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Nigeria’s had the 29th largest economy in the world at the end of 2018, according to data from the latest IMFs World Economic Outlook (April 2019). A couple of things struck me as I went through the data (see chart).
For one, Nigeria is the only African country in the top 30, with South Africa coming in at a distant 35th.
Secondly is the fact that the West African country that gained independence from colonial rule as recently as 1960, has built a larger economy than Ireland ($381.5bn), Denmark ($349bn), Finland ($276bn), Czech Republic ($246bn), Greece ($219bn), New Zealand($210bn), and a host of other long established nations.
So is this a glass half full or glass half empty scenario?
It is impressive that Nigeria has managed to build a semi-modern economy that has made it to the top 30 in the world even with all the problems the nation confronts. However there are no illusions that a lot of work still needs to be done to double the size of the economy and improve the lives of millions of its citizens.
It’s probably a miracle that the country hasn’t gone the way of the Democratic Republic of Congo (DRC), one of the richest countries in the world in terms of natural resources which has a GDP of just $48 billion.
On the other hand Nigeria could have with a little more hard work and discipline been closer to Indonesia (with a $1.1 trillion economy), especially considering both countries had similar structure of economies at independence.
The optimism that greeted Nigerian independence in 1960 soon vanished as the country fumbled into a needless Civil War that killed millions on both sides and disrupted the growth of the young nation, and made a mess of things generally, until 1998/1999 with the death of Military Dictator Sani Abacha, which some say was an act of God.
Whatever the case the economy took off in earnest in 1999 and expanded an average of 8 percent a year, for 16 straight years until 2015. In that period the economy expanded twelvefold, from $35bn in 1999 to $445bn today.
Major reforms were enacted in that timeframe (which would have been near impossible under an Abacha Presidency/rule) which aided the expansion.
These include achieving macro-economic stability through paying off the huge debt burden and the restoration of sovereign ratings, signing of the Pension Reforms Act which removed trillions of naira in Pension liabilities from the Federal Government’s balance sheet, banking consolidation that led to bigger banks with balance sheets that enabled them to increasingly finance large private sector credit needs, privatisation of close to 200 Federal Government enterprises overseen by a well-regarded Bureau of Public Enterprises (BPE), and reform of the Telecoms sector which kicked off a revolution in voice and data that continues today.
The list is by no means exhaustive. A lot of reforms that anchored the growth seen in those 16 year period were difficult to undertake but often took a principal/President that was willing to back his Ministers or Department and Agency head as the case may be.
The emergence of a private sector – an offshoot of the reforms – led to the large corporations of today such as Dangote Industries, the Banking sector, MTN Nigeria, the 21 Pension Fund Administrators (PFAs), and privatised firms like Indorama.
Before 2002, Nigeria pulled down the Tele density of Africa with its poor telecommunications network, today it is the largest Telecoms market on the continent, by far. The richest African is a Nigerian (with wealth not made in oil), and Airtel will list its African operations in Lagos, not Johannesburg, something unthinkable before 1999.
So Nigerians should have some pride in what has been achieved, however as our weeklong series on ‘lifting 100 million Nigerians out of poverty’ shows there is a lot of work still to be done.
A lot is still holding the engine of the Nigerian economy from going at full power and these need to be addressed.
Take transportation links between regions. They are woeful and expensive. Roads need to be expanded and railway lines built to move goods and services across the s regions in the country.
The military era land use charge, needs to be reformed as it traps millions of dead capital in homes which have no titles. For most people even in the developed world, home ownership is the base for wealth creation.
Infrastructure needs for the entire country needs to be audited, costed and a credible plan for attracting investments from the private sector to the roads, bridges, seaports, broadband fibre optics, and airports that will power growth for the next 30 years, needs to be on the table.
The country’s vast oil and gas wealth should be unlocked and production targets doubled (to say 4million barrels a day), so the country can get the best benefits of oil before the music stops and renewables become a cheaper means of energy.
Oil Production Sharing Contracts (PSC) need to be re-negotiated for the benefit of young Nigerians, the Sovereign Wealth Fund (SWF), needs improved funding, again led by politicians with an eye to 2060, not 2023, in essence playing the long game.
Young Nigerians must be prepared for the jobs of the future, frank discussions should be held about current regional disparity and a credible plan to tackle it put on the table.
Finally leadership at all levels must up their game. Young Nigerians need to be galvanised with a vision for a better tomorrow. They need to be given hope, beyond the extremes of reality T.V and suicide!
All of us have work to do. How did the little bit of reforms that propelled the Nigerian economy to become the 29th largest in the world happen? We need to find out and replicate on a national level, one state at a time, one Local Government (L.G) at a time.