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The misery in our market mystery

THE Economic Council under Vice-President Yemi Osinbajo may have been remarkable in the Ruga project (they say it is Livestock whatever now) but the government has yet to put together an economic team that can impactfully on the lives of all Nigerians outside the cow demography.

market
Economy

Anytime such a team comes up, they should try and consult Dr Ola Brown whose “The mystery of market size in Nigeria” is clearly beyond the pay grade of mediocrity that is the character of leadership in Nigeria.

Her lucid journey through our market has brought home some cold realities that should force us to the thinking corner if we have not totality become Galatians.

Alhaji Aliko Dangote is the biggest thing in private investor in our economy today but he is a poor investor as his company which ranks the best on Nigerian Stock Exchange sells salt/sugar/pasta. The mass media have been celebrating his desire to set up a refinery in the next two years. His petrol company, however, will not be dealing with artificially intelligent petrol or 3D printed petrol. It would pump out the ordinary one that J.D and Rockfeller specialized in 100 years ago!

The biggest companies on the American stock exchange, on the other hand, are companies like Google, Facebook and Amazon. They sell Internet search services, cloud storage services, e-commerce services. They continue to launch new ventures that specialize in advanced robotics and artificial intelligence.

“Tech companies that have scaled successfully in Nigeria to $1bn include MTN (a cell phone company) and Interswitch (a payments provider). Notable non-tech companies that have achieved this scale include companies like Dufil foods (Instant noodles) and Chivita (a cheap juice drink aimed at poorer Nigerians”.

Also read: Breaking: Cyril Ramaphosa finally apologises to Nigeria over xenophobic attacks

Poverty’s call obey 

With our richest being a poor investor, the rest of our demographics come out clearly pathetic. The work quoted the NDIC that claimed that 98 per cent of Nigerians has less than N500,000 ($1,250) in their accounts. The is the fact that the poorest Nigerians are unbanked.

With this reality, most of the citizens are like animals whose most notable activities are looking for food and reproducing. Any product that is being sold to Nigerians is competing with food. “On average nearly 60 per cent of Nigerians’ income is spent on food. But this average is spread across all segments including the rich. So we can assume that most Nigerians are spending 80-90 per cent of their income on food.” But in the North East of the country 121 per cent is spent on food. Is it any news the zone has become the secretariat of insurgency and banditry?

The grim picture all over the country is that we are running an archaic economy. According to Interswtich figures, 53 per cent of all card transactions take place in Lagos with other states running close to it having paltry shares: Rivers (seven per cent), Ogun (seven per cent), FCT (seven per cent) and Delta (four per cent). The implication of this is that there are only a few cities where serious transactions are taking place outside the government in Nigeria.

Little wonder Nigeria is one of only eight ‘World Bank red zones’. These are the only countries on the planet where GDP per capita (an indicator of an individual share of wealth) has fallen steadily over the past 20 years. We sometimes delude ourselves that we are a wealthy country whereas our economy is $400bn compared to California’s $3trn!

India versus Nigeria

The nations of Nigeria and India both have exceptionally diverse populations, endured the deliberate divide-and-rule strategies executed by British colonizers who sought thereby to exacerbate existing differences, and experienced peaceful transfers from colonial rule to independence. Despite these key similarities in certain aspects of their colonial and decolonization experiences, India and Nigeria have had very different levels of success in their efforts to create and maintain politically stable nation-states.

Today, India is distinguished from other post-colonial independent nations for its political stability, demonstrated by its “set of stable political and legal institutions that has now remained more or less intact for over five decades” and a parliamentary democracy that has “remained more or less unchanged since India’s independence and continues to function in an orderly fashion”.

Nigeria, on the other hand, is an exemplar of third world political instability, characterized as “highly non-democratic and prone to using force” and plagued by recurrent coups and violent ethnoreligious conflicts.

India has a population of 1.3bn people and they update their figures every night, but Nigeria according to Wold Bank is about 200million people as it cannot even count its people correctly because of its unitary arrangement based on cheating.

India, on the other hand, has a distribution of legal authority across national, state and local governments. The Constitution of India establishes a federal structure to the India   government, declaring it a “Union of States.”

There is a vertical link between the structures of governance in the countries which explains why India with almost seven times of Nigerian population handed over the champions cup of poverty to Lugard’s experiment in 2018.

India has been able to load its rich echelon while Nigeria is daily increasing its poor. There are about 60,000 millionaires ($) in the city of Mumbai alone while there only 12,300 in the whole of Nigeria. This shows the amount of wealth in both systems and the spending power in the high-end segment of both societies.

For instance, a total of 15.2 million passengers passed through Nigerian airports in 2018, another pointer to the size of the Nigerian middle class. But it is little when compared to the  341 million passengers, that passed through Indian airports during the same period.

India is also better placed than Nigeria in Internet cost that has the problem of data costs. The cost of 1GB in Nigeria is roughly $2.78, compared to $0.26/GB India. So the internet is over five times as expensive in Nigeria compared to India which makes a huge difference for poorer users.

It is estimated that there are about 110m Indians with income above $9000 per year. This demographic makes up the bulk of the market for Indian tech products and is responsible for the large exits and the rapidly scaling products. However, according to Mckinsey & Co, only two million people in Nigeria have purchasing power and annual incomes over $10,000. This means the size of Nigeria upper crust is two million compared to India’s 110 million!!!

Also read: Police ordered to produce detained journalist, Jalingo in court

Thanks to Dr Brown (Orekunrin) for bringing out these cold realities that aided this piece which our Rugarians may not have an idea of as the country continues to grow in leaps and bounds in poverty.

Apart from going nowhere without addressing our structure of governance, we equally need our brightest men and women in leadership positions and not rewards for mediocrity which is the hallmark of our leadership recruitment at the moment. Without addressing these, we are locked in the misery of our market size mystery.

Free Jalingo now!

I got a message from Agba Jalingo, the publisher of CrossRiverWatch on August 17, to the effect that the Cross River Police command had invited him for a chat over a story he published on the state’s microfinance bank.

The letter dated August 14, 2019, delivered two days later by Eni Benjamin 9:30 a.m. and signed by Mrs Tami Evelyn Peterside, a Deputy Commissioner of Police, State Criminal Investigation reads: “This office is investigating a case of conspiracy to cause a breach of peace, reported by Cross River Microfinance Bank, Calabar, in which your name is mentioned.”

My response to his information to me that he would be honouring the invitation was “Go with your honour.”

Jalingo did report to the police and has since been detained at the Anti-Kidnapping and Terrorism Unit and reportedly accused of “terrorism and plotting to overthrow the Cross River State Government.”

No formal charges have been preferred against him as I wrote this while his health is reportedly failing in detention despite his high spirit. Those of us who were at the forefront of the anti-military campaign did not anticipate that civilian despots would be their replacements.

When an invitation over a story complained against by a bank suddenly becomes “terrorism,” something is fundamentally wrong. Jalingo should be freed immediately or be charged to court if he has committed any offence.

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