Will Nigerian Economic Summit change the narrative of skyrocketing inflation?

As the annual Nigerian Economic Summit (NES) commenced yesterday, we remain confident that as it takes place in this turbulent period for the economy, the participants will proffer remedies for the government to change the dynamics for the Economy to become viable.

The yearly summit is organised by the Nigerian Economic Summit Group (NESG) in collaboration with the Federal Ministry of Budget and Economic Planning where high profile public and private sector dignitaries within and outside the country come to brainstorm on the Nigerian economy.

The programme is christened on five pillars: Stimulating Economic Growth which entails optimising resource utilisation. Embracing innovative technologies, and enhancing skills development, Nigeria can bolster productivity, improve domestic and global competitiveness, and foster economic growth.

It focuses on mobilising ‘Finance for Sustainable Development’ in which Nigeria can leverage a compelling portfolio of competitive investment-grade projects and social investment programmes to access and deploy financial resources in support of sustainable development initiatives.

Nigeria faces significant barriers to effectively harnessing its human capital. In harnessing Human capital with knowledge gaps in the country, avenues will be provided for skills acquisition abilities. The health of citizens is a critical resource that drives productivity, innovation, and sustainable development.

There is a need for the government at all tiers to reform public institutions and MDAs with profit driven activities. The state of Nigeria’s public institutions plays a crucial role in driving socioeconomic growth, but several challenges need to be addressed for effective reform.

Also, in Promoting National Cohesion and Inclusion, promoting a strong national vision, identity, and shared values that serve as the foundation for social contracts and compacts is essential for fostering a sense of belonging, ensuring equal rights and opportunities for all citizens, and addressing social divisions.

The Executive Director of Nigerian Workforce Strategy and Enlightenment Centre (NIWOSEC), Dr. Kayode David Ehindero called for an Economic Transformation agenda by the participants of the summit.

According to him, the Nigerian economy is at a critical juncture, grappling with the detrimental consequences of over-dependence on importation and government policies that have led to the impoverishment of its citizens.

There is a need to shed light on the urgent need for a paradigm shift towards increased local production and consumption. By examining the direct link between insecurity and the economy, particularly its impact on commerce and agriculture, we can begin to understand the multifaceted challenges facing Nigeria. It is imperative that we collectively address these issues and pave the way for sustainable economic growth.

He stressed that Nigeria’s heavy reliance on imported goods and products poses significant risks to its economy.

“The outflow of foreign exchange, coupled with the vulnerability to fluctuating global prices, leaves the country exposed to economic instability. The excessive importation of basic commodities, such as cashew, cocoa, and even petroleum, is a missed opportunity for value addition and job creation within Nigeria. To reverse this trend, we must prioritize the development of domestic industries, empower local entrepreneurs, and promote a culture of self-sufficiency,” he said.

Dr. Ehindero pinpointed that Government policies play a crucial role in shaping the economic landscape. Unfortunately, certain policies in Nigeria have inadvertently contributed to the impoverishment of its citizens. High tariffs, trade restrictions, and inadequate support for local industries have stifled economic growth, perpetuating a cycle of poverty and unemployment. It is essential to evaluate these policies critically and implement reforms that foster inclusive growth, prioritise welfare, and promote equitable distribution of resources. By doing so, we can uplift the livelihoods of millions of Nigerians.

On Promoting Local Production and Consumption, he tasked the government on revitalising the agricultural and industrial sectors which are key towards reducing import dependency and promoting economic prosperity.

“We must invest in improving productivity, quality, and competitiveness of Nigerian products. This includes developing infrastructure, providing access to affordable credit, and facilitating technology transfer. Moreover, refining commodities like cashew, cocoa, and even petroleum within Nigeria will not only add value but also create employment opportunities and other revenue generation pathways. It is imperative that we encourage domestic consumption, making it a national priority to ‘eat what we produce’ and support local businesses.”

The NIWOSEC boss charged the organisers of the summit to focus on providing solutions to insecurity noting that it has a negative impact on Commerce and Agriculture.

“Insecurity poses a significant threat to the Nigerian economy. The ongoing challenges of terrorism, banditry, and other forms of criminal activities have severely disrupted commerce and agriculture. Farmers are unable to tend to their crops due to fear, while businesses struggle to operate in an environment marred by insecurity.

“Addressing these security concerns requires a collaborative approach involving the government, security agencies, and private sector stakeholders. By improving security, we can create a conducive environment for economic growth, attract investments, and restore stability to the nation.

He highlighted that the Nigeria Economic Summit provides a platform for stakeholders to deliberate on the critical issues affecting the nation’s economy by acknowledging the challenges of import dependency, government policies that impoverish Nigerians, and the inseparable link between insecurity and the economy, we can pave the way for a transformative agenda.

“It is essential to prioritise local production, empower entrepreneurs, and implement inclusive policies that place the welfare of Nigerians at the forefront. Together, we can chart a path towards sustainable economic growth, prosperity.”

The Minister of Finance and Coordinating Minister of the Economy Wale Edun had during the summit emphasised that President Bola Ahmed Tinubu has signed two executive orders geared towards ensuring liquidity in the forex market.

Mr. Edun revealed that around $10 billion of forex inflows is expected within weeks rather than months.

The Minister said there is another executive order that allows domestic issuance of foreign currency instruments so that they will have the incentive to provide that foreign exchange from whatever source.

The President Tinubu as part of cushioning the effect gave assurance that he will clear a gaping foreign exchange future contracts backlog which has drained investor confidence in the country’s bold FX reforms resulting in uncertainty in the market. All foreign exchange future contracts will be honoured by this government.

While recognising the institutional frailties of past years and his pragmatic approach to achieving his bold agenda through a path that fully accounts for present-day challenges, the President said, “With the effects of an unsustainable fiscal deficit and hidden subsidies, these factors distorted the money supply and created an unfair playing field for an elite crop of unpatriotic forces.

“But that is no more. These changes have been tackled head-on. My government has introduced several measures to resuscitate the economy; including the Five Hundred Billion Naira intervention to support small businesses and the agricultural sector.

“By January 2024, the new student loan program and consumer credit schemes will have come into effect.We are saying no more strikes for the sake of our kids’ and students’ futures. A consumer credit scheme is required, and it needs to start as quickly as possible.”

The President called on the private sector to support his vision for a greater Nigeria, saying, “I would like to charge you the captains of industry here present, to commit and redouble your commitment to our vision of a Renewed and more Prosperous Nigeria, a better Nigeria for all. For us to successfully deliver our promise to Nigerians, we recognise that it is imperative that we foster a highly collaborative relationship with the private sector.

“We must work together. I have proven capacity in this regard, as we remember the role of public-private partnership in the transformation of Lagos State under my leadership. We will replicate that across Nigeria with your unwavering support.”

Few weeks ago the National Bureau of Statistics (NBS) announced that inflation in Nigeria has risen to 26.72 percent. The NBS via its X (formerly Twitter) handle said the increase according to the September index is marking a 0.92 percent from the previous month’s 25.80 percent. September 2023, the headline inflation rate increased to 26.72 percent relative to the August 2023 headline inflation rate which was 25.80 percent.

Though, it’s clear that the instability in the global crude oil prices is affecting many countries with rising inflation rates considering the fact that transportation of goods and services from one place to another is on high.

But the Federal government led by Tinubu must play  deliberate roles in weakening the dollar’s rise against the Naira. Aside the salary palliatives to civil servants and capturing of the informal sector, the government should give waivers to exporters by exempting them from the multi-payment at various Ports. Workloads of government agencies should be reviewed to ease exports activities while stringent conditions for imports should be introduced to discourage their activities.

We are hopeful that the ongoing Economic Summit will fine-tune likeable solutions through policies that will assist in reducing the inflation rates in the market.