Wale Edun: High-level Trip to S’Arabia Yielding Foreign Investment, FX Inflows

*Nigeria needs to mobilise  $8.82tn to hit planned $4tn economy by 2035, says NESG

*Seeks export diversification, digital transformation 

*Says rising inflation limiting nation’s capacity to save 

*Avers Nigerians currently spending 80% of earnings on food, transport

Deji Elumoye and Emmanuel Addeh in Abuja

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, yesterday disclosed that Nigeria’s recent economic diplomacy efforts to Saudi Arabia had started yielding reasonable benefits, including investments, foreign exchange inflows, and job creation for the country.

Edun had led a high-level delegation to Saudi Arabia to follow up on the president’s earlier engagements with the Saudi Crown Prince, Mohammed bin Salman.
Edun, who spoke with newsmen after a brief meeting with President Bola Tinubu, stressed “What we have brought back is investment. What we have brought back is foreign exchange. What we have brought back are jobs for Nigerians”
These efforts, the minister explained, are part of the administration’s broader strategy to attract foreign direct investment, trade partnerships, and financial collaborations.

Highlighting a key achievement, Edun referenced the Saudi Agricultural Livestock Investment Company’s (SALIC) recent $1.2 billion investment in Olam Agri Holdings, which he described as a testament to the president’s reforms and the stabilisation of Nigeria’s macroeconomic environment.
He added: “This type of transaction reflects the success of Mr. President’s strategy. It demonstrates the confidence global investors have in the steps being taken to attract and encourage such investments”.

Besides, Edun stressed that the investments translate into direct job creation for Nigerians, as Saudi Arabia’s focus on investing abroad does not include exporting its own labour force. “Clearly, where they invest, that is jobs for Nigerians,” he maintained.
He also stressed the government’s ongoing efforts to reduce inflation, particularly food inflation, through initiatives like dry-season farming, aimed at ensuring a bountiful harvest and lower food prices.

“Every effort is being made to bring down the price of food and the cost of living for the average Nigerian,” Edun stated.
The delegation to Saudi Arabia included representatives from the Central Bank of Nigeria (CBN), the Ministry of Budget and Economic Planning, and the Presidential Economic Coordination Council.

The visit built on the president’s economic diplomacy efforts, which have taken him to various global capitals, including Brazil, China, India, Germany, and France.
According to Edun: “The proof of the pudding is in the eating. When you see jobs being created and Nigeria’s foreign reserves being added to, that is success all Nigerians can understand.”
The visit is expected to further strengthen Nigeria’s burgeoning relationship with Saudi Arabia and unlock more opportunities for economic growth and collaboration.

Also, the Nigerian Economic Summit Group (NESG), one of the country’s foremost economic think-tanks, has proposed that if Africa’s most populous nation must achieve its proposed $4 trillion nominal Gross Domestic Product (GDP) by 2035, it must mobilise a total of $8.82 trillion.
The organisation stated this in its H2, 2024 Economic and Policy Review (EPR) tagged: “ Achieving Economic Transformation in Nigeria.”

Besides, the group noted that the ambition to hit $4 trillion in nominal GDP by 2035 in Nigeria should serve as a bedrock to achieving a sustained double-digit real GDP growth rate over the next decade until 2035, which should be in the range of 10 per cent to 15 per cent per annum.
It argued that Nigeria remains at a crossroads, brimming with potential, yet grappling with the complexities of its historical socio-economic performance, stressing that although endowed with abundant human capital and vast economic resources, Nigeria’s current position on critical socio-economic indicators has not been impressive.

By 2035, the NESG pointed out that Nigeria’s economy is poised to rank among the top 15 global economies, with a per capita income of $14,041.5, thereby propelling the country into the high-income category globally.

Endowed with substantial human capital and economic resources, Nigeria, it said, has historically faced suboptimal socio-economic performance, with critical macro-economic and social indicators underscoring the compelling need for a thorough and all-encompassing rejuvenation of the economy.

According to the NESG, the impetus behind achieving a $4 trillion economy by 2035 is rooted in the acknowledgement of Nigeria’s immense potential, abundant resources, and the necessity to expedite economic development to meet the burgeoning demands of its populace.
“Expanding from less than a $500 billion economy to a $4 trillion GDP by 2035 has cost implications. Over the next 10-13 years, the Nigerian economy needs to mobilise a cumulative total of $8.82 trillion.

“This comprises 18.8 per cent or $1.66 trillion of investment directly from the government, specifically on capital and infrastructure investment. The remaining 81.2 per cent or $7.16 trillion will be mobilised through the private sector, comprising existing and new capital accumulation and domestic and foreign investment flow.

“As such, the government needs to spend $185.16 billion and mobilise $841.00 billion in private investment over the next four years (2024-2027) to set the pace for a transformed economy. Subsequently, the government needs to spend $501,46 billion and mobilise $2.24 trillion in private investment between 2028-2031. In the following cycle (2032-2035), the government must spend $957.04 billion while mobilising $4,05 trillion in private investment.
“On average, the government has to spend $138.49 billion annually to achieve the envisioned $4 trillion GDP by 2035. With a cumulative funding need of $8.82 trillion within the next 10-13 years and an average of $737,16 billion annually, financing Nigeria’s $4 trillion GDP by 2023 appears daunting, however, not impossible,” it stated in the report.

In an era characterised by rapid global economic changes, digital disruptions, and evolving geopolitical dynamics, Nigeria’s vision for 2035, NESG stressed, is set against a backdrop of formidable challenges and unparalleled opportunities.
The global community’s commitment to sustainable development and the imperative of economic inclusion, the economic think-tank further said,  underscores the significance of the pursuit.

According to the group, the proposed pathways are intrinsically linked to the strategic objectives outlined in the President’s eight-point agenda, Nigeria Agenda 2050 and the African Union’s Africa Agenda 2063.
“This is achievable considering the historical experience of Nigeria’s aspirational peers, such as China. The policy priority for the government includes developing a framework for the inter-governmental economic relationship, inter-state infrastructural development, establishing regional economic commissions, developing regional shared services and clustering, and strengthening regional value chain development.

“During the initial stage of its economic transformation, China maintained an average real GDP growth rate of 10.3 per cent (from 1982 to 2011). Similarly, Japan and Germany maintained average growths of 10.5 per cent (1956 to 1973) and 9.2 per cent (1951 to 1960), respectively.
“While the strategic paths aim to achieve a $4 trillion economy by 2035, they are also expected to drive improvement across socio-economic indicators. Irrespective of the strategic path, this study anticipates specific mutations in the fundamental structure of the economy that accompany a transforming economy,” the NESG noted.

Moving towards the $4 trillion economy, and based on the country’s political cycle, the Nigerian economy, it maintained, could cross critical milestones of $1 trillion, $2.5 trillion, and $4 trillion by 2027, 2031, and 2035, respectively.
“Furthermore, Nigeria’s per capita income is expected to cross $5,000, $10,000, and $14,000 by 2028, 2032, and 2035, respectively. Nigeria needs to massively mobilise savings to drive investment, as is the case for most countries that have experienced economic transformation over the past five decades.

“But then, the continual erosion of the value of earnings due to the persistent inflationary pressure has limited Nigeria’s capacity to mobilise adequate savings.
“Recent fuel subsidy removal and the exchange rate devaluation accompanying the unification of the foreign exchange markets have nearly wiped out the middle class, as most people spend over 80 per cent of their earnings on food and transport with little to zero room for savings. Hence, the government must attract capital from diverse sources to drive investment,” it added.

With a visionary alignment of policies and strategic optimism, Nigeria’s economy, NESG said, possesses the potential to soar to $4 trillion within the same time frame, explaining that such growth promises expanded access to economic opportunities, uplifting millions from the depths of poverty.

“According to the World Bank Group (2024), more than half of Nigeria’s population is living in poverty as of 2024. Meanwhile, as Nigeria navigates its path towards a $4 trillion economy, poverty would recede by an average of 10 million individuals annually,” the group stated.
Therefore, the NESG proposed an export diversification and sophistication strategy for Nigeria to become a global export hub and regional integration champion of the African Continental Free Trade Area (AfCFTA), a free trade agreement that aims to create a single market for goods and services across the continent.

It further called for innovation and digital transformation strategy in order to become a central global innovation hub and exporter of knowledge products to the world.
Besides, the economic think-tank urged the country to embrace a subnational economic integration strategy to develop competitive and viable regions/sub-national economies.