Governor Godwin Emefiele of the Central Bank of Nigeria (CBN), has charged private sector operators to look inwards and figure out how best to develop the country’s economy.
The newly re-appointed CBN Governor made the call while delivering the third in the University of Benin’s series of Eminent Persons’ Lectures. According to him, private sector operators should think of what they can do to improve the fortunes of the Nigerian economy, instead of merely thinking of how they can benefit from it.
Emefiele further noted that there is enough potential within the Nigerian economy to make it as developed as other countries.
Why this is important: Nigeria’s public sector is among the smallest around the world. It and is marred by inefficiencies and coordination problems. Therefore, any medium-term growth trajectory will depend largely on private sector development.
The way forward: Emefiele is definitely right; private sector operators have a huge role to play towards the development of the Nigerian economy. However, the Government must help the private sectors.
Note that even though Nigeria improved 23 positions on the World Bank Ease of Doing Business (DB) index between 2016-2018, it still ranks 146th in DB 2019. This presents a lot of room for improvement, particularly in the areas of registering property (184th), trading across borders (182nd), and getting electricity (171st).
A hampered private sector: According to the World Bank’s biannual report, the Nigeria private sector has been hampered by inadequate monetary and fiscal policies. Also, low growth potential has also been attributed to structural constraints. Inadequate monetary and fiscal policies severely limit the medium-term growth outlook.
The World Bank equally noted that the delayed approval of the Medium Term Expenditure Framework 2019-2021 (MTEF/FSP) and 2019 budget, contribute to policy uncertainty, thereby postponing investment decisions across the sectors of the economy and foregoing potential growth-spurting injections.
Therefore, to increase investors’ confidence, the World Bank recommended that the Government should improve the business environment. This should be done alongside a stable macroeconomic environment and the strategic use of public capital investments that could further crowd-in private sector investment.
Note that Nigeria’s economic growth in 2019 is expected to hover around 2 percent in the medium term; below its potential and population growth rate.