Home Business Chaudhuri & Hernandez: Nigeria is an Exceptional Oil-producing Nation

Chaudhuri & Hernandez: Nigeria is an Exceptional Oil-producing Nation


For the first time since the discovery of crude oil, Nigeria has been in a situation whereby when oil prices go up significantly, globally, it does not translate into improved earnings for the country, but a deteriorating fiscal situation. Therefore, one of the fiscal burdens the economy currently shoulders is as a result of its retention of the controversial fuel subsidy policy, which the World Bank has predicted might gulp up to N5 trillion this year alone. Thus, in an interview with THISDAY, World Bank’s Country Director for Nigeria, Shubham Chaudhuri, with useful interjections from Marco Hernandez, the institution’s Lead Economist for Nigeria, have reiterated the dangers ahead if the federal government continues with the fuel subsidy policy, especially, that rising inflation was pushing more Nigerians into poverty. Excerpts:

During our last interview, you expressed concern about Nigeria’s fuel subsidy payments and said if it continues by this year, they might not have money to pay salaries. Today, subsidy payments are still active and the government has asked for it to be increased to about N4 trillion, what do you think?

Chaudhuri: Unfortunately, our take is that the problem has just gotten bigger, because of rising oil prices globally, partly of course, due to what’s happening in Ukraine. The fiscal burden of the Premium Motor Spirit (PMS) subsidies in Nigeria, means more challenges. In our latest projection for 2022, it’s more than N4 trillion; it’s probably N4.5 or even close to N5 trillion. Part of this, you would have already seen, reflects in the fact that the Nigerian National Petroleum Corporation (NNPC), in the last four or even five months, has not been able to transfer anything to the Federation Account.

The Federation Account Allocation Committee (FAAC) meets every month and a big part of the discussion is the net oil and gas revenues that NNPC transfers over to the federation account and then, from that, it gets divided between the federal and the states. Well, in the last four months and perhaps, even in May, the NNPC was unable to transfer anything, partly because revenues that it was getting in were being used to cover the cost of the PMS subsidy, which has been ballooning, and also other expenses.

Unfortunately, again, we wish what we had been predicting would not come to pass, but not only does it seem like it will come to pass, the problem has grown a lot larger. And if you look at how that translates into the revenues that the federal government will have and also what the states will have to meet basic expenses – whether it’s wages of civil servants, meeting payments to contractors, etc – it will be difficult. And in fact, we expect that some states, perhaps, will find it difficult to meet these payments, which means they will go into arrears.

Again, we hope that this does not happen and that a solution is found to somehow bring up government revenues from other sources. But the fact of the matter is that the costs of the PMS subsidies and the fact that revenues are being kind of dedicated to covering those costs before it goes to any other of the needs that the government has, have now gone up beyond N4.5 trillion, according to our estimates.

Hernandez: In terms of the latest estimates, these are based on not only the latest international prices for oil and also for gasoline, but also taking into account that there are many things that are interlinked. So, revenues are also a function of what’s happening with the petrol subsidy and of course, there are situations internally that have to do with oil production in Nigeria that also affect this calculation. So, what we can do is to highlight that in the amended budget for 2022 which happened several weeks ago, allocation was around N4 trillion, which is two per cent of GDP and much higher than what we have seen in previous years, even in years, when the petrol subsidy existed and prices of oil rose high.

Our latest projections, based on the fact that international oil prices have continued to increase, put it closer to around N5 trillion for 2022. And that means that even if Nigeria is expected to receive higher revenues from oil and gas, the country is likely, in 2022, to receive less revenues in nominal terms than what it received in 2021 and 2020, even though prices of oil were much lower in previous years.

Also, on what’s happening at the state level and what that may mean for the states to fulfil their obligations, what we know now is that in 2022, the situation has become more urgent and it would not be possible for the states to achieve their intended level of expenditure in 2022 as specified in their own state budgets. And that gap could be as large as 50 per cent for the majority of states in Nigeria.

So, that means that if they were planning to spend N100 on a given item, they would only be able to spend up to N50. So, they will have to decide what they spend on or not in the coming months of 2022. And even though there might be some variation across states, what is very clear is that the bottom line is not positive. The situation is much more concerning than before.

Chaudhuri:  That is the elephant in the room. Two other points your readers may want to keep in mind: First, this is the first time in Nigeria that we have seen a situation, where oil prices globally have gone up as much as they have, at the same time, Nigeria’s fiscal situation is actually more precarious and is likely to get worse. Nigeria will not benefit in fiscal terms from rising oil prices globally. One big reason for that is the PMS subsidy but the other very important reason as well is that oil production is trending downwards. At other times, when oil prices went up, oil production would also keep up but this time, that’s not what we’ve been seeing, certainly not for last year and possibly going forward.

The second point to keep in mind is that Nigeria is pretty unique among oil-exporting countries in facing this situation. Nigeria is the exception. Nigeria is an oil exporter but Nigeria is not enjoying the windfall from the higher oil prices and its fiscal situation is becoming more precarious. We have been saying this pretty much since early 2021. We said it with a heightened sense of urgency in November of 2021 and this time, unfortunately, we’re having to say it again with even greater urgency.

The picture you painted here is a scary one. But have you sat down with the government, and maybe, the policymakers to let them know the dangers of continued payment of fuel subsidies? Second, the implementation of the Petroleum Industry Act (PIA) was extended by 18 months, do you see them implementing it when that time comes?

Chaudhuri: We have certainly communicated and shared with government officials, both at the federal and at the sub-national levels, meaning the governors, everything that we are saying here, so there isn’t much difference between what we’ve been saying in public and what we said in private to government partners. What we’ve also said and you will have seen this in our November report, is that at this time, we understand that eliminating PMS subsidies just off the top is not going to be easy, it does require a consensus building and then a clear kind of understanding with the Nigerian people.

But first and foremost, a consensus within the governing elites, the political, business and other elites. And what we’ve been trying to say more privately is that it’s important even if the solution needs a bit of time to work out, that it’s really important and critical to have that conversation to have that public kind of debate and discussion about the need to find the solution. We have proposed that the solution really has to do with making sure that ordinary Nigerians do not bear the brunt of the adjustment costs. So, what are the adjustment costs? Is that if you eliminate PMS subsidies, that means that the price of PMS will go up, and with the price of PMS going up, the cost of some other things will go up? If you look at the numbers, think of what could be done with N5 trillion.

A big part of it could be used through targeted cash transfers and through making schools more affordable and primary healthcare more affordable, building rural roads so farmers can get their produce to markets.  We think the leadership must engage in that conversation to figure out where the pain points are and what robust ways of ensuring that these fiscal resources actually reach the people rather than going off into some black hole. I think, more important than anything else, is to just acknowledge the scale of the problem and begin a dialogue around it. It is a conversation that ultimately the political elites have to be willing to engage in as there has to be a consensus amongst the political elites to have that conversation with the Nigerian public.

In your latest NDU, Nigeria’s growth prospects for the next three years were revised upwards with agriculture as one of the drivers despite the insecurity in the country. Is that realistic?

Hernandez: I think there are two main reasons why we are projecting that Nigeria will grow in 2022 by 3.4 per cent, which is higher than the 2.8 per cent that we projected back in November. The first reason is that there has been better-than-expected performance with not just agriculture, but also services. For example, all of the services sectors except for trade, had a big rebound in terms of production. Part of that was driven by bass effects. As you know, in 2020 and part of 2021, the economy was trying to recover because it was not growing that fast. The growth that was projected in 2022 gives an extra push.

So, that’s one part, but there were other sectors like telecommunications and financial services that were growing more organically, they have been growing and they have continued to grow extensively and that is part of the way that they have been benefiting from higher consumption. In the case of telecommunications, it is driven by data and additional collections of oil. The agriculture sector has been growing on a sustained basis and that includes also the story of what happened in the previous recession back in 2016. So, it has been one of those sectors that have had continuous influx of workers because agriculture is an employer of last resort.

So, as they get more work and as they increase their production, they have been able to sustain a higher production even though sometimes, there have been higher prices for some of the inputs like fertilizers that have been put at risk to the sector. But even in that context, agriculture has been performing well. So it is the better-than-expected performance of services and agriculture that is pushing our higher growth projections. On the other side is the fact that we now have higher oil prices. Now why that matters for Nigeria is because even though the oil sector still protects a relatively small share of the total economy, it has a positive spillover effect for the non-oil sector, whether it’s through manufacturing or financial services or also transportation and trade that helped to boost the nominal economy as well as the oil sector.

So, those are the two main forces that are leading us to have higher growth projections. And to answer your question about security, we have incorporated our security assessment as part of our growth projections for 2022 and beyond. Nonetheless, as you highlighted, there could be a risk that the security situation might get worse or the insecurity continues to trend upwards as it has been over the past few months and that may put a dent on growth prospects. Now, we are assuming that the security situation will remain as it is currently.

But if it does get worse, what we do highlight in the Nigeria Development Update is that the risks are tilted to the downside. And one of these downside risks is the potential that as a result of other reasons, such as inflation and social unrest, and so forth, that insecurity would increase and that will bring growth down. That is a risk, but in our baseline scenario, we are projecting higher growth than what we were projecting six months ago. Again, this is driven by other factors, but security is taken as one of the pieces that does affect prospects for Nigeria.

The report also identified higher oil prices as a catalyst for growth for Nigeria. How do you mean exactly?

Hernandez: There are several transmission channels that we have to take into account when thinking about how higher oil prices will translate into the Nigerian economy. The first one is through the external sector. As you know, most of the exports of Nigeria, more than 80 percent come from the oil sector. Higher prices of oil would increase the value of Nigerian exports. But there is one thing that cuts across the outlook for the oil sector and that is how much oil Nigeria is actually producing. Production in Nigeria has been trending downward in the past two years, not only because it’s below the quota that the Organisation of Petroleum Exporting Countries (OPEC) set, but also because it is one of the lowest production levels in more than three decades.

Even if the prices of oil have increased substantially, the fact that we’re now producing less than before means that Nigeria is not benefiting as much. Now on the external side, they still benefit from higher oil prices and that means that they have higher exports which help them with their current account balances. That means that Nigeria requires less external financing for the investment that it makes. The second channel is the growth channel. Now on the growth channel, the oil sector as I mentioned before, has linkages with the non-oil sector. So, whatever happens in the oil sector creates expectations for the non-oil sector counterparts that have interactions and transactions with the oil economy.

A big one is the financial services sector because around one-third of all loans in Nigeria are tied to the oil sector. So of course, if that sector is doing well, then the financial sector will have more resources to lend further to other sectors that are not related to oil which will also spur growth in these other sectors whether it’s construction, retail, trade, transportation services and telecommunications and so on. So, the third channel is the channel that has to do with prices which link to inflation and higher oil prices, especially because Nigeria exports oil, but imports petroleum products, including gasoline and petrol.

So, because those prices are higher, that means that there is also upward pressure on prices and that also trickles down to the entire economy because transportation costs go up, that makes you feel food inflation, and so on and so forth. One transmission channel that we have been discussing is the fiscal channel. It’s mostly negative because of the petrol subsidy. Petrol subsidy means that whatever revenues Nigeria was expected to collect are being watered down as a result of the resources that go to pay for the petrol subsidy. So, that is our main message on the fiscal side in the NDU and one that we hope gets turned around so that Nigeria can eventually use fiscal policy as an engine for growth because without resources, Nigeria cannot promote growth through investments in critical infrastructure and human capital that it requires for the medium to longer term.

What is your projection for inflation in Nigeria?

Hernandez: The projection for inflation for next year and a half is 15.3 per cent on an annual basis, and this is close to two percentage points higher than what we were projecting before the invasion of Ukraine. So, it gives you an idea of the impact the war in Ukraine is suspected to have as a result of increases in various food items. But not only that, what we do highlight in the report is that the lack of concern in policy action to reduce inflation is also one of the reasons why inflation is not only ticking upwards but it’s not expected to come down as fast as it would in other emerging economies.

In your recommendation, what can the Central Bank of Nigeria do to bring down inflation?

Hernandez: In terms of reducing inflation, what we have highlighted in previous both public and private conversations with government counterparts and stakeholders across the country is that there needs to be a sequence and coordinated mix of policies involved in exchange rate management, monetary policy, fiscal policy, and trade. To give you some examples of a flavour of the type of policy options that we have been highlighting in the past, and we’ll continue to do so in the report published, is the importance of improving exchange rate management.

For example, the opportunity to adopt a single and a market-responsive exchange rate that is clearly communicated to all parties in the economy, so that there is more credibility in the exchange rate management system and also an improved availability of foreign exchange. That is because the inability to access foreign exchange is actually one of the reasons pushing inflation upwards. On the trade side, our recommendation has been to fully reopen the land borders and also to remove restrictions on trade, especially on staple foods and medicines, so that there will be less pressure from those critical goods that are especially affecting food inflation for the poor and for vulnerable groups.

On the monetary side, one particular example that I want to highlight is the importance of prioritising reducing inflation as the key monetary objective. At this time, the central bank is pursuing several objectives, which include the promotion of growth and these objectives are conflicting with each other. So, the prioritisation of price control as the primary objective is what we highlight as critical. And on the fiscal side, one important element that we have been highlighting also for some time is the importance of making sure that the central bank’s deficit financing is kept within the legal limit of not more than five per cent of the previous year’s fiscal revenues.

Because when fiscal deficits are also much higher than projected, then that also pushes more resources into the economy that eventually translates into higher inflationary pressures. Just to give you a flavour of the examples of these four dimensions of policies, once again, given that the particular situation is a balancing act. It is a balancing act for policymakers to understand where the pressures are coming from, what are the main drivers of inflation and make sure that there is once again, a sequence and a coordinated mix of all these different elements so that eventually inflation will be controlled, and it will stop pushing Nigerians into poverty. As it has been doing over the past three years.

Chaudhuri: The response that one often hears about the rising high rates of inflation in Nigeria is that it has to do with the structure of things, security, and transport costs. Certainly, that contributes especially as transport costs within Nigeria are high compared to many other countries. But we have to ask ourselves why are transport costs not only high, but are increasing and increasing at a faster rate. That’s what rising inflation means. That means prices are not only going up, but are also going up by 15 percent. Our take is that some of the structural issues that one often hears about, explain the high costs of overall transport and other things, but they don’t necessarily explain the fact that these prices are increasing and increasing at a faster rate. And we think that has more to do with some of the direct policy issues Marco mentioned.

I think structural issues are a big part of the story, but it doesn’t quite explain and doesn’t deal with the fact that you have the inflation rate itself rising. And then prices, which means prices are rising at higher and higher rates. And then that’s where some of the policy issues, policy choices that have been made become critical. Another reason for emphasising the policy choices is that even if it’s the case that there are these structural impediments, those structural impediments will take time to address.  I don’t think that Nigeria can afford to wait that long when ordinary households are finding it hard to put food on the table.

We are predicting that millions of Nigerians who are near-poor have now technically fallen into poverty because they’re not able to afford what’s considered the basic bundle of food and basic needs. And again, there’s a policy solution to that which is on foreign exchange management. Look, this is a very tricky thing to do, you don’t want to let the current foreign exchange rate depreciate by a huge margin or something. Our basic take is that having it be the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate, which is the investors and exporters’ (I&E) window to be a bit more responsive to market pressures, it will be like letting the steam off a pressure cooker.

There is a reason why pressure cookers have little valves on top that let the steam out, that’s because if you don’t let the steam out, then the pressure builds up. And what we see with the parallel market rate now being more than N600 is that the pressure is building up and manifesting itself in that market. Please hear us on this one, it is not that we are saying the exchange rate should be completely market-determined, what we are saying is that the exchange rate needs to be managed, but it should be managed in a way that is market responsive, that takes into account what the market pressures are and access to foreign exchange has to be a bit more predictable. In many countries, central banks may have rules about how they regulate foreign exchange, but there should be some predictability about it and I think that’s also what would help in terms of relieving some of the pressure.

Hernandez: There are two headline numbers that if you ask me are what keeps me up at night as an economist analysing Nigeria: Inflation is definitely one of the things that keep me up on a daily basis. So let me just have two headline numbers, one is inflation pushing millions of Nigerians into poverty. So, we are expecting that, for example, in 2022, by the end of the year, inflation would push seven million more Nigerians into poverty. The second one also takes me back to when I arrived in Nigeria in 2019, there was a lot of hype about the new minimum wage of N30,000 per month.

Now, if we translate what has happened with that minimum wage because of inflation, the first thing that we see is that the N30,000 in nominal terms that they were paying in 2020 in real terms today is close to N22,000. So, it’s not N30,000 anymore, you lost already N8,000 just because of the increasing prices. All of a sudden, for someone that is making a minimum wage, that’s an incredible blow.

But not only that, linking that was the point that because of this lack of predictability and availability, the parallel market forex rate shoots up and the parallel rate is where most Nigerians will exchange their money. So, that means that for the N30,000 minimum wage, if you convert that to dollars, you will be getting $82, but because of inflation and the fact that you have an exchange rate depreciation, you now only get $37 per month. So, from $82 to $37 per month, that is not only concerning but an astonishing statistic.

Are you suggesting an upward review of the  minimum wage in Nigeria?

Hernandez: There are very few people in Nigeria that benefit from the minimum wage. Actually, the minimum wage or the income for a family of five is less than N30,000 per month. Recall that the poverty line is about N137,000 per person, per year. So, the majority of Nigerians are living less than what some would call the minimum wage. The minimum wage is something that would get to a very small share of the population. There are many other things that Nigeria needs to do, such as to catalyse private investments and create more jobs on a sustained basis.

Chaudhuri: This is not a recommendation for raising the minimum wage. Most Nigerians need more economic opportunities to have jobs that pay them higher wages. Just legislating on a minimum wage in a country where 80 per cent of the labour force is informally employed is symbolic at best.

A worsening fiscal balance means more borrowing for Nigeria, what are your thoughts on debt service in the short and long terms?

Hernandez: We assess Nigeria’s debt to be sustainable. Let me start with that point. Now, there is also a discussion about how the rise of fiscal deficits is increasing debt faster. And the second point is that  debt is becoming more expensive. That is because on one hand, global rates have increased and that means that interest rates are higher globally and that means any debt Nigeria incurs would be more expensive. And another reason is also that Nigeria over the past three years has been borrowing more from the central bank to cover its financing needs and central bank’s financing is more expensive than other marketable debt instruments and as a result, the important thing is not just that the debt has increased, but also the cost of debt has also increased together with the amount of debt.
The bottom line that I wanted to highlight is that there is the deeper question about where debt is actually going or how the country is utilising its debt. If it is borrowing to just pay for the fuel subsidy, that will be a different story than if it is borrowing for constructing bridges, improving healthcare and education and also making sure that there’s targeted support for the poor and vulnerable who are facing  very difficult times.

What you have to ask is what is the debt being used for and how are we choosing who we borrow from, and under what terms? I think it’s the answers to all three that you need in order to assess whether Nigeria is on the right path. And our answer is that Nigeria does need to borrow for lots of things because the financing investments for Nigeria’s infrastructure and its people are huge, but only if that’s what it is used for. And second, in terms of borrowing, I think Nigeria has to be transparent with its debt reporting.

The NDU stated that Nigeria’s protectionist trade policy was making the country to lose $1.8billion in import tariffs annually. Can you speak more on this and what could be done to reverse this trend?

Hernandez: On trade, our analysis in the NDU shows that trade restrictions are hurting Nigeria through various channels. For instance, trade restrictions are leading to higher inflation. They’re also encouraging smuggling. They’re increasing tax evasion, which as a result, reduces fiscal revenues. And they’re also increasing the production costs for firms. So, there are several channels through which trade restrictions are affecting the Nigerian economy. And what we have been able to put together in this analysis is to quantify some of these effects.
So, for example, one of the things that we’ve highlighted is that when it comes to foreign exchange restrictions, we’re highlighting foreign exchange restrictions between 2015 and 2019, they were generating around $250 million in tax evasion every year. In a country that is desperately in need to mobilise revenues in a sustainable manner, this is a crucial statistic because we call it the unintended effect of trade policies. That is because some of these policies were put in place with the intended effect of supporting domestic industries. There are a series of unintended effects that are happening as a result of these trade protections.

One of them is the negative effect it has on evading taxes and another one is on higher inflation, increasing the production costs and so on and so forth. So, in addition to foreign exchange restrictions, they’re also import bans generating $1.8 billion in losses annually as estimated from our recent research. So that is also another effect and on top of that, we also highlighted that, for example, when Nigeria closed its borders in 2019, that coincided with a significant rise in inflation, including for those goods that were produced locally in Nigeria. So, you would ask, why is a good that is produced locally in Nigeria be at a much higher price when they closed the borders?

Well, of course it was because of fewer imports and the market is not producing as fast and that led to higher prices of goods. And in those states that were closer to the border, the increasing prices were much more significant when they closed the border in 2019. So, it’s not just one thing and only one sector that would be affected by trade restrictions, but all sectors in the economy because every single sector is interlinked and every single sector is affected by high prices, by higher production costs and of course, a worsening tax collection and so forth.

Chaudhuri: We often get accused of preaching this dogma of free trade. No one wants to see Nigeria, as you know, forever dependent on imports and being what is called a consumption economy. It is all about increasing domestic value-addition so that there are more jobs and better jobs for Nigerian youths. The point we are making here is that often the path to increasing domestic value-addition involves fixing certain things behind the borders rather than just imposing these restrictions at the border. Not only does it not always help in increasing domestic value-added, it sometimes can even be counterproductive because of the unintended consequences.

And I’m sure if you spend time talking to the management of many of the established domestic firms, some of whom are responsible for producing and creating much of the domestic value-creating value-added, they will tell you how their growth plans, their ability to kind of compete has been affected by the fact that they don’t have access to foreign exchange for critical intermediate inputs. These are some of the unintended consequences.

Since you are speaking about trade, how would you assess the Central Bank of Nigeria RT 200 policy, and then, finally, can you give us your outlook on the nation’s economy?

Hernandez: With the outlook I mentioned at the beginning, we are predicting higher growth prospects for Nigeria for 2022 and 2023 than what we were projecting six months ago. However, we’re also seeing that our projections on other macroeconomic indicators for the next two years are not looking as good, especially on inflation, the fiscal deficit and also on the lack of improvement in the external account. So, we’re seeing that inflation is expected to be much higher than what we had six months ago. The fiscal deficit is also expected to be much higher.

For instance, we are projecting that in 2022, the fiscal deficit could be as large as six per cent of GDP or more, which is much higher than what we have been seeing in the previous two years. And that trickles down into what is happening at the state level. So those prospects, I wanted to differentiate between just what we’re seeing in terms of improvements on higher growth and what we’re seeing in other macroeconomic indicators which make the situation concerning because even if Nigeria’s growth prospects have improved,  our bottom line is that growth is not near enough where it needs to fulfil the needs of the citizenry, especially, when you have close to 300,000 youths joining the labour force every single month and they need to find job opportunities and a growth rate of 3.5-3.6 and even a growth rate of 4 percent , may not necessarily provide those job opportunities for Nigerians.

So, what we are highlighting in this edition of the NDU is that we see that it is time for the central bank to scale down some of its development interventions because they’re providing subsidised lending to medium and large firms. And the time has passed already when this has to be phased out and phased out in a way that is orderly of course. But continuing to do so may just further delay the fact that many firms have been facing more difficult situations and you’re just delaying the problem with a higher cost. The CBN’s RT200 is a policy that actually proves that we need to make sure that there is a market-responsive exchange rate, which is what we were highlighting before. One of the components of the RT200 is a non-oil FX rebate scheme, which is a special local currency scheme for normal exporters.

So, CBN would pay N65 for every dollar repatriated into the I&E window for third-party use and N35 for every dollar that is repatriated and sold into the I&E window for own use and eligibility transactions. So, what the CBN has created are two additional windows that it is subsidising through an exchange rate mechanism, and what we are highlighting, not just in this edition of NDU, but in previous ones is the opportunity that Nigeria has, especially now that it might be receiving more foreign exchange because of higher oil prices, it needs to move to a single and a more market-responsive exchange rate that on the one hand, increases the predictability and credibility of the system but on the other hand, allows more price discovery so that there’s better access to foreign exchange. And that better access to foreign exchange we see as a critical component for not only short, but also medium and long-term economic growth.

Chaudhuri: On the overall outlook, growth pickup is encouraging, but it’s not nearly enough for a country of Nigeria’s size for its growing population. But really, if you ask me, the bottom line is that we are more concerned now than we were six months ago because we see the fiscal pressures and the inflationary pressures building up in a way that will directly impact the livelihoods and just everyday choices that millions of Nigerians will have to make and the government’s ability to respond to those needs will be limited by the fiscal pressures.

We hope Nigeria gets through at least to the other side of the elections but there has to be a broader consensus amongst the elites and then ultimately, Nigerian people as a whole, that this situation on the fiscal front and in terms of some of the key reforms that we’ve highlighted cannot continue. The title for our November NDU was, ‘Time for Business Unusual,’ this time, what we finally settled for was, ‘The Continuing Urgency of Business Unusual.’ That’s the bottom-line message and the need for Nigeria to kind of really embark down a different path that will help Nigeria realise its full potential. It’s become even more urgent. The fact that growth has picked up is great, but that’s just at the most, the first step.

In your report, investing in adolescent girls and education, is a call to action for Nigeria. How about you elaborate on its expected impact?

Chaudhuri: Does Nigeria have adequate investment in healthcare, please? No. It’s just that we run out of issues and we want to be a bit selective in terms of the things that we bring to the forefront in every given issue. If you ask us about what is Nigeria’s development agenda in terms of investing more in primary healthcare, that continues to be critical. Investing more in power, rural roads, and connectivity all of that remains. Is just that right now, the fiscal and inflationary pressures have to be dealt with a sense of urgency and that’s why we’ve highlighted it. And because we’ve talked about primary health care in the past, because we’ve talked about power in the past. We thought we would also bring in  investing in adolescent girls.

Let me just say that investing in adolescent girls is key to so many other things. Keeping adolescent girls in school is very important. I think it’s over 12 million adolescent girls, especially in northern Nigeria who basically dropped out, which is incredibly high. So, in terms of keeping adolescent girls in school, not only does it make sense as they have the opportunity to learn and contribute to their full potential, it has all kinds of spillover effects in terms of health and well-being of their families and for the economy as a whole.
So that’s why we were supporting governments across pretty much all the northern states to keep adolescent girls in school. And the reason why adolescent girls are dropping out of school vary. It has to do with their families needing them to do other work, it has to do with the fact that the schools are not close enough to their communities, and has to do with traditional norms.



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