By Tony Obiechina, Abuja
Nigeria’s economy is recovering gradually from the 2016 recession, with growth projected to pick up from 1.9 percent in 2018 to 2 percent in 2019 and 2.1 percent in 2020-21, latest World Bank Nigeria Economic Update (NEU) Report, has indicated.
According to the Report released in Abuja on Monday, “this growth outlook is vulnerable to external and domestic risks, including geopolitical and trade tensions that may affect inflows of private investment. With population growth (estimated at 2.6 percent) outpacing economic growth, per capita incomes are falling”.
The report noted that Nigeria has the opportunity to advance reforms to mitigate these risks amid growing public demand for greater economic opportunities.
The report, titled “Jumpstarting Inclusive Growth: Unlocking the Productive Potential of Nigeria’s People and Resource Endowments”, shows that Nigeria created about 450,000 new (net) jobs in 2018, partially offsetting the loss of 700,000 jobs in the previous year.
The Report however pointed out that Nigeria’s labor force is growing rapidly, and in 2018 over 5 million Nigerians entered the labor market. This resulted in 4.9 million more unemployed people in the last year.
According to Report, “positive news are emerging from some states that are creating enough jobs to keep up with the growth of their labor forces. In the year following the recession (between the first quarter of 2017 and the first quarter of 2018), 10 states saw some positive job creation, but the number of new jobs was not enough to absorb the new entrants into the labor force.
“The situation improved by the third quarter of 2018, as four states (Lagos, Rivers, Enugu, and Ondo) created more jobs than the entrants to the labor market, and as a result these states reduced unemployment.
“Recent government efforts to boost job creation include improvements in regulations to make it easier to start and operate a business. In this regard, Nigeria improved its ranking in the Doing Business index from 169th in the world in 2017 to 131st in 2019.
“Other efforts include the recent launch of the Central Portal for Government Services (www.services.gov.ng), which aims to increase transparency and also support the development of the digital economy.
“In the trade area, the government signed in July 2019 the Africa Continental Free Trade Area (AfCFTA) agreement; a signal that Nigeria is now more willing to become a driver of continental growth and integration. The government has also taken measures to enhance social protection systems”.
“Reforms would help achieve faster, more inclusive, and sustained growth with jobs”, said Shubham Chaudhuri, The World Bank Country Director for Nigeria.
“Building on recent efforts, going forward we recommend actions in priority areas, including increasing fiscal revenues and improving the quality of spending to manage oil-sector volatility, investing in much-needed human capital and infrastructure, and improving the business climate to unlock private investment and tackle Nigeria’s jobs challenge.”
The report discusses ways to boost the productivity and resilience of the Nigerian economy, including: leveraging trade integration to harness the benefits of the Africa Continental Free Trade Area; improving the efficiency of spending in education; monitoring the impact of conflict to protect the poor and vulnerable; and leveraging digital technologies to diversify the economy and create jobs for young workers.
“Investing in people and removing barriers that make it difficult for new firms to compete and grow will encourage entrepreneurship and innovation, spur job growth, and ultimately reduce poverty”, said Chaudhuri.