Tuesday, May 31, 2016

Efforts To Achieve Economic Transformation In Nigeria Require A Completely Different Approach – New Report

Weak oil prices and low economic growth have made economic development in Nigeria the key priority area for national policy, but only a significant shift from focussing on the domestic economy alone and better coordination of national
development towards nation-building around competitiveness and openness has any chance of realising this opportunity, a new report by the Overseas Development Institute has found.
The report ‘Supporting Economic Transformation in Nigeria’ found that the share of manufacturing in GDP in Nigeria at below 10% is below the average of sub-Saharan Africa.  Investment rates at 15% of GDP are well below any reasonable comparator. And the oil economy has impeded a move towards a more complex economy, with progress towards production complexity falling well behind comparator oil dependent states such as Indonesia.
But the new government plans could deliver change if they are designed and implemented with a new orientation in mind. The report argues successful transformation elsewhere (e.g. Korea) has been supported by a co-ordinated push through a central agency or ministry pursuing a path of change based on competitiveness and openness.
Dirk Willem te Velde, Director of Supporting Economic Transformation at ODI, said: “The current economic conditions force Nigeria to double their efforts at economic transformation. Business as usual is not going to generate the large increase in productive employment that the country needs.”
The analysis, drawing on the work of experts including David Booth, Danny Leipziger and Ebere Uneze, has examined international experiences as well as economic policy in Nigeria to date. It uses the latest economic techniques to assess economic transformation and promising sectors for the future
“But when we look at the experience of other countries, successful transformation elsewhere has been supported by a co-ordinated push through a central agency or ministry pursuing a path of change based on competitiveness and openness.”
“Nigeria has the opportunity to show it is serious about economic transformation and promote a number of carefully selected projects which demonstrate that progress in export-oriented transformation can be made, contributing to a shared vision of change.”
Reacting of the report, Mr Segun Awolowo, ED/CEO Nigeria Export Promotion Council said: “In an op-ed I authored earlier in March this year, I declared that Nigeria does not have an oil price problem, Nigeria has an “export inertia” problem! The rebasing of our GDP in 2013 exposed the fact that Nigeria’s economy is actually diversified. However, the predominance of economic activities across various sectors does not translate to economic empowerment for Nigerians and wealth for the nation. The missing link is targeted productivity towards exports of non-oil products both tangible and intangible. The launch of this document comes at an appropriate time as a desirable contribution to the discussion on Nigeria’s Economic Diversification.”
Notes to editors
·         The report ‘Supporting Economic Transformation in Nigeria’ is due to be published on Tuesday, May 31
·         Data on manufacturing from the World Development Indicators

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