It is obvious that Nigeria is now Africa’s largest economy, a position previously held by South Africa. After several delays, Nigeria finally rebased its nominal Gross Domestic Product (GDP), which saw estimates for 2013 hitting $509.9 billion (N80.22 trillion) from $285. 56 billion. Nigeria’s GDP recorded an 89.22% growth, automatically emerging as Africa’s largest economy and 26th in the world. South Africa with a GDP of $384.3 billion is second. The rebasing exercise, which received accolades from the IMF, World Bank and African Development Bank (AfDB), among others, also places Nigeria ahead of countries like Austria ($394.7 bn), Venezuela ($381.26 bn), Columbia ($369.6 bn), Thailand ($365.96 bn), Denmark ($314.88 bn), Malaysia ($274.7 bn) and Singapore ($269.87 bn). Yet, Nigerians remain largely poor; in fact, among the poorest in the world. Against this background, there are justifiable reasons to be cynical and incredulous over the rash of statistics extolling the Nigerian economy; since this curious inventory of positive macroeconomic success hardly reflect the reality of Nigerian living conditions.
The current fad to juggle arithmetic calculations took into account, rapidly developing sectors such as the telecoms and mobile phone market- Africa’s largest, the vibrant music industry, e-commerce and the film industry (Nollywood), estimated at $5.1 billion or 1.2% of GDP. The rebasing was greeted with loud ovation by Nigerian leaders who hope the statistical revamp will help them sell Africa’s most populous market to investors. Financial analysts have described the Nigerian economy as having a huge significant potential for growth and wealth creation. In recent years, Nigeria has witnessed high rates of growth, making it an increasingly attractive destination for foreign direct investments (FDI) owing to the size of its consumer market and growing capital markets. The annual growth rate averaged 6.8% from 2005 to 7.4% in 2013. However, these numbers mask the reality for the majority of Nigerians. GDP might be nearly one and half times that of South Africa’s, but Nigeria has to feed more than three times as many people. Which begs the question: is it the size of the cake or how many mouths it has to feed that is more important? The answer depends on whether you’re eating cakes, or selling them.
A high GDP means foreign investors pay more attention. The US and Europe no longer look down on China and India. On a per capita basis, Botswana, Mauritius and Seychelles are among Africa’s top five richest states. None has a population of more than 2 million, so they are admired but cannot claim heavyweight status when it comes to competing for foreign investors. Nigeria’s potential is predicated on its large population, because size matters. For a business, deciding where to invest, a market of 170 million beats the Seychelles’ 85,000. But the more fundamental issues that should be addressed to make Nigeria investor-friendly are provision of infrastructure, security, good roads, constant power supply and political stability. These issues need to be put right first and foremost in order to attract investors.
In all sincerity, the Nigerian economy is very far from strong. The main features of the economy show clearly that Nigeria is a least developed country. The UNDP Human Development Index ranks Nigeria deep among low-income countries. While the major proportion of the labor force is engaged in agriculture, Nigeria is a major importer of food. The manufacturing sector’s share of GDP is under 4%; 80% of manufactured goods in Nigeria are imported while idle installed manufacturing capacity is over 50%. Despite the decrepit infrastructure, the federal government allows budget recurrent expenditure to crowd out capital spending on infrastructure. The current budget is outrageous; it is, very shamefully, an ode to the wanton consumption attitude of the political class. The situation calls for a budget philosophy that tackles corruption, waste, inefficiency and poor governance. The economy is actually at its nadir because unemployment stands at 23.9% and absolute poverty is a depressing 70%.
A high GDP also does nothing to address widespread insecurity. The average Nigerian’s life is brutish with no value. Instead of life more abundant, it is death, cries of death and threat of death all over the place. Security of life and property is completely prostrate, leaving agents of death on rampage, wreaking havoc at home, places of rest, in holy sanctuaries, school dormitories, police stations, military barracks, in and out of place of work and even while in search of daily bread. In a continued orgy of indiscriminate bestiality, thousands of Nigerians have been killed; scores of homes and places of worship have been razed and many villages have been sacked. Indeed, the entire North-East has become a killing field for Boko Haram terrorists.
Besides insecurity, the continuing spectacle of petrol scarcity in the country is an embarrassment which is further compounded by oil theft. If anything, fighting oil theft has become a sleazy industry just as lucrative for brigands as oil theft itself, with both feeding fat on each other. It has gone on for too long and this must change now that Nigeria has joined the big league. Nigeria must also improve its telecommunications infrastructure. Against the background of public outcry over poor service delivery by telecommunications companies, making or receiving calls in Nigeria is a most frustrating experience. And other services using broadband are not better.
More importantly, Nigeria is yet to achieve an acceptable level of power supply, badly needed for economic development. The recent disclosure by Power Minister, Chinedu Nebo, that about 30 million Nigerian households have no access to electricity is a mere statement of the obvious but the number should be much higher because the entire country is in darkness. It is regrettable that despite the much-flaunted reforms in the electricity sector, 14 years after, little has changed. Rather, the situation is getting worse. Non-availability of gas, infrastructure vandalisation, sabotage and low water level to power the hydro power plants are some of his reasons. These are flimsy excuses that have been peddled over the years and Nigerians are now much more interested in solutions.
Nigeria has a lot to learn from industrialized economies that have perfected running government largely on taxes. Nigeria needs a tax system well positioned to meet global standards. Also, Nigeria must diversify its economy. The vagaries of the world economy and discovery of alternative energy sources in developed economies are enough reasons for resource-dependent countries to diversify, build a strong industry based one, create jobs and therefore increase its taxable base. As Africa’s economic giant, Nigeria must lead by example. Pretending that all is well when the electoral process is abused is a disservice to democracy. The huge loss to the state, damage to the people’s psyche and truncation of a people’s destiny are best imagined when elections do not reflect the preference of the electorate.
If the whole hue and cry about Africa’s biggest economy will ever transcend the realm of cliché, Nigeria must industrialize. The starting point is the Ajaokuta Steel Company; a perfect illustration of how the hope of an industrialized Nigeria was squandered on the altar of corruption and incompetence. Nigeria has massive potential but the economy faces serious challenges from corruption, decrepit infrastructure to general insecurity. The country is bleeding. In 2013, the Economist Intelligence Unit rated Nigeria the worst place for a child to be born out of 80 countries surveyed. This is unacceptable, and a shame. Nigerians are bored with slogans without action. Against the palpable fear that Nigerian leaders may have irretrievably betrayed the country’s high destiny, Jonathan has an historic opportunity to lead Nigeria into greatness. This requires bold and purposeful leadership, without which, the entire hullabaloo about Africa’s economic giant would remain a mirage.
