CFG Advisory: Nigeria Must Revamp Trade and Industrial Policies

Tilewa Adebajo, CEO of CFG Advisory, emphasizes the need for Nigeria to revamp its trade and industrial policies to achieve sustainable economic growth. He argues that the current GDP growth of 3.4 percent is insufficient and highlights the importance of reducing import dependency while boosting local manufacturing. Adebajo proposes targeted policies and fiscal measures to enhance productivity and investment across key sectors, aiming for a growth rate of 6-7% while addressing rising debt concerns.

Tilewa Adebajo, CEO of CFG Advisory, asserts that Nigeria must revamp its trade and industrial policies to foster economic growth and narrow the output gap. He denotes that the current GDP growth of 3.4 percent is inadequate for a country with a population of 200 million. Addressing this gap is critical to realizing the ambition of a Trillion Dollar Economy, emphasizing the need for sustainable double-digit growth.

Adebajo highlights Nigeria’s promising resources, including its young workforce and vast natural assets like oil and gas. Despite achieving relative economic stability, particularly in exchange rates and fuel subsidies, the manufacturing sector still struggles, registering only a 4 percent nominal GDP growth in 2024. A robust industrial policy is needed to diminish import dependency and stimulate local manufacturing.

He advocates for targeted policies to enhance sectors such as agriculture and manufacturing, thereby increasing productivity. Adebajo cites success in industries like cement and fertilizer and urges the government to offer incentives for investment in these crucial areas. Additionally, the importance of fiscal stability is underscored, noting the concern surrounding Nigeria’s rising debt and the need for optimizing its capital structure.

To alleviate debt, he recommends divesting certain joint venture assets to establish a foundation for improved productivity. Adebajo expresses optimism regarding the oil industry’s potential for growth, suggesting that reinvestment of oil revenues into diverse sectors is essential for economic diversification. With appropriate policies, he projects a growth forecast of 6 to 7 percent for Nigeria this year, yet cautions that growth could stagnate at 4 to 4.5 percent without significant changes.

In conclusion, Adebajo reinforced the necessity of proactive policy measures to enhance economic growth and prosperity in Nigeria. There is a clear call for reforms aimed at boosting local manufacturing and diversifying the economy, which are vital for sustainable growth in a country brimming with potential.

In summary, the insights provided by Tilewa Adebajo stress the urgent need for Nigeria to overhaul its trade and industrial policies. Such reforms are essential to bridging the output gap and achieving sustainable economic growth, particularly in light of the country’s substantial resources and young population. Proactive policies and fiscal stability are paramount to realizing the desired Trillion Dollar Economy.

Original Source: www.cnbcafrica.com