Nigeria - Facing the challenge of Sustaining Regional Leadership

Background

From an impressive track record of consistent growth in the last decade averaging 6.5%, well above global average and ahead of SSA average, culminating in emergence as Africa's largest Economy with a rebased USD 510Bn GDP (ahead of South Africa, Egypt and Algeria far behind at USD 352Bn, 285Bn and 228Bn  respectively), Nigeria faces the same challenge every pack-leader must face at some point - staying ahead of the pack. 

It is often said that getting to the top is not the real problem for high achievers, the true test of greatness is the ability to STAY AT THE TOP.

Can Nigeria consolidate and retain its leadership in Africa for the next decade and beyond? Can she conquer the ills of corruption, insurgency, socio-economic inequalities and weak infrastructure to show the world that its leadership is not a fluke but a truly earned and durable laurel? Can Nigeria achieve truly inclusive growth in the years to come?

In its defense, Nigeria has actually passed arguably the greatest test it will face on this quest - political stability. Against the grain of global expectation and speculations of impending doom, Nigeria conducted a peaceful and credible election  in March 2015 with the outcome being an acknowledged and accepted victory by the Challenger over a well-entrenched incumbent, thus once again separating itself from the pack. As an added bonus, the incoming administration is generally perceived as pro-reform and anti-corruption. 

STAYING ON TOP for Nigeria now becomes realizable if as a Nation we can successfully address the following critical concerns:

We must reduce the cost of governance which is, in most categories, well above the global benchmark. Government must make the necessary changes and savings through reforms in the Executive arm, Civil Service and the National Assembly. By reducing recurrent expenditure, government can gradually free funds for investment in capital expenditure which is abysmally low now.

Growing government revenues by widening the tax net and providing infrastructure and regulatory framework to support productive areas like export, agriculture, communication and the entertainment industries is key. Government must through a combination of incentives and regulation do all it can to bring in the informal sector which is accountable for a significant proportion of the high GDP growth. A government revenue structure composed 70% of crude oil sales is completely untenable when oil and gas is only 15.9% of the re-based GDP, which is well diversified with Agriculture 51% Services 22%, Manufacturing 6.7%, Telecoms 8.7% and Entertainment at 1.2%. With strong demand for export products like Cocoa, Sesame Seeds, Cashew nuts and a host of others, we must change the structure in which Crude oil accounts for 94% of our exports.

Energy sector reforms firstly in Oil and Gas sector and within key agencies NNPC and the Petroleum Ministry are clearly an imperative from unfolding revelations. The stalled Petroleum Industry Bill must be revisited. All impediments to the deregulation of the sector and privatization of refineries must be removed at the earliest. Gas supply issues must also be tackled as this has greatly stunted the success of the on-going power sector reforms.

Our huge infrastructure deficit affecting Transportation - rail, road, aviation and waterways, Power, Water supply and Healthcare must be addressed through a well-thought out strategy which must be consistently implemented. Clearly, government cannot fund our infrastructure needs by itself. What is required is an enabling environment and robust regulatory framework for private sector investment. To attract and retain both foreign and domestic investment, our challenges with security and corruption must equally be tackled sincerely and with boldness.

Although insurgency is localized to the North-Eastern part of Nigeria and indeed already receding, it remains a threat to be eliminated or at the least minimized. Other security threats like kidnapping and robbery must remain subdued. This will ensure a steady flow of investments in our otherwise very attractive economy and ensure we remain a competitive investment destination to global investors who clearly have competing alternatives. 

With regards to corruption, our government must not only make the right sounds, it must show positive example whilst implementing a transparent investigation, trial and enforcement mechanism to minimize corruption.

Our judicial system must be overhauled through a comprehensive reform process to enable it earn and retain the confidence of citizens and residents, particularly investors and the business community that we have a credible and dependable judicial system for the enforcement of contractual and other legal obligations.

Conclusion

As Nigeria embraces the change promised by the incoming administration, the world waits to see the nation prove that it has indeed earned and can keep its position as Africa's leading economy and leading democracy, capable of initiating and implementing the critical reforms required to sustain its leadership in a fiercely competitive world amidst a divided crowd of believers and skeptics.

 Oluwatoyin Sanni