MoneyNigeria’s economy can hit an annual Gross Domestic Product (GDP) of $500 billion if corruption is reduced drastically. This is the opinion of PWC economists in their recent report that was released on February 7, on the Nigerian economy. The economists also believe that a more efficient tax system would boost the country’s non-oil revenue with $104 billion annually.

The report also highlighted five ways Nigeria could drive inclusive economic growth. These could be attained by improving tax collection, economic diversification, eliminating corruption, easing the constraints to business, and increasing the productivity of the country’s workforce.

“Nigeria is a low-taxed economy compared to its peers with the tax-to- GDP, ratio estimated at just 8 per cent, the second lowest in Africa and the fourth lowest in the world. If these could be increased to the Sub-Saharan African economies’ average of 18 per cent of GDP, Nigeria could potentially raise its tax revenues to around $104 billion,” the report said, adding that “higher tax revenues would reduce government borrowing and encourage financial institutions to offer funds at lower interest rates, thereby boosting the real economy and economic diversification.”

Nigeria’s potential for economic growth, according to the report, includes a large consumer market, a strategic geographic location as a hub for Africa, and a young and entrepreneurial population. “The first step in harnessing these opportunities requires deliberate efforts to improve value-adding activity in the non-oil economy, particularly in agriculture and the services sectors.”

The report also said that “if Nigeria reduces corruption there would be a significant opportunity to boost GDP levels. For example, if corruption in Nigeria could be reduced in the long-run to estimated levels in Malaysia, we estimate that annual GDP could rise by over $500 billion by 2030. Deliberate efforts to reduce corruption will complement the Nigerian government’s diversification drive.”

PWC stated that a weak business environment was holding back Nigeria’s economic growth potential and slowing down the pace of development. Nigeria is currently ranked 169th out of 190 countries in the World Bank’s 2017 Ease of Doing Business Index, lower than Niger, Madagascar and Sierra Leone. “Other than protecting minority investors and getting credit, Nigeria ranks low on all other indicators and will need to particularly focus on improving electricity supply, simplifying the tax collection process and improving trading across borders so as to leverage its position as the hub of West Africa.”

By Dike Onwuamaeze

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