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From Uche Usim, Abuja
Close watchers of the Nigerian economy would not be shocked to find it surviving on ventilators in the Intensive Care Unit (ICU) 62 years after independence.
This is because regardless of the huge human and material endowments found in the country, profligacy, corruption and misplaced priorities by successive administrations have robbed the country of the dividends of good governance that would have placed Nigeria in the same league with developed nations.
The giant of Africa, as Nigeria prides itself, overtook India in 2018 to become the poverty capital of the world with 87 million people in extreme poverty, compared with India’s 73 million.
While India has retaken the first position, Nigeria is battling the worst insurgency in its chequered history. Bandits and terrorists have fractured the economy by sacking various agrarian communities and disrupting the local supply chain. Tens of thousands of people have been killed and maimed.
Today, the economic indicators are scary. Inflation stands at 20.52 per cent, depleted foreign reserve, baseline lending rate at 15.5 per cent, unemployment rate at 33 per cent, sovereign debt of N42.84 trillion, debt servicing has surpassed revenue, amid battle for revenue boost.
With a nation neck deep in corruption and decayed infrastructure, the COVID-19 pandemic of 2020 worsened the narrative.
Soothingly, the fiscal and monetary authorities responded with over N9.3 trillion intervention stimulus package.
Many believe the largely mono-economy structure Nigeria operates is responsible for most of the economic woes because before the discovery of crude oil in commercial quantities in 1956 in Oloibiri, Bayelsa State, Nigeria’s economy survived and flourished on agriculture. Records indisputably show that 72 per cent of the total national output of the economy came from agriculture in 1950, as against 1.1 per cent from mining.
But with the discovery of crude oil, agriculture was strangled and buried, making Nigeria a lazy importer of goods that could easily be produced locally.
From raw and processed foods to imported petroleum products, Nigeria flung its gates open for substandard goods to flood the country and ultimately fracture local producers and the economy at large.
With the addiction to crude oil receipts, the country, as a mono-economy, found itself in a ditch as the world preaches energy transition.
With that ugly development, Nigeria has been perennially robbed of handsome foreign exchange that should have been earned from exporting whole and processed agricultural products.
Foreign reserves that should safeguard the naira and grow through organised export became the lifeline of atrocious imports, depleted slowly but steadily.
Analysts infer that the oil boom era (1973-1983) was responsible for the emergence of disorderliness in Nigeria. Despite the fact that there was a remarkable increase in the foreign exchange earnings during the oil boom era in Nigeria, profligacy rather than frugality became the rule such that Nigeria did not save robustly.
Between 1960 and 1973, oil output exploded from just over five million to over 600 million barrels. Government oil-revenues in turn accelerated from N66 million in 1970 to over N10 billion in 1980.
The increase in oil prices from 2005 to 2008 reflected an increase in revenue but a higher expenditure for the Nigerian government.
To many, crude oil in Nigeria is more of a curse than a blessing because, over the years, it has been extremely difficult to convert this natural resource wealth into broad based improvements in economic performance and human development.
Recent international investigations have alleged that both the 2015 and 2019 general elections were funded by bribe monies from crude oil merchants. In fact, heavy dependence on the export of crude oil has been shown to negatively affect Nigeria’s economic, social and political development because the poor are not impacted. Despite the highly politicised economic growth, poverty has become endemic in the country.
Evaluating Nigeria’s economy after 62 years of independence, Nigeria’s first professor of the capital market, Prof Uche Uwaleke told Saturday Sun that the macroeconomic indicators leave very little to cheer about.
“With persistent double-digit inflation, sluggish real GDP growth rate below population growth rate, high unemployment and poverty rates, high exchange rate and insecurity, the 61st independence anniversary only calls for sober reflection.
“This is more so that after over 60 years of nationhood, the productive base of the economy has yet to be fully diversified and Nigeria has remained a mono-product, import-dependent one. The country imports petroleum products in spite of its status as a major crude oil producer.
“The independence anniversary provides an opportunity to reflect on these challenges and to commit to implementing measures to address them.
“Fortunately, some of these measures have been articulated in various reports and economic blueprints already at the disposal of the government,” he explained.
Also reacting, Dr Muda Yusuf, Founder and Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), noted that over the past six decades, the Nigerian economy has transformed from a basically agrarian economy to an economy driven largely by services and oil and gas. While the agricultural sector contributed an estimated sixty per cent (60 per cent) to the country’s GDP in the 60s, its contribution has reduced to about 26 per cent presently.
He added that the over two decades of uninterrupted democracy since 1999 reflects relative political stability which is also good for the confidence of investors.
“The Nigerian economy has recorded an impressive growth rate over the past decades although with a few instances of sluggish growth. The challenge of creating an inclusive growth trajectory remains a major concern. While the economy has experienced some positive growth trend over the past six decades, especially in the oil boom era, the impact of poverty, inequality and job creation has been very minimal. This is what is characterised as growth without development,” he stated.
Interestingly, the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, in his efforts to diversify the economy and conserve foreign exchange, listed 43 items in a 2015 circular that were not valid for foreign exchange via official channels.
