Zedcrest Capital CEO: Here’s what can be done to revive Nigeria's economy

Nigeria's economic landscape has been facing significant challenges, with a fiscal deficit of 1.48 trillion Naira recorded in the fourth quarter of 2020. Dayo Amzat, the Managing Director and CEO of Zedcrest Capital, delved into the current economic scenario and provided insights into the path forward for policymakers. The country has been grappling with various economic indicators such as inflation, unemployment, and debt, painting a stark picture of the economy's state. Amzat highlighted key concerns and potential solutions to steer Nigeria towards growth and stability. The interview shed light on the intricate web of issues facing the nation and the imperative need for concerted efforts to address them. Nigeria's fiscal deficit has surpassed initial projections, standing at 6.1 trillion Naira in actual deficits for last year, significantly exceeding the 5 trillion Naira estimated at the onset of the pandemic. Despite some uptick in oil prices, the pathway to recovery remains challenging, with a projected deficit of around 5 trillion Naira for 2021. The issue of inflation has also been a pressing matter, with rates soaring above 17%, notably driven by a substantial increase in food inflation at approximately 21%. The surge in food prices has significantly impacted daily staples, with prices escalating by as much as 50% in the last six months. Challenges such as food insecurity, logistics bottlenecks, and security-driven price inflation have compounded the inflationary pressures, posing significant hurdles to economic stability. Amidst these challenges, policymaking remains pivotal to navigate the economic headwinds. The upcoming Monetary Policy Committee (MPC) meeting will be crucial in determining the course of action on interest rates. With inflation hovering at 17%, the scope for aggressive interest rate adjustments is limited, necessitating a cautious approach from the Central Bank. Amzat emphasized the need for holistic solutions to address the multifaceted issues plaguing the economy. Tackling insecurity, particularly the rampant cases of kidnappings, is imperative to ensure workforce availability and mitigate disruptions to economic activities. Enhancing infrastructure, improving food security, and streamlining logistics are vital areas that demand immediate attention from policymakers. While the fiscal authorities are urged to expedite structural reforms and infrastructure investments, long-term sustainability hinges on robust revenue generation and fiscal prudence. Nigeria's burgeoning debt levels underscore the urgency for strategic debt management and revenue enhancement strategies. Despite the challenges posed by escalating debt, Amzat noted that judicious deployment of borrowed funds towards critical infrastructure projects could pave the way for sustainable growth. The interview underscored the intricate interplay of economic factors shaping Nigeria's trajectory and underscored the imperative for proactive policy interventions to revive the economy and foster long-term stability.