By Prince Okafor
Fresh indications have emerged that the Federal Government policies remain a threat to the nation’s economic recovery path in 2021.
This was the submission of Mr. Taiwo Oyedele, Fiscal Policy Partner and West Africa Tax Leader, PwC, during the Franco-Nigerian Chamber of Commerce & Industry, FNCCI, webinar titled: Key Macroeconomic Themes that will Shape the Nigerian 2021 Economy.
While giving an overview of Nigeria’s 2020 economic activities, Oyedele noted that, Nigeria experienced a rise in its inflation rate to 14.89 percent, while unemployment stood at 27.1 percent.
He further hinted that other macroeconomic indices show that the nation also witnessed a decline in Foreign portfolio investment, FPI, Foreign Direct Investment, FDI, Diaspora remittances, while ending the year as the largest economy in Africa ($443bn), and 26th globally according to the International Monetary Fund, IMF rating.
He also noted that fiscal policy which was mostly driven by Covid-19 interventions was anchored on the Economic Sustainability Plan.
In his words: “In terms of the African Continental Free Trade Area, AfCFTA, Nigeria do not have the advantage in manufacturing but we do have that in service. It is important we focus on that if we are to reap the benefits of the agreement.
“The Nigerian economy is expected to recover this year, but how well we recover and if we will build back better becomes a function of government policy.”
On Agriculture, he noted that the AfCFTA will impact the nation’s agricultural sector, thereby giving yield to increase in local agricultural production
“It will also improve regional agricultural value chains as well as improve investments in research, processing, technology and marketing infrastructure.
“On services, Nigeria will witness an increase in the supply of labour and foreign investments. The nation will also gain access to larger market across Africa, witness improve export capacity of both formal and informal service suppliers.
“While on industry and manufacturing sector, Nigeria will witness an increasing competition leading to the manufacturing of better quality goods.
“The nation will also see improved access to raw materials for Production, enhanced economies of scale, as well as price competitiveness, could lead to cheaper products,” he added.
He further stressed that, Joe Biden’s inauguration as the 46th President of the United States of America, could reduce trade tension but with caution from trading partners.
Earlier in his remarks, Regional Economic Counsellor, French Embassy, Pascal Furth, said there are a lot of expectations that the Nigerian economy may take a V shape recovery, as Nigerians are extremely optimistic despite the worst recession in 40 years.
Furth said French companies in Nigeria have shown resilience to support the economy, while the Francophone country is looking forward to a fruitful year and expectant of huge bilateral transfer in 2021.