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A Must Read: The gravity of the Nigerian situation

Nigerian-economyNigeria

In the run up to the 2015 elections, the former governor of the Central Bank, Prof. Charles Soludo, published what turned out to be a prophetic article. The article pointed out that, regardless of who won the elections, the country appeared to be heading for troubled waters and the discussion should be focused on how to get the country through the turbulent times and ultimately how to transform the economy into one that works for Nigerians. Alas, the elections came and went with the predicted economic prophecies fulfilled.

Four years later and although the situation is different, the fundamental question to all the candidates is the same: how can we transform the economy into one that works for Nigerians? The gravity of the situation is often lost on politicians who prefer to focus on simple sound bites like “growing the economy”. The onus however is on the voters to demand answers from the politicians on how they plan to tackle the serious challenges regarding the economy.

The first of these questions is how to get the economy back to growth. I know the official story by government is that we are showing a strong recovery after the recession, but the recovery is anything but strong. With a population that is growing at just under three percent a year, any growth that falls below that means we are really getting poorer. Given the toxic policy environment that followed the crash in the oil price, the fear is that the economy will remain sluggish for years as happened in the 1980s. Indeed, the IMF is already predicting eight years of decline in real income growth per capita. In English that means on average we are going to get poorer for the next eight years. Of course, eight-year forecasts into the future are very risky in terms of accuracy, but the mere fact that it is a possibility should have alarm bells ringing. Dear politician, how are you going to get the economy back to growth?

Growth is not everything as the say. After all, we were growing at seven per cent, but that growth was jobless. Growth is a necessary condition for most improvement, but the jobs problem stands out as a separate question that needs to be answered. With unemployment at 18.8 per cent and underemployment at over 20 per cent, the problem needs no introduction.

To get a sense of the scale of the challenge, according to estimates, over 20 million Nigerians are set to enter the labour force in the next three years. The economy needs to create about five million jobs a year just to ensure that the unemployment rate does not increase. To eradicate unemployment completely over 30 million jobs will need to be created by 2020. Dear politician, what is your plan to deal with the unemployment challenge? And no, we employed 250,000 people in the N-Power program is not an answer.

If the unemployment challenge is scary then the poverty problem should make everyone angry. The problem is so bad that we don’t even really know what the poverty rate is. We haven’t officially measured poverty since 2010 no thanks to funding challenges at the statistics agency. Or perhaps, we have had governments that don’t like to hear bad numbers.

According to a report by the Oxford Poverty and Human Development initiative, 53 per cent of people in Nigeria were living in poverty with another 18 per cent vulnerable to poverty. This study used data from 2013, before the recent recession so the current numbers are likely higher. According to the world poverty clock, Nigeria is set to become the world poverty capital this year – that is, the country with the largest number of people living in poverty. Dear politician, how are you going to tackle poverty?

There are more questions on the escalating violence around the country, the decay in education and health sectors, and the unfortunate statistic that 95 per cent of all our exports are still made up crude oil and natural gas. But I think we get the point. All the candidates must answer these questions, and the onus is on us the voters to demand that they do.

Nonso Obikili is an economist currently roaming somewhere between Nigeria and South Africa. The opinions expressed in this article are the author’s and do not reflect the views of his employers.

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