2023: Nigeria’s next president faces biggest test since 1999

An economics degree is no criteria for a good president, but the person to lead Nigeria by 2023 has the delicate job of reviving an economy in tatters.

At no point since the turn of democratic rule in 1999 has the economy been more crucial to Nigerians. The next President will have his job cut out in leading the economy out of the woods.

Nigerians have grown poorer every year since 2015, the longest stretch since Africa’s largest oil producer gained independence from Britain in 1960.

The economy has experienced two recessions in five years and has not expanded in per capita terms since 2015.

The World Bank in its latest economic report says the country will have lost a decade of economic growth by the end of 2021, a painful squeeze for Nigerians who are contending with accelerating inflation amid deepening poverty.

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The first election that brought President Muhammadu Buhari into power was partly won on the back of diversifying an economy that gorged itself solely on petrodollars and was falling short of creating the required number of jobs for a teeming population.

Six years into Buhari’s administration the economy remains reliant on crude oil revenues, with the two recessions under the 76-year-old’s watch triggered by low oil prices.

The jobless rate has quickened to the second highest globally at 33.1 percent and Nigeria is now home to the world’s largest population of poor people – 87 million, according to the Brookings Institution.

As bad as things look for the economy, it could get even worse.

The country’s population is projected to double by 2050 and oil may have run its course in driving the economy with the world rapidly moving away from fossil fuels.

Nigeria’s next president would need to find new growth drivers to power the economy and create opportunities for the rapidly growing population.

There have been glimpses of what could go wrong if Nigeria does not get its economy firing and keep its large youthful population employed with protests against police brutality tainted by social discontent by several Nigerians.

A BusinessDay poll on 40 business leaders, mostly taken from the commercial capital of Lagos, shows that knowledge of the economy would be key for the next president to steer Nigeria from an imminent socio-economic crisis.

“Nigeria needs a president that can quickly help it transition to an investment-led economy, where economic growth averages at least 7 percent per annum and 10 million jobs are created annually,” one of the business leaders states.

The poor shape of the economy and what lies ahead meant it was no surprise when former military president, Ibrahim Badamasi Babangida, said Nigeria’s next president should have a very good understanding of the economy.

Nigeria needs “a person who is very versed in economics and is also a good politician, who should be able to talk to Nigerians and so on,” Babangida said during a recent interview.

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Babangida also pointed at the need to have a president who adopts market policies to drive the economy.

“There is too much control in the way the economy is being run. We should open up the economy and make use of our God-given resources,” Babangida said.

In 2020, the Nigerian economy shrank by 1.8 percent, its deepest decline since 1983.

The COVID-19 crisis drove the economic slowdown, coupled by capital outflows, intensified risk aversion, low oil prices, and shrinking foreign remittances.

The Nigerian economy is expected to grow by 1.8 percent in 2021, though there is high uncertainty about the outlook.

The recovery would be driven by a rise in oil exports and in domestic demand. However, Nigeria’s recovery is expected to underperform those of other oil producers, and an unexpected shock to oil prices could threaten the modest growth projected.

Moreover, high inflation and high unemployment exacerbate macroeconomic risks, and activity in the tertiary sector will not fully normalise unless COVID-19 is contained.

By the end of 2021, Nigeria’s GDP is likely to approach its 2010 level, thus reversing a full decade of economic growth.

GDP per capita is projected to continue declining because the economy is forecast to grow more slowly than the population.

“The next president does have a big job on his hands in reviving the economy and he or she must hit the ground running,” said Wale Okunrinboye, an investment banker.

“There must be a clear economic strategy and we don’t have to re-invent the wheel as there are examples from China to Singapore on what we can do to grow the economy and reduce poverty,” Okunrinboye said.