As Nigeria draws closer to the 2023 general elections, the conversation around the economy is expected to dominate and feature prominently on the political agenda. From worsening macroeconomic fundamentals, unemployment, multidimensional poverty, inflation, and hunger among others, the fragile economy continues to have a significant impact on individuals, businesses, and even the government.
At least two of such challenges suggest that Nigeria may be approaching a potential fiscal crisis. The first challenge is that of inadequate government revenue that is enough to meet government obligations and other development objectives, the other challenge is the growing debt crisis, which has reached an unprecedented level. In the 2023 budget that was signed into law earlier in January, out of the entire N21.8trn budget size, N11.34trn was estimated as the budget deficit, while another N6.
It is therefore not surprising that perhaps, for the first time in a long while, every Nigerian irrespective of persuasion, are united in their conviction that a strong economy is required to deliver democratic dividends to the people. There is also a further admission that as the revenue from the oil sector continues to decline, in the light of a gradual global shift from oil, Nigeria must begin to consider the non-oil sector as the major driver of the economy.
The question has always been whether the government can see this potential and if there is the political will to institute the necessary reforms that are required to reposition the sector. What is however certain is that with either the local or cross-border movement of goods, Nigeria has the capacity to translate its land, geography, demography and a huge market to become a global leader in the logistics value chain.
There is no doubt that Nigeria requires an improved level of value-added export to achieve a competitive logistics and supply chain ecosystem, our year-on-year trade deficit will continue to impair the country’s ability to fully maximise the sector. For example, in 2021, Nigeria’s total imports were valued at N20.84 trillion, while exports totalled N18.91 trillion, resulting in N1.94 trillion , trade deficit.
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