President of the African Development Bank (AfDB), Dr Akinwumi Adesina, has urged Nigeria’s President-elect, Bola Tinubu, must be ready restructure Nigeria’s economy and ensure social inclusion.
He said this on Saturday in Abuja at the inauguration lecture as part of activities of the Monday’s swearing-in of Asiwaju Tinubu. adding that Tinubu must rise to the challenge of governance on his first day in office.
He noted that the country needs leadership that would reassure it with hope of security, peace, and stability.
Speaking on the topic, “Strengthening Nigeria’s Economy”, Adesina said that Nigeria needs to be healed and unites a fractious nation that will arise above party lines and forge a united nation with inclusiveness, fairness, equity, and justice.
He noted that the new administration must prioritise macroeconomic and fiscal stability as imperative, insisting that the incoming administration must act as a matter of urgency.
“Unless the economy is revived and fiscal challenges addressed boldly, resources to develop will not be there. No, bird can fly if its wings are tied. Nigeria currently faces huge fiscal deficits, estimated at 6% of GDP. This has been due to huge federal and state government expenditures, lower receipts due to dwindling revenues from export of crude oil, vandalism of pipelines and illegal bunkering of crude oil,” he said.
Adesina noted that data from the Nigeria’s Debt Management Office (DMO), which indicates that “Nigeria now spends 96% of its revenue servicing debt, with the debt-to-revenue ratio rising from 83.2 percent in 2021 to 96.3 percent by 2022.
He said, “Some will argue that the debt to GDP ratio at 34% is still low compared to other countries in Africa, which is correct; but no one pays their debt using GDP. Debt is paid using revenue, and Nigeria’s revenues have been declining. Nigeria earns revenue now to service debt not to grow.”
The AfDB President added that for Nigeria’s incoming administration to move the economy ahead it needs to make bold decisions to end the inefficient fuel subsidies.
“The place to start is to remove the inefficient fuel subsidies. Nigeria’s fuel subsidies benefit the rich, not the poor, fueling theirs and the government’s endless fleets of cars at the expense of the poor. Estimates show that the poorest 40% of the population consume just 3% of petrol.
“Fuel subsidies are killing the Nigerian economy, costing Nigeria $10bn alone in 2022. That means Nigeria is borrowing what it does not have to… if it simply eliminates the subsidies and uses the resources well for its national development,” he said.
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