Five Tough Responsibilities for Wale Edun, the Coordinating Minister of the Economy

On Monday, the 21st of August, President Bola Tinubu swore in 45 new Ministers, four months after his inauguration. One Minister who was the cynosure of eyes considering the dire state of the economy was the Minister of Finance, Mr. Wale Edun, who also doubles as the Coordinating Minister of the Economy.  

Wale Edun is a University of London-trained economist and investment banker with extensive experience in the Nigerian banking industry. He served as the Commissioner of Finance in Lagos State in the Bola Tinubu-led administration (1999-2007), before his appointment in the Lagos State Government, he served as the Head of Treasury and Deputy Head of Corporate Finance at Chase Merchant Bank (1980-1986). In September 1986, he became a part of the World Bank via the prestigious Young Professionals program, contributing to economic and financial initiatives for numerous nations in Latin America and the Caribbean. 

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In 1989, he co-founded and served as Executive Director at Investment Banking & Trust Company Limited (now Stanbic IBTC). Then in 1994, he established Denham Management Limited (Chapel Hill Denham) and became Chairman in 2008. With a wide array of exploits in the financial, economic and investment landscape, Wale Edun has feathers outside his professional hat. 

He serves as an International Trustee for the Duke of Edinburgh’s International Award Foundation and chairs the Lagos Boxing Hall of Fame. Through these roles, he strongly backs youth development projects. He engages in charitable work with entities like Livewell Initiative, a healthcare-focused NGO, and Sisters Unite for Children, dedicated to assisting underprivileged children. Apart 

In under 300 words, I have given a brief profile of Wale Edun, and this is a pointer to the extensive nature of his educational and professional qualifications. However, the job ahead of him is a tough one, as he rightly admitted. While speaking to journalists, he noted, “We met a bad economy, but Mr. President promises to make it better.”  

The inflation rate stands at a peak of 24.08% (June 2023), coupled with capital importation at a modest $5.3 billion (2022 figures), the Naira trading exceptionally at N760/$ in the official trading window, and Nigeria’s debt reaching an all-time high. In light of these factors, the tasks ahead of Wale Edun keep mounting and the economy urgently needs a surge of innovation to propel Nigeria toward economic development. Here are five priority areas for Wale Edun, the Co-ordinating Minister for Economy to work on. 

1. Fixing the High Inflation Rate 

Nigeria’s last reported inflation rate was put at 24.08% (July 2023), the highest level since September 2005, with food inflation at about 26.98%. The implications of the high inflation rate on the Nigerian economy have been enormous, especially the erosion of the value of money, with the purchasing power of Nigerians practically reduced daily. 

In the past, inflation had a positive relationship with economic growth in Nigeria, however, over the past administration, the reverse was the case, indicative of the cost-push inflation affecting Nigerians. With the CBN exhausting every monetary policy option available in efforts to stem the high inflation, Nigeria has pushed itself to lending rates that are simply injurious to businesses within the country. And despite this high inflation rate, experts claim “the interest rates need to go higher” before Nigeria can gain investor confidence once again. 

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With extensive experience in the Nigerian economic scene coupled with experience in the World Bank, Mr. Edun’s work is cut out for him concerning the inflation rate. Over time, there has been a disjoint between the country’s fiscal and monetary policy, with the inflation rate significantly surpassing the CBN’s lending rate. 

2. Restoring Investor Confidence in Nigeria

In 2022, Nigeria’s capital importation fell to $5.3 billion, down by 20.47% from the $6.7 billion recorded in 2021. Between 2015 to 2022, Nigeria recorded just about $22.1 billion in capital importation, in contrast to the $71.4 billion recorded between 2007 and 2014. An indication of the drop in investor confidence Nigeria was plagued with during the last administration. 

From a macroeconomic perspective, Nigeria is one of the viable investment destinations in Africa, however, investors don’t share this sentiment. During the Expo 2020 held in Dubai, UAE in 2021, ex-President Buhari in trying to make a case for Nigeria noted, “Nigeria’s pavilion at the Expo 2020 clearly shows why we remain the most viable and attractive investment destination in Africa. Our location, our natural resources, our population, and our regulations are there for all to see.” 

Nigeria will always be a prime investment destination in Africa, however, the country needs to take a multifaceted approach to address some of the challenges investors have pointed out in the Nigerian scene. From policy reform measures to political entrepreneurship, there’s an expectation that Wale Edun’s strong background in investment banking equips him with the needed skills to revitalize Nigeria’s attractiveness as an appealing investment destination.

3. Improving Nigeria’s Trade Receipts

During the Naira Conference 2023, one of the recurring themes hammered on by speakers was fixing the supply side issue. On the back of increasing oil prices, Nigeria recorded a trade surplus in 2022, however, all is not well yet. As it stands, crude oil accounts for about 80% of Nigeria’s export revenue despite the sector contributing less than 6% to Nigeria’s GDP. Thus, Nigeria’s macroeconomic stability is hinged too much on the oil sector, making a case for Nigeria to diversify its export revenue sources. 

Essentially, the primary responsibility for all trade-related activities rests with Dr Doris Anite, the Minister of Trade, Industry, and Investment. However, as the Coordinating Minister of the Economy, Mr. Wale Edun is tasked with the responsibility of fostering collaboration with his co-minister to promote growth in Nigeria’s trade sector. He should work on building cooperative agreements with the Agriculture, Gas, and Solid Minerals Ministers to formulate policies that can speed up these sectors’ transformation into significant contributors to export revenue. 

4. Fixing the High Unemployment Rate 

Some days ago, the National Bureau of Statistics came up with a new unemployment figure, based on a new methodology recommended by the ILO. According to the NBS, Nigeria has an unemployment rate of 4.1%, a significant uptick from the 33% last recorded in 2020. However, this data has generated so much controversy, and even Wale Edun alluded to this fact. 

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In speaking with a journalist, he noted, “Per capita has fallen steadily, inflation is at 24%, unemployment is high, you know they are rebasing how it’s calculated. Either way, it is high and youth unemployment is even unacceptably high. These are the key metrics that we have met,” 

5. Improving Nigeria’s Exchange Rate Management 

Amidst the challenging task of stabilizing Nigeria’s foreign exchange regime, Mr. Wale Edun shoulders a significant responsibility. The country’s prior attempts at establishing a consistent exchange rate policy created opportunities for arbitrage and a weakened Forex system that lacked attractiveness. Upon resumption of this administration, one of the initial actions taken was the unification of the exchange rate. However, these efforts have inadvertently pushed the Naira into politically sensitive territory.

The careful navigation of these challenges is imperative to ensure a more stable and resilient foreign exchange environment for Nigeria’s economic growth and development.