The World Bank Country Director for Nigeria, Mr. Shubham Chaudhuri, has voiced alarm over Nigeria’s exceptionally low levels of public spending, which he contends are among the lowest globally.
Mr. Chaudhuri made these statements during his keynote address at the annual banking and finance conference held in Abuja on Tuesday.
In his presentation, Mr. Chaudhuri emphasized that “Nigeria’s government expenditures are the lowest globally.”
He underscored the pressing need for increased public spending, noting that both federal and subnational levels of the Nigerian government have consistently maintained a path of minimal public investment.
Also, Mr. Chaudhuri raised concerns about the inadequacy of government spending in addressing the country’s glaring infrastructure deficit.
He starkly pointed out, “At the current rate of capital spending, it would take 300 years to close Nigeria’s infrastructure gap.”
Mr. Chaudhuri highlighted that public investment spending in Nigeria significantly lags behind countries such as Indonesia, Ghana, Egypt, and Kenya. This deficiency has resulted in subpar infrastructure quality and limited access to essential amenities.
Also, Mr. Chaudhuri drew attention to the country’s persistently low government revenues between 2015 and 2021, emphasizing that these meager revenues pose a significant risk to fiscal and debt sustainability.
He also highlighted the dismal state of access to finance, which further hampers the private sector’s capacity for investment, growth, and job creation.
In his keynote address, Mr. Chaudhuri stressed that to achieve sustainable growth and prosperity, both federal and state governments in Nigeria must take decisive measures to ensure the country’s security, political stability, and adherence to the rule of law.
He called on authorities to prioritize investment in human capital, particularly in children, unleash the potential of private investment, promote job creation, and ensure broader access to finance.
In related discussions at the conference, stakeholders echoed the imperative 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 elevate its GDP contribution from the current 3.6% to around nine percent, emphasizing the need to empower the country’s youthful population.
Similarly, the acting Governor of the Central Bank of Nigeria, Folashodun Shonubi, acknowledged the sector’s currently low economic contribution and urged bankers to engage in advocacy efforts that drive actionable change. Mr. Ebenezer Onyeagwu, Chairman of the Body of Banks’ CEOs, called for a concerted effort by stakeholders to stimulate the country’s economic growth, citing the vast potential inherent in Nigeria’s market size.
The President of the Chartered Institute of Bankers, Mr. Ken Opara, lauded the conference as the largest gathering of banking and finance professionals in Africa, providing a platform for critical discussions on issues vital to Nigeria’s economic growth.
He commended President Bola Tinubu’s reform initiatives, including subsidy removal, unifying the foreign exchange regime, infrastructure investment, agricultural support, SME backing, and tax reforms, expressing optimism that their effective implementation would unlock Nigeria’s economic potential.
