A decade is a long period of time but when put in perspective against the last century or Nigeria’s progress since 1960, it doesn’t seem that long.
Since the country returned to democracy in 1999 and today (2020), two decades have passed with stunning positive developments and lots of disappointments for the country.
Between 1999 and 2009, Nigeria underwent significant reforms. It was the decade of the Telecommunications or GSM boom, Pension Reforms that has today led to N9.5 trillion in Assets under Management (AuM), bond market reforms that lengthened the yield curve while guaranteeing regular supply by the sovereign, sub nationals and corporates, to feed the demand side of Pension Funds, Insurers and other asset managers.
It was the decade of Nigeria Inc., with the emergence of billionaires like Aliko Dangote of Dangote Group, Mike Adenuga of GlobaCom and Tony Elumelu of the UBA Group, who ventured outside Nigeria to begin to build multinational businesses in the rest of Africa and beyond.
The country’s crushing dollar debt was paid off by President Olusegun Obasanjo under the guidance of then Finance Minister Ngozi Okonjo-Iweala, banking consolidation led to the emergence of mega banks, close to 1,000 government owned enterprises were sold by the Bureau of Public Enterprises, headed by one Nasir El Rufai, the stock market boomed, with the NSE main stock index which started the year 1999 at 5,672 points quadrupling in 10 years to close 2009 at 20,827 points, and Nigerians in the diaspora trooped home with the buzz word being ‘Repats’.
Alas the next decade between 2010 and 2019 was not quite as bullish.
In a sense it was a case of two half’s with Nigeria continuing its ascent in the first half of the decade between 2010 and 2014, when the country was crowned as Africa’s largest economy, following a rebasing of the obsolete data that underpinned its GDP.
However the commodity super cycle that powered most of the growth of resource rich nations in the earlier decade soon ground to a seeming halt with the emergence of shale drillers in the United States who began to take market share from OPEC and in the process depressed oil prices.
The average Nigerian not familiar with Economics or Finance was introduced to a new word called ‘recession’, the Naira was devalued by close to 60 percent and the story of a rising Middle Class came to a screeching halt, with the ‘Repat’ buzz word now replaced with a more sobering one: ‘Canada’.
At the end of the next decade (2030), Nigeria could host a fourth of the world’s poorest people or the country could be in the league of the top 20 global economies, an expectation that had failed to materialize in the last decade.
BusinessDay held its economic outlook conference last week and various consensus emerged from speakers at the event about the themes that will shape the country between now and 2030.
The experts who spoke on the theme “Nigeria’s Prosperity Ahead 2030: Population, Data, Productivity,” said although, Africa’s largest economy might have missed the shot in the last decade, it has an opportunity of getting its economic prosperity right by rolling out the appropriate reforms that would retain and attract private capital and control rising poverty.
Global consulting firm, McKinsey estimates Nigeria’s infrastructure deficit requires $31 billion in annual investments over a 10-year period to fix. A large chunk of this would clearly come from the private sector as the sovereign balance sheet or fiscal position of the Federal Government or most states cannot finance such an outlay.
In the new decade, CEOs say ‘data’ would shape Nigeria’s prosperity.
Andrew S. Nevin, Chief economist at PWC said going into the next decade, Nigeria would need to bring more people from the informal economy to the formal economy.
He also said Africa’s largest economy would need to unlock its dead capital; the country’s underutilized asset that can’t be used productively and “the biggest source of debt capital in this country is real estate,” which he estimates to be around $900 billion.-
Nigeria has an active informal economy, large informal trade, which funnels informal taxes to non-state actors and billions in informal remittances.
According to PWC estimates, Nigeria’s informal sector in 2018 accounted for 55.8 percent of the country’s GDP. This is higher than the 49.6 percent contribution reported in the year before. The informal sector employs about 89percent of the total labour force in Nigeria.
Other factors that will shape the Nigerian economy in the next decade include the growing importance of the diaspora, presence of a small and diminishing public sector, ability to achieve the sustainable development goals or (SDGs) and the 36 state economies stepping up and playing a more important role in driving growth and development for the country.