It was reported in different interviews, where some financial experts said that Nigerians must elect right leaders or face total collapse of the economy, while insisting that the country should put an end to incessant borrowing and re-engineer fiscal and monetary policies in order to strengthen the naira.
With over N44 trillion in debt and the government contemplating adding another N8.8 trillion to fund its budget for 2023, Nigeria's public debt is a cause of concern among officials, although it appears that a deadlock has arisen over the management of another N22.7 trillion owed by the Central Bank of Nigeria—this time through its Ways and Means (W&M) window.
In order to ensure fiscal discipline, Dr. Diran Fawibe of International Energy Services Limited has said that Nigeria must stop borrowing money immediately and aggressively pursue peace in the face of pervasive insecurity. He stressed that the government must plug financial leakages across all tiers of society, and emphasized that it is essential for Central Bank of Nigeria to end the country's currency crisis.
Fawibe urged the government to investigate recent or ongoing oil theft and allegations of stamp duty fraud. He said: "Nigeria must work towards removing its subsidies on fuel before it bankrupts the economy." It is necessary to take effective measures in order to increase oil production from 1.8 million barrels per day up to 2 million barrels per day.
“We must lay a solid foundation to streamline investments in the oil and gas upstream, midstream and downstream sectors through orderly implementation of the Petroleum Act and ensure a transparent level-playing field in all engagements across board.”
He said that the government should implement stimulus packages to develop non-oil sectors of the economy and export high-value products. He called for a reordering of resource allocations so that human resources are channeled into measurable targets, with periodic policy impact assessments, While urging politicians to act responsibly during political campaigns, we should remember that elections are only one means of choosing leaders and not an end in themselves.
In a recent interview, former President of Chartered Institute of Bankers of Nigeria (CIBN) and professor at Babcock University, Segun Ajibola noted that 2023 is significant in Nigeria for many reasons.
“The hydra-headed problems of inflation, the international value of the local currency and high unemployment rate should be tamed. Current government policies towards resolving these disequilibrating factors need to be continued and strengthened,” Ajibola said.
The professor said that the removal of petroleum subsidy should be taken up immediately, asserting that the government needs to break NNPC's monopoly of importing fuel before removing subsidies can help Nigeria. He noted that positive actions, such as the turnaround maintenance of existing refineries and investment in new ones by private companies would help provide a long-term solution.
Ajibola said current policies and incentives on agriculture and industry need to be effectively implemented, especially as some tax rates are being reviewed upwards.
Mudiame University Chancellor Sunny Eromosele said that while the government might not have control over the nation's economy, they can still influence it by implementing policy, Improvement in economic indices depends on the right leaders being chosen in general elections.
“Looking at the national economy, nothing will change due to political tensions. It may be a standstill until elections are over,” he said. He added that if the new government is well prepared to hit the ground running, the economy could experience a little change in the fourth quarter of the year.
“Right policy framework with good intentions can turn the situation around. Considering the war in Ukraine and Russia, and the U.K. and U.S. recession, including the China COVID-19 issue, Nigeria should or must ensure that internal issues are resolved,” Eromosele said. He insisted that local approaches must be deployed to sustain the business of the country.
Managing Partner of BBH Consulting, Madaki Omadachi Ameh, noted that the coming election season would bring uncertainties and place government in a reactive mode. As such, he said it is unlikely authorities will be able to help matters much at all during this time period.
“The expected global economic downturn will have its impact on the Nigerian economy as well. Policymakers must buckle up and address long outstanding issues, such as wasteful and inefficient subsidies, low productivity in public and private sectors, further improvement in agriculture, and drastic import substitution, to shore up the value of the naira, among other measures,” he said.
Banker and former chairman of PETAN Anthony Okoroafor does not anticipate much economic growth in the first or second quarter, due to elections and transitions within his sector.
“Subsidy which is a heavy drain on the reserve will not be removed before transitioning, for fear it will trigger a backlash. Costs of consumables will continue to go up. Unemployment will still be high, amid declining income per capita and high levels of poverty. Exchange rate in the parallel market will be higher, costs of debt servicing are projected to exceed revenue,” Okoroafor said.
In the third and final quarters, with a new government in place and Dangote refinery coming on stream, Iledare speculated that subsidies would be removed while production ramps up, according to the expert, no quick fix would improve the economy in an election year.
“However, the first is to hope for a fair and free election with no unintended consequences of political hooliganism that can further have short-term implications on a stagnated economy. INEC officials must optimally be at their best,” Iledare said.
He views the year 2023 as a transitional period in which professionals—in key sectors such as energy, petroleum and economics–will play a critical role during the first six months.
He further claimed that CBN has a role to play in managing the money supply by mopping up any excess circulating in the economy, the new National Assembly must avoid unnecessary, unauthorised spending by ministries, departments and agencies — the budget for 2023 is too large as it is.
Iledare said: “If there is a time in history to invoke the Fiscal Responsibility Act, the first six months of 2023, represents that time. I am not sure the extent possible, but outgoing political leaders can redeem their inaction by calling for implementation of the PIA provisions on the downstream petroleum sector.”
