Nigeria grapples with significant economic challenges, as GDP per capita declines sharply. President Tinubu’s government faces calls for urgent reforms in energy, manufacturing, and social equity to address poverty and inflation. The disconnect between economic policy proponents and critics like the World Bank raises questions about the effectiveness of current strategies. A comprehensive plan to foster growth and manage disparities appears necessary to steer Nigeria back toward stability and growth.
Nigeria’s economy is facing urgent challenges, as pointed out by Dr. Akinwunmi Adesina, President of the African Development Bank. He noted a stark comparison between Nigeria’s GDP per capita, which peaked at $1,857 in 1960, and a troubling forecast of just $824 in 2024. South Korea, by comparison, has seen its GDP per capita soar from $158 to $36,157 in the same timeframe. The Independent Media and Policy Initiative disputed his figures, claiming Nigeria’s GDP per capita in 1960 was actually $93, but neither party revealed their sources for these claims.
As President Bola Tinubu marks the mid-point of his term, the economic indicators indicate a rough road ahead for struggling Nigerians. Increasing costs of living and inflation rates are pushing many into poverty, leading many to call for economic reforms tied to the principles of the Bretton Woods institutions. The liberal economic policies are seen by some as necessary steps to lift the country from near-economic collapse due to crippling subsidies on petrol and electricity.
Moreover, the discrepancies between what the World Bank and IMF recommend and what they criticize is troubling. These institutions previously championed tough reform policies only to now backtrack on their effectiveness. The main concern is that the government hasn’t effectively rolled out measures to cushion the impacts of its reforms beyond basic cash transfers and food aid, leaving many asking if more fundamental interventions are needed.
The government appears to lag on implementing deeper reforms aimed at improving crude oil output and offering petroleum for the naira, as well as promoting alternatives like Compressed Natural Gas (CNG). The focus on upcoming elections seems to have distracted officials from these critical economic initiatives. Observers have suggested the formation of a comprehensive economic plan akin to a Marshall Plan to drive Nigeria toward stability.
Recommendations for necessary actions by the government include expanding renewable energy initiatives beyond the Presidential Villa to state institutions and major facilities while also revamping how power generation and distribution are organized. Ideas like integrating electricity companies and supporting state enterprises to invest in the energy sector could step up production.
Investment in clean water infrastructure is also vital for public health and industrial use, with state governments urged to modernize existing water systems. Railways are another area needing attention; states should collaborate to build connections between urban areas, industries, and farms, fostering economic activity in the agriculture sector.
Reviving farm settlements to boost food production for both local consumption and export could play a crucial role in improving self-sufficiency. The current import-substitution strategy must be re-evaluated, as it restricts Nigeria’s manufacturing potential while continuing a dependence on imported materials.
The formation of a unified industrial plan via the National Economic Council could stimulate the establishment of manufacturing plants capable of producing machinery domestically. The government should also push for heavy industries such as automobile manufacturing to create jobs for the youth.
In terms of monetary policy, there’s a pressing need for the government to implement the naira-for-petroleum policy effectively, which would alleviate some of the pressure on the naira as it reduces the need for dollar sourcing, consequently making petroleum products more accessible. This links back to the need for increased crude oil production by the Nigerian National Petroleum Company.
Security issues linked to terrorist activities from the Sahel continue to pose significant threats to economic stability. Government strategies to manage these threats must be both kinetic and non-kinetic, requiring a reevaluation of cross-border movements as they relate to the Economic Community for West African States protocols.
As Nigeria strives to achieve a targeted 7% annual GDP growth rate and a $1 trillion economy by 2030, the allocation and management of national resources to narrow the economic gap between the rich and poor must be prioritized. With subsidies gone, state governors have more remittances; how they use this funding will greatly affect social equity.
In summary, it’s critical for Nigeria’s governments to consistently pursue policies that enhance economic performance and ensure fair wealth distribution. The challenges are substantial, but the potential for reform is equally present, demanding concerted efforts and aggressive policy directions.
Nigeria is at a crucial crossroads economically, with stark disparities in GDP per capita and rising living costs. Essential reforms are needed, particularly in energy, agriculture, and manufacturing, alongside better security measures against terrorism. The government must balance economic growth initiatives with social justice to ensure that prosperity does not sideline those who are already struggling. There’s an urgent call for a coherent strategy to manage these economic policies effectively so that the nation’s wealth becomes more equitable.
Original Source: punchng.com
