Is Nigeria beyond redemption? A discourse on the state of the nation (IV)
“Economics have an awkward way of overriding all other considerations”, John Buchan Recapitulating on previous experiences will definitely give us the direction towards which we can posit an argument whether we should be optimistic or otherwise about Nigeria’s present and future prospects. For, without recourse to past experiences, the ability to make an informed […]
“Economics have an awkward way of overriding all other considerations”, John Buchan
Recapitulating on previous experiences will definitely give us the direction towards which we can posit an argument whether we should be optimistic or otherwise about Nigeria’s present and future prospects. For, without recourse to past experiences, the ability to make an informed judgment about the present and future courses of events in the country will be futile and certainly off the mark. It is absolutely crucial that we should be seized with this idea of whether Nigeria has any future that we should look forward to with hope and optimism, or to be downcast and resigned about such a prospect happening at all.
Today, in this piece, we are going to dwell on the Nigerian economy since we have dealt with its political challenges and unresolved issues of governance. Since economics are the foundation of any modern society and indeed, of all societies throughout history, it is necessary that we should give some thoughts to these crucial issues and see if economic policies have served to develop the country’s well-being and strength. Nigeria remains the most populous nation in Africa with the potential to be a major player in the global economy by virtue of its human and natural resource endowments. Over time, different economic policies were formulated to achieve the optimum utilisation of the country’s resources to become self-sufficient and economically competitive.
However, due to various challenges including those of insecurity, lack of policy sustainability and corruption etc., the socioeconomic well-being of the people has become comparatively worse over time. Nigeria’s economic policies have been driven by historical factors that we failed to resolve that are defined by our over-dependence on oil exports, high imports, net consumption, negligence of the agricultural sector and an under-performing industrial sector, which left the economy ill-prepared for shocks and disruptions. So it was that when the APC-led government came to power in May 2015, the treasury was depleted, the crude oil price had fallen below $30 per barrel and the Nigerian economy was consequently pushed into recession.
To finance the budget, the then government issued foreign and domestic bonds which served to increase the country’s debt burden. It also quickly adopted an improvised economic policy called the Economic Recovery and Growth Plan (ERGP) as a mid-term plan for 2017-2020. It was supposed to be a continuation of previous development plans, such as the National Industrial Revolution Plan (NIRP) and the Nigeria Integrated Infrastructure Master Plan (NIIMP). None of these plans significantly propelled Nigeria to greater economic heights or changed the country’s economic trajectory. Performance remained mediocre and below expectation. Nigeria could not rise above the challenge posed by the regime of fuel subsidy and other wasteful programmes such as large-scale importation of goods.
Neither was the country industrialising nor was it developing its infrastructure at a commensurate rate of progress that the country needed or deserved. The social indicators were also dismal and not encouraging. In 2018, 40 per cent of Nigerians (83 million people) lived below the poverty line, while another 25 per cent (53 million) were adjudged as vulnerable. The number of Nigerians living below the international poverty line subsequently rose by another 12 million in 2023. In 2020, Nigeria experienced its deepest recession in two decades, however growth resumed in 2021 as pandemic restrictions were eased, oil prices recovered, and the authorities implemented policies to counter the economic shock.
Due to its inherent economic weakness, Nigeria was highly vulnerable to the global economic disruptions caused by COVID-19 and the Russia-Ukraine war, particularly due to the decline in oil prices. Oil accounted for over 80 per cent of the country’s exports, one third of its banking sector credit, and half of the government’s revenue earnings. Realising the precarious situation and the need to urgently rejuvenate the economy, the Buhari government took some decisive steps by directing the country’s fiscal and monetary policy authorities to intervene using various avenues. The Central Bank of Nigeria (CBN) exercising its “developmental mandate”, took some major actions on all the key sectors of the Nigerian economy which can be gleaned from the over 40 intervention programmes that it launched in succession or concurrently all aimed at resetting and stimulating the nation’s economy.
The interventions were in areas like agriculture, power, textile, infrastructure development, manufacturing, entertainment, sports, pharmaceuticals etc. It also provided soft loans to small businesses under the Targeted Credit Facility (TCF), which was to serve as a stimulus package to support households and micro, small and medium enterprises (MSMEs) among others. Under its now famous or infamous Anchor Borrowers Programme (ABP), the CBN cumulatively released the sum of N798.09 billion to 3.9 million smallholder farmers who were said to have cultivated 4.9 million hectares of land across the country
Out of this sum, the Bank released N161.18 billion during the 2021 wet season farming to 770,000 small-holder farmers said to have cultivated seven different agricultural commodities on 1.10 million hectares across the country. In a separate initiative under its Commercial Agriculture Credit Scheme (CACS), the Bank supported 657 large-scale agricultural projects, to the tune of N708.39 billion. We don’t know what or where such “commercial farms” are or who the “beneficiaries” were. Nevertheless, the alleged amounts were said to have been disbursed to them for the purpose of scaling up farming in Nigeria.