massive macro-financial shock caused by Covid-19 has continued to ravage the
global economy putting all systems and nations under severe financial instability
never seen in history. Stock Markets around the world have been pounded and
ravaged, and oil prices have fallen to an all-time low. Nigeria is not spared
from this crisis.  Total revenue expected to be realised from the 2020 National
budget was N8.42trillion. However, following the Covid-19 pandemic, revenue
projection was reduced to N5.16trillion. This represents a drop of close to 40%
or N3.26trillion.
Key sectors like manufacturing, maritime, aviation, hospitability
and the creative industry, collapsed resulting in huge financial and job losses.
The first-quarter report of the Nigerian Bureau of Statistics (NBS) shows
a slow-paced growth of -0.68% as GDP
contracted by 1.87% when compared to the fourth quarter of 2019. If this
continues into the second quarter there are ominous signals of an impending
recession. The World Bank 2020, Global Economic Prospects, June 2020, forecast that the Covid -19
pandemic will plunge all countries into the worst recession in history.  GDP of advanced economies are projected to
shrink by 7 percent. The outlook for emerging market and developing economies
is bleak as they are forecast to contract by 2.5 percent. This would represent
the weakest showing by this group of economies in at least sixty years. The
crucial issue is – How do we avoid and or minimize the impact of inevitable recession
on our economy?

The first and critical policy
action is to harmonize fiscal and monetary policy.  Fiscal policy must be expansionary. In other
words, big spending is required to massively stimulate the economy. This is called
economics named after
economist John Maynard Keynes
.  Keynesian economics served as the standard
economic model in the developed
during the latter part of the Great Depression, World War II, and the post-war economic expansion
(1945–1973). American President, Franklin Delano Roosevelt used the Keynesian
economic model by spending massively on public works programs to get America
out of the great depression. The mantra for Nigeria is to spend big to get out
of recession. We acknowledge the government has adopted an expansionary policy
by borrowing massively but we must have a clear strategy. First, we must
determine our Public Sector Borrowing Requirements (PSBR). Additionally, we
will need to identify an inventory of Public Sector Spending Requirements
(PSSR). The PSBR and the PSSR should be indexed to identify funding gaps.  Additionally an inventory of government
assets should be created as we have many wasting assets that can be converted
to cash. Using the abandoned Federal Government Secretariat in Lagos as the
index case, informed valuers believe it has a forced market value of N100
Billion. This can build the East West Road. Abandoned projects abound, Ajaokuta
Steel, Aladja Steel, the Newsprint at Iwopin, the various steel rolling mills
around the country, the Onitsha Port, etc. It is believed these assets are
worth at least N15, Trillion yet untapped. These wasting assets, if sold will
boost fiscal policy immensely. Turning to Monetary Policy, we clearly need a very
flexible monetary policy with interest rates pegged at no more than 5%
(Single-digit) to create a framework for quantitative

and open market operation (OMO).

Quantitative easing (QE) makes
borrowing easy for business. QE makes burden on business lighter. OMO flood the
economy with liquidity.  A harmonized fiscal
and monetary policy will lay the foundation to rebuild the economy.  Three requirements to avoid a recession are Job
creation, revenue mobilization and control of cost of governance.  If we get the macroeconomic environment right,
which is the alignment of fiscal and monetary policy, it will release economic
energy to create Jobs estimated at between 5 and 6 Million, year on year. With
respect to revenue generation with the right framework, massive funds can be generated
and pumped into the economy. With respect to cost of governance, everybody
knows it is far too high.
In the revised 2020
budget, 73.5% of total expenditure are for salaries and debt servicing, while
only 26.5% are for capital expenditure.
 This is unsustainable.
We cannot continue to borrow to pay high recurrent bills. Rather we must invest
in capital expenses to reflate the economy. The Government has taken steps to
implement the Orosanye report but there needs to be a timeline for
implementation. Corruption is a leading cause of high cost of governance. It is
important to review anti-corruption strategies to reduce public corruption.
Tackling the menace of big government and public corruption will give us more
balanced revenue to debt profile. With the macroeconomic framework highlighted
above, we can now review some critical factors that can help grow the economy
and avoid recession.

Diversification of the Economy

This is one area
government needs to urgently activate because of the massive budget deficit. Nigeria
runs a mono –cultural economy as 85% of her revenue is derived from crude oil exports.
 As a result of the price shocks
occasioned by Covid – 19, crude oil receipts have gone down and are no longer
able to sustain the economy.
The total revenue
expected to be realised as stated in the 2020 budget is N8.42trillion,
including a deficit of N2.17t. However, following the Covid -19 pandemic, fiscal
deficit has grown from N2.17t to N5.37t, which must expectedly be financed by
fresh borrowing.
We are now running a deficit budget and borrowing massively.
Unless we diversify the economy, we will continue to borrow to the point where
it becomes unsustainable. Many governments have paid lip service to
diversification, but this is the time to develop a very strong policy on
diversification. We must follow the example of the United Arab Emirates which
diversified their economy by reducing dependence on oil receipts from100% to
only 35% by going into service and smart industries.  Some of the sectors to diversify our economy


Agriculture is
one of the largest contributors to Nigeria’s GDP and has the potential to
create massive numbers of new Jobs, especially in Northern Nigeria that has
very fertile agricultural land. But our policy on agriculture must move away
from subsistence to mechanized agriculture. The Central Bank of Nigeria’s
Anchor Borrowers programme that made Nigeria self-sufficient in rice production
has shown the potential of the Agriculture Sector. The Central Bank has
identified 10 crops to support namely rice, wheat, milk, tomato, fish, cotton
etc. This is a great leap forward for the sector. Mechanized Agriculture will
not only create Jobs but also improve National Security by offering employment
to our teeming youths exploited for banditry and terrorism.  


This is a massive sector
that can create millions of jobs and billions in revenue. But the starting
point is to have a cohesive multi-model transportation policy to take care of
the 4 critical sectors of air, sea, road, and rail. Once there is an effective
transportation policy it will impact each of the 4 sectors in the following


Aviation is a major transportation sector.
Unfortunately, Nigeria has no presence in the international Aviation business.
Nigeria Airways has long been comatose. Foreign aircraft dominate the Nigerian
airspace and earn well over 2 trillion Naira annually to our exclusion. 2
trillion Naira is substantial in our national budget. A Fly Nigeria Act will
ensure that public funds to purchase air tickets must originate and fly on a
Nigerian carrier. The Fly Nigeria Act will create an instant market of goods,
passengers and services for our national carrier. Jobs will be created and
revenue generated to the advantage of the economy.  

Space technology is huge. The late English theoretical
and cosmologist, Stephen Hawking referred to
space as the
future of mankind. 
Regrettably, Nigeria is not harnessing this sector.  Space has many major applications for
developing our economy. We will mention two examples. First, space can be
applied to the energy sector as remote sensing establishes the quantum of our
hydrocarbons. Second,  is the link
between space and national security. Satellite technology intelligence gives us
vital footprints in the national security infrastructure. The growing threat of
terrorism and the adverse impact on economic stability can be checked by
intelligence provided by space satellites. Nigeria has no space legislation.
This hurts economic transformation.

Railway and
Road Transport

The opportunities for rail and road are
unimaginable.  They connect people and
open markets so goods and services are exchanged. Government is investing
heavily in this sector but a lot more investment is required. The CBN recently
launched InfraCo, a $39 Billion (N15 Trillion) infrastructure development fund
but N15 Trillion is not enough. Rail and roads need a lot more investment
because its revenue and job potentials are huge. The Post-COVID economy must
create what is called socialized jobs. American President, Franklin Roosevelt
used social jobs to push America out of the Great Depression, by creating the
Tennessee Valley Authority, and employed over 4 million people. To accomplish
all these, a strong Public-Private Sector Partnership (PPP) is vital.


This sector has
been completely ignored but it has the capacity to generate over Seven Trillion
Naira annually and four million jobs over 5 years.  All that is required is the implementation of
local content and Cabotage rules especially relating to the oil and gas sector
which is currently dominated by foreigners. Our Cabotage legal regime must be
enforced to stem capital flight and boost capacity for Nigerian Ship owners. Several
critical bills relating to the maritime sector pending before the National Assembly
require immediate enactment and implementation. Some of the bills are the
Petroleum Industry Bill (PIB), the Ports and Harbour Bill, Maritime Zones Bill,
Ocean Bill etc. There is also an urgent need to review the Nigerian Shipping
Policy Act of 1987. The enactment of a law on maritime zones is also long
overdue. The Maritime Zones bill will extend Nigeria’s EEZ of 200 nautical
miles by another 150miles. This will create massive new revenue streams and
generate jobs in the maritime sector.

Hydrocarbons and Solid Minerals

Although oil
receipts are down, our huge gas reserves present opportunities for alternative
revenue sources. Russia’s revenue from gas exports in 2017 was $ 38.1 Billion.
The success of Nigeria’s LNG has demonstrated that gas revenue is massive but
only if exploited.  Nigeria can also
derive revenue from petrochemicals like methanol which Nigeria currently
imports. But the legal framework must be right.
The legal framework relating to hydrocarbons is skewed in favour of
foreign companies in the entire value chain. In at least four cases, banking,
insurance, shipping, legal service, capital flight is massive. In relation to
shipping alone, it has been suggested that Nigeria loses over 10 Billion
Dollars annually. Revenue loss will continue unless the legal framework is amended
to domesticate the value chain in hydrocarbons. 
It is important to review the legal framework for local content with a
view to strengthen implementation and enforcement. It is also very important to
address the issue of corruption in the extractive industry. The continuing lapses
and loss to the nation in oil and gas revenue as revealed in the Report by
Nigerian Extractive Industries Transparency Initiative, NEITI, which indicate
lack of implementation of previous Reports, supports this. To ensure speedy
reforms in the oil & gas sector, the Petroleum Industry Bill has to be
passed into law. Our hydrocarbon resources especially gas is absolutely a major
source of revenue, and employment.

mineral is another sector that has not been adequately harnessed. Nigeria is
estimated to have about 34 solid minerals, with every Nigerian state boasting
of at least one of these minerals. This can generate $ 10 Billion and 5 million
Jobs. The Democratic Republic of Congo in 2017 alone saw the sector generate $
1.68 billion, accounting for 55.16% of the total government revenue and 17.40%
of the GDP. Solid minerals  is
undoubtedly capable of making a more pronounced impact on the country’s employment
rate and generating more revenue for the government however, to derive the
highest possible benefit from this sector, a proper policy and  legal framework needs to be put in place.

Information Technology

Nigeria can
leverage its status as a multi-billion-dollar tech hub to develop its IT sector
and become a global IT services destination. Github, a leading software
development platform, recently reported that Nigeria is home to the fastest
growing developer community on their platform. The country has benefited from
companies like Andela which brought world-class training and job opportunities
to budding Nigerian programmers. Gebeya is promoting a similar model of
training the next generation of African developers. Nigeria’s growing supply of
programmers will likely be met with rising demand from the country’s constantly
expanding tech hubs. The potential of the business-to-business (B2B) or
enterprise software sector is also good news for the country’s ITC sector.
African companies are expected to spend $3.6 trillion on B2B services in 2025.
Nigeria is well-positioned to be part of this growth given the coexistence of
traditional industries and B2B tech startups. The combination of a growing
local talent pool and a bustling B2B sector means that the IT sector can drive
economic growth for decades to come.


entertainment industry already plays an important role in the Nigerian economy
but their full potential remains untapped. The industry was projected to
generate $1 billion in export revenues this year and bring in crucial foreign
currency. The industry has an added benefit over the natural resource sectors
since entertainment products are non-rival goods. This means that the local
consumption of a movie or a song, for example, does not prevent the export of
that same song to international markets. This allows Nigerian entertainment
products like songs, movies, and books to generate wealth indefinitely. The
entertainment industry drives job growth and employs millions of Nigerians in
complex value chains. Nollywood, Nigeria’s film industry, produces an average
of forty films a week and directly employs 300,000 Nigerians. Nigeria’s
upcoming fashion industry is perhaps the best example of old value chains
meeting new ones: designers are using local cotton to create garments being
modeled at international fashion weeks. The fashion industry directly employs
and benefits farmers, distributors, designers, and more.

Trade policy

Nigeria has no
trade policy which is why it is a major dumping ground for foreign goods. We
billions of dollars importing basic food commodities
that can grow locally. We must grow what we eat.  We need to reverse this with
a robust trade
policy. Trade policy refers to the rules and regulations on imports, exports, tariffs,
duty etc. Trade policy rests on a tripod of critical factors – import
substitution, tariffs, border enforcement and compliance.  We need to enact
trade remedies legislation and a trade Expansion Act
.  These legislation will impose anti-dumping
duties on non-essential products. There are also special duties and measures we
can impose on exports into Nigeria which are subsidized by a foreign country.
The trade remedies legislation will prohibit imports if it is adjudged that
they will cause material injury to local industries, for example by impeding
local growth.  It is also important to
enact legislation that will support the recently established Nigerian Office
for trade negotiation (NOTN). It is crucial that the office is elevated to
ministerial level.  
We need to establish a National Customs and Border
Enforcement Services. This Border Enforcement Services will need new
legislation to merge immigration and customs services. The Border Enforcement
Service will replicate the US Customs and Border Enforcement Agency. The merged
service will reduce duplication and proliferation of agencies at the borders.
To comply with ECOWAS protocol and the African Continental Free Trade Agreement
(AfCFTA), the border closure policy should be replaced by a border enforcement
policy. A strong trade policy will help create millions of jobs, grow local
industries and expand the economy.

Access to Capital

Capital is the
oxygen and life blood of the economy. One of the areas where we can tap into
capital is the Housing/property market. Eighty per cent (80%) of Nigeria’s
businesses rely on land and housing as collateral. Unfortunately, the slow
administration of the Land Use Act in terms of consents and permits has meant
that the banks have not accepted untitled property as collateral. This has
caused incalculable damage to businesses in need of capital. A recent study
shows that the housing inventory of Nigerian property exceeds six trillion
dollars. Nigerian property and housing market is dead capital because 80% of
them have no title or bad title and therefore not good as collateral for bank
loans.  So creating the proper legal
framework to make dead capital fungible (easily transferable) will create an
instant credit market and enable Nigerians to borrow on their property. A Land
Use Administration Act will introduce new rules to make the consent process more
efficient and give confidence to banks to accept title documents as collateral.
This process will create an instant credit market to drive the economy and will
easily contribute at least 5% to GDP.  

Government stimulus intervention

Because of Covid-19,
the economy has taken a very big knock. It is the responsibility of government (like
most western countries) to reboot the economy by supporting businesses with a
business support fund of at least 50 trillion. We applaud the government for
the injection of funds to support the economy. We note the following:

Nigeria Economic Sustainability Plan (NESP),
12-month, 2.3 Trillion Naira ‘Transit’ Plan between the Economic Recovery and
Growth Plan (ERGP) and the successor plan to the ERGP

Ministry of Trade and  Industry, MSME Survival Fund, The Guaranteed
Off take Stimulus Scheme and the Credit Support to MSMEs and Priority Sector

Central Bank of Nigeria N10 billion loans and grants approved for various
groups and organisations for pharmaceutical and healthcare-related research,
under the COVID-19 intervention scheme.

The Special Public Works programme expected to engage 774, 000
Nigerians  to cushion the effect of
COVID-19 pandemic.

It is a good
start but not enough. The Government should look to ways and means by the CBN
to inject at least 50 trillion into the economy. Government can intervene
through a National Credit Guarantee Agency to support viable business proposals
so they Business can easily access credit. Major economies of the world run on
credit. The key is that the creditor is assured that he will be paid by
government guarantee.  
Another key institution is the Development Bank
(DBN). Nigeria has a Development Bank, but unfortunately undercapitalized. The
DBN needs to be properly capitalized to boost the economy.

Enabling Business Environment

The factors
listed above will not work without an enabling business environment. The first
step is to have an efficient legal and regulatory system.  For instance, the Nigerian judicature is
based on the 1875 Judicature Act. The consequence is that cases take too long
to resolve. It takes between 5 to 20 years to resolve simple contractual disputes.
Investors, both local and international,  will not invest in a country where simple
contractual disputes take between 5 to 20 years to resolve. We must give
urgency to this sector and reverse legal failure. A speed of justice policy
will reduce delays. In this regard, the National Assembly must consider
enacting the Administration of Civil Justice Bill to ensure efficient
administration of civil disputes.  Also,
new methods of dispute resolution should be considered such as Alternative
Dispute Resolutions, small claims courts, traditional and customary
arbitration. Quasi-judicial administrative tribunals can be established for sectors,
following the UK example. In England there are many administrative courts for
Telecommunications, Taxation, Transportation, Insurance, Education, Financial
Services, Trade, Investments, etc.

Finally, the Nigerian legal and regulatory framework must be
reviewed and structured to create the enabling environment that can support the
development of a digital economy. Enactment of the Company and Allied Matters
Bill will be an important step to improve the business environment for
entrepreneurship and to provide greater clarity for investment funds. Once
enacted, it will be important to develop regulations to support the Companies
and Allied Matters Bill and other relevant recently passed legislation, such as
the Secured Transactions Act, to ensure effective implementation. Additionally,
there should be a review of legislation impacting digital entrepreneurship
including the following:

The Intellectual
Property Policy and Legislative framework

ii.  Cybercrime Prevention Act

iii.  The Venture Capital Incentive Act

The Tax incentives system akin to the pioneer tax system is
needed to ensure that the regulatory environment is investment friendly rather
than an impediment to the growth of the economy.  

Discipline of Execution

Nigeria has a plethora of laws, regulations,
guidelines and Executive Orders. The challenge is lack of implementation of
these laws and regulations. Unless rules are enforced, Nigeria will not easily
overcome recession. A
vigorous government policy is needed to implement diversification,
strong trade policy and access to credit etc. There needs to be timelines and
harmonization of work of the various government agencies ministries.  Nigeria can
generate 10
million Jobs and over N100 trillion with full compliance with policy
implementation. This will help to mitigate the impact of the impending
President must take charge and ensure vigorous implementation.  


The story about
diversification of the economy is an old argument going back 30 years and in
fact the Nigerian economy is actually diverse but the problem is lack of
government consistency which has meant that although we have diversity, no
revenue flows out.  We can only succeed
if the twin administrative tools of power of focus and discipline of execution
are applied. This presentation is made from the point of view of a development
lawyer. It is up to the economists to draw what they can to mitigate the
impending recession.