For the sustenance of peace and harmonious cohabitation of diverse groups in the country in a manner that will enhance business development and engender economic growth, JOSEPH INOKOTONG writes that Nigeria earnestly yearns for shared prosperity.
THE term “Shared Prosperity” has evolved over time and expanded beyond the scope initially defined by the World Bank Group in 2013. The Nigerian Economic Group (NESG) said from its inception to the present, Shared Prosperity has advanced from an economic concept to a development agenda for most developing countries and emerging market economies. As a result, there is no simplistic definition for the idea of Shared Prosperity but noted that there are two broad definitions of Shared Prosperity worldwide.
On its part, the World Bank Group defined “Shared Prosperity” as the process of fostering income growth among the bottom 40 percent of a country’s population through sustained economic growth and equitable distribution of growth outcomes.”
The United Nations Industrial Development Organisation (UNIDO) defined “Shared Prosperity” in its development strategy as: “… a strategy for achieving sustained growth, in the form of industrialisation, creating opportunities that are accessible to all and broadly distributes income and non-income gains across groups in the society.”
Perhaps, Malaysia’s version of the definition is worth studying. In its Vision 2030, the country defined ‘Shared Prosperity” as “a commitment to make Malaysia a nation that achieves sustainable growth along with fair and equitable distribution across income groups, ethnicities, regions, and supply chains. The primary aim of the shared prosperity vision is to provide a decent standard of living to all Malaysians by 2030.”
For British Columbia, Shared Prosperity is a society where a significant majority of citizens work together to pursue opportunities, where institutions enable collective and sometimes difficult, decisions to be made and where all can share in the benefits of a thriving economy – both now and for future generations.
In this context, one can conveniently conclude that the phenomenon can be achieved in Nigeria if concerted efforts are geared towards it. However, it is instructive to note that Nigeria is a country with great potential. Its vast natural resources and large population offer the possibility of great prosperity for its people. In the same vein, the country faces significant challenges in achieving shared prosperity and economic inclusion.
According to the NESG, “Over time, Nigeria’s economy has faced a wide range of challenges that have shaped its socioeconomic fabric. While the economic gains and progress of early 2000, as a result of a wide range of economic and policy reforms, unleashed a new optimism, the overall abysmal socioeconomic performance of recent years has left many asking what the fate of this country is.”
The NESG pointed out that going by different projections, the economic outlook for 2023 remains pessimistic for Nigeria, with only moderate economic growth in the cards – not enough to boost the long-desired robust and inclusive economic growth needed to tackle unemployment, reduce poverty incidence, and address other socioeconomic challenges.
To reverse the trend, it stated that comprehensive and system-driven economic reforms are needed to change Nigeria’s economic trajectory from a weak, non-inclusive and highly vulnerable narrative to one with the guiding principle of creating economic value and benefits for all. However, driving this economic agenda requires a set of reforms that ensures a conducive and enabling environment for generating economic benefits and prosperity. It also requires that no one is left behind in this process.
President Bola Tinubu’s enunciated wide-ranging policies in fidelity to the pledge he made to put Nigerians at the centre of government policies and address business unfriendly fiscal and monetary policies, especially multiplicity of taxes, may be the right way to go under the prevailing economic situation. Nobody is in doubt of the administration’s preference for a market-driven economy, especially the growing quest to maximise revenue growth for developmental purposes. Much seems to have been accomplished within a short time in office in terms of reforms, however, what remains conspicuously missing are measures with a direct impact on the populace to significantly ameliorate the consequences of the fuel subsidy removal, which should include the immediate roll-out of palliatives as promised by the government.
Accordingly, the question arises: what type of economic reform agenda can deliver this economic state? The NESG provides the answer, saying that Nigeria needs an economic vision driven by clear, implementable and consistent policy reforms and an agenda for shared prosperity. Nigeria needs to implement reforms to improve the lives of its people, especially the vulnerable and create an economy that is more diversified and resilient.
It observed that the shared prosperity framework is not only based on expanding the economic pie to be shared, but also ensuring that the income disparity is narrowed. “The underlying principle is not to redistribute a percentage of an existing pie but to continuously expand the size of the pie and share it so people can improve their quality of life as quickly as possible. Sustainably expanding and sharing prosperity entails monetary and non-monetary dimensions of economic efficiency and well-being for the current and future generations.
According to the definitions highlighted above, the NESG posited that Shared Prosperity aims to address developmental imbalances, including widening economic inequalities and due to this, Shared Prosperity’s measures, strategies and focus can be tailored for each country based on its unique characteristics and needs.
“In light of Nigeria’s developmental needs and goals, the country’s Shared Prosperity will be defined as a situation or state in which every Nigerian enjoys a decent standard of living measured by equitable access to economic opportunities, including decent jobs, quality education and healthcare, along with the protection of lives and properties,” the NESG highlighted.
It continued by stating that “Building on the above definition, some elements of the Nigerian-centric meaning of Shared Prosperity are crucial. The first component emphasises creating a competitive economy with high and sustainable growth. If realised, the targets which align with the country’s long-term development goals as outlined in the National Development Plan 2021-2025 and Nigeria’s Agenda 2050 – could revitalise the private sector to drive economic wealth creation needed to be shared. The second component focuses on creating an equitable and inclusive society, both economically and socially. This component is “…the equitable and fair distribution of economic prosperity across all income groups.” This component brings to life the establishment of a robust institutional structure and systems that support the construction of a united, peaceful and prosperous nation.”
In the estimation of the NESG, therefore, the Shared Prosperity Agenda (SPA) proposes reforms that promote broad-based economic growth, create jobs, reduce poverty and ensure socioeconomic prosperity for all. The SPA, it noted includes measures to achieve broad-based economic progress via concentric economic diversification and transformation, thriving private sector, human capital development and functional social programmes while ensuring institutional quality. If appropriately implemented, it stated, the SPA has the potential to transform Nigeria into a prosperous middle class.
The NESG went ahead to attempt conceptualising a policy framework for achieving SPA for Nigeria by aiming to show the policies that are prerequisites for shared prosperity in the Nigerian context. In doing that, it provided a tool to help structure policy discussions and determine what policies are linked specifically to shared prosperity objectives. It noted that it includes “supply-side” policies that seek to increase incomes and “demand-side” interventions that focus on ensuring everyone has access to essential services or safety nets.
The economy think tank also addressed critical policy questions such as what shared prosperity means for Nigeria; what the framework of SPA should look like for the nation and what reforms are needed to achieve sustainable SPA outcomes in the country. To answer the questions raised, the NESG started by contextualising SPA for Nigeria, and afterwards, developed a SPA analytical framework that helps identify foundational principles, objectives, pillars/drivers and SPA outcomes in Nigeria amidst some required enablers, as well as identifies the needed reforms to achieve improved shared prosperity outcomes in Nigeria.
Indeed, for the sustenance of peace and harmonious cohabitation of diverse groups in the country in a manner that will enhance business development and engender economic growth, Nigeria earnestly yearns for shared prosperity.
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