Nigerian President Goodluck Jonathan approved the removal on Tuesday of $1 billion from the country's oil savings to distribute to state governors for unspecified projects, one of the governors said after a meeting with him.
The withdrawal leaves $8.242 billion in the Excess Crude Account (ECA), Nigeria's mechanism for oil savings, Rivers state governor Rotimi Amaechi said after the meeting.
Finance Minister Ngozi Okonjo-Iweala has been on a drive to boost savings for Africa's second largest economy, doubling the balance in the ECA over a year before this withdrawal.
Economists have welcomed Nigeria's improved savings levels, but cautioned that there is nothing in place to stop them being rapidly depleted, as has happened in the past.
Jonathan and his team will be hoping this latest handout appeases the state governors, who have threatened to take the federal government to court over what it says are unconstitutional withdrawals from the ECA.
The governors are also in court trying to block the expansion of a Sovereign Wealth Fund (SWF) launched last year, which was supposed to replace the ECA and which has greater safeguards to prevent savings being removed. It will now run alongside the ECA with an initial sum of just $1 billion.
The SWF would in theory help Nigeria better manage its oft squandered oil funds by putting them out of the reach of its political elites, but without the governors' full support it is unlikely to take off.
State governors are among Nigeria's most powerful figures, some of them controlling budgets that are larger than those of other African countries.
Savings are usually depleted to pay for patronage just before elections and economists worry that if the SWF is not in place before a 2015 presidential vote, this will happen again.
Christiane Amanpour was the first journalist to interview Goodluck Jonathan when he assumed the presidency in April 2010. One focus of that conversation was about the endemic electric outages that average Nigerians face. Three years later, despite continued problems and a report by Nigeria's Infrastructure Concession Regulatory Commission that says 60% of Nigerians are without access to power, Jonathan said that the country has made significant strides.
“That is one area where Nigerians are quite pleased with the government – that our commitment to improve power is working,” he said. “I promise you before the end of this year, power outages will be reasonably stable in Nigeria.”
“You cannot change the mindset of people by waving your hand. You must take means to make sure that you don’t create an environment where everyone will be corrupt and we are doing it very well,” Jonathan said. He cited the previous elections as signs of success against corruption. International observers, The African Union, and the Independent National Electoral Commission all praised the polling. But there is still widespread corruption in the oil industry.
Last April, Nigerian Finance Minister Ngozi Okonjo-Iweala said that 400,000 barrels of oil a day were looted from the country in just one month. The International Energy Agency said that $7 billion dollars a year is lost annually to oil theft. “Frankly speaking, speaking I want the international community to support Nigeria because this stolen crude is being bought by refineries abroad and they know the crude oil was stolen,” Jonathan told Amanpour. “The world must condemn what is wrong.”
SEE VIDEO: http://amanpour.blogs.cnn.com/2013/01/23/nigeria-battles-to-stop-spread-of-al-qaeda-chaos-in-africa/
Mr. President, I hate to be the bearer of bad news, but the reality is that Nigeria is only great in our imaginations. Nigeria is big for nothing!
How many times have we heard the expression “Nigeria won’t break up”? This clichéd expression has become the chorus of Nigeria’s ruling elite; an elite that will not raise a finger to defend the territorial integrity of Nigeria if it becomes necessary to do so.
Like every bankrupt ruling class, ours never ceases to find an opportunity to proclaim its commitment to the country and her unity. One such opportunity offered itself a few days ago during the Inter-Denominational Church Service to mark the 2013 Armed Forces Remembrance Day Celebrations at the National Christian Centre in Abuja.
The Armed Forces Remembrance Day, also known as Remembrance Day,was celebrated on November 11 to coincide with the Remembrance Day for veterans of World War II in the British Commonwealth of Nations. The date was changed to January 15, in commemoration of the surrender of Biafran troops to the Federal troops on 15 January, 1970, an action that brought the Nigerian Civil War to an end. January 15 is also remembered for another important event inNigeria’s tortuous road to democratic governance and nationhood. It was on that day, 47 years ago, that the first of many military coups took place, ending Nigeria’s First Republic.
It is understandable, therefore, if presidential emotions run high on Remembrance Day. While lauding the Armed Forces and other security service for their efforts to “keep the nation one and in peace” the president assured Nigerians that the country would not break up. “Some people talk about disintegration of Nigeria, now even at political levels some people take it as a weapon … when they want to discuss politics. But my conviction and I believe that of most people here and those listening to us, is that Nigeria will continue to remain a united nation,” the president averred.
Two months ago, at the height of the debate about another petrol price increase, the president had likened the pains Nigerians were experiencing to a boil on the face of a five-year-old girl. Then, he had suggested surgery for the little girl with an assurance that “if she bears the pain and does the incision and treats it, after some days or weeks, the child will grow up to be a beautiful lady”. The president was saying in essence that Nigerians should be ready to bear the pain of his government’s agonizing policies.
This time around, President Jonathan likened Nigeria to a 100-year-old marriage which , in his wisdom, is indissoluble. “Nigeria will not disintegrate… I know Nigeria will remain one”, the president assured his audience. “In 2014 we will celebrate our centenary, 100 years in existence. It will only take two mad people to stay in marriage for 100 years and say that is the time you will divorce and we are not mad. If there are issues that have been brewing over the period and we have been managing, we will continue to manage.”
I wonder why the president keeps coming up with this crude comparisons. First, there are not many people in the world who live up to 100 years and there are even fewer who are married for that long. Even if we assume that the president was speaking metaphorically, there is no law that says people who have been married for so long can’t go their separate ways. You don’t have to be mad to divorce after being married for a long time. Sacrifice, yes, but marriages survive based on trust, love and respect, not because of the length. No marriage can survive for too long if it is based on abuse, neglect and deprivation.
Mr. President, we can’t continue to manage after over five decades of independence and almost a century of amalgamation and billions of dollars in earnings. Every Nigerian, including those whose actions have brought the country to its knees, has become a professional manager. No country can survive that continues to patch rather than fix once and for all the long-term structural problems that continue to hold down its progress.
Waxing patriotic, President Jonathan had this to say about the motherland: “I always say that Nigeria is great not because of our oil, because we have people that produce more oil than us but we are appreciated and still reckoned with because of our size and diversity both for human beings and environment. These are areas we should exploit for unity and development”.
Mr. President, I hate to be the bearer of bad news, but the reality is that Nigeria is only great in our imaginations. Nigeria is big for nothing! We are not respected in the comity of nations; our citizens are mistreated around the world, sometimes because of their actions, and other times simply because they have a green passport. What is there to respect? Even with the abundance of human and natural resources, we have one of the highest maternal mortality rates in the world. We are ranked amongst the most corrupt nations in the world and we are in competition with Afghanistan, Chad, Angola, DR Congo and Pakistan, for countries with persistent polio transmission. To our eternal shame, while Afghanistan’s polio programme has been described as “consistently performing at a reasonable level”,Nigeria’s “has slipped back in a quite alarming way”.
That President Jonathan – like those before him – has to use every opportunity toproclaim that “Nigeria won’t break up” is reflective of the state of our union. Forty three years after the civil war ended, we have a virtual war on our hand. The same issues that existed before the civil war began are still with us, except that todaythey have grown worse. The president is unable to visit certain parts of the country; fiends are murdering at will in the name of religion; militancy has become profitable; armed robbers and “freelance assassins” prowl the country while kidnapping has become a lucrative profession; poverty, anger and disillusionmentare rife; and our corrupt public officials have graduated from 10% to 150%kickback. What this means is that our rulers, and their collaborators in the private sector, have become so brazen that contractors are guaranteed to receive full payment for a contract that was never started, much less completed. And they are entitled to an additional half of the total contract sum after a review of the contract in line with the rate of inflation.
Indeed, we are witnessing a scenario worse than the country breaking up. The real fear shouldn’t be the country breaking up because that is a harder and much longer route to travel. The real fear is the possibility that anarchy will envelop the countryand we will go the route of Somalia, the poster child of failed states.
The president admonishes “us all (to) stand up and condemn those who say otherwise about our unity. Those who call for our disintegration or who make similar statements should be condemned by all Nigerians”. I agree with the president. Now also is the time for all Nigerians, including the president, to rise up in one voice and condemn those ills that breed terrorism, anger, disillusionment,poverty and threaten the unity of the country. Ills like corruption, abuse of power and suppression of the rule of law.
Ultimately, Nigerians would have to take control of their destiny and decide the shape of things to come. If in the end the country survives the doomsday prophesy,it won’t be because the present administration has done anything to stem the slide.
PricewaterhouseCoopers (trading as PwC), a major international accountancy and multinational professional services firm has issued a report that predicted that Nigeria will be ranked one of top 20 largest economy in the world by 2050. With a projected GDP of almost $4 trillion by 2050, 6 percent growth and vibrant youthful population, Nigeria's economic future looks very promising and reassuring. But does Nigeria has what it takes to make it happen?
The report published by the Pricewaterhouse Coopers (PwC’s) macroeconomics team was based on the modeling approach that is anchored on the utilization of the World Bank GDP data up to 2011 and "medium term projections for real GDP growth between 2012 and 2017. We then use our long-term economic model to estimate trend growth rates from 2018 to 2050." PricewaterhouseCoopers projections are based on the below specific paradigm tabulation:
· Growth in the population of working age (based on the latest UN population projections).
· Increases in human capital, proxied here by average education levels across the adult population.
· Growth in the physical capital stock, which is driven by capital investment net of depreciation.
· Total factor productivity growth, which is driven by technological progress and catching up by lower
income countries with richer ones by making use of the latter’s technologies and processes.
The key point here is that it is a microeconomics projections based on econometric forecasting with sound empirical data. The probability advantage is there, but the certainty may not be there, for the outcome is not written on the stone. The bulk of the work must be done by Nigeria to become a powerful and sustainable economy by 2050.Nigeria must diversify her economy away from oil. An economy based on export of natural resources, oil in case of Nigeria is not the wave for the economy of 21st century. Moreover, all corners of the world are overflowing with oil and the coming of the nosedive of oil price and glut are inevitable.
At the interim, Nigeria's natural resources especially it's large earning from crude oil can do a whole lot of good when it is put into a good use especially in the provision of durable infrastructures. Oil can be an engine of development, PricewaterhouseCoopers report put it this way, "Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions (e.g. as regards rule of law and political governance) and hence support long term productivity growth – the potential is there, but it remains to be realized in practice." This report reinforces that Nigeria vibrant and mammoth population is a thing of joy, when properly managed and geared into optimum productivity and wealth creation. But the youths must be encouraged and incentify to shy away from life of crime and violence.
Nigeria must keep her young and growing population educated and healthy. Poor educational facilities and inferior technological curriculum for schools will not cut it. Nigerian workforce must be familiarize with modern technology and technical know-how for them to take the advantage of the future opportunities. Nigeria must be able to compete with China and India for investments and capitals.
Nigeria realization of this prediction is also based on having a sound macroeconomics fundamental which includes low to moderate inflationary rate, a stable currency and implementation of an attractive and incentive-orientated fiscal policy that is commerce, investment and trade friendly. Nigeria needs a sustainable political economy stability that is rooted and planted on peace and prosperity. Naira can be safeguard and not be open for aggressive speculators to weaken it. Nigeria should accumulate an intimidating foreign reserve as a war chest to stabilize naira which is doable with arrays of export products other than oil.
According PwC report, "The world economy is projected to grow at an average rate of just over 3% per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.". In this case, Nigeria has a good prospect because her economy is projected to grow at 6 percent or even more in the future and Nigeria has the advantage because many sectors of the economy that needs to be improve and can attract more capitals and investments.
While China and India are making their biggest gains by 2050, many other economies including Brazil, Poland, Mexico, Indonesia, Vietnam and South Korea are becoming economic powerhouses on their respective regions and on global economic theater. The PricewaterhouseCoopers report stated that:
"China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third ‘global economic giant’ by 2050, a long way ahead of Brazil, which we expect to move up to 4th place ahead of Japan. Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by around 2035 at market exchange rates. Emerging economies such as Mexico and Indonesia could be larger than the UK and France by 2050, and Turkey larger than Italy. Outside the G20, Vietnam, Malaysia and Nigeria all have strong long-term growth potential, while Poland should comfortably outpace the large Western European economies for the next couple of decades".
Nigeria policy makers should see this report as a clarion call to be ready and alert to put her house in order and to set her priorities right. The path to a powerful economy by 2050 is paved with discipline, hard work and supreme dedication. The problems of corruption and mismanagement must not be given the room to side track this radiant projection.
2050 Projected GDP at PPP (2011 US$bn)
1. China 53,856
2. US 37,998
3. India 34,704
4. Brazil 8,825
5. Japan 8,065
6. Russia 8,013
7. Mexico 7,409
8. Indonesia 6,346
9. Germany 5,822
10. France 5,714
11. UK 5,598
14. Italy 3,867
15. Spain 3,612
16. Canada 3,549
17. South Korea 3,545
18.Saudi Arabia 3,090
19. Vietnam 2,715
20. Argentina 2,620 (Source: PwC)
IT is that time of the year when I like to remember the darkest days of Nigeria's history, January 15th 1966 to January 15th 1970. For years it has been a ritual for me, for the simple reason that my life was defined, altered and in fact, retarded by it.
I am just one of the millions who lived in Nigeria's core theatre of war as a sub-ten little boy already looking forward to the best that life could offer only to come out of the bush in January 1970 as a refugee to be plunged into a (temporary) life of destitution.
Everything we had was lost. What the enemy could not bomb they burnt or looted. In fact, we came back from our five-month habitation in the bushes to find our centuries-old compound overgrown with weeds!
Though my grandfather's storey building (built in Abiriba in 1917) remained standing (miraculously, I must say) all the exotic furniture were looted leaving only the manila dressings in the sitting room which, I presumed, the "vandals" did not understand their worth as antique artefacts. That house still stands with people still living in it!
When Professor Chinua Achebe wrote his latest book: There Was a Country, telling his experiences through the crises and war as well as offering his personal perspectives and judgement on roles played by the central figures in the saga, it provoked a fire storm of reactions from across the divides.
It reopened dormant but suppurating emotions and generally had the three major ethnic groups and their affiliates - the Igbo East, Hausa/Fulani North and the Yoruba West at daggers-drawn, at least intellectually (thank God). No one was willing to be a "Nigerian".
It is difficult to be a "Nigerian", rise above primitive sentiments and deliver a fair and unbiased analysis of roles played by the various ethnic groups, sections and their leaders in the events before and after our independence in 1960.
The root cause of our problems came from the very manner in which Nigeria was amalgamated and run by the British colonialists until 1960. The country was never configured to facilitate the emergence of a nation. Structural inequalities were foisted on it to create a permanent state of flux, crises and disputations among its various stakeholders, big and small.
That was why, barely five years after independence the quarrels boiled over when the first military coup took place on January 15th 1966. Because the coup failed, it was later rationalised and branded an "Igbo coup", based on which the course of action taken against the Igbo people between 1966 and 1970 by the federal coalition led by the North with the technical support of ex-colonial authorities, the UK, took place.
Let us assume (without necessarily conceding) that indeed the first coup was an Igbo coup. The question I would like us to reflect upon is this: which of the subsequent coups, attempted coups and even transitions from military to civilian regimes were "national" events? Sectional forces simply took over and foisted their narrow interests upon the rest of the country as "national" interests.
At no time did any leader who emerged sit down to creditably and patriotically carry every section of the country along. Even the 1999 hand over of power to General Olusegun Obasanjo by the North was meant to serve northern interests of burying June 12 and returning power back to the North.
As Chimamanda noted in the above quote-line, Nigerians will always remember 1966 to 1970 differently. Some Nigerians experienced the pain of war and lost everything. They came out of the trenches and were plunged into forty years of exclusion (marginalisation) from strategic involvement in the affairs of state.
Some Nigerians gained ascendancy, besides not even knowing what the war being fought in Eastern Nigeria was like. Some took what the Igbo fled from and fed fat on it for thirty years before they were rudely told they could not be president.
Smaller groups, which were happy to be part of the mob, in their euphoria of being "liberated" fought to "keep Nigeria One" only to find out they were mere pawns. Smaller groups from the North tried to assert their right to power but were always brutally and bloodily silenced both in the military and now in their churches while they worship and in their homes while they sleep.
For smaller groups in the South, it was their oil that the ruling class descended upon; the very true reason for which foreign powers ensured the war was fought and Igbos bumped out of reckoning.
Today, the only thing we Nigerians remember in the same light is that the country has been ruined by the post-war ruling class, who imposed mass poverty on the country, particularly the more culturally vulnerable northern masses.
And the angry, though misguided youth, has responded with militancy, terrorism, violent crimes and general disobedience to the post-war ruling class and their agents. The post-war ruling class simply factored their permanent interests into the system before handing over, just as their colonial predecessors had.
They ossified their interests in a difficult-to-amend presidential constitution which was updated in 1999. The Constitution of the Federal Republic of Nigeria 1999 is still very much Decree No 24 of 1999, despite the cosmetic amendments and charade of grassroots public hearings towards its further amendment.
I have said it before, and I say it again: we need to allow the Nigerian people to draft unto themselves a new constitution that will remove traces of colonial and military self-interests; a constitution that will break with the past 99 years of external and internal imperialism; a constitution that will help us build a new nation where no one is oppressed.
Nigeria must never enter the second century in 2014 without it.
Nigeria will be following the footstep of France and in less than 24 hours will commence the deployment of her military forces to Mali. Earlier, even before France throw in her hat in the Mali war theater in order to defeat the Northern Islamist in that country, The Economic Community of West African States (ECOWAS) has pre-arranged to deploy a contingency plan of 3200 force.
Associated Press reported that "Nigerian defense spokesman Col. Mohammed Yerima said Tuesday that Nigeria will send about 900 troops to Mali.The announcement comes as West African nations pledge support for a French-led mission to oust Islamic extremists from Mali.French President Francois Hollande launched an attack on the militants, who are linked to al-Qaida, last week after the rebels began advancing south.France's action pre-empted a United Nations-approved plan for a military operation in Mali, which was expected to start about nine months from now. Hollande decided that a military response to the extremists could not wait that long."
Chief of Army Staff, Lt Gen. Azubuike Ihejirika said at the Armed Forces Remembrance Day while laying the wreath to commemorate the ceremony that Mali's insecurity is a threat to the regional's security.
This will not be the first time Nigeria has intervened in African hotpots, Nigeria's intervention in Liberia and Sierra Leon have been helpful to the cultivating of democracy and peace in those former war torn nations. In 2003, the Nigeria led ECOWAS military deployment chased away Charles Taylor, former president from Liberia .Since then democracy has flourish in Liberia and Charles Taylor has been convicted by United Nations backed International court of justice for war crimes and crimes against humanity.
In same year of 2003, there was also an African peacekeeping mission in Democratic Republic of the Congo (DRC) and Sudan in 2004 to resolve the western Darfur atrocities. Some of these missions can be characterized as success while others like western Darfur were a failure.
Even the successful interventions were sometimes muddled and disorganized, out of track without a well thought plan. Many civilians were misplaced and the collateral damages could have been minimized. But this does not mean that ECOWAS or AU will not be given thumps up and kudos for their initiatives and interventions in hot spots of Africa.
Nigeria’s growth rate of eight per cent is not capable of reducing poverty in a way that will match the target set by the Federal Government, the Vice-President for Africa, World Bank, Mr. Makhtar Diop, has said.
Diop said this in Abuja at a press briefing on Tuesday shortly after holding a closed-door meeting with President Goodluck Jonathan as part of the activities lined up for his two-day visit to Nigeria.
The former Senegalese Minister of Finance was visiting Nigeria to appraise the bank’s activities.
Answering questions from journalists, Diop regretted that although Nigeria’s growth rate was high, the effect could not be felt by a majority of the populace.
“The growth is at eight per cent. Is it sufficient? No. Is it capable of reducing poverty to the level government wants? No. Is it capable of accelerating poverty reduction? Yes,” he said.
The country’s target is to reduce poverty by 21.4 per cent by 2015.
The World Bank vice-president said diversification of the economy held the key to ensuring that majority of the populace enjoyed the growth being recorded by the country.
Diop said working and looking more closely at the agricultural sector was capable of accelerating job creation, which could affect the majority of the people.
“We need to make growth more inclusive,” he added.
Diop, who said the World Bank’s contribution to the nation’s budget was only about two per cent, added that its most important contribution to the growth of the Nigerian economy was not finance but knowledge.
“We have an open data policy. Once we get information, we make it available to the government and to the civil society,” he said.
Diop said the economic outlook of the nation for 2013 was promising, adding that there might not be a reversal of the seven per cent growth rate earlier projected by the institution.
On the bank’s involvement in the power sector reform, Diop said it was important to exercise some patience and get things right, adding that if the legal framework was not right, the process could end in series of litigation.
He had earlier said the World Bank had set up a task force saddled with the responsibility of supporting the ongoing power sector reform in the country.
Diop said the bank’s decision to support power reform in the country was borne out of its desire to see a quick end to power outages.
He said, “We spoke on the issue of the power sector, which obviously has been on the mind of everybody in Nigeria. We decided at the World Bank to put up a task force, which will include private sector branch to support the reform.
“It is good that the reform is really making progress. I was with the main players of the power sector today (Tuesday), and they were all happy with the reform process so far.
“We are discussing about benchmark and timelines to really make sure that the reform is implemented timely and make the issue of outage in Nigeria a thing of the past or history in the near future.”
Diop commended the government’s effort at reviving the economy; saying at the time when the global economy was going down, Nigeria was keeping a growth rate that was significant.
He said he was at the Villa to listen to the President’s priority and discuss other issues such as how poverty had been evolving in the country and what could be done to accelerate its reduction.
He said the bank’s recent work had shown a slight reduction in poverty level in the country.
Diop said, “Our work recently has shown that there is slight reduction in the level of poverty in Nigeria moving from 48 to 46 per cent. The trend is good. It needs to be accelerated obviously.
“What we discussed are the policies that we can put in place to accelerate the pace of poverty reduction in Nigeria. We also talked about regional issues, including the role of Nigeria in the region.
“As you know, Nigeria is an important player economically in the sub-region, and it was important for me as I come here, to hear from Mr. President on how we can collaborate on regional integration and stability in the region; how the development and economic programmes of the World Bank can help the efforts that the political leaders are making to stabilise the region and create situation of peace.”
Jonathan, on his part, reaffirmed his administration’s commitment to the implementation of all reforms considered necessary for accelerated economic growth, job creation and poverty alleviation in the country.
The United States based global economic and political intelligent agency, National Intelligence Council (NIC) recently had a radiant prediction on Nigeria’s economic prospects by 2030. According to NIC report, Nigeria and many other developing economies including Colombia, Indonesia, South Africa and Turkey will play a vital role in the global economy by the 2030 and beyond.
The report also made an already unfolding reality that China will overtake United States economy while Asia will become powerhouse of the global economy. In case of China and Asia, all the economic indicators are pointing to the inevitability of their economic supremacy. Even further, China military power accelerates with increasing military strength due to rising spending in its military industrial complex.
This is how NIC report put it:
"In addition to China, India, and Brazil, regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey will become especially important to the global economy. The diffusion of power among countries will have a dramatic impact by 2030. Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending, and technological investment.
China alone will probably have the largest economy, surpassing that of the United States a few years before 2030. Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines."
But when it comes to Nigeria the affirmative economic prospect may be there but the road map and the given reality are clouded and foggy. Therefore many Nigerians including economic stakeholders and policy makers are receiving the good news with grain of salt. The point here to make is that Nigeria has everything it takes to emerge as a true regional economic power house with global influence. But in reality Nigeria may not have the discipline and will power to actualize the prospect. This does not imply that it is not doable but it is logical to comprehend that the pathway is loaded with difficulty and complex problems.
This is why Nigerians including Minister of Finance, Dr. Ngozi Okonjo-Iweala are cautiously optimistic. Nigerians and interested parties should listen to Okonjo-Iweala on Nigeria’s economic prospect. She believes in Nigeria and she is bullish on Nigeria but she is saying that Nigeria is not yet on the pathway to the promise land. Her words, "We are of course happy at such a forecast and we need to work harder as a nation to ensure we get there."
Nigeria has the potential to make the forecast a reality but the path to a powerful and sustainable economy is paved with discipline, hard work and unreliability. It is doable but it will take a lot of hard work. Nothing good comes easy and such a tall order beckons a serious industry and order.
Ugochukwu Okoroafor, CBN Director of Communications said that Nigerians receive of the news from NIC was filled with pessimism. Okoroafor said: "I think Nigerians don't take themselves as serious as the rest of the work sees us. We all need to come together and see what we have here and work. The world sees us as a major power; I think that we don't fully appreciate the power that we have and what is taking place in the rest of the world and how Nigeria is in position to take full advantage of this; others seem to see it but we don't."
With all due deference to Hon.Okoroafor, I think Nigerians have every reason to be cautious even cynical. Nigerians point of references and history taught them to be careful not to wholly consume the news no matter how tempting or sweet it maybe.
Nigeria has in past lunched many programs including “Operation Feed the Nation” and “Green Revolution, but they all failed. Even the recent 2020 vision program is floundering and many international institutions including IMF has predicted that Nigeria will not make to one of the twenty largest economies by 2020.
But in spite of our history, I will cast my lot with Okonjo-Iweala, Nigerians must work harder, come together, set achievable priorities, then kick the ball to the net. Therefore Nigerians cannot afford to be cynical despite our history; we cannot afford to curse “the darkness but light a candle,” as ancient Chinese saying goes.
The strategies for realization of NIC forecast must be clearly formulated and diligently implemented. The key to herculean economic growth and its sustainability are rooted on political economy stability. The problem of instability that comes through Boko Haram, kidnappings, pirates menace and criminality must be uttermost priority of the federal government. The most important duty of a government is the protection of life and property. Economic prosperity cannot thrive in absence of peace and stability.
Education plays a vital and significant role in economic development and advancement. Nigeria needs well trained and healthy workers to able to compete on the international scale. Nigeria must reverse brain drain and attract back many qualified Nigerians who are living abroad.
Nigeria must diversify her economy to have arrays of products other than oil to generate ample foreign exchange and strengthen naira with a quantifiable war chest as a bulwark against currency speculators. It must be noted that the economy of 21st century cannot be built solely on oil and natural resources but on human capital and complex problem solving intelligence that are grounded on high-technology training and superior education.
Then comes the most important which is the provision of social and physical infrastructures. A well-built roads, railways with effective delineated traffic rules and regulations. Steady provision of electricity and running water make the wheel of industrial production and output possible and sustainable. Nigeria can surely make it to a powerful economy not with words and big mouth but with action and hard work.
Analysis and Commentary
The economy of 21st century will not be plausible to dissect and analyze in the absence of politics because both politics and economic activities are entwined and reinforced each another. This is where political economy of Nigeria becomes significant due to consequential co-existence of the two enmeshed entities. Political economy is at the epicenter of state capitalism, an interaction between free economics and government.
In case of Nigeria there is no way one can isolate or divorce politics from the economy. The growth and sustainability of the country’s GDP is rooted on political stability or lack of it. While the economy is making some gains, the politics can be likening to the second law of thermodynamics, which is characterized by increasing disorder and instability. Nigeria’s economy in spite of its gain was still derailed by the state of the politics. The instability and rumblings in the country especially in northern Nigeria; where senseless and continuous bombings by the strange religious group Boko Haram have proven that these actions are not conducive for vibrant and sustainable economic growth.
According to the numbers coming from The National Bureau of Statistics (NBS), the country’s Gross Domestic product (GDP) was impressive at estimated annual growth of over six percent. The problem with the statistics of NBS is that many financial and economic leaders are back peddling in the endorsement of the numbers from NBS. Notwithstanding, there is a threshold of evidence to justify the stipulated economic growth especially the consumer spending and confidence. Just like any other thing in Nigeria the so called empirical tabulations coming from NBS may not be backed with authentic scientific procedure and verifiable methodology.
By any standard the above six percent economic growth is not bad at all especially when compare to the weak global growth that stood at less than 3 percent. Even Obama’s United States has seen one of its weakest GDP growths that barely rise to 2 percent. Therefore Nigeria’s economy is hovering and cruising at a bullish rate.
The major problem with Nigeria’s phenomenal growth is its inability to create jobs for millions of Nigerians, who are without jobs. Majority of the population are being swallowed by serious poverty and abject poverty that is steadily creeping into many homes in Nigeria. Those that have it worst are the youths who have the most recorded unemployment number in the country. The national unemployment number given by The National Bureau of Statistics (NBS) cannot be accepted, due to incoherent collection of date especially in the rural areas where vast majority of Nigerians dwell.
According to Vanguard, “The percentage of labour force that is without job is alarming while the army of the underemployed youths is frightening. Apart from the figures released early this year by the National Bureau of Statistics, which puts unemployment rate in 2011 at 29.3 per cent, the situation has over the years grown from bad to worse. From 2006 until 2011, the unemployment rate averaged 14.60 per cent, reaching an all time high of 23.90 per cent in December of 2011 representing about 20.3 million Nigerians who are currently jobless.
The situation which was put at about 71 per cent early this year would have rocketed to over 75 per cent, throwing even some of the hitherto employed out of jobs. The matter is compounded daily as higher institutions churn out fresh graduates to add to the already saturated labour market.”
Another major change coming to Nigeria’s economy is the rebasing with new methodology of calculation that will catapult the economy up to 40-60 percent. At the moment Nigeria nominal GDP stood at $247 billion as for 2011 according data from IMF. But with the rebasing the economy will be reaching up to $395.2, this will put Nigeria on the path of overtaking South Africa’s $422 billion economy in near future as the largest economy in Africa. This is a cosmetic change without any direct effect on the populace. But the new image will probably make Nigeria more noticeably and may even attract investments.
The new rebased economy will move Nigeria from the 40th largest economy to a 30th position. But even with that Nigeria will not make it to the twenty largest economies by 2020 as it envisioned and planned with its 2020 vision. The plan to become among the twenty largest economies by the year 2020 was poorly strategized and feebly implemented. The instability, not-so-well macroeconomic fundamentals and poor infrastructures are the barriers to the lofty goal.
Nigeria must put her attention and energy on solving the real issues of poverty and unemployment in the country not on make-believe adventures that she is not ready or equipped for.
Even if you are hiding under a cave, almost everybody has heard about Ph.D Nigerians who were applying for truck driver positions at Dangote Group of Companies. The number of joblessness which can even be higher as stated above, is an alarming number and should serve as a clarion call to policy makers and politicians that all is not well in the house of Nigeria. This is not the time to point fingers of blame to higher academic institutions for turning out graduates. After all education is the key for industrial development of a nation. Therefore it is not prudent and productive to blame the victims and academic institutions for doing their jobs. In Adam Smith’s Wealth of a Nation, he propounded the theory of division of labor. Adam Smith stipulated and argued, if not drive the point home that each sector and department of an institution must involve in co-dependency for a productive outcome.
Coming back again to political economy, in the relationship between politics and economy, no nation can thrive in economic stability with majority of its youths without jobs. The overflowing energy and restive state of the energetic youths cannot be managed without jobs for them. The problem of bombings, terrorism and kidnappings can be significantly reduced with gainful employments of the youths.
The macroeconomic policy and its implementation may be said to be fairly stable. The application of the monetary policy and the outcome from Central Bank of Nigeria has been stable for a while. The Central Bank of Nigeria (CBN) under leadership of Sanusi has failed to deliver as they promised to keep inflation rate under less than 10 percent. The yearly inflation rate was above 12 percent. At the fourth quarter of 2012 inflation rate ended at 12.3 percent in December from previously 11.3 percent in October.
Sanusi’s Central Bank of Nigeria by now has hit a roadblock with tightening of monetary tool to mop liquidity in order to checkmate inflation. But that has not been really successful and application of monetary policy as a tool to combat inflation has appeared to be waning. The benchmark interest rate as of fourth quarter of 2012 stood at 12 percent. CBN was instructed by IMF to cool off its aggressive application of monetary tool by steadily jacking up interest rate.
Apart from the devastating impact of the flood in 2012 that destroyed properties, displaced inhabitants and killed many people: The weakness of the relationship between monetary and fiscal policies cannot be overemphasized, which made the fight to lower inflationary activity much complex. There should be an effective coordination between the fiscal policy coming from the executive and monetary policy coming from the Federal Reserve Bank. Taxation and incentives can be used as tools to attract capital and consolidate economic growth.
Nigeria is gradually but steadily accumulating foreign debts by increasingly borrowing from international financial institutions. It is paramount that the accumulated loans are invested in the areas of the economy that needs to be improved for further wealth creation. The building of infrastructures including modern roads, bridges and provision of clean drinking water and steady electricity are necessary infrastructures for economic development and elevation of the nation’s wellbeing. The wealth of a nation endures and flourishes with the provision of the existential necessitates for optimum living and productivity.
Nigerian government has an important role to play in the development of her nation. The path to economic development, sustainable growth and stability are paved with discipline, hard work and 2020 vision. Government does not necessarily create jobs but must be an enabler for economic growth by protecting life and property. This implies that there must be a credible roadmap to maintaining stability. The social and physical infrastructures must be present for development to make any headway and to be sustainable.
Electricity, roads, railways, and security infrastructures are tools for upward economic growth and development. Government must do more beyond being an impartial referee and tax collector.
1. I greet and rejoice with you all as we celebrate the advent of a new year.
2. I join you all in giving thanks to God Almighty for bringing us and our beloved nation safely through the past year to the beginning of 2013 which, by His Grace, will be a much better year for us and our country.
3. In keeping with tradition, it is usual for individuals, institutions and organizations to make resolutions and set agenda as a new year begins, to guide their actions in the coming months.
4. I have already given a clear indication of the Federal Government’s agenda for 2013 in recent pronouncements. Our objective for the year is to ensure by all possible means that more of the programmes and projects envisioned by this administration, and which are already being embarked upon are further brought on stream within the next 12 months to meet the yearnings of our people, and raise the quality of life.
5. We have in the last year achieved a lot in terms of the positive transformation of vital sectors of our national life such as public infrastructure, power supply, oil and gas, transportation, education, health and agricultural development. We will continue to work diligently in 2013 to ensure that our efforts in these areas are carried forward to full fruition in fulfillment of our promise of better public services and improved living conditions for all Nigerians.
6. We will give priority attention in the coming year to flood and erosion control, the rehabilitation and expansion of existing federal roads, improved power supply, as well as the continued rehabilitation, upgrading and reactivation of the national rail network.
7. Employment generation and wealth creation will also remain a primary objective of our socio-economic agenda for 2013. Creating more employment opportunities for our youth and graduates of our universities is an imperative that will continue to underpin our drive for massive economic growth, the rapid expansion of our manufacturing and industrial base, and the productive diversification of our national economy. In this regard, we will continue to provide the necessary enabling environment for the private sector to thrive.
8. As peace and security remain pre-requisite conditions for the full realization of our objectives, we will also do more in 2013 to further empower our security agencies who are working in collaborative partnerships with our friends in the international community to stem the scourge of terrorism in our country and enhance the security of lives and property in all parts of Nigeria.
9. I also want to assure Nigerians that we will refuse to be discouraged by those who have taken it upon themselves to pick on every initiative and effort of this administration. We remain resolutely committed to the rule of law, due process and fair play in all circumstances. Our democracy continues to grow, and the scope for human freedom continues to expand. It is an achievement that we will continue to build upon.
10. I say it again, we are determined to continue to push forward. We will do more, not less. We will remain focused.
11.For your part, dear compatriots, I urge that you all include in your new year resolutions a commitment to do more this year to support the implementation of the Federal Government’s Agenda for National Transformation in every possible way. That is all I ask for.
12. The task of making our dear nation a much better place for present and future generations cannot be left to government alone. Leaders and followers alike have critical roles to play in our march towards the fulfillment of our great national potentials.
13. Let us all therefore resolve as we celebrate the new year to place the higher interests of national unity, peace, stability and progress above all other considerations and work harder in our particular fields of human endeavour to contribute more significantly to the attainment of our collective aspirations.
14. I wish you all a happy and rewarding 2013.
15. God bless the Federal Republic of Nigeria.
Goodluck Ebele Jonathan, GCFR
Federal Republic of Nigeria