Apparently, the economic woes of the country still persist, which, is a stark reminder of failure of leadership to effect change, and steer the country on the path of growth and sustainable development.
Recent report by the World Bank, captured how high inflation, driven by soaring food prices pushed seven Million Nigerians into poverty. The report did not come to many as a surprise. Keen observers of the Nigerian economic landscape had warned of such impending danger, but, political actors in the country seemingly had their sight on a different priority.
Similarly, according to the National Bureau of Statistics, in May, year-on-year inflation dipped to 17.93 percent, just below the four year high of 18.17 percent registered in March. Which means, food price in May, was put at 22.28 percent.
The report, on a positive note lauded government’s efforts for embarking on needed reforms, in the aftermath of the pandemic, which still ravages global economy. Some of the reforms range from deregulation of oil and gas, to energy and power sectors.
Ironically, these sectors have a direct impact or effect on the average Nigerian. Most businesses in the country inadvertently are linked to these variables. Therefore, a glitch would certainly impact on small and large scale businesses in the country.
Meanwhile, the report left out the most critical causal relationship of inflation and high cost of food items in the country. The Dollars! The new Dollar exchange rate by the CBN was partly responsible for the spike in the prices of commodities. In May, the CBN devalued the Naira by 7.6 percent, against the Dollars. It replaced the fixed rate of 379 Naira to dollars, which was the official rate to an average 410.25. The implication is, since Nigeria consumes more, especially via import, and export less, commodity prices could potentially rise.
Most economic reforms embarked upon by the government are in a way too sophisticated to bring down inflation and lift people out of poverty, a narration they constantly put out.
In his Democracy day broadcast, the President claimed his administration lifted 10.5 million Nigerians out of poverty in the last two years among who are farmers, artisans, market women and small scale business owners. But, the World Bank report sharply contrasts with government’s claim, as available data shows a rise in the number of Nigerians that slipped into extreme poverty in the last two years.
No need for vainglory, government must do a lot more in mitigating the effect of inflation and rising cost of living. And, there is no better way than strengthening the Naira, against the Dollar. The most effective way to go is discourage importation by encouraging local production. Reduce dependency on Dollars and expand exports, as with a lower value, more Nigerian export will be relatively cheap, compared to other countries.
Government must expend much energy and vigour in encouraging local consumption and production, while discouraging imports, especially of non-essential goods. Successive government’s efforts in that regard has been unyielding, since strict disciplinary measures are not put in place.
Agricultural policy of the government looks quite ambitious, at least at the onset. CBN anchor-borrower and other low-income schemes for farmers have been quite helpful, but, lack of supervisory and regulatory bodies to ensure its success was the greatest undoing of the administration.
Government must relentlessly seek a formidable platform to aid in the diversification of the economy. Continued dependence on oil, which for decades had been the chief revenue earner must stop. The pre and post independence economic blueprint, with agriculture coming top, must be revisited. Cash crop production, across zones must be intensified, which will be exported, thereby raking in huge revenue in dollars for the country.
The power, and energy sector is undoubtedly an area which could potentially stabilize the economy. Once the sector witnesses tremendous growth, such as improved and affordable electricity, chances are, businesses could thrive significantly. Large and small scale businesses rely on energy and power to enhance productivity.
According to a 2014 World Bank survey, 27% of businesses in Nigeria identified insufficient electricity, as the main obstacle in running a successful business. As such, neglecting the sector, will be counterproductive. For years, successive governments sank billions of dollars in the sector without any remarkable gains. Privatization of the sector could not also provide the desired result, as corruption and favoritism marred the process.
Most businesses or manufacturers experience power outages and fluctuations approximately between ten to twelve times in a week, with each lasting for about two hours or more. The implication is, within such period, productive hours are lost, adding to damaged products and cost. It’s on record that Nigerians spend approximately 4.3 billion Naira annually on imports of generating sets, and an additional 2.9 billion in fueling them.
As a matter of urgency, government must muster the courage to pursue reforms in the power sector to aid businesses. It must be more practical and resolute.
The World Bank Country Director said Nigeria faces interlinked challenges in relations to inflation, limited job opportunities and insecurity. Insecurity, unarguably remains the most lethal and formidable challenge confronting the nation.Human security, and food security are what no serious nation trivializes; it provides the nexus for political stability. Once a nation attains food sufficiency, it can grow and shore up its exports, earning a formidable GDP which could potentially stabilize and strengthen the economy. It’s a constitutional mandate for government to protect and safeguard its citizens, secure lives, properties and maintain peace.
The looming danger staring government in the face is, combating banditry, which disrupted farming activities across the North, a region which produces 70% of the country’s agricultural needs is on the brink of famine, no thanks to bandits who had driven farmers off their farmlands.
Sadly, new planting season has arrived, yet farmers could not have free access to their farmland. The focus of the Presidency should shift to securing these areas, and other crisis prone sections of the country, to avert full-blown food shortage. Once government can bring to an end, banditry and reduce criminality, other existential challenges could be tamed.
Events in the past few days proved, government has begun to show resilience and determination in that regard. Troops of the Nigerian Army acted heroically when they decimated bandits who abducted the Yauri school children. If troops could maintain such tempo and frequency, the days of bandits/terrorists are numbered.
As the lifespan of this administration is winding down, it is expected government acts remarkably fast in redeeming its image, by fulfilling campaign promises made to Nigerians. It is never too late.
Abdullahi D Mohammed is with the Department of Political Science and International Studies at the Ahmadu Bello University-Zaria