Nigeria targets 7% medium term growth rate

The Nigerian government is currently working towards achieving a seven per cent medium-term growth rate as part of its efforts to unlock rapid and sustained inclusive growth. With the Economic Management Team leading the charge, the focus is on building on the country's current stability and aiming for higher growth rates that can effectively cater to Nigeria's population of over 200 million people. Tilewa Adebajo, CEO of The CFG Advisory, shed light on the importance of growth as a key challenge facing the Nigerian economy. He emphasized the need for sustained growth of around eight to ten per cent to drive meaningful development and lift people out of poverty. A crucial factor in achieving this growth target is maintaining inflation rates between nine to twelve per cent, which is deemed optimal for Nigeria's economic landscape. Adebajo also highlighted the significance of bolstering Nigeria's credit rating to attract investments and foreign direct investments (FDI). Structural reforms across monetary, fiscal, trade, and industrial policies are pivotal to enhancing credibility in the market. The pursuit of inclusion in the JP Morgan Bond Index further underscores the government's commitment to boosting its reputation and credibility in the international financial arena. Despite positive strides in the reform agenda and recent upgrades by rating agencies, Adebajo stressed the need for additional steps to address lingering economic challenges in the country. He emphasized the importance of completing the fiscal space by restructuring contracts and optimizing equity within the government's balance sheet. A notable proposal included selling joint venture assets to raise substantial funds for refinancing and enhancing credit ratings. The conversation also delved into the impact of global oil prices on Nigeria's economic landscape. Adebajo highlighted past missed opportunities, underscoring the significance of establishing a stabilisation fund akin to Norway's sovereign wealth fund. By shifting focus to increasing oil production and sustaining reforms in the oil and gas sector, Nigeria aims to mitigate oil price fluctuations and leverage increased output for economic gains. The interview also touched on Nigeria's policy initiatives, such as the Nigeria First policy supporting local industrialization and the establishment of a Cocoa Management Board. These efforts aim to strengthen Nigeria's industrial base, enhance competitiveness, and boost value capture in key sectors like agriculture. Additionally, Nigeria's move to join the Asian Infrastructure Investment Bank reflects a strategic step towards addressing the country's infrastructure deficit. Collaboration with the private sector in infrastructure investments and prudent concessioning of infrastructure projects can pave the way for sustainable development and economic growth. The discussion extended to the Central Bank's earnings report, highlighting positive developments in profitability, transparency, and accountability within the institution. Despite notable achievements like clearing FX obligations and fostering a fivefold recovery in net reserves, concerns lingered over rising staff costs and Naira printing expenses. The report underscored the importance of maintaining a clean financial slate and addressing operational challenges to sustain economic momentum. Overall, Nigeria's pursuit of a seven per cent growth rate amidst economic challenges underscores the government's commitment to driving inclusive growth and fostering a resilient economy.