Nigerians living on US$10 a day still has extremely low social indicators. According to United Nations’ Children’s Fund (UNICEF), under-five infant mortality rate has rather gone up to 158 per 1,000 live births in 2011 from 138 per 1,000 live births in 2007. Sadly, Nigeria accounts for 20 per cent of child deaths in Sub Saharan Africa.
In my opinion, Nigeria should not be swayed by the propaganda around GDP which is expected to overtake South Africa. Look closely, it is the outcome of statistical reengineering. Nigeria should play on its strengths. An economy with 38.2 per cent population comprising of youth and the average working-age population estimated to be 45.2 per cent, is sitting on a treasure chest to be channelized in the right direction.
Investing and developing the manufacturing sector is the way forward to a sustainable development. According to National Bureau of Statistics (NBS), manufacturing sector accounted for a meager 3.6 per cent of the GDP in 3Q2013. More than 80 per cent of the businesses operating in the country rates power supply as the biggest constraint to businesses. Nigeria has witnessed the thwarting exit of conglomerates distraught by epileptic power supply. The ongoing power reforms are expected to spread relief. It is estimated to reduce the cost of doing business in the economy by a whopping 30.0 per cent from the current levels. The multiplier effect of an improved power sector cannot be over rated which would open up plethora of openings from expansion of almost all industries to generation of employment opportunities. The time is ripe for Nigeria to tap the opportunity of becoming the manufacturing hub as economies like China are becoming less competitive due to increasing wage bill.
Though arable land accounts for 80 per cent of the total land area yet it’s food imports has been increasing at an alarming rate of 11 per cent annually, footing a bill of more than US$11.5 billion on wheat, rice, fish, milk and sugar. Agriculture, which is the largest contributor to GDP (at 41.9 per cent in 3Q2013) and the largest employment provider, accounts for less than 5.0 per cent of federal government revenues. On the contrary, oil and gas which contributes 12.5 per cent to the GDP, accounts for 77 per cent of federal government revenues; however, as per World Bank estimates, only 1.0 per cent of the total population benefits from energy revenues. Oil is an exhaustible resource so how long can the economy keep footing the import bills? Can the country afford importing all the time? It needs to draw inspirations from Thailand and Vietnam and invest in agriculture so that Nigerians can feed themselves in times to come. The call of the hour is to deploy the oil revenue to build a non-oil dependent economy of tomorrow and renewed focus of the federal government is expected to provide the requisite push to the agricultural sector.
In addition, building of infrastructure and port reform initiatives of the government would boost wholesale and trade sector tremendously, opening the sector up to the vast West African countries. Furthermore, Central Bank of Nigeria (CBN)’s strategy of financial inclusion would be the primary driver of growth of the financial services sector.
Such transformative measures in creation of wealth and productivity gains in private activities would signal the increase of the middle class in size and boost its economic power. It would then be self-sustaining with new consumption patterns and, potentially, a strong interest in sound and stable political and economic institutions.
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By: Ruchi Gupta
