drivers

Nigeria Economy	1772 VIEWS
Nigeria Economy
1772 VIEWS

Wednesday, November 25, 2020 / 8:59 AM / By FBNQuest Research / Header Image Credit: Twitter; @officialNESG

Today we highlight one of the panels, 'Growth Drivers', at the recently concluded Nigerian Economic Summit (NES). This was a hybrid event in Abuja and partially virtual this week. The Covid-19 disruptions have created demand and supply shocks in the global system while unlocking new opportunities for growth. Nigeria's businesses must be pragmatic in capitalizing on these new growth drivers, and unrelenting in nurturing them as new frontiers and making the right investments with the appropriate policy environment and incentives. The speakers on the panel focused on technology, agriculture and health sectors.

Technology is widely seen as a catalyst for growth across the economy. Some argue that sectors like agriculture, education and manufacturing can receive a substantial boost if technology is strengthened. Omobola Johnson, senior partner at TLcom Capital and the former minister of communication technology, opined that attention needs to be given to the country's weak talent pool in order to enable technology to support other sectors.

Johnson insisted that curricula across education down to the primary level must incorporate technology-inclined subjects that can equip the future workforce, as there is currently a huge skills gap. Investment in STEM will have a long-lasting positive effect on the sector and the broader economy.

Turning to the health sector, we note efforts made by the FGN to reverse the trend in medical tourism. These efforts are laudable but may translate into negligible impact, given their modest scale.

Fola Laoye, CEO Health Markets Africa, mentioned that there has been a significant decline in medical tourism due to the mandatory lockdowns across countries. This has forced the authorities to look inwards and consider revamping the country's dilapidated health sector. The issues around fx liquidity also make it difficult for Nigerians to afford frequent medical treatment abroad.

The brain drain within the health sector was also touched upon. One major challenge the sector has faced, particularly with combating the pandemic, is Nigeria's shortage of doctors and health practitioners. The brain drain in the health sector is one of the chief reasons for its underperformance domestically. Based on industry sources, approximately 33% of graduates trained in Nigeria's state medical schools migrate to the US, Canada or the UK within ten years of graduation.

A conversation around growth drivers for an economy like Nigeria is incomplete without agriculture featuring in the discussion. The heavy reliance on one commodity for its export earnings has resulted in significant macroeconomic slippage for Nigeria. Agriculture provides an opportunity for revenue diversification.

According to Nasir Yammama, CEO Verdant, although smallholder farmers are catalysts for growth for agriculture, they are grossly neglected and given very little support. He also argued that the export promotion of agric-related goods can only be achieved when the standardization of products is taken seriously. Furthermore, a proper strategy that aligns agricultural output with global demand is necessary to grow its exports.

Both technology and agriculture were growth drivers for the non-oil economy in Q3 2020. They posted growth of 17.4 y/y and 1.4% respectively. Meanwhile the health sector grew by 2.8% in the same quarter.

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