Valid economic questions should actually be the major focus of our
discussions in this country --- but we prefer to discuss politics. Who is to
blame? Who is not to blame? etc.
Nigeria's economic problems
have been there all along, handed to us by the British and successive
governments have failed to address them because of oil boom. The British never
wanted Nigeria to develop technologically, preferring it to just produce
primary products, initially Agricultural ones, and later Oil and solid
minerals, which it hauls to the UK for its manufacturing and Technological
plants for processing into finish goods with its technology and then sell such
finished products to the world.
The Nigerian leaders who
took over followed the same pattern of exporting primary products, later mostly
oil and using proceeds to develop some infrastructure and stealing the rest.
Although temporary blips in oil prices forced them to think about
"diversification" especially since the 1982 Economic stabilization
act (Austerity measures) was promulgated and “Diversification of the
Economy" was its main focus, it was a mere lip service and was soon
forgotten when oil prices rose. Nigeria has never lacked "sound economic
policies" or competent managers. Only that those policies are never
implemented or followed either because of corruption or blackmail.
Nigeria experienced
unprecedented boom in oil prices between 2009 and 2014. In this period, they supervised the
squandering of such riches and allowed most of Nigerian infrastructure to rot
away, evening borrowing to finance consumption, spending whooping 90% of our
total Budget on Recurrent expenditure. In 2011 alone rogues stole N2Trillion
out of the Fuel subsidy Budget alone! N350Billion Budgeted for fuel subsidy
turned out to be N2.4Trillion- since 2013 when some fuzzy trials were supposed
to have been initiated by the EFCC, not a single soul went to jail, including
those who just printed invoices from "Oluwole." and got paid tens and
hundreds of Billions of Naira without importing a litre of fuel anywhere into
Nigeria. All those bleedings masked away by unprecedented oil price boom are
now coming to hurt Nigeria as oil prices collapsed.
The problem with Nigeria
was excessive reliance on oil for sustenance for 50 years, and worsened by
corruption and poor management of public finances. The solution will lie
in cutting our coats according to the size of our cloth and in:
- Diversification of the
economy, away from an oil based one to areas where Nigeria might have
comparative advantage- Agriculture, Solid minerals, Tourism
- Rapid industrialization
from within Nigeria, not waiting for "foreign investors."
- Development of its
technology to a level where it can compete globally- some of these
Universities may be converted to pure Technical colleges well equipped to
retrain current unemployed graduates in any technical subject area;
- gradually restrict the export
of pure primary products, and more of value added, consumer and semi- processed
intermediate goods which attract far higher prices.
I don't see a short term
solution to this; foreign investors are not coming here for some time,
especially if oil prices and production levels don't rise significantly. You
cannot be floating a currency you don't have nor have any form of control over
its supply, and the investors know it. If the government and the people
of Nigeria want to come out of this downturn, they have to be ready for
sacrifice and look within for the solution, not one "international
star" somewhere with a magic wand!
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