The World Bank Country Director for Nigeria, Mr. Shubham Chaudhuri, emphasized during his keynote address at the annual banking and finance conference in Abuja that Nigeria’s public spending is currently one of the lowest worldwide.
Chaudhuri’s presentation pointed out that the government’s expenditures, both at the federal and subnational levels, have been notably low.
He also highlighted that this inadequate government spending falls short in addressing the country’s infrastructure needs, stating that at the current rate of capital investment, it would take a staggering 300 years to bridge Nigeria’s infrastructure gap.
Additionally, he compared public investment spending in Nigeria unfavorably to countries like Indonesia, Ghana, Egypt, and Kenya, which has resulted in subpar infrastructure quality and accessibility.
Chaudhuri underscored that the low government revenues between 2015 and 2021 pose a significant risk to fiscal and debt sustainability.
Furthermore, he noted the limited access to finance, which hampers the private sector’s ability to invest, expand, and create jobs.
In his keynote address, Chaudhuri stressed that for Nigeria to achieve sustainable growth and prosperity, both federal and state governments must prioritize factors such as national security, political stability, and the rule of law.
The World Bank also called for increased investment in human capital, particularly in children, unlocking the potential of private investment, promoting job creation, and ensuring access to finance.
At the same conference, various stakeholders echoed the need for the financial sector to actively contribute to Nigeria’s Gross Domestic Product (GDP).
The Minister of Budget and Economic Planning, Abubakar Bagudu, challenged the financial sector to aim for significant growth, moving from a 3.6% contribution to approximately nine percent of GDP. Bagudu emphasized the importance of empowering Nigeria’s youthful population to curb emigration trends.
The acting Governor of the Central Bank of Nigeria, Folashodun Shonubi, acknowledged the low economic contribution of the banking sector and called for improvement.
He encouraged bankers to engage in advocacy efforts that drive actionable change.
Similarly, the Chairman of the Body of Banks’ CEOs, Mr. Ebenezer Onyeagwu, called for a deliberate and collective effort from stakeholders to bolster the country’s economy. He highlighted the vast potential within Nigeria’s market and the need to tap into it effectively.
In his remarks, the President of the Chartered Institute of Bankers, Mr. Ken Opara, praised President Bola Tinubu’s reform initiatives, such as subsidy removal, foreign exchange regime unification, infrastructure investment, support for agriculture, SME promotion, and tax reforms.
Opara believes that if these reforms are well executed, they can unlock Nigeria’s economic potential.
