Nigeria needs to achieve economic pragmatism with the support robust institutions to achieve economic stability amidst the COVID-19 pandemic that has recorded over 230 cases in the country.
Dr. Temitope Oshikoya an economist and CEO of Nextnomics Advisory disclosed this on the WebTV Coronanomics Watch program.
He described the recent N500bn intervention plan of the Federal Government as a good step; a critical one at a time of a viral pandemic, even as Nigeria has also engaged Multilateral Development Banks (MDBs) like the World Bank, International Monetary Fund and the Islamic Development Bank amongst other.
According to him it was important to strengthen Nigeria’s healthcare infrastructure and delivery systems, because good health leads to economic wealth.
Oshikoya emphasized the need for effective governance measures through institutions and pragmatism from policy makers, to navigate the challenges arising from the coronavirus disease.
According to him sustainable economic development depends on productivity and productivity depends on incentives, robust institutions and innovation.
Speaking further, he said that Nigeria needs ‘Economic Pluralism’ which will adopt a combination of financial market roles and efficiency of government institutions.
On the fiscal support from the Federal Government for states, the economist said, “We need an efficient information system to monitor distribution and disbursement which means we need an efficientdatabase”.
“We need to work with the NBS, ICT digital economy information ministry in order to build our infrastructural data base and reach out to the poor and most vulnerable. We need stabilizers from social security arrangements, the insurance sector, and pension administration which the USA is building upon. The local government apparatus is equally very important”.
Taking on the issues further in the area of state intervention, he stressed that the issue of decentralization from each state was important, and equipping the healthcare sector should start from the local government level.
He noted that, “the local government apparatus is very important and strengthens the state’s capacity to handle healthcare, insurance and educational matters competently and efficiently. The focus should be at the local government not federal level”.
He cited Germany as an example of a country that is effectively driving the state decentralization process through strategic interventions at the Federal, State and Local Government levels which is evident in the reduced cases of COVID-19.
The economist acknowledged Nigeria’s high debt and low revenue base with a low tax base characterized by tax revenues constituting only 7% of GDP, compared to Africa’s average of 15% and a tax to GDP ratio of 25% in OECD countries.
“In the short term, we need to support the government in the fiscal space but over the long term we need to build public institutions to enable the government to widen the base for tax revenue”, he said.
In terms of key areas for the Nigerian government to focus on Oshikoya highlighted the following areas:
We need to manage our debt very carefully over the medium term
.we need to mobilise more revenue by improving efficiency in the collection of taxes and reduce corruption
.In terms of public expenditure, we need to focus on more things that government would imply a greater impact of fiscal spending per capita and improved growth of the productive real sector of the economy
(TEMITOPE WAHEED OSHIKOYA is an Assistant Professor of Economics at the University of New Brunswick, Canada, and a former Economics Consultant to the World Bank)