Last week, we tried to restate the fact that finance is a major challenge faced by the SME sector, not just in Nigeria but practically everywhere in the world. We however, emphasised that it is not the most critical challenge. We identified some other factors that are equally, if not more important, than finance. Indeed, we cautioned that under certain circumstances, the coalition of the other challenges often turns around to reinforce and often exceed the negative impact of lack of finance. In that regard, it was our candid opinion that putting finance high above other challenges plaguing the SME sector may be a recipe for failure.
This has been the experience of many programme efforts in many climes. It is an experience we are likely to repeat, going by some of our current policy actions. In other words, whatever policy action that is proposed or taken in an effort to empower operators in the SME sector, must be comprehensive. It must include social overhead capital and common services – the elixir for private enterprise.
The structure of the Nigerian economy makes it imperative that we continue to talk about certain development-related issues, to the extent that some people are feeling the issues are over flogged. That is how it sometimes feels when we discuss poverty, the informal sector and the developments around them. We cannot, therefore, be guilty of overemphasis on subjects that are rather getting worse by the day – poverty and insecurity.
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It is certainly not a case of saying something ad nauseam if we discuss poverty every day in Nigeria. For one, we hold the poverty crown of the world. Second, our ranking on the scale of failing states is worsening and unemployment is rising. Youth unemployment is in the region of 60 per cent and there is a risk of youths transiting from unemployment to high crime. Our economic life is threatened by the soon-to-come obsolescence of hydrocarbon, and our diversification efforts need time to materialise.
Our life as a nation depends on our ability to drag more of our people out of the class of the abjectly poor and increase the size of our middle class. We often forget that it is the middle class that makes the critical mass of investment that pushes development, but only when secure
The Nigerian economy is overwhelmingly informal, and informality is related to poverty. A lot is being done to increase transition to formality through the education of entrepreneurs and the promised simplification of business interactions in the country. However, much is yet to be seen to have been done, as multiple and illegal taxations, extortion by security men unleashed on the roads, purely for commercial purposes, have made both inter- and intra-state trade and movement almost impossible, especially in the south, where security men act as though they are an army of occupation. They have run riot forcing motorists to tip them on the way. There has been the little political will to end this scourge and the result is fear, hatred for security operatives and poverty among the people.
As current reports paint pictures of worsening poverty, such that the number of abjectly poor Nigerians is projected to hit 150 million by 2021, just next year, and the government continues to struggle with its finances, leading to policies that are not people-friendly, it would be a disservice to downgrade the discussion and insecurity and speak only to economics. Our life as a nation depends on our ability to drag more of our people out of the class of the abjectly poor and increase the size of our middle class. We often forget that it is the middle class that makes the critical mass of investment that pushes development, but only when secure.
The problem of Nigeria has been compounded by the fact that most of the evils we identified in this column, over the past several years, as poverty generators have either become worse or given birth to children, contrary to our expectation of their elimination or reduction. A war-torn country cannot be counted among the prosperous nations of the world, while the war lasts. As we write, there is no visible sign of an end to insecurity in Nigeria. Rather, if care is not taken, we are just at the beginning of what looks like a persistent and increasing attack on the rural dwellers in Nigeria. One of the key causes of rising poverty in the country is that more people join the rank of the hopeless every day, than exit the dreaded conundrum of poverty and insecurity.
Somehow, we seem to have put certain external interests ahead of ours. We allow such things as the so-called ECOWAS protocol on the free movement of people, including killer herdsmen from all over Africa to come into the country. We are guaranteed unsafe communities as these migrants extend their ambitions from merely grazing their cattle to owning a piece of the Nigerian space. Farming has come to an end and even social life, like weddings and other community-based activities, are on stop. We cannot hope to bring a single person out of poverty in 20 years, for as long as there is no freedom. Whatever it costs Nigeria to secure its people is a worthy investment in its future.
Dr Osuji is Associate Professor and Head, Dept of Economics, Pan Atlantic University
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