Nigeria Economy | |
Nigeria Economy | |
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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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