Mr Akinwumi spoke on the topic, ‘Nigeria’s Economic Resurgence: Learning from the African Experience’, Dr Adesina who was Guest Speaker at the retreat held October 11, 2021, in Abuja, gifted the federal government of Nigeria, a most loaded and padded speech; the content of which if implemented, will engender the country’s economic resurgence.
The speech by the President of the African Development Bank Group, Dr. Akinwumi A. Adesina, at the Mid-Term Ministerial Performance Review Retreat, comes as a panacea to Nigeria’s recovery.
Stating the fact that the corona virus “pandemic has caused so many deaths and upended global economic growth”, he noted that “due to COVID-19, Nigeria’s economic growth rate declined to -1.8% in 2020. This mirrors the pattern across Africa, as the continent posted a -2.1% growth rate in GDP, its lowest in two decades”.
“The African Development Bank will invest $3 billion in support of local pharmaceutical industries in Africa, including in Nigeria”.
He however posited that the country’s recovery, expected in 2022, “will depend on two critical issues: access to vaccines and tackling debt issues”. He added that Nigeria must build quality health care systems that will protect its population, today and well into the future, as well as world-class local pharmaceutical industries, able to effectively tackle the production of therapeutic drugs and vaccines. “Nigeria must revamp its local pharmaceutical industry and launch strategic investments for local vaccine manufacturing. Africa should not be begging for vaccines; Africa should be producing vaccines.
Adesina also insisted that “Nigeria must decisively tackle its debt challenges. The issue is not about debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35% is still moderate. The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth. “The debt service to revenue ratio of Nigeria is high at 73%.Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have economic resurgence, we need to fix the structure of the economy and address some fundamentals”.
Dr Adesina advised government to “significantly boost productivity and revenues from its non-oil sector, with appropriate fiscal and macroeconomic policies, especially flexible exchange rates that will enhance international competitiveness”, adding that “The private sector should be given incentives to invest in infrastructure.
”The Federal Government’s15 trillion Naira Infrastructure Fund is a good idea, so is the initiative for tax credits for private sector investment in infrastructure. To be sustainable and more efficient, Public-Private Partnerships (PPPs) should be accelerated to finance major infrastructure across Nigeria”, he stated. Regarding trade, investment, and competitiveness, he explained that “The Africa Continental Free Trade Area presents a major opportunity for Nigeria. Consumer and business expenditures in Africa are projected to rise to $6.7 trillion by 2030.
“Significant support should be directed toward boosting industrial manufacturing capacities. Nigeria should also move rapidly to the top of selected value chains, such as automobiles, computers and electronics, textile and garments, and food manufacturing, transport, and logistics”.
Much, he noted in this regard, will depend on the ports of Nigeria. “According to the sector operators, the cost of exporting 100 tons of cargo in Nigeria is $35,000, compared to $4,000 in Ghana. Today, the leading ports for West Africa are in Cote d’Ivoire, Ghana, Togo, and Benin Republic. All these countries have modernized their port management systems, leaving Nigeria far behind”.
Nigeria, he said can “learn from Morocco’s world-class Tangier-Med port. The port is unique in that it is an industrial port complex, and a platform that has over 1,100 companies. They collectively exported over € 8 billion worth of goods in 2020″.
Sharing his experience at the Tangier-Med Port, Dr Adesina said, “I actually thought they were on vacation, as I did not see people; just machines, haulers, automated systems moving containers in what looked like a well-synchronized maze, with incredible efficiency. There were no kilometers of trucks waiting to get to the port”.
Suggesting the adoption of the Morocco port model, he declared that “We should not be decongesting the ports in Nigeria, we should be transforming the ports. Nigeria should rapidly modernize and transform its ports. Ports are not there for revenue generation. They are for facilitating business and exports, and stimulating industrial manufacturing, and competitiveness of local businesses and exports”.