Our policy makers, advisers and experts need to evaluate/test the assertions of the IMF/World Bank Economic Outlook Database (2024) on the Nigeria’s possible economic stagnation, gainst the nation’s current and recent past basic macroeconomic fundamentals. Fundamentals such as the rates and rates of inflation, exchange as well as unemployment and balance of trade, among others. A case of moving from the known to the unknown.
The average figures derived over the past couple of years up to the first quarter of 2024 according to nbs stood thus; inflation over 25% (33%,March ’24), exchange rate ( over 40% depreciation), 5% composite national unemployment while those in the youth (15-24) bracket 53%.
The balance trade took a heavy knock too, to the extent of eroding over 90% of surplus in 2023/24 balance from a not too encouraging previous trends. A serious challenge for a primary product/commodities exporting country.
One may take a different stand on the weightings of these factors, there is no denying the influence/impact on economic performance and the well-being of the people. The they largely determine the pace of GDP growth. The nation, obviously has not fared well in this regard.
For the Nigerian economy to pull out of inertia the, rate of GDP growth should be above 5% consistently in the foreseeable future. This will half the poor indices so cited. A tall order, one may say, because the task needs to be leveraged on infrastructure, security and blocking leakages.
Unfortunately all three are yet to show signs of improvements, after decades challenges. Power supply which is a huge enabler of economic development is still comotose and barely responding to “shock” treatment. The conditions of highways are still challenging. Corruptions drains a substantial part of the annual national budgets. Equally dire, is the level of joblessness as opportunities for both paid and self employment are fast drying up due largely to the harsh operational environments for both existing venture and startups that normally hire labour.
And the agricultural sector that normally should be a major employer of the labour in a less developed economy like Nigeria has been seriously constrained by the activities of insurgents, terrorists, marauding herdsmen and separative movements across parts of the country. Incidentally, even with the best of intentions and the strongest political will, history tells that it takes not less than a decade to turn such challenges around for the better. Ask Egypt, Brazil, India, Indonesia and a host of similar economies.
Let the power sector be up and doing. Let 50% (at least) of the about 60,000 km of road networks be fixed to facilitate the movement of goods and services. Let the the insurgents, terrorists and the marauding herdsmen be degraded to a level of incapacity. And let nature smile on the nation with abundant rainfall to ensure bumper harvest so that food prices would come down and with it inflation as high food prices constitute a large part thereof.
Maybe the Indian model of economic diversification driven by SMEs and currently the ICT and underpinned by the Brazilian legal system that could jail a former President needs to be looked into and adapted as appropriate.
Things could however work if the Judiciary is reformed, for a start. Else the little successes (removing fuel subsidy, floating the Naira, etc) so contemplated but never actually by past Administrations but never executed, may prove too inadequate regardless of their multiplier effects. The impacts of such reforms are maximised when carried out simultaneously with the stimulation of the productive forces/agents (agriculture, power, infrastructure SMEs, human capital etc) of the economy. This is to mitigate the inherent short term painful effects of such strategies on the society.
A. G. Abubakar
agbarewa@gmail.com
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