Breaking News in Nigeria Today

Economic growth and Nigeria’s ‘Badluck’

ACCORDING to the International Monetary Fund (IMF), the top 10 fastest growing economies in the world in 2018 are: Libya (16.44%); Ethiopia (8.55%); Côte d’Ivoire (7.36%); India (7.36%); Rwanda (7.20%); Bhutan (7.12%); Senegal (7.04%); Myanmar (6.90%) and Cambodia (6.90%). The median growth rate for 192 countries falls at number 96, which is Israel, with a growth rate of 3.29 per cent. Nigeria tails towards the worst performing countries, with an estimated 1.90 per cent.

The worst performing countries are war-torn South Sudan (-3.82%); Equatorial Guinea (-8.48%); Venezuela (-15.00); and the Caribbean nation of Dominica (-16.3%).

What are the factors that make some economies grow while others stagnate? In any case, why is growth important at all, if we may ask?

Economic growth remains important because increases in output lead to improved livelihoods for millions of people. When an economy is in full-throttle, it also means a country’s productive assets are being put to full use. When this happens, it means more incomes are accruing to all the factors of production – labour, capital, land and entrepreneurs. Rising incomes also mean reduction in poverty, improved employment and enhanced collective welfare.

Economists have long debated the causes of economic growth. The explanations range from increases in capital investments to rises in total factor productivity (TFP) and so-called “endogenous” growth factors such as education, human capital, technology and skills.

As the IMF data in our preamble reveal, Nigeria’s economic growth for 2018 falls well below the median of 3.4 per cent of 192 countries. Given that our annual demographic growth rate of 3.3 per cent, it means our estimated economic growth rate of 1.9 per cent, when deflated by population, is a net negative growth of -1.4 per cent. It does mean that we are actually regressing in real terms. For us to keep above water, we need to grow by a minimum of 5 per cent, as far as I am concerned. To make a significant dent on poverty we need to be growing at an annual minimum rate of 6 per cent. To prosper and flourish, we should be looking at growth at the order of magnitude of between 7 and 10 per cent. Which is, of course, a tall order!

The story of Nigeria’s economic growth has been a rather topsy-turvy one. In the first decade after independence in 1960, our economy was largely dependent on the export of agricultural cash crops: groundnut in the North, cocoa in the West, palm produce and rubber in the East and South East. Economic growth during the first decade was a modest 5.9 per cent. The year 1968 was one of the worst for the war-economy, as growth plunged to a negative of -1.8 per cent. Oil production began on a modest scale in Oloibiri in 1956. It was not until after the ending of the tragic civil war in 1970 that our country became a major oil-exporting nation. It was an enormous game-changer. Average annual growth stood at an impressive 8.0 per cent during 1970 to 1973.

The dark night of military tyranny coincided with some of the worst years for economic growth, which averaged a paltry 3.2 per cent between 1976 and 1990. But the Babangida/Abacha years were the bleakest, as growth averaged 1.9 per cent between 1991 and 1998. The return to democracy during the second coming of Olusegun Obasanjo brought renewed hope. Economic growth averaged 5.6 per cent during the years 1999 to 2007. The years from 2008 to 2014 were even more spectacular, averaging an impressive 7.0 per cent.

However, since 2015, it has been downhill all the way. The current APC-led administration came to power under a rather unlucky star. French strongman Napoleon Bonaparte declared that he preferred lucky Generals to brilliant ones. Buhari is both unlucky and incompetent. Bonaparte would never have touched his type with a barge-pole!

When he came to power as a military officer in December 1983, oil prices had collapsed and the economy was in recession. He proceeded to treat the country as a military cantonment, handing over the reins to his subordinate. When he came back in 2015, oil prices had again collapsed and the economy was in recession. His incompetence and procrastination worsened everything. In 2016, we had negative growth of -1.8 per cent. For the first time since 1968, the current account was in red. Again, he handed over power to a venal cabal.

Muhammadu Buhari was born under an unlucky star. Buharideens  wallow under the illusion that being “honest” translates into  effectiveness in statecraft. Reminds me of Calvin Coolidge, the squeaky-clean American president who spent his days praying while Wall Street crashed in 1929. Coolidge was a good man whose incompetence brought America to a complete ruin.

Until now, I never understood what former American Secretary of State Henry Kissinger meant when he remarked that “political office taxes intellectual capital.” He must have meant that men without knowledge should never be allowed near the high magistracy of any republic. They will only bring it to ruin. To the best of my knowledge, Buhari has never been seen with a book. At least, not in public. He obviously cannot give what he does not have.

We cannot help but notice the sheer recurrence of a Badluck syndrome that seems relentlessly to dog Muhammadu Buhari’s career trajectory at every turn. We may be technically out of recession, but his nepotistic administration has quenched the joie de vivre for which our countrymen and women are so globally renowned for. The nation is in an unprecedented sombre mood. Rising debts and groaning banks. Capital flight. An economic race to the bottom. A stock market in the doldrums. Youth unemployment in frightening proportions. Kidnapping and killing fields. On top of that, the dubious prize of being the world’s new poverty capital. Violence, anomie, chaos, hunger, fear and gloom — a gathering storm of bad omens. We’ve never descended so low on the scale of civilisation!

Loading...

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More