By Udeme Clement

Akpan Ekpo, is a professor of Economics, and the  current Director General, West African Institute for Financial and Economic Management (WAIFEM). He speaks  with Sunday Vanguard on the  economic perspective of Nigeria at 56.  

The economy is in recession.As an economic expert, can you give us your perspective on the stages of growth over the last five decades?
The economy has registered positive growth averaging five percent but that has not resulted in development. Within this period Nigeria experienced ups and downs in a typical business cycle. At 56, unemployment/underemployment is about 30 percent, far from the 5 percent benchmark of unemployment.    For youths, it is almost 50percent. Poverty incidence is 70 percent. In the last 26 years, the economy has witnessed episodes of hardship towards its citizens. The social indices have not performed well in the last 30years.    Public school system at al levels has collapsed, power supply is still epileptic and millions of Nigerians lack basic amenities of life.    In the last 4years, the rate of growth in economy is less than population growth, hence, recession or no recession, the entire economy is in disarray.

How do you analyse the stages of growth at different regimes within this period under review?
The performance after independence from 1960 to 1966 when Nigeria imbibed planning, one could see a pattern of growth and attempt to implement what was in the development plan.    Six years after independent, macro economic fundamentals moved in the right direction. The early leaders who struggled for independence (political independence) showed commitments to build a country of the future. There was competition among the regions.    Each region depended on its resources. For example, Western region built University of Ife with its resources, mainly cocoa as the mainstay. Eastern region built University of Nigeria (Nsukka) based on revenue from palm produce. The North built Amadu Bello University, based on revenue from cotton and groundnut. There was healthy regional competition.

Since the economy had such relative stability, where did we go wrong?
Intervention of the Military in 1966 changed the equation. Military found the country that they did not fight for and systemically destroyed it. After the civil war in 1970, Yakubu Gowan, who in my judgment is one of, if not the best Military ruler used the oil proceeds to build hard and soft infrastructure, especially in Lagos that was the capital of Nigeria then. Subsequent Military regimes were interested in looting the treasury than building the country. There were brief episodes of Military intervention that showed the tendency of benevolent dictatorship, such as the regimes of Murtala Mohammed and that of Buhari Idiagbon.

From 1999, with the advent of civilian experiment, Nigerians were hopeful that betters days were to come. The regime of former President Olusegun Obasanjo continued the attempt to build market capitalism with an assemblage of competent technocrats, yet the outcome was not satisfactory. The primitive capitalist accumulation continued unabated.

But during the period of 1999 to 2007 the economy registered positive growth, moderate rate of inflation, unemployment rate that was about 12 percent and lending rate remained very high. So, the real sector was almost in comatose, but there was increase in foreign reserve due to rising global oil prices.      Inspite of billions spent in the power sector, power supply remains epileptic, the economy remains generator driven, through there were some marginal improvement in macro-economic management of the economy. The living standard of Nigerians did not improve despite the formulation and implementation of robust macroeconomic policies and strategies such as the NEEDs documents, Fiscal responsibility Act and the Procurement Act.

Prof Akpan Ekpo

How did the economy performed under late President Musa Yar’Adua?
The economy of Yar’Adua saw attempt to re-introduce planning into the system as reflected by the formulation of long term economic blue print, the Vision 20: 2020, derived from his 7-Points agenda. Yar’Adua’s replacement by President Goodluck Jonathan, who accepted ownership of Vision 2020, but formulated his own transformation agenda, saw the economy once again in a decline despite positive growth trajectory. The rate of unemployment rose to 24percent, becoming a national crisis. The looting of treasury went unabated, infrastructure development was neglected and macroeconomic fundamentals began to move in the wrong direction.

So, despite 16yeas of civilian rule (democratic experiment), building of market capitalism did not result in positive outcome. The huge oil revenue was not properly managed. The dependence of the private sector was more cosmetic, as the private sector though an engine of growth did not exhibit such tendency in practice. They depended heavily on government as they were mainly traders who bought and sold, assembled, packaged and bottled goods that came from abroad.    At the end of this period, the country became more of consuming than producing economy.    There was not attempt to restructure or transform the economy from that of primary state to secondary level. This was evidence by the fact that throughout that period, manufacturing contributed less than 7percent to the Gross Domestic Product (GDP).

What was the economic benefit of the rebasing carried out during Jonathan’s regime, which made Nigeria the largest economy in Africa?
The rebasing exercise that made Nigeria the highest economy in Africa produced more excitement than substance. The result of the rebasing did not show that the economy has been transformed from primary production to secondary level. The indication that the services sector dominated the economy during rebasing was misleading, because the services in Nigeria is not only rudimentary but of low quality.

How do you describe the coming of President Muhammadu Buhari?
The coming of Buhari’s regime with change mantra gave Nigerians hope. However, almost two years of his regime, the promised change remains cosmetic. Nigerians are still waiting for a positive change that will improve their standard of living.

How did we get into economic recession?
The delay in implementing the budget and inconsistence of monetary and exchange rate policies coupled with negative growth in the first two quarters of 2016 suggest that the “new” government has enormous challenges. So, the issue is not whether the economy is in recession or not. Recession comes and goes in capitalist market system, but the matter is how you manage recession to reduce adverse impact on the citizens. So, as far as the misery indices continue to rise, government must deal with the following issues: What is happening to unemployment, youth unemployment, education, health, hard infrastructure such as power, roads and rail, gender inequality, income inequality and poverty among many others. These issues cannot be addressed by the private sector, but only government can address them.

Can you give us the statistical analysis of growth indices in the last two quarters of 2016?
Currently, the growth is negative between -3.36 and -2.06. Specific sectors like manufacturing grew negatively by -7.0 and -3.36 in the first and second quarters of 2016. Finance and insurance grew negatively by -11.28 in the first quarter and -10.82 in the second quarter, oil industry -2.96 in the first quarter and -17.19 in the second quarter. Construction record had negative growth of -5.37 in the first quarter and -6.28 in the second quarter. The real estate witnessed -4.68 in the first quarter and -5.27 in the second quarter. These important sectors are not growing. The real sector is dead. People cannot borrow due to high cost of lending rate, which is about 25percent in the average. Naira has lost its value. The idea that there will be foreign investments is not too correct because investors consider factors like foreign exchange market, security, infrastructure development and the high cost of doing business.

So, holistically, how do you describe Nigeria’s economy at 56?
56 years of independent, one can generally say that it is 56years of misrule. Consequently, Nigerians must take governance seriously if the future must be better. At this 56years of independent, Nigeria is suffering from government and market failures.

What is the way forward?
What is needed is a systemic change, which at a minimum must formulate and implement a developmental state economic blue print. When we abandoned planning, that was when the problem started. Any country that wants to fast track its development and moves millions out of poverty must embrace comprehensive economic blue print. Nigeria would not be the first to do this. Countries like China, India, Singapore, Malaysia, Japan and Indonesia have embarked on this path. The bottom line is that we must industrialise to have a productive economy. We have a large market to consume what we produce within Nigeria and export the surplus abroad.

Can sale of national assets get Nigeria out of recession crisis?

When economy is in recession, you don’t sell national assets, even if you have to, you will not get good returns. Selling of national assets is a panic measure to solving the problem. If you sell national asset now, what will you sell in another recession? What we need is industrialisation.