Economic and policy experts have advised the Nigerian government to adopt far-reaching proactive economic policy measures as strategic options towards averting a prolonged national economic crisis in view of the existing policy gaps and lopsided structure of the nation’s economy over the decades.
Experts, who hinged their concerns on two fundamental grounds, namely the inadequacy of the existing development policies to cope with shocks and graft-supportive and dysfunctional institutions in the public sector, have cautioned that if government failed to act fast, the nation’s current poverty, unemployment and insecurity rates may aggravate and plunge it into prolonged social, economic and political crises.
Available statistics sourced by Daily Trust from the Central Bank of Nigeria’s (CBN) reports and other research works showed that in 1960, Agriculture contributed 64.1% to the nation’s GDP compared to the Manufacturing sector’s 4.8% and other sectors’ 30.8 percent contributions. The Oil sector only accounted for 0.3% of the GDP then.
Twenty years later (1980), Agriculture still maintained its lead, contributing 30.8% to the GDP, while Manufacturing and Other Sectors contributed 8.1% and 39.1% respectively. During the fiscal year, the Oil sector contributed 22.8%.
A further analysis of the various sectors’ contributions to the nation’s GDP in 2011 showed that Agriculture, Manufacturing, Oil, Other sectors still held sway, contributing 40.0%, 4.2%, 14.7% and 41.1% respectively.
By 2018, the narrative had not changed as the Oil sector accounted for about 8.56% of the GDP rate while Agriculture, Manufacturing and Other sectors contributed 21.2%, 25.75% and 52.0% to the GDP.
Apart from the non-oil sector, the nation’s Health Sector has suffered prolonged neglect for decades both in terms of budgetary allocations and implementation of primary and secondary healthcare systems such that today, Nigeria is rated among nations with high mortality rates and susceptibility to health risks such as the present COVID-19 pandemic, Lassa fever and malnutrition, amongst others.
More statistical data from the public finance agencies and researchers showed that between 1999 and 2016, the federal government spent over N52.67 trillion in yearly budgets compared to the states’ N55.36 trillion, yet the nation’s health sector lacks critical technology, infrastructure and well-motivated personnel to make service delivery to the sick efficient.
These developments are not in line with the expectations of the Nigerian authorities if the provisions in the Quarantine Act (CAP Q2, LFN 2004), the National Health Act (2014) and several other public health legislations at federal and state levels are to be used as assessment parameters for the responsiveness of the Nigerian government to the COVID-19 pandemic.
Sadly, today it is estimated that about 2,300 under-five-year-olds and 145 women of child-bearing age die in Nigeria daily while neonatal mortality rate of about 37 per 1000 people translates to an estimated 25,000 yearly.
Ironically, successive governments have failed to tackle this and as experts have noted, the leadership ineptitude to efficiently manage the resources and their egocentric approaches to governance at all levels have today turned Nigeria into ‘the poverty headquarters of the world’.
For instance, the nation’s unemployment rate report as published by the NBS in December 2018 indicated that in Q3, 2018, the economically active or working age population rose from 111.1 million in Q3,2017 to 115.5 million in the corresponding quarter of 2018. Out of the figure, in Q3, 2017, 18.8 percent of the population was unemployed, a percentage that further rose to 23.1 in Q3, 2018.
COVID-19 pandemic exposed Nigeria’s policy weaknesses – Prof Akpan Ekpo
Commenting on the structural imbalance in the nation’s economy and options open to the government to correct the defects and achieve a well-structured productive and export-driven economy, a seasoned economist, Prof. Akpan Hogan Ekpo, noted that COVID-19 pandemic had impacted negatively on the economy when assessed from the massive job loss, increased inflation, instability in the exchange rate regime, declining growth, social vices, anger and hunger it had triggered.
To mitigate the impact on the economy, the Professor of Economics at the University of Uyo, Cross River State, advocated the need for government to put in place fiscal and structural policies to reverse or reduce the adverse impact of the recession.
He expatiated on the way forward for the economy, saying “monetary policy may be effective in the short-run, especially in correcting the structural dimension, adding that if the recession persists, it may result in a depression.
“The pandemic has once again re-echoed the need to reduce the heavy dependence on an exogenous source of revenue (crude oil) to finance development, fast-track the economic diversification of the economy as well as implement policies towards industrialisation.
“The economy must become a productive rather than a consumption enclave. We can leap-frog into a sustained growth and inclusive development path if there is transformational leadership at all levels”, the economist stressed.
Nigeria’s agric, economic policies’ defects threat to food security – Dr. Oyeleye
Speaking from an agro-economic development perspective, a veterinary doctor and agriculture research expert, Dr. Kayode Oyeleye, noted that generally, the nation’s economy has been mostly dependent on petroleum for over 75 per cent of its annual revenue, adding that this absence of diversification is a major point of vulnerability to economic shocks, especially those externally-induced.
He pointed out that there wasn’t a better time to feel the practical impact of this than now, when the coronavirus pandemic has led to drop in world demand and the OPEC cartel’s inability to use its traditional economic logic of mutual production cuts to shore up prices, predicting that “the full effects of the pandemic on Nigeria’s economy in 2020 will only become clear later in the year.
On the performance of the key sectors, the livestock expert and public policy analyst lamented that “the real sector has not fared well because of the relatively higher risks that drive investors either away or make them more cautious.
Oyeleye attributed the structural defects in development policies to how and why Nigeria still continued to contend with low agricultural productivity in view of the huge number of subsistence farmers in the nation’s agriculture sector.
“In particular, policy measures that are half-hearted and not demand-driven have been promoted for the most part and these have left Nigeria more vulnerable to economic crisis”, the livestock expert added.
Future of Nigeria will depend on full-scale economic diversification – Dr. Danlami
Taking a critical look at where Nigeria missed it in economic policy terms and what could be done to restructure the economy to achieve balanced-growth, another public analyst and social scientist, Dr. Ibrahim Abdulhamid Danlami, pointed out that for Nigeria, the impact of the pandemic became more devastating on the economy because most of the arguments of ‘Dutch disease theory’ manifested themselves in the country due to over-dependence on crude oil.
Specifically, the don at Bayero University Kano (BUK), identified some challenges, including corruption, mismanagement, mis-specification of priority, lack of sincerity of purpose, desire and will to bail and develop the economy by those in power, in addition to the extreme selfishness of every ‘nook and cranny’ as well as visible and invisible structural defects as the causative factors of Nigeria’s under-development over the years.
He insisted that: “What will save the country is full diversification of the economy which may take many ages due to the aforementioned problems. Two major things can cushion the impact and aid the country’s economic recovery drive, pending achievement of the needed results.”
Danlami listed these to include finding alternative market to the country’s crude oil exports such as by building refineries that can take care of local demand and meet the needs of neighbouring countries as well as provision of uninterrupted electricity needed to support economic activities, particularly at the MSMEs’ sub-sector.
Our fiscal sustainability, mono-cultural economic challenges can’t support growth – Dr. Chizea
X-raying the structural lapses in the economy and how they accentuated the COVID-19 pandemic’s impact on the economy, Dr. Boniface Chizea, a chartered banker and economic consultant, maintained that in spite of the fact that the economy witnessed positive GDP growth, such growth has not been reassuring.
He pointed out further that growth of just above 2% of GDP while the population growth rate is at about 3% was not good enough as what that clearly says is that there is no development and therefore no improvement to the quality of life of the generality of the population.
Specifically, Chizea, who is also the CEO, BIC Consultancy Services, linked the structural defects to a federation that operates more like a unitary system, noting that the way and manner resources are realised and distributed offend natural justice, as the region that generates the resources is not equitably treated in terms of environmental despoliation.
The finance expert identified the mono cultural oil-dependent economic structure as one of the banes of Nigeria’s fiscal sustainability, with oil earnings literally vanishing due to the impact of the coronavirus on the world economy at large, adding that “this is reflected in inadequate generation of revenue such that over 60% of revenue is spent on debt servicing.”
He clarified: “We also have the lowest rate of tax to GDP ratios in the world. There is the problem of perks which are in most cases but particularly for the political class not aligned to the reality of the Nigerian situation.
“COVID-19 pandemic has globalised recession but in particular in Nigeria the economy has been dug into an economic hole which we pray must not result into a depression. The economic road ahead is uncertain and scary. The prospect for quick recovery is rather dim.” .