- Nigeria’s Economy Growing Without Jobs
When President Muhammadu Buhari took over the mantle of leadership of Nigeria on May 29, 2015, there were high expectations from Nigerians that the long-awaited ‘Messiah’ had come.
The word ‘Change’, which was the campaign slogan of the All Progressives Congress, became as popular as the country’s National Anthem.
The Buhari administration came into office with three major promises to Nigerians. These are: fighting insecurity, tackling corruption and reviving the economy.
To revive the economy, the administration promised to pursue an economic diversification programme that would make Nigeria produce what it needs and consume what it produces.
This was expected to be achieved through targeted spending on key areas such as infrastructure, agriculture and solid minerals, among others.
The government also signed three Executive Orders aimed at making the business environment less hostile and making it easier for investors to do business.
But three years after assuming office, many Nigerians can say that they have yet to fully enjoy the dividends of the change, which the government promised.
For instance, finance and economic experts say that while the current administration has made remarkable progress in the area of reducing inflation and increasing the external reserves, its performance in the area of job creation, poverty reduction and economic diversification has been below average.
Speaking on the development, a former Managing Director, Unity Bank Plc, Mr Rislanudeen Mohammed, said the growth recorded by the economy in the last three years had been fragile.
Mohammed explained that the two major challenges of foreign exchange shortage and fuel subsidy, which the Buhari administration met in 2015, had yet to be fully addressed.
He said, “The government met two major challenges when it assumed office in 2015. The first is the issue of foreign exchange shortage and the second is petroleum subsidy, which is a major issue that has yet to be resolved.
“After the recession, the economy trajectory has been showing positive signs even though the growth rate has been shaky. The fourth quarter GDP growth rate was 2.11 per cent, while we had a contraction to 1.95 per cent in the first quarter.
“If you look at the growth trajectory, we are growing but it’s shaking; inflation is going down, reserves are improving, but we have the problem of rising unemployment, which the government has yet to deal with despite all the talk about the N-Power programme.”
He added that despite the fact that the economy was growing, the growth rate had not been inclusive enough as it had not translated into reduction in poverty and the rate of unemployment.
He called on the Federal Government to urgently work towards ensuring that Nigerians feel the impact of the growth rate in the economy.
Mohammed said, “If you are saying the economy is growing based on the economic parameters, people are really hungry and not happy, and that shows that the growth rate is not trickling down.
“But that trickle-down effect is one of the areas that the government needs to urgently look at, and the only way it can do that is to quickly approve the budget so that jobs can be created and unemployment can be addressed through targeted spending.”
He added, “The lives of Nigerians can be better enhanced if the growth is inclusive. So, the growth trajectory is still shaky and something needs to be done, because the economy is still vulnerable to shocks from the international market; shocks from any challenge in the Niger Delta will affect the Nigerian economy.
“Despite all the support given to state governments, many states are not up to date as they cannot pay salaries.”
The immediate past Director-General, Abuja Chamber of Commerce and Industry, Dr. Chijioke Ekechukwu, said that the government needed to step up its economic diversification agenda.
He noted that while the government had been pursuing economic diversification since the inception of this administration, the results had not been too impressive based on the recent Gross Domestic Product report released by the National Bureau of Statistics.
Apart from agriculture, particularly crop production, he said oil was still the leader in terms of income generation for the country.
To simulate the economy, Ekechukwu noted that there was a need for more reforms to further reduce the cost of doing business and the lending rate.
Ekechukwu stated, “The country came out of recession as a result of an improved production capacity and improved international oil prices. These two major reasons are actually out of the control of the government, and so, achieving that feat cannot be said to be a better plus, because if that situation had not happened, it is possible that we won’t have been out of recession.
“The area we have to give commendation to the government is the area of curtailing the insecurity in the Niger Delta, because that was a major reason why we exited recession.”
He added, “In the area of growing the non-oil sector, we have yet to make any significant effort that can take the country to the path of sustainable growth. In fact, that is where I expect that the government will put a lot of effort considering the decline in the GDP figure in the first quarter that was released two weeks ago.
“The non-oil sector, on its own, has the capability to drive the economy in case the price of oil that is not within our control starts declining. So, there is a need to put in more efforts into agricultural development, boosting the export market and the manufacturing sector.”
On the performance of the stock market under the current administration, the Head, Department of Finance, Nasarawa State University, Prof. Uche Uwaleke, said 2017 was a spectacular year for the Nigerian economy following a return to positive growth trajectory.
Uwaleke stated that the stock market was a huge beneficiary of the country’s exit from recession, but noted that the equities’ prices had largely been on a downward spiral since February this year, with market indicators on the negative on the average
He said, “The economy appears stronger today than it was in 2017. The rebound in crude oil prices and production volumes have led to unprecedented foreign reserves accretion, shy of $50bn.
“The recovery in crude oil revenue has also enhanced exchange rate stability and helped moderate inflationary pressure. Agriculture, in particular, has gained traction, thanks to a number of initiatives put in place by the Central Bank of Nigeria.”
Uwaleke added, “In spite of these positive developments in the economy, investors’ moods have swung tremendously this year. With each passing day, stock prices seem to be on a trip of their own, out of sync with improvements in the economy.
“Equities prices have largely been on a downward spiral since February 2018, with market breadth in the negative on the average.”
In her assessment of the economy under the current administration, the Minister of Finance, Mrs Kemi Adeosun, said the government had performed to the expectations of Nigerians.
She stated that the Federal Government had stepped up the tempo of addressing the myriad of challenges posed by the demands of reflating an economy that was badly battered by years of mismanagement, fiscal leakages, depleted reserves and poor budget performance.
Adeosun said the government remained very innovative in churning out reform policies and initiatives that had helped, in no small measure, to stabilise the Nigerian economy and putting it on the path of sustained growth.
When asked about what had changed between when Buhari came in and now, she explained, “Everything has changed. What has changed the most is the attitude of Nigerians. Nigerians are becoming more industrious and innovative. The country has gone through a difficult period and is now on the path of economic growth. Nigerians are now less ostentatious than before.
“Previously, the talk used to be how many private jets we have in Nigeria, but the narrative is changing to how many young graduates are gainfully employed, how many free school meals are provided, how many roads are being constructed and rehabilitated, how many rails are being built?
“The matrix by which we measure our success as a nation has changed for the better. That, for me, is very rewarding. With the school feeding programme, more children are now enrolling in schools. The President has directed the use of UBEC funds to build more classrooms.”
The finance minister explained that the narrative had changed as the government now cared more for the people than previous administrations.
She stated, “We have a government that cares for the poor, the needy and the people. As far as the economy is concerned things are much better now than before.
“Our reserves are improving, inflation is coming down and growth is back. We have stimulated some industries, revived some fertilizer blending plants and we are growing rice in Nigeria and eating the Nigerian rice.”
Adeosun said the Federal Government had succeeded in building macroeconomic resilience for Nigeria, particularly revising the funding mix, rebuilding fiscal buffers, enhancing reserves and focusing on import substitution strategies.
“We are confident that if we continue to diligently implement our economic plan, Nigeria’s growth level will keep improving,” she concluded.
