Nigeria’s Economy Beyond 2011 Elections

on   /   in Business 9:47 am   /   Comments

By AKOMA CHINWEOKE

Michael Aderohunmu, Managing Director of Dudu Investment and Business Research Centre Limited, analyses Nigeria’s economy in the post 2011 polls era.

Michael Aderohunmu

We need to acknowledge the fact that Nigeria must be politically stable to achieve economic growth and sustainable development. Also, I would like to point that our country is in urgent need of a leader that is strong politically with the capacity to reconstruct and restructure the national economy both on internal market as well as improving the Nigerian foreign trade.

We also realize that Nigeria is recognized globally as a big economy, the third largest in Africa after South Africa and Egypt. 150 million people represent robust market for international trade with untapped opportunities; every individual in Nigeria is a potential buyer and a potential consumer. Hence, it is time for Nigeria to develop her internal market and take the national economy to the next stage.

The international community as well as Nigerians is waiting for the outcome of 2011 elections, to see new economic direction. These are the real issues.

For better understanding of the state of Nigeria economy, let us have quick facts on the state of economy:· In 1975, Nigeria was listed among the  countries to be self sustained by the year 2000.

· In 2009, Nigeria spent 200 billion US dollars on food importation.· Manufacturing sector contributed less than four per cent  in 2009
· 70 percent of Nigerians population is under 30 of age.

· 40 million young Nigerians are unemployed.· Nigeria spent 600 billion Naira on PMS and PDK importation. · The Federal Government  spent 2.07 trillion Naira on fuel subsidy alone.

· 1.95 trillion Naira was spent by Nigerians in generating electricity.· To achieve stable power Nigeria must invest nothing less than 10 billion USD annually.

· Cost of doing business in Nigeria is rated among the highest. · The pensioners, those who fought to keep Nigeria one in the past, our heroes are dying for lack of regular pension allowance.

· Nigeria has been ranked 142 out of 169 countries on the Global Human Development Index.
· Our football team, the Super Eagles, used  to be in  the first 20s of FIFA rating;  now Nigeria has dropped to 36th  position.
The analysis of Nigeria’s economic situation may be made in the context of the prevailing challenges facing the people of Nigeria on daily basis, as well as the current policy thrust of the government intended to address the various problems of the economy.

The incoming government has to put into perspective the Nigerian situation in global economic environment, the new team will encounter a twin problem of: ·    The desire to build a united, strong and self-reliant nation.
·    A great and dynamic economy.

Obviously, growth outcomes would depend on initial conditions, i.e. ability to identify capable and qualified Nigerians to formulate adequate policies and its implementation.

Politically, the new president must devote a greater part of his four-year term in office to achieving a measure of political stability as a logical foundation on which to build the edifices of our democratic dreams of a robust economy. Nigeria must be united, we need a unity of purpose politically, our next president must be willing to bring the people together for developmental purpose.

There must be a strong unity in the union to obtain the desired socio-economic result; we often make reference to nations like Malaysia, Singapore, South Korea and China. These countries continue to be relevant in the global economy.  Most recently, we were talking about Ghana forgetting that these countries certain things in common: unity, vision, political and economic discipline.

How to form a meaningful view and prospects for the development of national economy over the next few years should be top the agenda of the incoming president. Our economy needs more road networks  to develop commerce and grow internal market to transport products.

The incoming government must create an environment for the  private sector to invest more in agriculture with value added  in products like cassava, palm oil, rubber, gum Arabic, groundnuts through processing and transformation.

Economically, let the incoming president take it as a challenge to give a clear definition of Nigeria’s economic development and direction in the first few months. He must be conscious of his position and the advantage of his leadership to draw new economic and social structure for Nigeria.

I received phone calls  from friends both in Nigeria and abroad asking  why is it that the recorded GDP growth  has not stimulated development and improved  the lives of average Nigerians?. How do we make sure that our labour intensive economy employ more youths? On education, how much does government budget to spend on secondary education as against primary education?

How much of the national revenue should be apportioned to infrastructural development? What about agriculture? Can the sector be the  focal point of a sustainable development? How do we increase the industrial output? How can the service industries contribute their quotas by training and employing skillful labour..? etc. Nigerians are waiting for Mr. President in all these important and very serious matters.

Talking about development, economists usually focus on nation-state as a unit of development because “national development” is a concept which encompasses social, political as well as economic development. It includes national identity, the relationship among various types of developmental agents are extremely important.

Development involves process of economic, political and social change in a progress direction towards better social well being of the people of our beloved country. That is why in social sciences, people must be at the centre of economic development, people must be given the opportunity to participate in the nation economic development .There should be a strong link between leadership and the people.

Economic development is about improving the living condition of people, it’s about bringing people together to participate and contribute actively according to their competence, an act to achieve desired socio-economic objective in a community or in a society.

It is all about commitment, if the government of Nigeria is desirous of   achieving the Millennium Development Goals, for example, foundation must be laid; serious steps must be taken toward community economic planning.

With proper framework, we could actually trace what has been done so far on community driven development projects and have clear idea of actions needed to achieve the set goals. I was privileged to attend the UN Special Session  General Assembly on Social Development “Geneva 2000”,in the year 2000, during the formulation of the MDGs framework.

The MDGs concept is nothing other than a framework for socio-economic development, designed particularly for the economy of the underdeveloped. The MDGs are about achieving the basic human needs in a society (education, health, shelter, infrastructure, skills acquisitions, economic progress etc…)   Nothing more nothing less.

Globally, the Nigerian economic development has generated international acceptance, the global economy is waiting for Nigeria to add value to the global market by producing more of goods and services rather than recording GDP from crude oil extraction.

The international community, actors in the globalizing world economy would rather prefer to partner with Nigerians in transforming our vast agricultural products to semi finished products for industrial use in the global market. Global economy is referred to as global market; the strength of your local market determines how competitive your external trade will be.

We may ask? , where is Nigeria positioned  and how is Nigeria viewed in the global market economy? Today, Nigeria is ranked among the highest world oil producer with economy heavily dependant on importation to survive.

Nigeria is considered as a permanent buyer in the international market; whereas in the market place, there are buyers and sellers;  if a country does just buying, the country will become poor.

The global market favoured export economy, country that has products to offer to the international market like China, Malaysia, India, Brazil, Vietnam and more.

Thus, the incoming president must place priority in creating structures to support facilities, co-ordination of business activities with local response. Government can respond through resolute implementation of sound policy measures and providing an enabling environment for the private sector to thrive, because globalization process affects local firms, industries, economies of a nation in the global market.

Nigeria needs to be organized, a country is recognized by the way it organizes its economy, mode of production and pattern of consumption. We have noted the generally dismal performance of the Nigerian economy.

The task of achieving economic development and sustained qualitative growth is rather daunting, as Nigeria appears to be sucked into the vortex of interlocking vicious circles of import orientation economy, which have kept internal market in a low growth equilibrium trap with balance of trade deficits. With industries functioning below capacity and declining of the manufacturing sector’s contribution to GDP, we may ask the incoming team, is economic development in Nigeria an impossible task? or to put it more specifically.

What are the prospects for achieving much higher growth of industrial and manufacturing sector?, which would be needed to reverse the poverty trend and to cope with rising population?; what are the policies needed to face the current global economic challenges in Nigeria?
We are very certain that a strong economy is critical to political stability.

Perhaps the next president will be willing to introduce innovative policies that will discontinue with macroeconomic instability; economic distortions and leakages; high cost of doing business; adversarial inter-governmental relations; depending solely on  oil prices for internal development; capital flight; lack of focus in government expenditure profile; poor state of infrastructure and facilities; inadequate coordination of monetary and fiscal policies for MSME development ; socio-political tensions; poor investment climate; pervasive corruption, etc.

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