There were a number of recent developments that caught our attention this week due to their inter-relatedness, timing and ability to shape Nigeria’s GDP growth performance, going forward.
Earlier on Tuesday this week, Nigeria’s 9th national assembly (NASS) was formally inaugurated by the NASS management, after the two preferred candidates of the ruling APC, Ahmed Lawan and Femi Gbajabiamila were voted as Senate president and speaker of the house of representative respectively. Ovie Omo-Agege and Ahmed Idris of the APC also emerged as deputy senate and deputy speaker of the two chambers after the elections, giving the ruling party “complete” control of both the Senate and the house of representatives.
While we are less interested in the politicking that led to the emergence of the new leaders of the national assembly, our concern is centred on drawing the attention of the executive and legislature to key recommendations of the World Bank to policymakers in Emerging Markets & Developing Economies (EMDEs), in order to guide against renewed financial turmoil and sharper-than-expected economic slowdown in H2’19 and beyond.
Interestingly, the present administration led by President Muhammadu Buhari, had on many occasion attributed the lack of policy cohesion during its first term to the absence of cordial relationship between the executive and the legislature; hence, we believe restoring a growth driven synergy now (between executive and legislature) will help the country guide against downside risks highlighted by the World Bank in its latest publication.
According to the June 2019 edition of the World Bank Global Economic Prospect (GEP) report released on Wednesday, 4th June, 2019, the Washington based organization highlighted the sharp deterioration in Global and EMDEs growth momentum in H1’19, owing to the escalating trade tension between the U.S. and China and subdued investment inflows into EMDEs (of which Nigeria is one).
With likely policy-destabilizing developments such as the further escalation of trade tensions between major economies, renewed financial turmoil in EMDEs and sharper-than-expected slowdowns in major economies hanging in limbo; the World Bank recommended that policymakers in EMDEs should as a matter of urgency:
a) Reinforce policy buffers and build resilience to possible negative shocks
b) Implement reforms that will promote private investment and improve public sector efficiency
c) Prioritize and implement through cost-effective and private-sector-led the solution, efforts to strengthen access to market and technology while boosting
the quality of infrastructure and governance
d) Effect structural reforms aimed at improving the business climate and also boost growth prospects; and
e) Develop well-designed social safety nets and active labour market policies to manage risks and protect the vulnerable groups.
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