The International Monetary Fund has said that Nigeria’s economy stands to grow at five percent beyond the current 3.19 percent if there is a 25 percent removal of bottlenecks around governance and business regulations.
IMF Resident Representative, Dr Christian Ebeke said Nigeria is growing at three per cent but has the potential to grow at five per cent by “simply reducing the governance bottlenecks and business regulations by 25 per cent only.”
The IMF’s projection on Nigeria’s economic growth came after the National Bureau of Statistics reported that the country’s Gross Domestic Product grew by 3.19 per cent (year-on-year) in real terms in the second quarter of 2024.
Ebeke made his remarks on Tuesday at the 2024 International Business Conference and Expo organised by the Lagos Chamber of Commerce & Industry in Lagos and themed ‘Invest Nigeria’.
He noted that Nigeria’s economic reforms, including the financial and external sector liberalisation, need to be consolidated to “transform the country’s nascent momentum into something more general.”
Nigeria lagged as an emerging market due to structural gaps in governance and business regulation and closing the gaps will trigger a multi-durable growth acceleration, the IMF Resident Rep added.
Ebeke said the IMF ran a simulation of reducing the structural gaps by 25 per cent and discovered that bringing governance and business regulation to the level of older energy markets can lift Nigeria’s output by 6.4 per cent in the next three years.
“If you divide this six by three, you have an additional ten percentage points. Right now, Nigeria is growing at three per cent so it means this country can grow at five per cent by simply reducing the governance bottlenecks and business regulations by 25 per cent only,” he stated.
Ebeke observed that Nigeria needs to grow at least five or eight per cent every year above the population growth.
“This is good for businesses, particularly in a period where interest rates and inflation are high. So you need disposable income to grow, and you need a company to have higher turnover,” he added.
The Minister of Marine and Blue Economy, Adegboyega Oyetola, enumerated the Federal Government’s efforts at driving investments, including the establishment of the Nigeria Export Processing Zones Authority, which oversees Free Trade Zones and Export Processing Zones, which offers exemptions from customs duties, VAT, and corporate taxes.
Oyetola said the Federal Government collaborated with the Lagos State Government to clear the Apapa – Tincan – Mile 2 traffic for landside operations and provided tugboats, mooring boats, pilot cutters, bollards, fenders across all port locations for effective seaside operations.
He added that the governments maximised crane productivity and ensured a reduced transit time for vessels and trucks which led to a reduction in both the vessel and truck turn-around times.
“The vessel turn-around-time went down from an average of seven days to an average of five days, while truck turn-around-time went from an average of 10 days to a few hours,” the minister remarked.
President of LCCI, Gabriel Idahosa, said the 2-day 2024 International Business Conference and Expo would help the Federal Government embark on bold reforms in various sectors, including agriculture, energy, foreign exchange markets, and technology, to further diversify Nigeria’s economy and reduce our reliance on oil.
Idahosa urged the Federal Government to create a policy and regulatory environment to attract foreign investments into building factories in Nigeria to manufacture the many products we import today.
