Politics of the economy

By Eze Onyekpere

Governance is about the allocation and management of public resources to satisfy the public good. The electoral process throws up candidates from different political parties who contest for power and present their world views on how they intend to address the myriad of challenges facing the society. These challenges and the response of contestants for power to solving them are usually problematised and become a national dialogue before and after the elections. Successful candidates become government officials charged with the management of resources in the economy.

In the run-up to the 2027 elections, Nigeria is faced with a lot of economic challenges. Multi-dimensional poverty is reported at 63% and this manifests inter alia across the dimensions of access to food, education, clean energy, health care, water and sanitation, standard of living, etc. For a population of not less than 230 million in 2026, the number of the multi-dimensionally poor is about 145 million persons. Despite official figures in denial of the factual unemployment situation, Nigeria needs to create not less than 4 million jobs yearly to absorb the teeming youthful population. Over 90% of available jobs today are in the informal sector and self-employment, which most times, is euphemism for under-employment or very lowly paid jobs.

Furthermore, the macroeconomic indicators show an economy that is not growing sufficiently for its teeming population. The 4.43% year-on-year in the second quarter of 2026 should be compared with a population growth of about 2.3% which leaves a margin of 2% growth. With a gross domestic product per capita of USD1,224.3 and overall GDP which depreciated from being the largest in Africa and now ranks behind South Africa and Egypt, Nigeria’s productivity and economic growth have become sub-optimal. Nigeria’s public debt grew from N87.379trn in June 2023 to N166.788trn in June 2026. With the continued borrowing, the debt figure may not be less than N170trn by the end of 2026.  The Federal Government, according to the International Monetary Fund (IMF) Article 4 Consultation Report used 53% of its revenue to service debts in 2025.

Although the headline inflation is reported at 15.3 percent in August 2026by the National Bureau of Statistics, the Monetary Policy Rate, being the minimum rediscount rate and the rate at which the Central Bank of Nigeria lends to money deposit banks is 23%. This ensures that lending rates from banks to businesses will be in excess of 30%. The high lending rate ensures increased cost of borrowing, reduced business and investment growth, debt service pressure for borrowers and the risk of loan defaults, financial market volatility and slowed economic growth, etc. However, deposit and savings rates are low single digit, way below the official inflation rate and as such punishes persons who save money in the banking system. This discourages savings which is imperative for capital formation, leading to decreased investments required to grow the economy.

Economic growth, job creation, poverty reduction, improvements in the standard of living and healthy macroeconomic indicators (inflation, low credit rates, etc.) are not neutral subjects and deliverables.

They are products of appropriate policy choices, properly sequenced policy implementation and leadership motivation of societal actors. For instance, the current economic growth model is one without a focus on job creation and the decision to spend less than 20% of the 2025 capital budget votes in 2025 are all products of policy choices. Relatively reduced food inflation of 19.57% was based on the importation model that allowed tariff free grains and cereals into the country. This led to financial post harvest losses quantified at not less than N5trillion for local farmers who have found it difficult to reinvest in farms in 2026.  The food inflation scenario creates policy choices and options. Since government is willing to forfeit revenue accruing from imported grains, food inflation could have been reduced by collecting normal tariffs, deploying a part of the revenue to subsidise local farms instead of forfeiting same to grow farm jobs in other countries.

Rejuvenating the economy with jobs and improved standard of living requires political will at the highest levels of governance. It also requires the mobilisation and spending of a great quantum of resources. The resources will come from the public and private sectors, domestic and foreign investors and Nigerians in the diaspora. It is therefore imperative to generate a national discourse, get political parties and candidates to be part of the discourse, to set agenda and approve checklists for action which will be used to evaluate political party manifesto. It will also present an opportunity for the political parties and candidates to unveil what they propose to do for the economy and the people after the elections in 2027. 

Considering the poor state of the economy in Nigeria, there are several questions begging for answers. What did the political parties and candidates promise in their manifestoes in previous election cycles?  Were the promises in manifestoes implemented or implementable? Were the promises:Specific through targeting specific economic challenges and indicators for improvement;Measurable through being quantifiable and stating indicators for progress; Attainable by not being pipe dreams – through being feasible and realistic and assignable to key stakeholders who are in a position to implement them: Did the promises take into consideration the prevalent political economy context of the country? Were the promises realistic through being feasible, considering available resources or new resources that could be generated from an optimally operated economic system? Were they timely, raising the question whether the promises were achievable within the timeframe of the life of the administration or extended versions of the promised timeframe?

Nigeria’s current economic indicators clearly show that previous economic promises by political parties were not SMART and even the components that were actionable, were not implemented.  Promises were made without an iota of thinking through the cost. Thus, previous political manifestoes on the economy were simply a wish list, without a clear intent that the promises will be implemented.

This foregoing sets the context of the change as it sets a governance and political agenda for the economy. Parties and candidates should focus on the building blocks of the economy and key issues in their policies and manifestoes. The purpose is to mainstream economic issues in governance and political discourse so that it will be a national priority in political debates. The discourse needs to be robust and evidence based.