Following a huge drop in foreign investment into the country in 2020, the African Development Bank (AfDB) has called for a quick and comprehensive plan to make the country attractive again.
At the launch of the African Development Bank’s 2021 edition of its annual African Economic Outlook on Thursday, the bank noted that uncertainty and macroeconomic imbalances are impediments to Nigeria’s ability to attract external private financial flows.
The Outlook which was launched virtually by the AfDB President, Dr Akinwumi Adesina, also warned against further depletion in foreign reserves.
Part of the report reads, “Nigeria’s public debt is relatively sustainable at 25 per cent of GDP, but debt service payments are high and the country’s ability to attract external private financial flows is hurt by macroeconomic imbalances and policy uncertainty.
“Nigeria’s financing requirements require improved domestic revenue collection. Currently, non-oil revenue collections are equivalent to four per cent of GDP. The revenue yield in 2020 from an increase in the value-added tax rate to 7.5 per cent from 5 per cent was less than projected because of subdued economic activity.”
It further added that flooding, and rising insecurity could hamper agricultural production.
“Nigeria’s high unemployment, poverty and growing inequality remains a major challenge in Nigeria.” the report noted.
Adesina was joined by the recipient of the 2001 Nobel Memorial Prize in Economic Sciences and American economist, Prof Joseph Stiglitz; Governor, South African Reserve Bank, Lesetja Kganyago; Governor of the Bank of Ghana, Ernest Addison; Secretary of State for Budget and Public Investments, Republic of Angola; Aia-Eza da Silva; and the President, Center for Global Development, Masood Ahmed to launch the report.