What will drive Nigeria's economic recovery?

Nigeria's economy, the largest in Africa, is projected to grow by over 2% in 2021 according to the International Monetary Fund and the World Bank. However, to overcome its development challenges, the economy needs to grow at a faster rate. Andrew Nevin, Chief Economist at PwC Nigeria, highlighted some key strategies that could unlock growth for Nigeria's economy in a recent interview on CNBC Africa. Nevin emphasized the importance of unlocking dead assets in Nigeria, stating that the country is wealthy but has many assets that are not producing returns for its citizens. He focused on the real estate sector as a significant opportunity for growth, highlighting the potential in residential housing construction. Nevin stressed that by building more houses, local employment would be boosted, and the economy would benefit from increased consumer spending on furnishing these homes. In addition to the real estate sector, Nevin pointed out the need to unlock government assets that are not generating returns, such as underperforming steel mills and refiners. He emphasized the importance of addressing these dead assets to drive economic growth. Furthermore, Nevin discussed the need for creative financing to support development in Nigeria. He highlighted the government's budget of 16.4 trillion naira and emphasized the importance of getting value for the investments made. Nevin addressed the issue of low tax revenue in Nigeria and the ongoing transition to a new social contract where citizens expect improved services in exchange for taxes. Nevin also touched upon the opportunities presented by the energy transition in Nigeria. He supported the government's focus on gas as a transitional fuel and emphasized the potential for domestic consumption of gas to drive economic growth. Nevin underscored the need for investment in gas infrastructure and highlighted the importance of global support for developing nations in their energy transition. Regarding attracting investment to Nigeria, Nevin outlined key policy reforms that could stimulate growth. He emphasized the importance of unifying the exchange rate to attract diaspora investments and simplifying the business environment to encourage foreign direct investment. Nevin also called for legal reforms to empower state governments and streamline regulatory processes to facilitate business operations. In conclusion, Nevin expressed optimism about Nigeria's potential for achieving high levels of economic growth with the right policy reforms and investments. He highlighted the pent-up demand for investment in the country and underscored the need for proactive measures to unlock growth prospects. By unlocking dead assets, implementing policy reforms, and attracting investment, Nigeria could accelerate its economic recovery and achieve sustainable growth in the future.