When an institution such as the World Bank warns about the trajectory of an economy, all stakeholders must show interest and critical attention. According to that important bastion of global economics, Nigeria risks becoming the home of not just the majority of poor people but 25 percent of the global poor. In other words, where we worried about 98 million poor, we should be thinking of about 200 million persons struggling to live.
Their prognosis came with a caveat. Nigeria must find a way to boost employment and economic growth to prevent this sad scenario from playing out. Precisely, Nigeria must remove the many restrictions on the free operations of market forces in the economy and stop the rush to an economy controlled and run by the state.
The World Bank wants Nigeria to remove trade restrictions, stabilise economic policies and increase domestic revenue. They also advise as they always do, the removal of fuel subsidies and lending by the Central Bank to specific areas.
Nigeria’s current situation would help to understand the gravity of the prognosis of the World Bank. Projections are that the economy would expand by 2.1 percent in 2020 and 2021. It seems weak but manageable until you place it against the population growth figure of 2.6 percent for the same period. In other words, the economy will be growing behind the numbers we need to feed our growing population.
The other challenge is the enormous debt the federal government has accumulated in the last four years. It is the highest rate of debt growth in the history of not only Nigeria but other countries not at war. We are so much in debt it is now worse than the massive debt overhangs the 15 years of military rule post-Shagari left us.
The real threat though is the fact of a government revelling in the swagger of failure. There is an arrogance to the pursuit of wrong policies and programmes by the federal government. They despise counsel and contrary opinion to the paths they choose even as the results show those paths to be incorrect.
As the indices point south, the government walks with a swagger claiming fantastic results that do not reflect in the lives of citizens. They quarrel with the figures. Or generate their own statistics as manifested in two successive ministers of agriculture. While Audu Ogbeh claimed our alleged rice, revolution had shut mills in Thailand, his successor believes there is no poverty in the land that has now become the poverty capital of the world.
The real threat though is the fact of a government revelling in the swagger of failure. There is an arrogance to the pursuit of wrong policies and programmes by the federal government
At inception, the federal government by acts of omission and commission quickly led the economy into a recession that the country had not seen in three decades. The federal government then started a game with the economy: multiple exchange rates that allowed significant arbitrage and freeloading; selective bans on items or denial of access to official foreign exchange and more. What followed was the blame game. Rather than tackle the challenges of governing, it spent three years blaming the past government while doing worse things.
Take the matter of fuel subsidy. A government that swore it would not tolerate it, quickly embraced subsidy more than ever before. The figures for fuel subsidy are the worst we have ever had. And it is continuing in that direction.
Going back to the 1984 playbooks, the government recently then shut the western border. The goal of the protectionist move is to enable the protection of local production of rice while curbing criminality. Note, however, the selective application of the border closure.
A significant challenge for the Nigerian economy is the confusion and mixed signals of running command-economy style policies against a market economy in practice. There is a critical mismatch between policy and practice in the Nigerian economy. An excellent example of that confusion is the increasing incursion into the field of play by the Central Bank of Nigeria. It is now going beyond development financing and regulation to regulating itself as an enterprise player in agriculture.
Will Nigeria listen to the World Bank? If the history of our relationship with such bodies is any guide, the bet is that the federal government will ignore the bank and respond with a salvo of accusations instead. How do they dare to call out the Government on its direction? The FG knows what is best for Nigeria; we do not even believe the figures that they share about our economy! Pride goeth before a fall, the aphorism of old holds.
Chido Nwakanma
