Rejuvenating The Nigerian Economy

By Godwin Akhimie

The Nigeria Economy has gone headwinds in the past eight years with all the sectors of the economy namely, agriculture, manufacturing, oil and gas operating at low capacity.

The Muhammadu Buhari-led administration could not keep up with the momentum of the economy handed over to it by the past administrations of Umoru Yar'Adua and Goodluck Jonathan.

The economy of Nigeria remained largely dependent on crude oil export, thereby making it a mono economy.

While Nigeria has potentials to turnaround it's dwindling economy using agro export like it's peers in Africa, but she must first of all banish complacency and laziness to do that.

Diversification of the economy has been on the lips of Nigerian leaders for ages but not on the front burner. It has always been a matter of political expedience for our political leaders to make statements about diversifying the economy only to still fall back to free resources they get from the shared monthly allocations from the sales of crude oil. There has simply not been any political will to back up these pronouncements with action.

As at 2007 when umoru Yar'Adua was president, Nigeria's crude oil export was less than 200,000 barrels per day owing to the hostilities in the Niger Delta region that distrupted crude oil production and export.

Umoru Yar'Adua administration initiated the amnesty programme which necessitated a total surrender of arms and ammunitions by the militants who were inturn compensated with scholarships to study  in schools of their choices in far-flung overseas countries.

As it turned out, the programme had an instant impact as peace returned to the once troubled with oil production increasing to 2million barrels per day. Nigeria's economy was the  better for it as it bounced back to reckoning.

The Goodluck Jonathan administration which came into being following the death of Yar'Adua inherited a thriving economy which he also worked hard to improve upon.

Goodluck Jonathan administration scouted for the best brains in the diaspora and liberalized the economy.

Prior to Goodluck Jonathan's administration,  South Africa's economy was the biggest in Africa by nominal value but Nigeria overtook the  rainbow country in 2012 as the biggest economy in Africa with $371b in nominal value and was the seventh fastest growing economy in the world. Nigeria's economy increased to $551b in 2013 after it was rebased, propelled of course, by agriculture and ICT.

The Goodluck Jonathan administration leveraged on the amnesty programme of Umoru Yar'Adua which increased Nigeria's oil production to 2.5m barrels daily.

During this period, inflow of forex was high and the Naira was stable until late 2014 at the twilight of his administration when international media predicted that Muhammadu Buhari was going to win the presidential election.

After the election of 2015, Buhari administration came into office and rather than improve on the successes recorded by it's predecessor, it went after alleged corrupt elements and abandoned governance and the economy.

Most foreign investors lost confidence in the Nigerian economy and moved their investments to neighbouring countries where they have good economic policies.

The administration of Muhammadu Buhari  was slow in taking off as it took the administration six months before cabinet ministers were appointed. Investors don't like uncertainty. They want to know the economic policies of the government and they dislike policy somersaults.

Nigeria's economy thus experienced a free fall from 2015 onwards and efforts to salvage it has been halfhearted, and not all-encompassing at best.

Borrowing to fund critical infrastructure has not helped the economy because the infrastructures are not self paying the loans they took on them. Endemic corruption and misplaced priorities has also served to scupper efforts made to save the economy in recent years.

Nigeria's debt is humongous as 75% of it was borrowed for consumption through the payment of salaries and pensions of civil servants and servicing the expensive lifestyle of the political class.

The sectors of the economy that should have lifted it are crawling.

The manufacturing sector is operating at low capacity because of the volatility in the exchange rate which has inhibited them from sourcing for raw materials for production and low electricity.

The floating of the Naira by the current administration, though a noble idea, has not produced the desired results.

To reverse the trend and save the economy from total collapse, therefore, the current government of Bola Tinubu must seek ways to plug the loopholes that encouraged the waste that characterised the running of virtually all the sectors of the economy in the last administration, fix the exchange rate, encourage direct foreign investment, arrest the rising wave of oil theft, and ensure that our refineries are not only repaired, but made to produce at their installed full capacities in order to break the vicious hold of the independent oil marketers on the supply and distribution of refined petroleum products in the country.