2023: Nigerian economy as ‘abandoned property’
From all indications, the closer we get to the dates of the 2023 general elections in Nigeria, the clearer it becomes that the economy has become an abandoned property, getting only leap service even from its supposed managers. This reality has become evident in the current trends of all the indicators for assessing the progress or otherwise of the economy. Inflation is very high (at double digit) and still rising to hyper levels; unemployment rate is alarming and still getting worse; the Naira has almost lost its entire value in the foreign exchange market; public debt (both local and foreign) has assumed worrying sizes—with debt servicing gulping almost all Government earnings.
This situation is being actuated by the fact that even the putative heads of the monetary and fiscal authorities have directly or indirectly fully embraced partisan politics and politicking in the build-up to the 2023 general elections. The ugly trend is such that many public servants at various levels have already joined the moving political train, bought forms as aspirants to contest elections before they realized that they ought not to do so in the first place. This trend is more glaring in the critical institutions and agencies that supposedly man the economy—starting from the head of the apex bank of the land to the chief executive officer of the Mint, among others.
Even the entire legislature is practically on recess because its head, the president of the senate has opted to become an aspirant, and is ‘pushing’ to clinch the ticket of the ruling party to become the president of Nigeria come 2023. Sequel to this, almost all legislators are on ‘permanent recess,’ junketing all over the place to contest for one position or another. And so, legislation and relevant ‘oversight’ functions are fully in abeyance for (may be) the next one year. The same in the executive arm of Government, where the supposed head of the economic management team is also fully in the field seeking for votes to emerge the presidential candidate of his party. Some ministers and heads of agencies have either resigned their posts to contest elections or have practically abandoned their jobs to give support and company to their ‘friends’ in the electioneering outings. Some that have bought nomination forms had to ‘change their minds’ and recant their announced ambitions.
Howbeit, it is the economy that bears the brunt of these ‘distractions’ or wilful abandonment of duties. This is because even before now, most of the economic, fiscal and monetary initiatives and interventions have been ill-digested and laden with political motives—as the recent moves of their key initiators and drivers have shown. Many proposals and memos usually get addressed and approved during the Federal Executive Council (FEC) meetings, but the relevant minister and/or executing agency heads are already too immersed and absorbed in partisan political pursuits to actuate any process. Here, one or two examples will bear out the scenario: all the major works done in various parts of the country in the areas of railway lines, seaports upgrading and refurbishing and the establishment and building of transportation and maritime universities have been ‘tied’ to the Minister of transportation, Mr. Rotimi Amechi.
Much of the funds used in building those structures are loans (mostly secured from China and others), and the story making the rounds is that the creditors are bent on having Amechi in the saddle in 2023 as president. This is both to ensure the terms and conditions for the huge outstanding loans are fully kept; and so that more loans could be advanced to the cash-strapped Nigeria, going forward. Therefore, today, this core infrastructure-building ministry (ministry of transportation) is practically at a standstill and all its personnel are fully engaged ‘working’ to see Amechi emerge as president of Nigeria.
This same scenario is also playing out in the Ministry of Niger Delta Affairs where Godswill Akpabio, the minister in charge has just jumped ship to pursue his ambition of becoming the president of Nigeria in 2023. In the Niger Delta Ministry as well as the Niger Delta Development Commission (NDDC) which Akpabio superintended, so many solid infrastructure building work had been abandoned (or kept on hold) for the outcome of a forensic audit into the NDDC affairs to be completed and made public. Till date, the audit report remains a ‘secret document’, even when NDDC has been known to be a cesspool of corruption and malfeasance. It is this notoriously obvious fact that has denied the entire Niger Delta space the rich infrastructural field that it ought to have become since NDDC was set up over two decades ago.
With so much NDDC funds embezzled or misappropriated by successive managements, the agency remains perpetually stymied; yet, Akpabio moved on without changing the narrative—meaning that the Niger Delta economy is still denied the substratum—the critical infrastructure—that would truly drive its development.
By far the most bizarre of developments in recent times regarding the ‘orphaning’ of the economy has been the moves by the head of Nigeria’s apex bank to join in contesting to become the president of the country in 2023. Not only were the actions unprecedented in Nigeria, such moves are yet strange to effectual economy management anywhere in the world. While it is otiose at this point arguing about the merits or demerits of the activities of the apex bank’s boss, the imports and connotations of those steps will obviously tell negatively on the Nigerian economy. It suffices to ‘wait and see’, since all issues on the subject matter are yet subjudice.
However, as earlier indicated, Nigeria’s ‘orphaned’ economy is already showing all the symptoms of rudderless existence: inflation rate has gone haywire, now standing at 16.82 per cent as at end-April 2022, much higher than the projections of the International Monetary Fund (IMF) and other agencies. The IMF had projected that Nigeria’s Consumer Price Index would hit only16.1 per cent in 2022 in its recent publication, ‘Regional Economic Outlook for Sub-Saharan Africa’. Nigeria’s April inflation figure is the highest in the country since August 2021 when it was 17.01 per cent.
The surging inflation rate indicates clearly that citizens are becoming poorer, especially given the weakening Naira vis-à-vis other trading currencies. The Naira keeps crashing in the official and ‘parallel’ markets due to increased speculations, dwindling external reserves, and steadily dropping foreign exchange inflow into Nigeria. Also, the activities of politicians (as already highlighted above) who are ‘mopping up’ dollars in pursuit of their forthcoming election primaries are unleashing distortions upon the forex market. As of Monday May 16, 2022, the Naira exchange rate at the official (Importer & Exporter) window was N415.75 to US$ while in the parallel (bureaux de change) market, it was N600 to US$—a gap of N184.25—much room for all manner of arbitrage.
In addition to all these, the Federal Government claims to have a development plan in place, but the staccato style of policy flow in the economy has yielded mostly undesirable outcomes: already unsustainable huge public debt standing at over N45 trillion by end-march 2022, and dangerously high unemployment rate of 33 per cent. Debt servicing is already gulping over 90 per cent of Nigeria’s revenue — implying a death knell for the nation’s economy. And all these are compounded by the ever darkening cloud of insecurity, drying up of foreign direct investments (FDIs) and foreign portfolio investment (FPIs) as well as massively emigrating potential local investors who are scared stiff by the activities of marauding terrorists, bandits and all manner of criminals. Indeed, whither the Nigerian economy?
Okeke, an economist, sustainability expert and business strategy consultant, lives in Lekki-Lagos. He can be reached at: firstname.lastname@example.org