Nigerian Govt advised on ways to achieve economic growth targets


Economic Growth

Economic Growth

Two economists on Wednesday advised the Federal Government on measures to adopt to make Nigeria to achieve its economic growth targets.

The economists, Dr Babatunde Adekunle and Dr Lukman Oyelami of the Department of Economics, University of Lagos, Akoka, gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos.

The academics gave the advice against the backdrop of the growth forecast by Fitch Ratings on the economy which it put at 2.6 per cent, the International Monetary Fund forecast stands at 2.1 per cent while that of the World Bank is 2.5 per cent.

From the foregoing, the economists advised the Federal Government to tackle insecurity and exchange rate issues decisively and to also ensure diversification of the economy for Nigeria to achieve growth targets.

To diversify the economy for steady growth, they suggested that government must exploit other sectors like entertainment and tourism, which they described as the mainstay of the economies of other countries.

Oyelami argued that the bulk of the growth projections were expected to come from the oil and gas sector and given the increase in the price of crude oil, he argued that such growth would be achievable.

He said that the agricultural sector, another key sector, should also be given its desired attention with appropriate policies by the government.

On the issue of exchange rate, he said that major economic transactions were determined by foreign exchange, citing oil, which he described as the life wire of the economy.

“This, therefore, calls for stability of the rates in the foreign exchange markets because foreign exchange is a very important micro-economic variable, especially in a developing nation.

“Instability in the foreign exchange market can affect other micro-economic variables,’’ he said.

According to him, the volatility of exchange rate serves as a risk factor in international interactions because the higher the volatility, the higher the risk a business person takes.

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“That can actually mar the growth of the economy.’’

Oyelami also urged the Federal Government to look into the e issue of insecurity, which he said had posed serious threat to growth projections.

“In any country, crisis, violence and extremism pose a very big challenge to both foreign and local investors,’’ he stated.

On his part, Adekunle said that a strong exchange rate was an indicator of a strong economy.

“Government can achieve projected growth if quality social and economic policies favourable for investors are put in place.

“Although, most of the projected growths are expected from oil, other sectors such as mining, entertainment, tourism and agriculture must be fully exploited.

“Each of these sectors is what some countries depend on as the mainstay of their economies.

“Irrespective of the level of development of any nation, insecurity and crisis can pose serious threat to economic growth.’’

According to Adekunle, such crisis may lead to serious capital flight that can bring the economy to its knees.

He said that the agriculture sector was usually among the first sectors that would record decline as farmers begin to flee their farmlands.