In 2019, world economies went through an upheaval. Some went from their lowest productive levels while others suffered a case of near economic meltdown.
There was a huge embrace of digital technology in the financial market as well as a high rate of youth participation in political and economic revival.
These are the some of the notable points of that year.
MONETARY POLICY RATE (MPR)
The Central Bank of Nigeria (CBN) in a bid to regulate the affairs of the economy used MPR as one of its instruments; which is an interest rate where lending is offered to commercial banks and other clients.
The MPR is the benchmark against which other lending rates in the economy are pegged and is usually used as an instrument to moderate inflation in the economy.
ECONOMIC RECOVERY AND GROWTH PLAN (ERGP)
The second quarter of 2016 was hit with a devastating economic recession in Nigeria.
It was in this context that the government developed the ERGP to tackle the causes of the recession and ultimately change the national economic path thereby leveraging the ingenuity and resilience of the Nigerian people.
The Plan outlines initiatives to ramp up oil production to 2.5 million barrels per day by 2020; privatizing selected public enterprises/assets and revamping refineries to reduce petroleum product imports by 60 percent by 2018.
With the plan, GDP is projected to grow to 2.19 per cent in 2017 and 4.8 per cent in 2018 before peaking at 7.0 per cent in 2020.
Nigeria and other African nations came together to embrace the African Continent free trade deal.
The Agreement is anchored on Article 3 of the Constitutive Act of the AU, which seeks to accelerate the political and socio-economic integration of the African Continent.
It is intended to promote agricultural development, achieve food security, industrialization and structural economic transformation in the African continent.
This is a mission to increase trade between African nations.
The AfCFTA is proposed as the world’s largest free trade zone since the establishment of the World Trade Organization in 1994.
The trade deal will start by cutting tariffs for goods traded within the bloc and then eventually expand into other areas.
The AfCFTA was introduced in March, 2018 with the aim of creating a single continental market for goods and services as well as a Customs Union with free movement of capital and persons which is expected to kick off by 1st July 2020.
A notable highlight of 2019 was Nigeria’s signing of the Africa Continental Free Trade Agreement (AfCFTA) on July 7, 2019 by President Muhammadu Buhari at the 12th Extraordinary Summit of the African Union (AU) in Niamey, Niger.
It aims to bring all members of the African Union (AU) together in a single market of 1.2 billion people by removing trade barriers such as tariffs across Africa.
Africa’s GDP is expected to grow by 1% and total employment by 1.2%. Intra-African trade is expected to grow by 33% and Africa’s total trade deficit to be cut in half.
If successfully implemented, the AfCFTA could generate a combined consumer and business spending of $6.7 trillion by 2030.
Nigeria will have an expanded market. Businesses can expand operations across the region.
The AfCFTA would create more trade opportunities for states, and lead to more investment and industrialization.
It could unite 1.3 billion people, create a $3.4 trillion economic bloc and boost trade within the continent itself.
African and international investors will both benefit from the agreement, as it will make it easier for businesses to expand operations across the region.
However, it is important to note that Section 12 of the Nigerian constitution provides that an international treaty or agreement would not automatically apply to Nigeria unless the agreement or treaty is ratified or domesticated by an Act of the National Assembly.
It is, therefore, up to the National Assembly to ratify the agreement before it becomes operational in Nigeria.
This move by the Nigerian government which seemed harsh to neighboring nations was implemented by the Buhari Administration to improve local production of goods and agriculture, especially rice.
National Statistics Institute states that Nigeria imported 1.3 million metric tons of rice in 2017 for a population of over 190 million people.
Benin republic imported 1.2 million metric tons of rice annually, against its population of about 11 million people.
Further reports state that the biggest contraband route was between Cotonou, Benin’s biggest city and Lagos, with cases of smuggled rice and several other goods.
According to the World Bank, Benin’s economy is heavily reliant on the informal re-export and transit trade with Nigeria, which accounts for about 20% of its GDP, or national income. And about 80% of imports into Benin are destined for Nigeria.
Nigeria banned the importation of rice from Benin in 2004 and its neighbours in 2016, but smuggling still remained an issue. This brought about the drastic measure to shut down borders in order to address this growing anomaly.
This has brought about a strong effect on businesses home and abroad.
EASE OF DOING BUSINESS IN NIGERIA
According to the World Bank, Nigeria is ranked 131 among 190 economies in the Ease-of-Doing-Business index, according to the latest World Bank annual ratings.
The rank of Nigeria improved to 131 in 2019 from 146 in 2018. Ease of Doing Business in Nigeria averaged 143.92 from 2008 until 2019.
The visa on arrival policy in Nigeria is also aimed at improving the ease of doing business in Nigeria, despite some concerns.
However, many have shown approval as it has encouraged alliances with neighbouring nations.
According to statistics; a social media research site, in 2010 the world had less than 1 billion people avid social network users but today, there are over 2 billion people.
Nigeria among other nations has not been left out as the country has about 30 million users. There is a projection that by 2023, there will be nothing less than over 36 million users on board. This is no small achievement in world which has been tilting fast into digitization.
Trade was also another area where lots of investment and projections were made and are still ongoing.
The idea of import/export duties and several other aligning policies helped to either strengthen bilateral ties between nations, increase foreign investment, place embargo on adulterated goods or improve local production.
The U.S- China trade deal called for concerns as to the rising tariff of import goods. This act was predicted to raise the prices of domestic production and strengthen trade barriers.
This battle all started in June 2018 when President Donald Trump first imposed tariffs as a result of a formal investigation conducted by the U.S. Trade Representative’s Office under Section 301 of the Trade Act of 1974.
An act which found fault with a variety of Chinese practices, including intellectual property theft, cyber intrusions, discriminatory indigenous innovation policies, forced technology transfer requirements, and other related items.
So far, reports state that Washington has cancelled tariffs on about $160 billion of imports from China and kept in place the 25 percent tariffs imposed on about $250 billion of Chinese goods.
The world watches with hope as a reasonable agreement to the trade deal will surely improve global productivity.
Another area of interest was the Brexit deal which indicators stated would have a long –term effect not only on the UK economy but globally.
The referendum pushed UK inflation by 1.7 percentage points in 2017, leading to an annual cost of £404 for the average British household.
While some international economists are of the opinion that EU membership has a strong positive effect on global trade and, as a result, trade would be worse off if it left the EU, others believe that that leaving the single market and customs union might increase UK exports to the rest of the world.
Already, oil prices recorded a three-month high since U.S-China 18-month trade war began to inch toward a solution.
But if handled badly, the impact could create collateral damage to nations on the sideline.
Finally, all the measures taken in 2019 have gone ahead to reveal a pregnant year ahead.
Irrespective of political unrests, debt crisis and economic meltdowns in some undeveloped/developing nations, 2020 is a year filled with high expectations especially for young people who long for a new dawn in their economy.
The New Year message of Antonio Guterres, the United Nations Secretary General tells the world what to expect: “We are launching a Decade of Action for the Sustainable Development Goals, our blueprint for a fair globalization.
“The world needs young people to keep speaking out. Keep thinking big. Keep pushing boundaries. And keep up the pressure.”
Voice of Nigeria