Reports on the Nigerian economy have been on the positive side in terms of pace of growth and increasing economic fortunes. Reported figures on GDP growth and per capita income have been on the rise. Prices of crude oil has gone up over the last few months as expected due to the long crisis that bedevilled the middle east and the oil industry crisis in Nigeria. The inflation rate has been on a downward trend throughout the course of this year. Single digit inflation has given the economy a ‘seemingly’ clean bill of health over the past months. The current rate being 8% should be a sign of hope for all Nigerians as prices of commodities ought to have been affected, prices should have gone down, and it is still a wonder why basic items in the market are still shooting up. Macroeconomic indicators show that the economy is performing relatively well, foreign reserve has been on the increase with a boost of more than 40billion US dollars in reserve, the pace of growth at 7% is modestly high and among the ‘fastest’ growing in the world. Most critical sectors of the economy are seemingly doing well, the Nigerian banking sector is reporting increasing profits and putting up stellar performances consistently for the past few years post financial crisis era. The telecommunications sector is increasing in capacity, infrastructure in this sector is booming. The insurance companies are bouncing back to life. Foreign direct investment is not a bad story when compared to other African countries. The main focus of this piece is to critique the non- inclusive growth in the Nigerian economy. In the preceding paragraphs; I have tried to bring to the fore the level of reported growth rates in most of the sectors of the economy. A major area of interest for economists is the ability of government policies to translate growth into positive economic realities. Government should be able evolve policies that will see the growth transmit through the lines of the economy to the real fabric of the society. It is needless to have growing figures without growing number of lives being touched. This ‘jobless’ growth brandished in the media is of little significance to the young graduate who cannot find a suitable job. Single digit inflation rate means nothing to buyers in the market who continue to grapple with rising cost of common food items. Nigeria’s economy is growing and not developing. To give you a background idea of the differences between these two concepts, Economic Growth is a narrower concept than economic development. It measures increase in real GDP (real output). Development looks at a wider range of statistics than just GDP per capita. Development is concerned with how people are actually affected. It looks at their actual living standards. It is possible to have economic growth without development. i.e. an increase in GDP, but most people not seeing any actual improvements in living standards. Growth in output without a corresponding increase in the living standards of people means little or nothing especially in emerging economies such as Nigeria. Pertinent questions are pressing for answers when you dissect the Nigerian economy to its actual fabrics. Operators of this economy should be concerned at the disjointedness of Nigeria’s growth viz-a-viz actual development. How come an economy is growing as high as 7% without absorbing more labour into the economy? Why should the unemployment rate be heading upwards in the same direction with economic growth? Can a growing economy such as ours be experiencing increasing unemployment challenges without any ray of hope? How come more Nigerians are impoverished in the face of mountainous growth? The inflation rate is reported to be at a single digit. Why is interest rate still increasing? Shouldn’t there be a correlation between these variables? How come the cost of accessing funds is increasing? The real sector is being denied access to credit and the government is competing with the private sector to source for funds. Can there be any meaningful growth without new investments? What is the proportion of bank’s profit line charged to interest income to the real sector? Until the interest rate is down to single digit and the naira brought to its highest realistic level, Nigeria will merely continue to be a country of lenders and currency exchangers without a production base. Nigerian banks by the way are not into real banking. The best we have here is currency exchange deals. Only the top tier of the real sector are privileged to have access to credit. When will the small and medium scale firms be given the opportunity to access these funds? For this government to be taken seriously, concerted efforts should be made to translate the growth in real GDP to improved standard of living. The figures mean nothing to Nigerians if we do not experience improvement in our state of living. The Nigerians on the streets do not understand these figures; the only thing that will make sense is to have more people afford basic necessities of life without so much stress. This is an oil rich country for Christ sake!
Posted on: Mon, 11 Nov 2013 00:46:25 +0000
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