Nigeria’s accounts appear to be adding up but the quality of life, in real terms, isn’t. According to the World Bank, with gross domestic product reaching $450 billion and a per capita income of $2.20 last year, Nigeria easily regained its status as Africa’s largest economy. Besides, we became again the biggest oil producer on the continent. Good news, isn’t it?
The World Bank’s Country Director for Nigeria, Dr. Ndiame Diop, confirmed this latest economic status of Nigeria during the Country Private Sector Diagnostic (CPSD) and Stakeholder Engagement last week in Abuja. He said while Nigeria received far less foreign direct investment (FDI) than its potential warrants, especially in comparison to countries like Indonesia and South Africa, it continued to hold its position as Africa’s biggest economy. Diop stated that the CPSD report, set to be released in the coming weeks, would reveal the impact of private sector constraints on economic growth. He noted that if targeted actions were taken to remove those obstacles, Nigeria’s economic potential would be significantly enhanced. The country’s current macroeconomic reforms, he noted, had created “a favorable environment” for such changes, citing the country’s recent economic stabilization measures, particularly exchange rate market adjustments and improved access to foreign exchange as critical steps that have already enhanced investment conditions.
Diop outlined four key sectors where strategic reforms could unlock massive investment and job creation. In the Information Communication Technology (ICT) sector, investment opportunities worth up to $4 billion could be realized, potentially creating more than 200,000 jobs. In agribusiness, reforms could unlock $6 billion in investment and generate over 275,000 jobs. The solar photovoltaic (PV) industry holds the potential for $8.5 billion in investment and more than 129,000 jobs, while the pharmaceutical sector could attract $1.6 billion and create 30,000 to 40,000 jobs. For the ICT sector, Diop identified the high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges—comprising 30 to 70 per cent of broadband rollout costs—as a major barrier. Addressing these regulatory inconsistencies, he argued, would be a game changer for broadband expansion. He acknowledged that the National Economic Council recognized that issue and that progress was being made through a World Bank-supported initiative.
As I noted earlier, it is good news to be back where we would rightly be called the “giant of Africa”. However, it would be better still if the “good news” could tell on the purse or pocket of the average Nigerian. But it will not, if experience is anything to go by. This is my problem with what Dr. Diop called “economic stabilization measures” or “structural adjustment” – in other words stomach tightening. The so called improvements they engender, if they do at all, remain on the government’s books, never affecting the prices of goods and services. The government and banks are only interested in knowing that the books add up.[Take, for instance, this. Shortly after the news came through of Nigeria regaining its position as Africa’s economic power house, the state oil company NNPC announced a slight reduction in the retail price of petrol from N960 to N945 a litre. Not that the two were cause-effect developments. But Nigerians were not impressed, not only the price slash was too minimal to matter to them but also because they knew “filling” stations wouldn’t implement the price change.]
Structural adjustment is an extremely bitter pill. It hurts citizens and potentially imperils the government that accepts them. The pain may trigger social unrest which may sweep away the people in power. In Nigeria, in 1986, military president Ibrahim Babangida, engineered a national debate whether or not Nigeria should take a $1 billion IMF facility. The result was an overwhelming rejection of the proposition. However, Babangida went on to institute a belt tightening regimen that was more punishing than the IMF’s “conditionalities” that Nigerians had rejected. What helped him hang on to power was that his was a military dictatorship that brooked no open dissent.
The IMF and World Bank know their prescriptions don’t heal the patient but kill him slowly. So they are prescribed to deny the common man the resources of his country but ensure loans and interests continue to be paid. If not, why do they put strictures on social spending but will not recommend that the debts of poor countries should be written off or interests stopped? No, they won’t because that will hurt them badly. Or for that matter, why haven’t they prescribed something to deal with stealing of public funds? That’s how developing nations lose the bulk of their wealth. Money stolen is not saved in local banks but international banks that the IMF and World Bank dare not touch because they – the World Bank in particular – borrow from them. Global financial institutions encourage the stealing of third world funds by their leaders to also enrich themselves.
It isn’t too difficult to figure out why these two finance houses are not fit for any third world nation, Nigeria as one. They were set up after World Two, to firstly handle the economic reconstruction of war ruined and weary Europe. In that the IMF and World Bank succeeded very well. But asking them to also take care of another part of the world just emerging from colonialism/imperialism without repositioning them was always going to be a fundamental development flaw. War devastation and resource looting which colonialism was were not one and the same thing. What Africa, in particular, needs isn’t “soft loans” that invariably turn to stones too hard to swallow but what pro Africanists including our late MK Abiola proposed – restitution. Resources taken out of Africa to develop the Western World need to be returned several fold. The continent must be compensated for the pillage it suffered. The IMF and World Bank need to be reworked to lead this campaign. Unfortunately, a kind of ennui appears to be affecting the drive for restitution, even in Africa. A reawakening should begin now. Is there anyone there listening?
