After a bleak 2017, what hope for Nigeria in 2018?
2017 was bleak; blighted by inflation, recession, government prevarication on important decisions, an insincere war on corruption, uptick in Boko Haram attacks (mostly on soft targets) and needless pastoral conflicts.
The gloom that the year represented was accentuated by the promise that heralded it. At the beginning of the year, the Muhammadu Buhari administration had the chance to implement Nigeria’s biggest budget ever. But passed on it. The N7.44 trillion budget was only signed into law halfway through the year yet the economy grew – marginally, barely enough for the country to exit a biting recession that smothered the masses’ spending power. Companies closed down; there was capital flight, and expectedly, lots of job loss.
Nigeria’s unemployment rate rose from 16.2 per cent in Q2 of the year to 18.8 per cent in Q3, the National Bureau of Statistics (NBS) said in its Q3 report of 2017. With less than fifteen months before the next general elections and Nigerians wondering if the Buhari administration will attempt to impress in the new year, the experts have filed their predictions.
SBM Intelligence, a private intelligence outfit which provides analysis of the Nigerian socio-political and economic situation says the outlook for 2018 is less than sterling but holds promises for economic growth and expansion [Read SBM’s full 2018 projections here]. Similarly, the World Bank has projected that growth will pick up “from 1.0 percent in 2017 to 2.5 percent in 2018 and 2.8 percent in 2019.” But the IMF, with a forecast of 1.9 percent, is less optimistic.
These growth forecasts are below Sub-Saharan average, and heavily dependent on the prices of oil on the global market and the government’s ability to maintain peace in the Niger Delta.
“Oil will end 2017 at above $60, and the 2018 outlook for the commodity is bright. We expect that political upheaval in the Middle East will cause supply disruptions in the global market leading to further increases in oil prices early in 2018,” SBM said in its 2018 forecasts for Nigeria.
It adds, “this supply gap will be quickly filled by other traditional producers, including Nigeria, and crucially, by shale producers as well, leading oil prices to drop to 2017 year-end levels by the end of 2018.”
Other indices such as the various initiatives being pushed by the CBN and the Federal Ministry of Finance will spur lending to the real sector by banks, while the beginning of moneyed political campaigns, which will largely be between the People’s Democratic Party and the ruling All Progressives Congress, will increase the volume of raw cash in circulation. The latter, however, may likely impact negatively on the implementation of the 2018 budget.
The government’s hope for the effects of rising oil prices to trickle down to various segments of the national economy, and by extension, down to the average Nigerian, will be hinged more on hope than actual substance. But it is that hope that has continued to power Nigerians’ resilience. It is the same hope that has precluded the governed from asking the government the real questions.
While employment rate may improve in 2018, the growth may not happen very quickly. The unemployment rate, induced by recession, typically “peaks about 15-18 months after the beginning of a recession or 4-8 months after the end of a recession before it returns to its pre-recession trend,” NBS noted in its report.
The projected slow growth in employment rate may likely lead to “agitation from members of the middle class who have fallen into the lower class on the back of their job losses,” SBM said.
2018 can be a good year for Nigerians. This, however, is dependent on the government’s readiness to be purposeful in its execution of policies that can aid economic recovery.
But with the campaign season due to begin and general elections to follow, “save for a few big-ticket projects, this is unlikely to happen, as Nigerians are more likely to see direct cash transfers rather than policy actions, whereas the latter would provide long-term assurances and security.”