Lagos, Nigeria — The International Monetary Fund (IMF) has projected that Nigeria’s economy could grow by five percent if the country addresses key governance and business regulation bottlenecks. This forecast comes after Nigeria’s Gross Domestic Product (GDP) recorded a year-on-year growth of 3.19 percent in the second quarter of 2024, as reported by the National Bureau of Statistics.
IMF Resident Representative Dr. Christian Ebeke, speaking at the 2024 International Business Conference and Expo organized by the Lagos Chamber of Commerce & Industry (LCCI), emphasized that Nigeria has the potential to elevate its economic growth by simply reducing governance and regulatory bottlenecks by 25 percent.
“Nigeria is currently growing at three percent, but by cutting down these governance and business regulation barriers by just 25 percent, the country could easily achieve a growth rate of five percent,” Ebeke said during the conference themed ‘Invest Nigeria.’
Ebeke pointed out that Nigeria, despite being one of the largest emerging markets, has lagged behind due to structural deficiencies in governance and business regulations. According to him, addressing these gaps could ignite a durable acceleration in economic growth.
He revealed that the IMF conducted a simulation to assess the impact of reducing these structural gaps by 25 percent. The results showed that such reforms could boost Nigeria’s economic output by 6.4 percent over the next three years. “Dividing this six by three gives an additional ten percentage points. Currently, Nigeria is growing at three percent, so this country can grow at five percent with just a 25 percent reduction in governance bottlenecks,” Ebeke explained.
The IMF representative also stressed the need for Nigeria to achieve an annual growth rate of five to eight percent to outpace its population growth. “This is crucial for businesses, particularly in a period where interest rates and inflation are high. You need disposable income to grow, and companies need higher turnover,” he added.
In his address, Nigeria’s Minister of Marine and Blue Economy, Adegboyega Oyetola, highlighted the Federal Government’s efforts to drive investments through initiatives like the Nigeria Export Processing Zones Authority. The authority oversees Free Trade Zones and Export Processing Zones, offering exemptions from customs duties, VAT, and corporate taxes.
Oyetola also noted the government’s collaboration with the Lagos State Government to improve port operations, including clearing the Apapa–Tincan–Mile 2 traffic corridor for landside operations and enhancing seaside operations through the provision of tugboats, mooring boats, pilot cutters, bollards, and fenders.
“The vessel turn-around time has decreased from an average of seven days to five days, and truck turn-around time has dropped from ten days to just a few hours,” the minister reported.
LCCI President Gabriel Idahosa, speaking at the conference, urged the Federal Government to pursue bold reforms across various sectors, including agriculture, energy, foreign exchange markets, and technology. He stressed the importance of diversifying Nigeria’s economy beyond oil and called for a conducive policy and regulatory environment to attract foreign investments in manufacturing.
“The 2024 International Business Conference and Expo is a platform to push for these reforms, helping Nigeria reduce its reliance on oil by encouraging the local production of goods we currently import,” Idahosa said.
As Nigeria looks to the future, the IMF’s insights and the government’s ongoing efforts could be pivotal in realizing the nation’s economic potential and achieving sustained growth.