By Okechukwu Victor
Sir: The Nigeria population is on the rise despite government assurance of reform to change the look of things. Its current population is about 200 million.
Seventy-three per cent of this are youths and being the sixth largest oil producer and highest energy producer in Africa, means that we have immense wealth, both human and material.
But we have not been able to get our economy working in such a way that we can be in a position to employ the talents of youthful population for the realization of value.
A country with its economy struggling to grow at 2.1 per cent when the population growth is about 2.6 per cent means that the average income for Nigeria declined for four consecutive years.
Poverty and unemployment are growing at an alarming rate; and, despite high oil prices, external borrowing ballooned to fiscal contraction level where debt servicing now surpasses expenditure.
With 90 million people in extreme poverty, the World Bank warned that Nigeria might be harbouring a quarter of the world’s extreme poor by 2030, unless the country undertakes a significant reform.
According to the World Bank latest economic report, over five million Nigerians entered the labour market in 2018 with 4.7 million joining a growing army of unemployed people compared to the preceding year.
The last unemployment report by National Bureau Statistics (NBS), showed 23 per cent of the labour force was unemployed or underemployed in the third quarter of 2018, a 22 per cent increase compared to 2017.
More Nigerians probably were rendered jobless in 2019 with unemployment rate likely to have topped 30 per cent.
Going by the trends over the past two years, a new record in unemployment in over a decade to push the country’s misery index to a new high seems inevitable.
As the Financial Times said in an editorial “Nigeria is going backward economically”! Nigeria is the sixth most miserable in the world, according to the Economist Intelligence Unit; “The poverty capital of the world”, according the Brookings Institution and as the World Bank said recently, Nigeria could account for 25 per cent of the world’s total extreme poor population by 2023.
All this boils down to two things: Dutch disease and lack of good policies and programs.
Dutch disease is when natural resource export gains have effects that hamper the development of the other sectors.
The standard Dutch disease diagnosis is that natural resources discoveries, generating natural resource exports or higher world prices for those exports, increase income and therefore demand, drawing in more imports of other tradable goods and pulling resources from manufacturing sector into the tradable sector.
This comes about partly because the natural resource export growth strengthens the foreign exchange rate and that in turn makes the rest of the economy (more precisely, the production of other tradable goods and services) less competitive than it otherwise would be.
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The Dutch Disease causes a nation to see only good in exporting from one of its natural resources due to high demand which will later make others suffer. This happened in the defunct Soviet Union.
Right from 1960, Nigeria leaders have failed to think and plan for the future. The Chinese for example, with their history of statehood dating back to millennia, often think in long-term centennial cycles so do the Indians, Koreans, Indonesians, Malaysians and Singaporeans.
The Gulf Cooperation Countries have made giant strides in economic development by thinking long-term and thinking big. Our leaders are always confused when the country is in serious situation.
Some African countries lately have begun to see the need for dexterity and innovation in policy making.
Despite all pretences at diversification, Nigeria is yet to wean itself from overdependence on crude oil. This situation raises the need for a holistic approach to deepen current efforts to diversify the economy.
Petrol subsidies will further add a burden. This is why the government aggressively seeking to raise taxes on citizens as seen in the passage of the finance bill but it will require greater transparency and accountability to achieve the support of people.
- Okechukwu Victor, University of Nigeria, Nsukka.
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