The World Bank’s Country Director for Nigeria, Mr. Shubham Chaudhuri, has highlighted the country’s remarkably low levels of public spending compared to the rest of the world.
According to Chaudhuri, Nigeria’s government expenditures are among the lowest globally, hindering the nation’s ability to close its infrastructure gap and achieve sustainable economic growth.
Chaudhuri’s presentation emphasised the significant disparity between Nigeria’s public spending and that of other countries.
He pointed out that both federal and subnational levels of government in Nigeria have allocated very limited funds for public spending.
This lack of investment has resulted in poor quality infrastructure and limited access to essential services for Nigerian citizens.
The World Bank leader for Nigeria further highlighted the alarming consequences of this inadequate investment.
According to his presentation, at the current rate of capital spending, it would take an astonishing 300 years to bridge Nigeria’s infrastructure gap.
This glaring disparity in public investment spending becomes even more apparent when compared to countries like Indonesia, Ghana, Egypt, and Kenya, where infrastructure development has been prioritised.
Furthermore, Chaudhuri stressed that Nigeria’s government revenues are among the lowest in the world between 2015 and 2021.
This low revenue generation poses a significant risk to fiscal and debt sustainability, further exacerbating the challenges faced by the country.
The lack of access to finance was also highlighted as a major constraint, limiting the private sector’s ability to invest, grow, and create employment opportunities.
The World Bank’s assessment underscores the urgent need for Nigeria to increase its public spending and prioritise infrastructure development. By allocating more funds to capital projects, the country can bridge the infrastructure gap, improve the quality of essential services, and stimulate economic growth.
In his keynote address, Chaudhuri emphasised that for Nigeria to achieve steady growth and prosperity, both federal and state governments must take critical steps to ensure the country’s security, political stability, and the rule of law.
The bank also called on authorities to invest in human capital, particularly in children, unleash the potential of private investment, promote job creation, and ensure access to finance.
Also, at the conference, some stakeholders reiterated the need for the financial sector to make deliberate efforts towards increasing its contribution to the country’s Gross Domestic Product.
The Minister of Budget and Economic Planning, Abubakar Bagudu, challenged the financial sector to move from 3.6 to about nine per cent growth of GDP.
Bagudu said, “To grow Nigeria’s economy, we must empower our youthful population and this can only be achieved by having an inclusive and sustainable financial services industry, adding that the biggest threat to retaining our best brains today is emigration and our country’s talent is being sought after in the more developed countries in Europe and North America.
“Emigration is a personal choice for the person and his family, our country cannot and will not forcefully stop anyone from legally pursuing their dreams and ambitions. If they choose to leave Nigeria, all we can ask is for them to be good ambassadors for our country in their adopted homes.”
Also, the acting Governor of the Central Bank of Nigeria, Folashodun Shonubi, said the sector’s economic contribution to the nation was low and needed improvement.
“Can we promise them that instead of 3.6 per cent, we will be contributing a lot more than that. And we will sit down and find what the drivers are that we can influence and do.
“I don’t want to put a number in front of us but it is what I will like to see at the end of the conference. I don’t think we contribute a lot of ourselves, we as bankers need to be more conscious, a bit more active on advocacies that are actionable,” he said.
Similarly, the Chairman, Body of Banks’ CEOs, Mr Ebenezer Onyeagwu, urged for a deliberate effort by the stakeholders towards growing the country’s economy.
He said, “We have enormous potential, the biggest potential we have is in our market. Our market is depleted by the number of people we have.”
In his remarks, the President of the Chattered Institute of Bankers, Mr Ken Opara said the event which has grown to become the largest gathering of banking and finance professionals in Africa, provides the platform for professionals to come together to drive conversation on topical issues that are critical to the growth of the Nigerian economy.
He praised the reform initiatives of President Bola Tinubu, noting that “the reform initiatives such as subsidy removal, unifying the foreign exchange regime, investing in infrastructure, promoting agriculture, supporting SMEs and tax reforms, among others, if well implemented will unlock the economic potentials of the country.”