At the Lagos Chamber of Commerce and Industry (LCCI) International Business Conference and Expo 2024, the International Monetary Fund (IMF) issued a stark reminder that Nigeria’s projected economic growth for 2024 hinges on the successful implementation of robust reforms.
Speaking on Tuesday, Christian Ebeke, IMF Resident Representative, outlined the critical need for Nigeria to enhance governance and business regulations to surpass the 2.9% growth rate of 2023 and achieve the anticipated 3.1% in 2024.
Ebeke’s remarks at the conference painted a picture of cautious optimism. While acknowledging the progress Nigeria has made in its credit market, financial, and external sectors, he emphasized that these gains alone would not suffice to propel the country toward its growth target.
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“Insecurity, tight financial conditions, multiple taxes, insufficient power, and corruption are foremost constraints identified by businesses,” Ebeke highlighted, echoing the concerns of many within Nigeria’s business community. He noted that these challenges were significant barriers to achieving sustained economic growth.
However, Ebeke also expressed confidence in Nigeria’s ability to overcome these hurdles, provided that the government remains committed to reform.
“What comforts the IMF is that these issues can be addressed by the Nigerian government, and they are currently being addressed through reforms by the Federal Government. And we are encouraged by the fact that these issues can be reversed,” he said.
The IMF’s outlook for Nigeria is contingent on the country closing its structural gaps—an endeavor that Ebeke likened to India’s experience. He suggested that if Nigeria could reduce governance and business regulation bottlenecks by 25%, the country’s GDP output could see a significant boost of 6.4% over the next three years.
Government’s Commitment to Reform and Investment
The conference also served as a platform for the Nigerian government to showcase its efforts to create an enabling environment for economic growth. The Minister of Marine and Blue Economy, Adegboyega Oyetola, disclosed the vast investment opportunities available in Nigeria, particularly in the marine and blue economy sectors.
“Nigeria’s strategic location and abundant resources present vast investment opportunities, particularly in the marine and blue economy sector,” Oyetola said, assuring the audience of the government’s dedication to fostering economic growth and attracting significant investments despite existing challenges.
Oyetola highlighted several government initiatives designed to stimulate investment in the marine and blue economy sector. These include tax exemptions for businesses operating in free trade zones and infrastructural support aimed at enhancing the sector’s competitiveness. He also pointed to new export opportunities under the Guided Trade Initiative (GTI) of the African Continental Free Trade Area (AfCFTA) and the Cabotage Vessel Financing Fund (CVFF) as examples of the government’s proactive approach.
“Our commitment to the marine and blue economy is demonstrated through ongoing port rehabilitation and modernization projects. To boost investment, the Nigerian government has introduced various incentives, including tax reliefs, trade zone benefits, infrastructure development, and financial support. I encourage the business community and investors to take advantage of such incentives to contribute to Nigeria’s economic development and be part of Africa’s promising future,” Oyetola said.
Lagos State’s Role in Nigeria’s Economic Future
Governor Babajide Sanwo-Olu of Lagos State also spoke at the event, emphasizing Lagos’s position as Africa’s economic hub and its role in driving Nigeria’s growth. Sanwo-Olu highlighted the state’s conducive business environment, strategic location, and vast market potential, coupled with a pool of energetic talents.
“Our administration has implemented and continues to implement policies and initiatives to attract investments, create opportunities, and drive growth,” Sanwo-Olu stated. He pointed to infrastructure development as a key area of focus, with ongoing upgrades and expansions in transportation, logistics, telecommunications, healthcare, education, and the digital ecosystem.
Sanwo-Olu also stressed the importance of a solid infrastructure foundation for achieving the state’s growth projections.
“The projected growth will not happen without a solid foundation of infrastructure that can keep up with our rapidly growing population,” he said.
The governor noted that Lagos is investing heavily in digital infrastructure to support innovation, especially as the state is one of Africa’s startup capitals.
In the agricultural sector, Sanwo-Olu highlighted efforts to ensure food security, despite Lagos’s small landmass.
“We are building Africa’s largest food logistics hub here in Lagos,” he announced, explaining that the hub, once completed, would have the capacity to hold enough food to supply Lagos for 90 days in the event of shortages.
Sanwo-Olu also mentioned investments in tourism and entertainment, designed to showcase the best of Lagos and Nigeria.
“We will continue to roll out incentives for investors, from tax breaks and waivers to streamlined regulatory processes, and a judicial system that is competent, efficient, and guarantees the sanctity of contracts and property rights,” he added.
Private Sector’s Call for an Enabling Environment
LCCI President Gabriel Idahosa spoke to the broader context of Nigeria’s economic journey, emphasizing the importance of creating an enabling environment for business growth. He noted that Nigeria, blessed with vast resources and an entrepreneurial spirit, is home to Africa’s largest economy, a burgeoning middle class, and a youthful population eager to contribute to the global economy.
“To fully harness the nation’s potential, there must be an enabling environment to support business growth, encourage innovation, and ensure that local and international investors remain confident in their investments,” Idahosa said.
He acknowledged the government’s commitment to making Nigeria a preferred destination for global investors and pointed to the ongoing engagement between the private sector and government to implement policies that promote ease of doing business, improve infrastructure, and enhance security.
“We also see the government embarking on bold reforms in various sectors, including agriculture, energy, foreign exchange markets, and technology, to further diversify our economy and reduce our reliance on oil,” Idahosa observed.
He urged the government to focus on creating a policy and regulatory environment that would attract foreign investments into building factories in Nigeria to manufacture products currently being imported.
International Support for Nigeria’s Economic Development
The conference also saw a show of international support, with ambassadors from countries such as Belgium, Germany, Israel, Bulgaria, India, Ireland, Kenya, and Bangladesh affirming their commitment to deepening partnerships with Nigeria. These diplomats emphasized the mutual benefits of strengthening economic ties across various sectors, further underscoring Nigeria’s importance on the global stage.
While challenges remain as Nigeria looks toward achieving its 2024 growth targets, the consensus at the LCCI conference was clear:, the path to economic prosperity is within reach, provided that the government continues to implement the necessary reforms and create an environment conducive to sustainable growth and investment.