Islamic Development Bank rated Nigeria the third fastest growing economy
in the world last April, it elicited widespread interest and approval.
This classification was based on Nigeria’s GDP figure of US$64 billion.
the report, with a growth rate of seven per cent in 2011, Nigeria stands
behind Mongolia with 14 per cent growth and China with eight per cent
rate of growth. Indeed, with elation, Nigerian government officials were
quick to tell the nation that we have graduated from a low-income
country to a medium income one because of the improved per capita
income, which according to the Federal Ministry of Planning, has
increased from $1,200 to $1,400.
As it was to be
expected, this generated divergent opinions, ranging from repudiation
and excited acceptance. However, economists insist that the
classification is misleading and capable of goading members of the
Federal Executive Council and the National Assembly into self-delusion
since the reality everywhere does not support the false statistics being
export only oil, both in crude form and sometimes, refined quantities as
well. But in spite of the huge sums of money realised from oil, how do
we explain our budget, which is always in deficit? Indeed, economists
explain economic growth to mean the capacity of an economy to supply
increasingly diverse goods to its population based on advanced
technology with necessary institutional and ideological adjustments.
There are three
dimensions to growth. One, the gradual and consistent rise in output
over time. The measure of output is the Gross Domestic Product (GDP),
which is the aggregate of an economy’s yearly value of output of goods
and services within a given period of time, usually a year.
availability of relevant technology and infrastructure as conducive
factors of growth. The quantity and quality of technology in a country
determines the power of the economy to produce and supply goods and
services to the people, otherwise the economy like ours, will be import
dependent. However, import driven growth usually dislocates other
fundamentals such as the purchasing power of the currency.
Indeed, the most critical of the dimensions of growth is the nature, quality and power of the institutions driving growth.
meaningful growth will occur in an economy if fiscal institutions are
weak. Available data show that Nigerian output has been on a gradual
rise now, particularly since the ascent of Lamido Sanusi as the Central
Bank governor. Despite obvious challenges, economists aver that the GDP
revision will see Nigeria where Argentina was when she joined G20. It
isn’t surprising therefore that our policymakers are positive that by
2020, Nigeria would join the league of 20 most advanced economies. Thus,
all things being equal, we are on the right course to prosperity.
But can we say
that the Nigerian economy is growing. The GDP rate of growth is often
touted as an indicator of the general health of the economy.
rise in the rate of growth of GDP shows that an economy is buoyant. This
will be reflected by an increase in employment, a rise in the
purchasing power of the people and a higher standard of living, since
such conditions don’t operate in Nigeria, it means the economy isn’t
growing. When an economy is not growing, it will be declining, in other
words, a decreasing rate of growth leads to rise in unemployment, as
witnessed in Nigeria since the advent of the meltdown of 2008. Thus,
the economic condition in Nigeria is moving opposite of positive growth.
As a result, Nigeria is declining economically in spite of our huge
revenues from oil. This decline in our well-being is attributable to the
activities of the enemies of the Nigerian economy.
First of such
activities is the failure by government officials to produce regular
electrical power to service the economy. This failure has been
deliberate, and is being done for personal gain either for money or such
that a generator supply company may continue to operate. Such other
enemies of the nation are those who want to curb the autonomy of the
Central Bank of Nigeria (CBN). In any event, the present CBN model that
price stability is its main objective, is based on a huge body of
empirical evidence regarding the positive impact of central banking
independence on economic performance, especially in achieving lower
inflation rates. Central Bank autonomy also boosts fiscal discipline
without any additional costs or sacrifices in terms of output or reduced
growth. The shift towards central banking independence has become the
norm since the banking crisis of 2008, and we should follow suit or
experience has shown that nations with independent central banks attract
more investment because indices such as GDP, exchange and interest
rates tend to be stable, thereby enabling investors to make long term
investment commitments. Thus, it is no accident that the period when
Nigeria achieved a superior economic growth coincided with when the CBN
became more independent of political maneuvering. Thus, those seeking to
alter the CBN charter are part of the enemies of the economy. Lamido
Sanusi is not going to be CBN governor forever. Don’t change the CBN Act
because of jealousy. What we need is a law regulating donations.
Because we know they want to destroy CBN because it donated N100 million
to the victims of the Kano bomb blasts. We share the feeling that the
manner governors, ministers and the presidency is doling out money to
the public is wasteful and unacceptable.
of the flawed growth patterns in our economy involve fiscal distress,
contrary to the prevailing wisdom of today, some degree of Keynesian
demand management in this transition to a sustainable growth pattern is
not in conflict with restoring balance to the economy.
Thus, the real
enemies of the economy are those who stoke unrest by refusing to employ
enough policemen for Nigeria. Being about 168 million in population
Nigeria needs 1.68 million policemen.
we can only boast of 377,000 cops, a number, which is less than one
third of our needs. Any wonder Boko Haram has unleashed terror on the
country three years on? Perhaps, the only way to stop the enemies of
the country is to change the personnel of government every four years.
This can be achieved by changing the ruling parties in each state and
the federation every four years. Stability is critical to the economy
because terror scares away investors from the country.