American advisory group, Morgan Stanley, hails Tinubu over steps taken to reposition Africa’s biggest economy on track for economic recovery.

Morgan Stanley, the American investment management services company in its recent advisory report titled “Tales From the Emerging World: Nigeria’s New Dawn?” released yesterday, commended President Bola Tinubu  for major reforms taken to reposition Africa’s biggest economy on track for recovery. While Tinubu’s the removal of fuel subsidies have led to higher fuel prices, the advisory company deemed it a necessary evil. “The removal of subsidies is likely to prove painful in the near term, especially as it will likely erode consumer confidence, send inflation higher, and hurt consumption,” the report said. “We believe Tinubu’s actions could potentially mark a turning point and deliver medium-term growth which will spur the emergence of a mass consumer market in one of the fastest growing populations in the world.”

The report opened with a comparison of the consequences of policies made by the prior administration and the potential opportunities offered by the promise of change as a new president takes control. Under Nigeria’s former president, Buhari, Nigeria managed an annual GDP growth of 1.4%. Buhari’s refusal to remove fuel subsidy cost the country $9.7 billion in 2022. Furthermore, during Buhari’s tenure, the average Nigerian saw their annual income shrink by nearly one-third, from $3,222 to $2,200—one of the steepest declines recorded by any country over that time span.

Morgan Stanley advised the new administration to enact bold and sound policies, such as Mobile banking and investment in education to unleash its human capital potential.The advisory firm asserts that Nigeria’s burgeoning youthful population will serve as an advantage for telecom operators that offer mobile money solutions. More than half of the Nigerians have no bank accounts. While more than 85% of the adult population in the country have a mobile phone, only about 10% have  mobile-money accounts, showing an attractive investment opportunity in mobile money banking in the coming years. 

While there was a mass exodus of Nigerians in the Buhari led administration, Morgan Stanley is placing a bet on Nigeria’s human capital potential—the country’s greatest asset, taking into consideration its huge population. It has asked the government to increase investments in education and skill development. “We would urge the new administration to focus on investments in educational outcomes and skill development, everything from improving too-low literacy rates to prioritizing STEM fields,” the report read. “Bridging the gap in outcomes between the North and South of the country will be key, but we can think of no better use for the $10 billion in annual savings from fuel subsidies.”

While the advisory lauds Tinubu’s reforms, it believes more can be done. “The reforms are a positive step but more needs to be done to ensure momentum is not lost. Tinubu and his team of technocrats have a unique opportunity to free up the economy and attract foreign investors looking for sustained growth,” the report concluded. 

Faith Omoniyi Reporter

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