|
Listen now
|
Newly elected Nigerian President Bola Tinubu is targeting a doubling of the Nigerian economy to over $1 trillion by 2030, to be achieved through accelerated reforms of the entire economy and regulatory agencies.
This was contained in a presidential Policy Advisory Council report on the National Economy, seen by MoneyCentral.
Members of the National Economy sub-committee included: Senator Tokunbo Abiru (Chair), Dr Yemi Cardoso, Samaila Zubairu, and Dr Doris Anite. KPMG acted as consultants to the team.
“There is an urgent need to implement high-impact initiatives to grow the economy at a GDP average growth rate of 7% per annum in order to achieve a $1 trillion GDP in next eight years,” the sub-committee said as part of its recommendations.
The committee forecasts a GDP size of $769 billion by 2027, at the end of Tinubu’s first term in office, and rising to $1.042 trillion by 2030.
The report plans reforms to: Fiscal Policy, Monetary policy, Capital Markets, Industry & Trade, and Performance and Delivery, as tools to be deployed to deliver on the set targets.
Fiscal policy reforms to be concluded within 18 months are aimed at achieving the following targets: Revenue to GDP ratio of 22% (from 7.96% currently), capital expenditure as a percentage of GDP of 25% from (4.1% currently), and by addressing oil theft, pipeline vandalism and substantially growing oil production to 4m barrels/day from offshore and onshore assets within 4 years.
The growing crude oil revenue and savings are to be saved/invested into the excess crude account (ECA) and NSIA.
The Tinubu Government should also look to deepen tax collection by restructuring and automating key revenue generating parastatals, the report said.
Meanwhile, a key recommendation of the removal of Petrol subsidy, which was to happen up to 18 month from now has already been achieved.
On monetary policy the recommendations are to achieve price stability to foster sustainable economic growth, reduce interest rate to drive investment, and harmonise and stabilise the Naira exchange rate.
The unified exchange rate policy has also already been announced by the Central Bank of Nigeria (CBN).
Outstanding reforms remaining on the FX front would be to review the CBN balance sheet and ascertain the true position of the Nigeria’s external reserves, aggressively grow FX supply and build external reserves, including securing funding support from the Multilateral Agencies and DFIs at concessionary rates.
“An estimate of least $50-$60 billion in reserves, with a monthly inflow of at least $6bn-8bn$/month from export earnings and other forms of capital inflow, will be required to defend the Naira at an exchange of N500-N600/$,” the report said.
There is also a recommendation to raise the capital requirements of BDCs to ensure only strong, well-capitalized and automated BDCs are allowed to operate, such as Travelex.
For manufacturing and trade, the major recommendations were to: implement the National Single Window Trading Platform Project to facilitate product valuation and classification, provide information, minimise human discretion and streamline the import and export processes.
There is also the plan to establish an $8 billion export financing facility sized to support the targeted $40 billion worth of exports including a Made-in-Nigeria for export program.
This would be achieved by providing incentives, including partnerships with strategic trading partners, to accelerate the growth of key sectors (Light Electronics Assembly, Garments, Fertiliser; Refined Sugar, Oil Palm, Automotive), generating target output in excess of $50 billion annually.
High Growth Sectors whose regulators/agencies are targeted for reform include: NUPRC, NMDPRA, NNPC, NERC, NCC, CBN and SEC, NBC and Nigerian Film Corporation, Federal Mortgage Bank and PENCOM, NEPZA, NAFDAC, Customs, NPA, and the CAC.
Under Capital Markets, the plans are to: Issue long-term, high yielding debt securities (such as Special Purpose Bonds) for dedicated/ specific projects/ initiatives such as Agriculture, Industrial related initiatives, and facilitate increased participation of pension funds and insurance companies in the capital market.
The Tinubu administration also plans to collaborate with fintech companies to introduce new capital market products such as multi-issue structured products, and special financial bonds to facilitate the interest of SMEs.
To achieve success, facilitate decision making, clear roadblocks and resolve issues & challenges a well-coordinated performance and delivery unit to accelerate implementation of strategic projects is to be established, which is to report back to the Federal Executive Council (FEC), Vice President and President on progress on the priority areas on a monthly basis.
“The unit is to be led by an outstanding leader with strong implementation capability, of ministerial level, supported by staff from the private and public sectors, with less focus on committees and staffed with personnel with relevant core experience and proven track record in delivering strategic transformation projects,” the report said.