Nigerian Govt Renews Commitment to Diversify Economy

Nigeria's Finance Minister Okongo iweala
Nigeria's Finance Minister Ngozi Okongo Iweala

Nigeria’s federal government has renewed its commitment to diversifying the nation’s economy to ensure the country depends less on crude oil as its major revenue earner.

Coordinating minister for the economy and minister of finance, Dr Ngozi Okonjo-Iweala, said that government would continue to double its effort in diversifying the economy through structural reforms.

Speaking at a press conference with Nigerian journalists at the ongoing Spring Meetings of the World Bank and the International Monetary Fund in Washington, DC, she said that government will continue to monitor developments in the global economy and work hard to ensure that the economy was strengthened to have inclusive growth.

According to her, Nigeria is aiming for a 7 to 8 per cent growth of the economy for 2012 even though the 6.6 per cent growth projected for the country in 2013 by IMF was exceptionally good considering the global economy trend.

“They obviously have their own projections, we also have our own. We are aiming for 7 to 8 per cent growth of the economy for 2012, but let me say that 6.6 per cent growth in this current environment is regarded exceptionally good on certain international environment on which we are in now.

The projections for world growth done by the IMF is about 3.5 per cent, so if we are growing at even 6.6 it’s something that we need to be quite proud of. Very few countries are not doing that well, except China and India,” she said.

The IMF, on April 17, maintained its growth forecast for Nigeria’s economy at above 7 per cent in 2012 but predicted a slump to 6.6 per cent in 2013 in the recent published World Economic Outlook report

The report says the economy is expected to maintain its real GDP growth target at 7.1 per cent in 2012 from 7.2 per cent in 2011.

Also commenting on the situation, Mallam Sanusi Lamido Sanusi, Central Bank governor, said that a lot depends on how quickly the growth drivers came into play to boost the economy.

“We already have fiscal consolidation, we have macroeconomic stability; what is left is to make progress on power and agriculture reforms.

“Once we are able to make that progress and there is an increase in electricity generation and an improvement on contract productivity, I don’t think that these 7 to 8 per cent that has been forecast by the finance minister will be unachievable.”

He noted that, all things being equal, the nation’s economy may exceed the growth forecast of the minister.

He added that what would add to the pace of growth in the country was the structural reforms that government had embarked on

Meanwhile, the World Bank has won support from member countries for a plan to boost its work on “efficient and fiscally sound” social safety nets, said President Robert B. Zoellick at the close of the World Bank-International Monetary Fund Spring Meetings in Washington.

“At international meetings, we talk a lot about the global financial safety nets. We need to focus equal attention on the human safety nets,” said Zoellick at a Development Committee press briefing Saturday. “As we know, there are dangers when institutions are too big to fail. But let’s remember that beyond the talk of financial systems, of regulations, or of firewalls, it is people who are too important to fail.

“Social protection makes sound development sense,” said an April 21 communiqué of the Development Committee, made up of the boards of governors of the World Bank and IMF.

“Social safety nets bolstered poor people’s resilience to the last financial crisis and are also an important component of longer-term poverty reduction when they are well-targeted, affordable, gender-sensitive and sustainable.”

While growth remains relatively strong in emerging and developing countries, poor countries continue to need support, the Development Committee said.

The committee called on the World Bank to support a New Deal for Engagement in Fragile States and to continue to look for solutions to food insecurity and malnutrition.

The committee also endorsed the Bank Group as “uniquely placed” to innovate and advise countries on how to harness the private sector for development.

“The global economy depends on proper incentives for private financing,” said Zoellick. “The World Bank Group has been a leader in developing public policies to encourage private sector innovation, investment, and job creation. At the end of the day, the best safety net is a job”.

The Development Committee praised the outgoing bank chief’s tenure at the helm of the international institution, citing the bank’s timely and effective responses to the food and financial crises and natural disasters under his leadership. It also lauded Zoellick’s championing of issues such as gender equality, climate change, agriculture, and infrastructure, as well as the institution’s work in fragile and conflict-affected situations.

Zoellick helped transform the World Bank Group, making it more open, transparent, accountable and ready for a new era of “modernized multilateralism,” the committee said.

The committee congratulated Zoellick’s successor Jim Yong Kim and thanked Ngozi Okonjo-Iweala and Jose Antonio Ocampo on their candidacies and for sharing their ideas for the World Bank Group.