By Akpan H. Ekpo
The Nigeria Economy is at its lowest since Independence. All macroeconomic fundamentals have been moving in the wrong direction even the performance of various sectors is nothing to write home about. The eight years of President Mohammadu Buhari with the APC mantra of change was a disaster in terms of economic performance. The rate of unemployment averaged 40 percent from 2008-2022 with inflation rate trending at double-digit and approaching run away level. Lending rates averaged 26 percent with the misery index standing at 86 percent in 2022.
Since independence, the manufacturing sector has never contributed more than 10 percent to GDP. Broadly, the Nigerian economy remains at the primary stage of development in spite of an average growth of 6 percent between 2017 and 2022 notwithstanding two economic recessions of 2016 and 2020. The economy has been in s stagflation phase from 2010; recession are common features in economic systems that depend heavily on the market, that is, market capitalism.
The Buhari administration approved a development plan of 2021-2025 and an Agenda 2050 economic blueprint. The New administration of President Ahmed Bola Tinubu in assuming office on May 29, 2023 came up with a 7 point priority within the Renewed Hope Agenda. Most of the priority areas are embedded in the approved economic development Plan 2021- 2025. Moreover, the same party, APC is in power. There seems to be a disconnect between the APC of President Buhari and that of President Tinubu. My concerns center on the pieces of advice given to President Tinubu in implementing his renewed hope agenda under the so-called ‘Bold Reforms’.
The implementation has resulted in untold hardship to millions of Nigerians who were already suffering under President Buhari. The entire reforms rest on market fundamentals coated with neo-liberalism and the Washington consensus. Let me argue upfront that neoliberal policies will not solve the economic problems of Nigeria. It should be stated that countries such as those in Asia rejected neo-liberalism garnished with pieces of advice from the World Bank and the IMF in order to leap-frog into sustained growth and development. The newly industrialized countries of Singapore, Malaysia, Indonesia and China rejected the World Bank/IMF prescriptions. These countries conceptualized, formulated and implemented home grown solutions to escape from backwardness and underdevelopment.
The World Bank and the IMF have become too visible in our appetite for advice. Their one-size fits all policies must be rejected if Nigeria is to make progress. Let us not forget history. We implemented Bretton Woods model of Structural Adjustment Programme from 1986 and the Nigerian Economy was in disarray up to 1988 and beyond. It took Chief Anthony Ani, Honourable Minister of Finance under General Abacha to salvage the economy by conceptualizing and implementing the philosophy of guided-deregulation. During the period of Chief Ani, macroeconomic fundamentals such as exchange rate, unemployment and inflation rates moved in the right direction prompting some observers to label the period the Abacha Miracle.
I will suggest that the present economic team seeks the wise counsel of Chief Anthony Ani.
On May 29 2023, it was wrong for the President to pronounce that “oil subsidy is gone”. It was unnecessary for after all, there was no oil subsidy (which was s scam) from June, 2023. Economists call such a situation an “announcement effect”. That single error sent the entire economy into panic buying of petrol and all prices as I predicted in 1996 went up by more than 400 percent exhibiting structural inflation. The Nigerian economy depends structurally on the export of crude petroleum.
The country would have seen better off with the refineries functioning, finding better ways of intervention as well as punishing those who benefitted from the oil subsidy scam. It is important to state that those who are against subsidy do benefit from subsides of all kinds, for example, the IMF, World Bank and the United States economy have different kinds of subsidies. The elites in Nigeria benefit from all kinds of subsidies too numerous to mention.