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3 areas that need total reforms to drive Nigeria’s economic growth

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The exchange rate, fuel subsidy, and power sector have been identified as three key areas that need structural and policy reforms to unlock and drive Nigeria’s economic growth in 2021.

This was disclosed by Andrew Nevin, Partner and Chief Economist, PwC Limited, during his presentation at the Nairametrics’ Economic Roundtable webinar on ‘How to get out of this Economic Crisis,’ on Saturday.

He said, “The exchange rate, fuel subsidy and power sector need total structural and policy reforms as they are largely distorted. There is also a need to move the informal sector to the formal sector.

“We understand what the Central Bank of Nigeria (CBN) is trying to do, as it aims to operate market-determined rates, however, this has not been implemented.

“But the problem is that when we have multiple exchange rates, it is confusing for investors and when they are confused, it is not good for our economy because they won’t come. We have not taken the expected step needed and we believe that is part of the solutions.

“On fuel subsidy, we need to look into this because according to the PPPRA (Petroleum Products Pricing Regulatory Agency), Nigeria spent about N10 trillion on fuel subsidy between 2006 and 2018.

“Also, Nigeria’s power and electricity industry is challenged with low electricity generation, poor transmission infrastructure, liquidity issues, high electricity consumer debts among others, due to non-cost reflective tariff.”

Nevin concluded by highlighting Nigeria’s unique capacity to self-organise. A characteristic that he said could bring about a transformation in the nation.

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