Even for a country with the dubious distinction of being the poverty capital of the world, the latest report by the World Bank paints a grim picture of life-and-death challenges as a plethora of headwinds have hit the nation’s economy, with ominous signs about rising unemployment and diminished growth prospects; as the Washington-based institution warns against further delay in addressing issues assailing economic activities in the country; including the Covid-19 pandemic that has orphaned 4,000 Nigerian children between March 2020 and July 2021. Specifically, rising inflation, currently at 17.8% has defied liquidity tightening measures, amid unemployment for Nigerians across all education levels which has risen five-fold, from 6.4% in 2010 to 33.3 % in 2020, leading to the worst economic recession in decades. “Combined with significant demographic changes and increased aspirations of the youth, Nigeria’s unemployment crisis is creating migratory pressure in the economy,” the report said. It is scandalous and unacceptable that neither the government nor the Central Bank of Nigeria (CBN) seem to have any clue on halting the descent into economic suicide and chaos. President Muhammadu Buhari requires no reminding that he is constitutionally mandated to pursue sound economic policy options to guarantee the security and welfare of the Nigerian people. The Nigerian economy is big with limitless potentials. Buhari has no more time to waste before recognizing the urgency of articulating a blueprint and setting the machinery in motion to put the economy on the path of recovery.
“Nigeria is facing one of the most acute jobless crises in recent times. Between 2014 and 2020, Nigeria’s working age population grew from 102 million to 122 million, growing at an average rate of approximately 3 per cent per year. Similarly, Nigeria’s active labour force population, that is, those willing and able to work among the working age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labour force. Since 2018, however, the active labour force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians who are in the working-age population but not active in the labour force has increased from 29 million to 52 million between 2014 and 2020. The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth,” the World Bank report noted.
Titled: “Of Roads Less Travelled: Assessing the Potential for Migration to Provide Overseas Jobs for Nigeria’s Youth,”, the World Bank in conjunction with the Korea World Bank Partnership Facility (KWPF) and the Rapid Social Response (RSR) trust fund, blamed a combination of rising unemployment, booming demographics, and unfulfilled aspirations as resulting in increasing pressure on young Nigerians to migrate in search of gainful employment overseas. “Unemployment is considered to be a key driver of migration. Consequently, multiple surveys show that the number of Nigerians, who are looking to migrate internationally, is high and increasing,” the World Bank pointed out. The report disclosed that the socio-economic challenges facing Nigerians in the last 10 years have led to an astronomical increase in the number of citizens seeking asylum and refugee status in other countries; as the number of international migrants from Nigeria has increased 3-fold, from 446,806 in 1990 to 1,438,331 in 2019. It also estimated that, as at last year alone, there were at least 2.1 million Internally Displaced Persons (IDPs) in Nigeria.
The World Bank stated that in the last few years, the number of Nigerians eager to migrate has increased from 36% in 2015, when Buhari came to power, to 52% per cent in 2018, noting that the desire to migrate remains higher among unemployed (38%), youths (39%), secondary education graduates (39%), urban residents (41%) and post-secondary graduates (45%). The Bank said because there has not been an expansion of legal migration routes for restive Nigerian youths increasingly eager to find opportunities in overseas labour market, young Nigerians are opting for illegal migration to seek greener pastures and to realize their hopes for a better life. “What is worrying, however, is the increase in the number of forced and irregular migrants from Nigeria,” the Bank disclosed.
Rescuing the nation from economic collapse, demands implementation of new economic models, as the existing models have failed to generate sustainable development, and instead impoverish Nigerians. To be sure, Nigeria’s chronic economic weakness is caused by the willful excessive fiscal deficits substituted for withheld Federation Account (FA) oil proceeds and that economic malaise will only clear when the Central Bank of Nigeria (CBN) is allowed to convert FA dollar allocations to non-inflationary naira revenue through deposit money banks by means of a managed float system. That way, conducive economic conditions will quickly evolve just as the humongous but idle domestic bank credit potential will begin to be accessed at internationally competitive interest rates thereby laying the foundation for diversified and enhanced non-oil revenue generation. It is a national shame that more than 55 years of commercial oil production during which period oil proceeds have accounted for over 50% of the annual budgets on paper since 1974, the Federal Government’s willful but inappropriate handling of the oil proceeds has made the economy today incapable of self-reliantly sustaining the operations of the petroleum industry, let alone provide catalytic infrastructure across the various sectors.
The pig-headed dollarization of the economy involves illegally printed deficit-financing naira funds that the CBN substitutes for withheld dollar amounts from the Federation Account (FA) oil receipts. This has given rise to high inflation, constant depreciation and periodic devaluation, thereby eroding the quality of the naira as a dependable store of wealth (a critical function of money). It defies logic for CBN to hold relatively huge dollar reserves with little or no yield, while Nigeria goes to international capital markets to borrow the same dollars at astronomical rates. It is also irrational for CBN to sell dollars at face value to bureau de change, while government borrows dollars at a relatively high cost! There is no better way to drive home the point than the inherent fact that the deindustrialization of Nigeria is assured by such contradictory policy directions and actions of the monetary authorities.
It bears repeating for the sake of emphasis that the Nigerian economy wears the hostile conditions and hallmarks of an economy steeped in unbroken excessive fiscal deficits, with forex from oil sales squandered in the name of defending the value of the naira in the sham forex market. In the process, Nigeria can only manage to stave off excessive fiscal deficit-induced meltdown of the naira. The CBN should infuse available public and autonomous forex into the economy by means of a managed float system. In spite of the dwindling revenue from falling oil prices, the correct infusion of available oil-derived and autonomous forex would produce truly positive results, where up till now; great economic damage is being wreaked by the substituted excessive fiscal deficits that are proportional to the contribution of over 50% by oil earnings to the country’s annual budget.
It is a great misfortune that successive governments have remained wedded to fiscal and monetary policies that sabotage national economic progress. The Buhari administration should break the cycle now before it becomes too late. The government should foster an environment that would pave the way to a competitive, diversified and self-reliant economy. Such an economy must be anchored on agriculture and manufacturing. Nigeria must turn the page and return to the land; to an era when the economy was driven by cocoa, cotton, rubber, among other cash crops. Such crops would therefore constitute a buffer for the nation against the volatility of the international prices of oil. A true diversification of the revenue base should be predicated on freeing the nation’s full capacity in a true federation if Nigeria would ever thrive. The government should lead by getting the nation’s priorities right and creating the right environment to unleash the unlimited potentials, resourcefulness and creativity of the Nigerian people. This is how you save Nigeria from imminent collapse!
