A financial analyst, Mr Oluwaseyi Odufuwa, says Nigeria’s ambition to build a one-trillion dollar economy by 2030 is achievable if critical policies are implemented within the next three years.
Odufuwa, who is also the Managing Director of Capital Plus Ltd., made this assertion during an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.
“Sustainable finance is crucial for long-term economic growth.
“President Bola Tinubu has emphasised the need for Nigeria to reach a one-trillion dollar economy by 2030.
“This goal is attainable within the next six years, though some economic experts have expressed skepticism based on the current economic trends,” he said.
Odufuwa, an investment banker with over 20 years of experience, said that the one-trillion dollar target was realistic if Nigeria adjusted its monetary and fiscal policies.
He noted that Nigeria’s Gross Domestic Product (GDP) currently stands at 253 billion dollars, with a growth rate of 3.2 per cent in the second quarter of 2024, compared to 2.51 per cent in 2023.
He added that while the 2024 budget benchmarked growth at 3.76 per cent, the current growth rate of 3.1 per cent, though not ideal, is a sign of progress.
Odufuwa emphasised that to achieve a one-trillion dollar economy, Nigeria must increase its GDP growth rate to a minimum of six per cent annually.
He outlined several key policies that the government should prioritise to meet this target.
Odufuwa stressed the need to curb inflation, particularly headline and food inflation, noting that both remained high in recent years.
“Food inflation accounts for 40 per cent to 41 per cent of headline inflation.
“Headline inflation has only dropped to 33.4 per cent year-on-year, which is still high.
“If we tackle food insecurity, inflation could fall to around 28 per cent or 29 per cent, boosting food sufficiency and freeing up foreign exchange (FX) from food exports, which in turn will grow the GDP,” he explained.
Odufuwa also called for a reduction in the revenue to debt servicing ratio to create more liquidity in the foreign exchange market and support infrastructure development.
He highlighted that while the ratio had dropped from 97 per cent to 63 per cent, the global standard, according to the World Bank, is 22.5 per cent.
“If the government sustains this downward trend, more funds will be available for capital projects, which will, in turn, stimulate economic growth and increase the GDP,” he added.
The expert pointed out that the government must meet the Organisation of Petroleum Exporting Countries (OPEC) target of increasing oil production to two million barrels per day from the current 1.4 million barrels.
He acknowledged that insecurity in oil-producing regions had been a barrier but noted that achieving the two million barrels per day mark would generate over one billion dollars per month.
The analyst said that this would ease pressure on the naira and spur economic growth.
Odufuwa called for the rebasing of Nigeria’s GDP, which was last done in 2014, when it increased from 270 billion dollars to 510 billion dollars representing a 90 percent rise.
He mentioned that the National Bureau of Statistics (NBS) was considering another GDP rebasing, which, if done, could significantly boost the country’s current GDP.
Diversifying the economy, he criticised Nigeria’s reliance on oil and called for a stronger focus on agricultural exports, which currently contribute 16.8 per cent to the GDP, amounting to 42 billion dollars.
“Nigeria needs to increase its agro-export capacity to earn more FX and stimulate growth,” he said.
Odufuwa added that the country should focus on producing food both for local consumption and export.
He also spoke on the new national minimum wage of N70,000, noting that while it might appear small, it would stimulate consumer spending.
According to him, this will, in turn, drive productivity and contribute to economic growth.
Odufuwa commended the Securities and Exchange Commission (SEC) for its expansionary initiatives, noting that in the past few months, six banks had raised a combined N1.4 trillion from the capital markets, which would help grow the economy.
He urged all levels of government to tackle insecurity, which he described as a “cankerworm” that had hindered the growth of agriculture, oil production and the night economy.
He called on state governors to use technology in farming to boost food production and achieve sufficiency.
Odufuwa also pointed out the untapped potential of Nigeria’s night economy, which could contribute significantly to the GDP if properly harnessed.
“In the U.S., the night economy accounts for six per cent of their 27 trillion dollar GDP, while in the U.K., it contributes five per cent and provides about one million jobs.
“Nigeria can do the same by improving security and opening up the space for economic activity after dark,” he noted.
Odufuwa emphasised that achieving such a huge economy vision would require kinetic and non-kinetic strategies to combat insecurity, ensuring that the right policies were implemented for long-term economic growth.
