I don’t think the state of the economy is something to cheer about; I think by all parameters, if you compare Nigeria to its peers in terms of where they were before and where they are now, I can only say that we have performed sub-optimally. Docile followership, ineffective and compromised leadership and structural flaws in the economy have produced sub-optimal results.
Look at your life expectancy; it is only 53 years, when, in fact, Singapore and Malaysia are 85 and 76 years. We were about the same maybe 60 years ago. Look at labour productivity; we are -0.04 per cent, while many of these countries are doing three to five per cent labour productivity growth. Look at power output; while our population has grown by three per cent, our power output has declined by over five per cent per annum.
All we need to do is to accept that we are not as rich as we think we are, and we have to give up some things; we have to differentiate between what we need and what we want; and we have to give up some things and focus on the others. If you prioritise, you are likely to achieve better results. •Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane
One of the tools that we use to measure the growth of an economy is the Gross Domestic Product, and it is very clear that as far as the GDP is concerned, Nigeria is not doing very well. We have to be very open and honest to ourselves, Nigeria has not collapsed as a country; we thank God for that. But as far as growing the economy is concerned, I think Nigeria is largely struggling.
Some of the reasons responsible for the struggle are clearly known. One of them is insecurity; the insecurity in the country assumed an alarming proportion and because of the high degree of insecurity, a huge chunk of money that would have been used to boost other areas of the economy is being diverted to take care of the insecurity. Another thing that has happened as a result of the insecurity is that the level of agricultural production we would have been getting from our human capital has dwindled.
When you look at the killings in some part of Nigeria, especially around the Middle Belt, North-East and other hotspots, communities where we have farmers and fishermen were mostly affected. Nigeria has lost so much in the area of food security; so, to that extent, you can see clearly that the insecurity has caused so much damage to our economic security due to lack of proper food security.
When you look at what is happening if you talk about the debt profile of the country, somehow you can also tie it to insecurity, but we also have issues with our current economic planners. It is one thing to be a leader, it is another thing to be an economic manager. I wouldn’t want to say our leaders are not organised, but I will be bold to say that as far as economic planning is concerned, I am still struggling to see the relationship between the quality of the current leaders that we have and the direction of the economy.
As far as this political dispensation is concerned, I can practically say that this dispensation has not helped in moving the Nigerian oil and gas industry forward. Before the coming of this dispensation, we had the 223-page Petroleum Industry Bill. This regime and the National Assembly said for easy passage of the bill, they were going to break it down into four bills. But as we speak today, the National Assembly has only passed the Petroleum Industry Governance Bill.
Many oil companies are not exploring and drilling. And if they are not embarking on drilling campaigns, how can we build our reserves. Also, the reserves that Nigeria has been claiming to have had dwindled. •An oil and gas expert, Mr Bala Zakka
The last 58 years have witnessed upsides and downsides in the Nigerian economy. Some transformation has taken place in the economy, from a largely agrarian economy to a more diversified one. We have seen remarkable developments in the service sector, especially in the Information and Communications Technology, entertainment, retail trade, construction, e-commerce and financial services.
However, the economy is still largely driven by resources from the oil and gas sector. Today, the biggest shortcoming of the economy is its heavy dependence on oil. It makes the economy very vulnerable to global shocks, and weak in inclusiveness.
The economy still suffers profound productivity issues because of the huge infrastructure deficit. The growth of population and economic activities has considerably outpaced the growth of infrastructure provision. This is a major failure of several governments, especially in the last two decades. That is why the Nigerian private sector has serious competitiveness problems resulting from high operating costs.
The institutions of state are yet to appreciate the strategic role of the private sector in wealth creation for the country. Many policies and institutions are not investment-friendly. The economy had since independence also grappled with macroeconomic management problems. A classic example is the fact that the naira exchange rate has depreciated from 60 kobo to the dollar in 1980 to N360 to the dollar today. The quality of macroeconomic management since independence is also a major driver of the escalating poverty in the country.
The lack of political will to reform the oil and gas sector remains a major shortcoming of governance since independence till this day. The real sector, especially agricultural and manufacturing, is still grappling with the burdensome challenge of weak infrastructure, creating profound productivity issues.
The financial services sector has also shown significant transformation since independence, especially with regards to leveraging technology to enhance service delivery. The sophistication of the industry can compare with its counterparts even in the advanced economies. Regrettably, the sector has not adequately complemented the economic diversification aspiration of the country.
The power situation remains a major burden on business. It is one area in which the trend since independence has been that of progressive decline. Power supply has consistently lagged behind the pace of the economic activities and population growth. This development impacted negatively on investment over the past few decades with increased expenditure on diesel and petrol by enterprises. This also comes with the consequences of declining productivity and competitiveness. •Director General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf
The economy has not done quite well; in terms of how people have fared in the economy since independence, one would say that the situation seems to have worsened. If you look at the proportion of Nigerians in poverty before independence and the proportion of Nigerians in poverty now, you will actually recognise that the economy has not really supported the growth in population. You cannot say that the wellbeing of citizens is better now than it was at the point of independence in all ramifications of our national life.
It looks like the country has been retrogressing if you take the average of Nigerians’ wellbeing. Nigerians have not really enjoyed an improved standard of living as one would expect for a country that has been independent for 58 years. If you look at countries that became independent five years after we became independent. Look at where Malaysia is in terms of economic standard. In terms of per capital GDP, where Nigeria was in 1960 and where we are today, and compare to other countries like China that were far below us in terms of per capital GDP – China is the second largest economy in the world today, one can say comfortably that our growth trajectory as a nation in economic terms has been quite woeful.
There is no sector that has done quite well, maybe apart from the telecommunications and banking sectors. The manufacturing sector has seen a major decline. The agricultural sector has not seen a material improvement in terms of value addition. Even the petroleum industry has not seen any improvement because few years after we got independence, we built refineries. Today, we are importing virtually all the petroleum products we consume. In terms of transport facilities, we had intermodal transport facilities when we became a nation; we had functional railway system; today, we just have only one or two corridors that are operating. Many of the highways have collapsed. We have not been able to build a single deep seaport; we are still limited to Apapa and Tin Can Island ports. •Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu
The economy is not at its best. We still have very high rate of unemployment; inflation is still in double digit; and despite all the talks to diversify the economy, we are still relying on oil. After 58 years of independence, we have not implemented what we have been discussing over 40 years ago. So, it is not yet Uhuru. The basic needs of life are still out of reach of millions of Nigerians, almost 100 million; they lack good water, power, shelter and even food.
For me, even the things that we had in 1960, we have lost most of them. We need to be honest and say the economy is not doing well, and then see how we can make it work for the next generation.
I think we need to change our development model or philosophy and become more of a developmental state, where development will be taken as a priority. I think for now, we are not doing that. In the last few months, politics has taken over the economy. There is nothing to celebrate about. For me, I think it is time for sober reflection and ask ourselves what did we do wrong and how can we make progress so that the next generation does not abuse us even in our graves? •Director General, West African Institute for Financial and Economic Management, Prof Akpan Ekpo
I think that the economy has been struggling; we have not seen any major policy to jump-start the economy. Beyond our reliance on oil, we have not seen any major policy that gives hope that will help diversify or stabilise our economy, when you look at it vis-à-vis the capital market, because you can’t dissociate the performance of the economy from that of the capital market.
This has limited the growth of Nigerian capital market. Before people can invest, especially from the domestic space, they have to be empowered; they have to save, and it is from their savings that they can invest. But because of the low level of savings due to the structural issues that the economy is experiencing, it has been very difficult for local investors to set something aside to invest.
It is also noteworthy to mention that the regulators need to also step up to further provide confidence in the capital market. Beyond foreign investors boosting our capital market, local participation needs to be encouraged because it is still very low. • Managing Director, Afrinvest Securities Limited, Mr Ayodeji Ebo
- Compiled by: ’Femi Asu
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