The best place for Nigeria in the new world order
It did not start in 2016. The nation-first movement. 2016 marked the peak point in the upended world order, but the movement had been evolving with an equal measure of stealth and drama. In the preceding two years India, Indonesia, and Nigeria, in that order, threw up various shades of “change” presidents. They all countered the establishment, asserted more benefits for everyday citizens, and signalled their intentions to shift the focus of their markets from foreign imports to domestic exports. Add to that, more extreme nationalist sentiments and 2016 merely heralded a new status quo: an ideology that will, at the very least, challenge the unmet promises of globalization. Last month alone, the United States and the UK embraced their roles as leaders in the nation-first movement: Trump proposed a budget to Congress that would shrink the State Department, EPA, and USAID in 2018. Theresa May embarked on a path for the UK to leave the EU by Spring 2019. In tandem, China is repositioning to fill the void and become the new champion in a modified globalization.
The concern for Nigeria? Finding how to capitalize on the modified state of play. Globalization cannot be completely undone. So Nigeria should anticipate a form of globalization where South-South economic links gain more strategic importance than North-South ties. “Emerging markets and developing countries already contribute to 80 percent of the growth of the global economy,” Jinping said, presenting evidence at Davos. Let’s think about how Nigeria navigates the new order, mindful of local challenges IMF identified.
In January, Nigeria’s loan requests to the World Bank and Chinese Export-Import Bank loans were stalled. The lending parties awaited Nigeria’s governance and economic reforms. The loans were predicated on them. By February, China had put in place a $1.5billion loan for the Lagos – Ibadan rail project, and earlier this month, a $4.5billion loan to mechanize our agriculture. In March, the World Bank received Nigeria’s economic reform plan and needs to know whether we plan to maintain a market-determined exchange rate, rather than using foreign reserves to prevent further declines in the naira’s value. This specific question was not answered in the plan, so the World Bank approval rests on other articulated economic recovery measures. “In a country that has never been short of plans of blueprints, the question is whether this one will be implemented,” said Manji Cheto of Teneo Intelligence.
Meanwhile, Nigeria’s top export destinations for crude oil include South Africa, Brazil, and India – countries with obvious interests in stabilizing Nigeria’s oil production. They are co-founders of the New Development Bank (NDB), which has a broad remit to support development projects in cooperation with international actors. While diversifying, Nigeria should explore uncharted financing territories to secure traditional revenue.
The UN fund programmes in Nigeria that build good governance, the rule of law, democracy, women’s rights and strengthens civil society. These building blocks help to boost investor confidence in Nigeria. What happens if US reduces its major share of funding to the UN? Nigeria can still totally control whether it respects election results, applies corporate sanctions fairly, offers attractive concessions to agri-business investors, and removes import bans on commodities, where export enabling infrastructure and capacity is currently lacking. Inspired investors must in turn build our core economic competencies.
Political risk and uncertainty now disturb the developed world not just frontier markets like Nigeria. Trump’s victory promises to embolden anti-democratic leaders, not only outside the West, such as Putin, Turkey’s Erdoğan, and Hungary’s Orbán. Nigeria will not be alone in its bid to assure investors of a steady climate. Will these conditions be permanent?
“In the battle between reality and populism, reality is now winning,“ says Peter Kelner of Carnegie Institute. Peter is right! Since January, apart from two public conquests – the appointment of Gorsuch and the lauded airstrikes on Syria – Trump’s signature campaign promises have turned into ignominious defeats. With his 36% approval rating being the lowest of any new U.S. president on record, the allure of a nationalist deal-making genius, running a “fine-tuned” machine is fading. How should Nigeria engage? Before fully loosening our North-South ties, we should be mindful of areas where newly tenured governments would actually wish to keep our links tight.
“It’s hard to argue that any country in Africa is more important than Nigeria for the geopolitical and other strategic interests of the US,” J. Peter Pham of the Atlantic Council asserts. Trump signaled his approval to sell Nigeria up to 12 Embraer A29 aircraft, which are assembled in Jacksonville, Florida. We improve our relationship with America by boosting US manufacturing in high-wage paying jobs, while also equipping our military. This is also a solid model on the question of timing: Two tenured governments investing in a process once evident that local enablers are on board: Senators McCain and Corker in this case
With all lending agreements and tomorrow’s partnerships, the task for Nigerian government negotiators is to strike agreements that maintain our economic interest, accept sensible reforms that enforce those interests, and stay mindful of any lending partner’s shareholder or credit rating motivations. While forming allegiances with demonstrable value, Nigeria should remember Henry Dunant, founder of the Red Cross, who said, “Our real enemy is not the neighboring country; it is hunger, poverty, ignorance, superstition and prejudice.”