The Nigerian economy has witnessed a favourable 2018 outlook following the recent 1.9 percent and 2.5 percent growth projections by the International Monetary Fund (IMF) and the World Bank respectively. This is as a result of the recent oil price increase in the international market, increase in Nigeria’s oil output due to improved security in the Niger Delta, and improved output in the agricultural sector promoted by the Central Bank of Nigeria (CBN) through its Anchor Borrowers’ Programme (ABP).
According to Fitch Ratings, one of the world’s leading credit rating agencies, “The recovery will be driven mainly by increased FX (foreign exchange) availability to the non-oil economy and fiscal stimulus, as higher oil revenue and various funding initiatives have raised the government’s ability to execute capital spending plans”. What this should mean is that in terms of infrastructural development, Nigerians should anticipate the awarding of several contracts and mobilisation with the expected higher levels of money in circulation. This is good news indeed. But what is really the case in Nigeria?
For the rich, and for those whose wealth flows from one oil well or the other, the economy has recovered and is having a positive outlook. Nevertheless, we may need to analyse the economic growth through the perspective of sustainable development. In the field of sustainability, what matters is how inclusive the economic growth is, in other to impact positively on the ‘real economy’ – which is the overall societal wellbeing or the economy of the daily lives of the vast majority of people in a country.
Economic Growth through the Lens of Sustainability
According to the United Nations (2014), “sustainability calls for a decent standard of living for everyone…” Unfortunately, the common trend is that the Gross Domestic Product (GDP) growth does not address societal issues such as how best to meet the medical, financial, job creation, housing and social needs of an entire population, as well as how to address issue of inequality often neglected within the contemporary economic models. Issues like how best to drive the economic growth to the benefits of the vast majority of people remain unresolved in Nigeria. But with the GDP growth, the rich are without a doubt getting richer in Nigeria.
There is frustration everywhere in the country, Nigerians celebrated their holidays and are starting the year with a biting energy (fuel and electricity) scarcity and high cost of transportation. So, in reality, have we actually recovered from the economic recession that besieged the nation since the first quarter of 2016? Not at all. Other things such as the rising unemployment rate and the income of the common man are yet to rceover. For instance, unemployment which was under 8% in late 2014, now sits stubbornly at 18.8% to worsen the poverty situation even while we claim to have exited recession technically. Our primary concerns should be in what is happening on the streets.
How can the current minimum wage continue to serve the people with the foreign exchange rate where $1 is valued to N360 in the parallel market? Remember that the current minimum wage has been existing while the inflation rate was 10% till the current 15.1% that has resulted to the current increase in the price of commodities. For example, the price of one litter of fuel which was sold at the rate of N90 in early 2015 is today sold at the official price of N145 and about N200 in the parallel market. The new minimum wage that has long been agitated for by the labour force is yet to be brought to table for negotiation, even while the common man is aware that: Nigeria’s foreign reserves have reached a remarkable $40.4bn; that Nigeria earns $70 per barrel from crude oil currently against the $45 per barrel benchmark; and that Nigeria’s crude oil production has increased to almost 2.5 million barrels per day.
Governments have failed in the provision of basic needs of Nigerians even when the people are ready to pay. Health care delivery, quality education, unemployment, housing, potable water supply, sanitation and electricity are not available to millions of Nigerians. The basic amenities are only available to the elites who live in high-end areas like Maitama, Ikoyi, Banana Island, Wuse, and more but form a very tiny fraction of the population.
As often seen, politicians may commence negotiations for the minimum wage to gain the support of the people in the build-up to the 2019 general elections, but in reality, there is no intention to implement this. Money that is expected to flow in the economy this year may be money released for political ambitions.
Ultimately, the economy of the daily lives of the vast majority of people, rather than the economy of oil dealers, need to be meaningfully improved with reliable power supply, good transportation networks for movement of goods across the country, and public-private sector partnership for increased job creation as well as grow cheap credits in 2018. Nigeria’s economic policies should be geared towards inclusive and sustainable approach to close widening inequality that characterised its economic outlook.
Fixing the economic problems that affect the vast majority of Nigerians will take much more than a rising GDP and foreign reserves. If the current economic outlook is not about what is happening on the streets or the wellbeing of the common man, then, it is never a normal growth and hardly a reason for celebration.
- Why Extractive-Based Nations Fail: Between Resource and Knowledge-Based Economies
- 2018: The Nigeria We Want
- Towards The Bleak Future of Crude Oil: What Nigeria Should Do Now
- Fiscal Sustainability: Between Nigeria’s Debt Plan and the 2018 Budget
- Mainstreaming Street Hawking in a Formal Economy: An Inclusive Approach to Development
- The Reality of Nigeria’s Recession Exit: Between GDP Growth and Sustainable Development
- Financial Inclusion: Are Nigerian Banks Getting it Right?
- FITCH Predictes Growth For Nigeria’s Economy In 2018. Peter Egwuatu, January 2, 2018
- From Angola to Zimbabwe: Guide to Key Africa Markets in 2018. Paul Wallace, Bloomberg, January 1, 2018
- Global Economic Prospects: Sub-Saharan Africa. The World Bank, January 9, 2018
- Nigeria’s economy will be better in 2018 — Fitch, economists. Bayo Akinloye and Tobi Aworinde, Punch Newspaper, December 31, 2017
- Nigerian economy to achieve moderate growth in 2018 – World Bank. Bassey Udo, Premium Times Newspaper, October 11, 2017
- Nigeria 2018 Outlook: Acta Non Verba. Proshare, December 21, 2017
- IMF: Nigerian Economy to Grow by 1.9% in 2018 But Subdued by Population Growth. Kunle Aderinokun, Chika Amanze-Nwachuku, Obinna Chima and Nume Ekeghe, Thisday Newspaper, October 11, 2017
- Petrol May Sell Above N175 As Kachikwu Backs Marketers. Azimazi Momoh Jimoh, Guardian Newspaper, January 5, 2018
- The Real Economy vs. The Wall Street Economy. Hamilton Nolan, Gawker, June 5, 2013.