• Monday, July 15, 2024
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Nigeria’s lost decade: A reflection on APC’s period of economic stagnation

Nigeria’s lost decade: A reflection on APC’s period of economic stagnation

In January 2016, the Economist magazine described former President Goodluck Jonathan as an ineffectual buffoon in an article titled “Crude Tactics,” which hailed the perceived gains of the then 8-month-old government of President Muhammadu Buhari. Jonathan’s sins, according to the Economist, included “letting politicians and their cronies fill their pockets with impunity,” citing Buhari’s Information Minister, Lai Mohammed, who had parroted how just 55 people stole $6.8 billion from the public purse while Jonathan looked on.

Saint Buhari would eventually complete an eight-year tenure defined by gross incompetence and bureaucratic abuses that led to the complete dismantling of the foundation that supported the economic growth overseen by the “ineffectual buffoon.”.

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I recall how in 2013, just fresh from the university and starting my first job as a cub reporter in Lagos, I was able to rent a studio apartment in the heart of Surulere, clean it up, and furnish it with a rug, a mattress, and a 22-inch LG television for no more than N150,000.00. Today, that same apartment would cost me N350,000 without the furnishing costs. That same 22-inch LG LED TV costs around N65,000, while the same brand of mattress, which I bought at N25,000 at the time, costs around N110,000 today.

The Nigerian economy was doing well by all standards and on the frontiers of the Africa rising narrative, with export earnings hitting $97.8 billion in 2013 alone. The GDP had just been rebased from about $270 billion to $510 billion, catapulting it to Africa’s largest, while the GDP continued to average 6.1 percent annual growth. With FDI peaking at around $8.8 billion in 2011, unemployment was manageable at 3.88 percent, and inflation was at 8.5 percent, a historical low. Today, we have a mass exodus of foreign firms due to elevated risks, while we are baiting foreign portfolio investors with high interest rates at the expense of real sector growth.

“By 2025, the APC would have presided over a decade of unbroken economic decline and poverty.”

In present-day Nigeria, most people would not recognise the Nigerian economy described above. As you read this, a bag of local rice that most Nigerians would hesitantly consider just 10 years ago goes for N80,000, as well as the cost of most staples, with food inflation at 40 percent—a 28-year high. Most Nigerians no longer remember the taste of milk. The economy grew by only 2.7 percent in 2023, the same speed limit it had maintained for the past five years under the APC after the initial two recessions. People barely speak of unemployment these days as the economy delivers fewer and fewer jobs.

The economic conditions that led to the emergence of the so-called middle class have been completely eroded, with recent statistics suggesting that no fewer than 40 million Nigerians bear the mark of the beast called poverty, no thanks to the extractive economic policies of the ruling All Progressives Congress, APC, even though it inherited a fairly robust economy. By 2025, the APC would have presided over a decade of unbroken economic decline and poverty.

The man at the helm now is the architect of the party, upon whose ideas the movement for a change agenda took root in 2015. But alas, although Buhari, whom he trusted to deliver the change mandate, failed woefully, he has also failed to convince anyone that his original change agenda had anything to do with a commitment to progress. Since his assumption of office, his utterances have complicated Nigeria’s economic woes, and his actions have not made things any better. One year into his government, many still wonder which direction the economy is headed. His attempts at economic reform have delivered only pain and a freewheeling reversal of the economy.

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Nigeria’s problems are many and clear as day. Some, however, are more fundamental and, once addressed, can become the foundation for a prosperous economy. Take power, for instance; there is no nation on earth in modern history that has achieved prosperity without it, yet it is not an obvious choice for a serious problem that must be addressed urgently by successive governments. In his book, The Audacity of Hope, former US President Barack Obama narrated how he visited Google HQ and saw live satellite images of the world for the first time, and recalled how he was drawn to a portion of those images that was predominantly dark while the other parts glowed intensely. Google engineers explained that that portion was mostly Africa. It has been at least 18 years since Obama’s encounter with dark Africa on satellite images, and Africa’s energy poverty has only worsened to a staggering proportion, led by Africa’s so-called giant, Nigeria. Current estimates suggest that an average American fridge consumes more electricity in a year than an average African.

The civilisation and prosperity of the modern state are anchored on electricity and rule of law, yet those we elect in Nigeria believe it is possible to build a civilised and prosperous modern state with AGO and PMS, which is why the government has prioritised other projects such as a 700-kilometre coastal highway that will cost taxpayers $11 billion, a N21 billion mansion for the Vice President, N57 billion for SUVs for lawmakers, and even some new private jets for the President while factories are shutting down for lack of electricity. These are symptoms of state capture.

No one is under the illusion that we are currently dealing with a kind of politics that has delivered an extractive political and economic institution, which a narrow few have used to perfect state capture. This trajectory is how nations collapse, and as Daron Acemoglu and James A. Robinson explained in their book “Why Nations Fail,” “nations fail when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth.”.

Why does the Nigerian state exist today? This question must have crossed the minds of many citizens over nearly a decade of APC’s rule. Is there anything they have done over the past nine years that demonstrates that the Nigerian State exists to serve the interests of the Nigerian people rather than the interests of the few political elites and their cronies? Your guess is as good as mine.

 

Jonah Nwokpoku, a finance journalist and the author of First Generation writes from Lagos.