While Nigerian policymakers were sleeping, some East African countries were creating jobs and lifting millions of their population out of poverty.
Egypt’s unemployment rate fell to 8.9 percent in the fourth quarter of 2018, from 10 percent in the previous quarter, for instance, while Morocco’s unemployment rate dropped to 9.8 percent in 2018, from 10.2 percent in 2017.
In Nigeria, unemployment rate increased from 18.8 percent in the third quarter of 2017 to 23.1 percent in the third quarter of 2018.
Nigeria is currently tagged poverty headquarters of the world with over 87 million people in extreme poverty, according to a 2018 Brookings Institution report.
This is because Nigeria’s policymakers have failed to embrace reforms that would unlock opportunities like some East African countries.
Back in 2016, Egypt and Nigeria were in the same situation when they both grappled with a severe dollar scarcity that paralysed business activities and hemorrhaged external reserves.
But Egypt was able to revive a struggling economy and improve the standard of people by agreeing to a $12 billion International Monetary Fund (IMF) loan.
The credit facilities, which are in tranches, reflated Egypt’s economy as government was awash with money to fund infrastructure projects while businesses had access to foreign currency to import raw materials and equipment to meet production.
Morocco adopted a more flexible foreign exchange system under free-market reforms recommended by the IMF, a policy that made the country’s assets attractive to foreign investors.
On the other hand, Nigeria’s refusal to adopt the right reforms has left its economy battered and its citizens despondent as they get poorer as the clock ticks.
For instance, the Petroleum Industry Bill has yet to be passed and the the Central Bank of Nigeria (CBN) refused to float the naira at the height of the currency crisis that tipped the country into its first recession in 25 years.
Perhaps more worrisome is that government, rather than selling assets and using the proceeds to fund infrastructure, continues to go on a borrowing spree.
Although Nigeria’s public-debt levels are among the lowest worldwide, at about 21 percent of gross domestic product, according to the CIA World Factbook, weak tax collection could compromise its ability to repay future obligations.
A slow recovery with little job creation has hindered poverty-reduction efforts in Nigeria, which has the world’s highest number of people living in extreme hardship.
About 92.10 percent of Nigerians live at below $5.50 a day, according to a recent World Bank data. Most people cannot afford to buy a packet of Spaghetti or proteins today.
While the recent data from the National Bureau of Statistics (NBS) show the economy expanded by 2.4 percent in the fourth quarter of 2018, from 1.80 percent in the third quarter, the number is shy from ARM Research’s 2.70 percent projection.
Experts are of the view that whoever is elected president has a herculean task of diversifying the economy by boosting the non-oil sector, curbing spiralling inflation, and formulating policies that will lift millions of people out of the shackles of poverty.
“If you are creating less activity than your population is growing, then you will have high rate of unemployment,” said Johnson Chukwu, managing director and CEO, Cowry Asset Management Ltd.
“Government will have to create an enabling environment for businesses to thrive. For instance, the cement industry is thriving because of right policies. If we have the right policies, people will invest in agro-related industries,” said Chukwu.
Chukwu said that Nigeria cannot grow the downstream oil and gas sector if it continues to subsidise. Jobs that would have been created in the paints and pharmaceuticals industries are lost as the country is not creating intermediate jobs.
Onyeka Ijeoma, an analyst with Vetiva Capital Management Ltd, is of the view that there has to be a lot of investment in the agriculture and manufacturing sectors that employ more people.
“Total budget to the agriculture sector is abysmal despite high rate of unemployment,” said Ijeoma.
BALA AUGIE
