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2021: Time for Nigeria to Move into Higher Gear?

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by Lukman Otunuga, Senior Research Analyst at FXTM

 2020 will be remembered for its extraordinary uncertainty, explosive market volatility, unprecedented events, supply chain upheavals and a worldwide wave of monetary policy easing.

The new year 2021 may bring renewed hope and a return to normality for many developed and developing economies but what are the chances it will happen by the end of the first quarter? COVID-19 vaccination programmes rolled out in the EU, UK and US and Nigeria expect the first Pfizer/BioNTech vaccines to arrive at the end of January. Hope for better days lies ahead and the positive news has been welcomed by investors.

However, while steps are taken to secure and improve the public health circumstances, economic circumstances are still troubled by the crushing impact of the pandemic. The economic impact of the pandemic will likely set personal incomes in Nigeria back four decades, according to the World Bank. The outlook for the full-year GDP growth is 1.1 percent compared to an estimated minus 4.1 percent, said the World Bank.

Meanwhile, Nigeria registered 1,184 deaths from COVID-19 and a four-week lockdown hit the informal economy hard, meaning that the short-term outlook appears clouded by persistent pandemic headwinds.

Fiscal policy moved ahead after President Muhammadu Buhari signed the 2021 appropriation bill of N13.59 trillion into law with the 2020 Finance Bill set to run concurrently. The annual budget dubbed ‘Budget of Economic Recovery and Resilience’ is expected to reposition Nigeria’s economy back to recovery, growth and flexibility. The bill shows an expected revenue of N7.99 trillion and an aggregate estimated expenditure of N13.59 trillion, implying a budget deficit of N5.60 trillion.

The medium-to-long-term fiscal outlook is one of the significant debt burdens which will need servicing. For a developing economy in the midst of diversifying away from a reliance on the crude Oil industry, this presents enormous challenges. The historical problems in Nigeria’s economy precede the COVID-19 exposures and are mainly to do with structural weaknesses bombarded by persistent external shocks.

The Nigerian economy slipped into a recession in the third quarter of last year after GDP contracted by minus 3.62 percent. Classically, recessions in Nigeria were mostly caused by a fall in the price of crude Oil and the relatively limited fiscal and monetary buffers within a structurally weak economy.

Pandemic response

The economic recession is likely to trigger changes in the benchmark interest rates in 2021 to support a recovery. Monetary policymakers will probably be concerned about the misalignment of interest rates in the fixed income markets, further supporting the argument for one or multiple rate cuts in 2021.

In related developments, the introduction of the Central Bank of Nigeria’s Special Bill as an alternative investment vehicle may absorb a proportion of the liquidity in the system and stabilise the interest rate environment, at least in the short term.

Prolonged recession?

At this point, the best scenario for the Nigerian economy is to save the long-term outlook from a prolonged recession. The World Bank warned that in the next three years, Nigeria could enter a recession the depths of which haven’t been seen since the 1980’s. Efforts have been made to harmonise exchange rates, introduce a market-based pricing mechanism for gasoline, adjust electricity tariffs to reflect the costs and reduce non-essential expenditures.

While there may still be short-term pain ahead, there is still time to enact a series of potentially politically unpopular reforms in line with the World Bank’s recommendations. These include enabling the private sector to be the engine of growth and job creation and redirecting public spending towards development projects and investments in Nigeria’s people and youth in particular, said the World Bank.

Difficult choices lie ahead for investors, consumers, fiscal and monetary policy makers and other stakeholders in the Nigerian economy. Nonetheless, the ground covered so far is promising and with better confidence generated by the vaccination programme, Nigeria’s recovery could move into a higher gear.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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General News

Nigerian Tech Prodigy sets World Record with Smallest GPS Tracker

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Young Nigerian tech genius, Oluwatobi Oyinlola, has developed the world’s smallest GPS tracking device, a prototype measuring just 22.93 x 11.92 mm.

Recognised by the Guinness World Records, the device was created at the prestigious Massachusetts Institute of Technology (MIT), USA, on April 27, where he is employed as a researcher.

It has been hailed for its potential across industries, from logistics and personal safety to medical devices and wildlife monitoring.

Nigeria’s President Bola Ahmed Tinubu celebrated the feat in a post on X, praising Oyinlola for showcasing the ingenuity of the West African country’s youth. “You have just shown the world that Nigerian youth can!” he wrote.

Adding to the accolades, Minister of Communications, Innovation and Digital Economy, Bosun Tijani, lauded the innovation as a symbol of national pride and technological potential.

He commended Oyinlola’s journey, noting his early support for the young inventor’s IoT startup. “Long before this global recognition, I had the privilege of backing Oluwatobi. His journey, now continuing at MIT, is a powerful reminder of the extraordinary potential of our people,” Tijani said.

The prototype not only marks a leap in miniaturised technology but also highlights Nigeria’s growing footprint in global innovation. Bosun added that as Nigeria intensifies efforts to nurture homegrown tech talent, Oyinlola’s success is a beacon for the next generation of innovators.

“The world is only beginning to see what you’re capable of,” said the Minister.

 

 


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Africa Looks to Solar Amid Electricity Challenges

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Africa is becoming a global hub for solar energy development. The commercial and industrial sectors are driving this trend, with photovoltaic systems being installed on-site at businesses, educational institutions, and government facilities to meet energy demands.

This is according to CBi-electric: low voltage, which manufactures and supplies low voltage electrical distribution, protection, and control equipment.

2.5 gigawatts-peak (GWp) of solar capacity was built across Africa in 2024, with 194.34 GWp expected in 2025, according to the company.

Dr. Andrew Dickson, engineering executive of CBi-electric: low voltage, outlines how several reasons are hastening the continent’s transition to solar. “Energy poverty remains a major issue across Africa, with reliable grid electricity reaching only 14% of Zimbabweans, for example.”

He goes on to say that inconsistent power supply is another significant contributor, stating that “Persistent nationwide blackouts are affecting countries like Botswana, disrupting day-to-day operations. And in hydro-electric dependent countries such as Zambia, climate change is reducing water levels, leading to lower electricity generation and higher prices.”

Dickson believes that strategic system design and management are critical to realising the full potential of solar energy on the continent.

He said: “As Africa’s solar energy market continues to expand in 2025, organisations have an opportunity to capitalise on its long-term benefits. With the right technologies and safeguards in place, solar is not only a clean energy solution it’s a strategic asset that pays off.

“By combining surge protection, DC breakers, and monitoring tools, businesses can reduce unexpected costs, minimise downtime, and extend the life of their investment.”


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Nigeria Trains 200,000 Citizens in AI to Drive Innovation and Sustainability

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Federal Government of Nigeria has launched a major initiative to train over 200,000 Nigerians in Artificial Intelligence (AI) and other emerging technologies, aiming to build a digitally skilled workforce and position Nigeria as a continental leader in AI-driven innovation.

The announcement was made by Chief Uche Nnaji, Minister of Innovation, Science, and Technology, during the 10th Annual Symposium and Awards of the American Chemical Society (ACS), Nigeria International Chemical Sciences Chapter, held at the National Open University of Nigeria (NOUN) in Abuja.

AI’s Role in Sustainability and Economic Growth

Chief Nnaji, represented by Dr. Patricks Oghuma, Special Assistant to the Minister, emphasized the transformative power of AI, particularly when integrated with chemistry to address sustainability challenges.

“We are at the intersection of a revolution where artificial intelligence and chemistry converge to create new frontiers,” he stated. “This powerful synergy offers a vision of the future where innovation and sustainability work hand in hand”.

He also highlighted the gap between scientific research and real-world application, stressing the need for transformational research that directly solves real-world problems through AI.

Academic and Industry Collaboration

The Vice-Chancellor of NOUN, Prof. Olufemi Peters, echoed the Minister’s sentiments, noting that AI’s ability to model, predict, and optimize is vital for reducing waste, conserving energy, and enhancing chemical processes.

“At NOUN, we remain committed to providing accessible, technology-enhanced education that directly addresses national and global challenges,” Prof. Peters said.

The symposium gathered key stakeholders in science, technology, and academia, focusing on leveraging AI to drive sustainable solutions and calling for stronger collaboration between research institutions, industry, and government.

Building a Knowledge-Driven Economy

Prof. Edu Inam, Chair of the ACS Nigeria Chapter, reinforced the society’s commitment to research mentorship and student engagement, noting that ACS continues to host campus events and outreach programs aimed at nurturing young scientific minds.

The initiative is expected to accelerate Nigeria’s AI adoption, fostering economic growth, sustainability, and technological advancement across multiple sectors.


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