Whenever I hear anyone talk of the Nigerian economy, I don’t know whether to laugh or cry. I really don’t, because I wonder what anyone can mean by the Nigerian economy in a situation in which there is so much fluidity that the word inchoate does not begin to describe it. Economists like to describe themselves as scientists and although this claim is rather contentious, there is no doubt that they need to crunch a lot of numbers if they are to make any sense of the enormous number of variables they have to contend with to make their conclusions sound anywhere near intelligent. Nigeria is rich in many things including competent people in many things but the country’s poverty in reliable figures is proverbial. If the truth be told, we can only guess how many Nigerians there are, where they live, what they consume and how much, not to talk of what they need. Given this background, how can anyone talk of a Nigerian economy?
Conventional wisdom dictates that every country must operate within the limits of what they call an economy and for this reason if nothing else, Nigeria must have an economy. This means that those who talk about a Nigerian economy have a point, even if there is a need to prove it. If we look at this case closely we may even say that there are two points here since whatever is described as the Nigerian economy must be a composite structure composed principally of two parts; the part which is visible and which to all intents and purposes supplies all the figures which are quoted, often in a garbled manner by all the so called managers of the nation’s so called economy. It would be a very brave or foolish person for example, to actually believe that the rate of inflation in Nigeria is say, 15% or any other figure ascribed to this phenomenon at any given point in time. Any planner that bases his projections on figures published by the authentic bodies given the authority to release such figures sees soon enough that all his structures have been built on quicksand and he is quickly buried under the weight of the debris produced by this inevitable collapse. And yet, these are the figures which are bandied about by the World Bank, IMF, Goldman- Sachs (originators of the pernicious and now discarded or just conveniently forgotten 20-20 prediction) and other such bodies which seek to remotely manage (and in many cases) damage what they describe as the Nigerian economy.
To put the term Nigerian economy into perspective, if it is an iceberg then all you see is the tip. In other words what remains out of sight is the 90% lying under water. Projecting the tip as the whole is therefore monumental nonsense. All there is about the Nigerian economy is the collection of rent from crude oil extractors and the spending of same in the most profligate and fraudulent manner imaginable. Now that the extraction and subsequent sale of crude oil are no more than wild guesses, the bottom can be said to have fallen out of the Nigerian economy which can and has even been described as being on auto pilot. Unlike what you have in other national economies, the element of production in the Nigerian economy cannot be factored into any calculation for the simple if painful reason that it does not exist. This means that the most conspicuous portion of any national economy is here only conspicuous by its absence. And why is the nation’s productive capacity so low as to be practically non-existent? There is a direct relationship between the level of electricity generation and industrial productivity and we all know is that we are not generating enough electricity to power a medium sized American city. There is therefore nothing here with which to power a modern economy not even a miniscule one. This is why the question of whether what can be called a Nigerian economy exists at all.
In those heady days of free fall economy inflicted on the country by probably the most vacuous leadership the country has had the misfortune of enduring, the executioner in chief of that government, the irrepressible Babangida was once moved to ask in genuine perplexity why the Nigerian economy had not collapsed under the weight of insults inflicted on it by his policies and in many instances the lack of policy. The answer to that question is, since a Nigerian economy existed only on the pages of fictitious government papers, there could not be a collapse of something that did not exist in the first place. The alternative answer is that the economy had indeed collapsed but like a decapitated chicken which was still running around, the reality of its demise was yet to be appreciated. At the time that Babangida was moved to ask that question, Nigerians were still enjoying what we would now refer to as a booming economy in reference to what we are now desperately struggling to cope with.
Official figures say that 70% of Nigerians live on less than $1 a day. If you believe that, you can believe anything because it is simply impossible, except in the most inaccessible parts of the country for anyone to live on that ridiculous sum. We are supposed to live on $1 a day and yet more than 100 million Nigerians have mobile phones and beyond that must find at least N100 a day to recharge their phones and another N50 from time to time to charge his phone battery given the acute shortage of electricity with which we all have to contend. This is not to talk of food, shelter and other bare necessities of life. It is clear that the $1 figure can only be in terms of the visible economy and has nothing to do with the reality of Nigerian existence. It is clear evidence of the huge undertow of the Nigerian economy which is actually the reason why Nigerians can still live halfway decent lives in spite of the incredible lack of competence and integrity by those who are paid too handsomely to order their lives. In other words, there is a shadow economy within which Nigerians must derive their daily subsistence and without it the hunger in the land would have consumed many more millions than we ever thought possible.
The current debate about the Nigerian economy concerns the Naira and whether it is overvalued or not. If the World Bank is to be believed over the period of thirty years and more, the Naira is overvalued and needs to lose weight. This view was also combatively canvassed by the one-time governor of the Central Bank and now governor of Anambra State, a learned Professor of Economics. Interestingly, he was succeeded in time by another governor who was subsequently removed from office and went on to become the Emir of Kano, a post from which he was also removed. He was as passionate in his defence of the value of the Naira, as his predecessor was in her devaluation. He argued very convincingly that any further devaluation of the Naira was not only unjustified, it was unjustifiable. Over the last thirty five years, the Naira has crashed through the floor being now less that 1/600th of what it was before 1986 when Babangida and his boys caved in to the blandishments poured into their ears by those boys in the World Bank. The original devaluation was supposed to stimulate the economy but thirty five years later all it has done is to stimulate the personal economy of a few privileged and criminal persons leaving the economy in tatters. The World Bank and IMF imposed devaluation regimen has clearly failed to revive the patient for which it has been prescribed and there is now no realistic hope for any recovery of the bastard and brutally battered entity which some still insist on calling the Nigerian economy. With the Naira plummeting in value on a daily basis, it is clear that what ails the Nigerian economy is much more serious than what a devaluation of the Naira can cope with and a more nuanced response must be found before it becomes impossible for anything of value to be imported into Nigeria. Given that virtually everything consumed in Nigeria has to be imported, continued devaluation of the Naira by any means can only undermine the Nigerian economy and cause it to become totally irrelevant so that we would have to revert to that portion of the iceberg which as at now is under water.
The Naira has been devalued to such an extent that no matter how many thousands of Naira you have in your pocket, you are still unable to participate actively in what is left of the so called Nigerian economy. This is a great disincentive to saving any money and as any economist worth his salt knows, the healthy development of any national economy is anchored on the willingness of people to save money which can be lent to entrepreneurs with the capacity to stimulate development. As things stand, I wonder how many people can save any money knowing that whatever is saved will be lost to relentless inflationary pressure pressing down on it.
Economics is a theoretical science; never mind all the equations which economists generate in such impressive profusion. In most instances those the theories cannot be validated by scientific experimentation. The erstwhile governor of the Central Bank who staked all his hard earned reputation on the theory of the usefulness of the devaluation of the Naira has seen for himself what the devaluation of the Naira has done to the economy. Now, the Naira is being massively devalued in our very presence and I cannot help but wonder what the governor of Anambra State thinks of the usefulness of this devaluation to the Nigerian economy.