A CRITIQUE OF THE ECONOMIC WOES OF NIGERIA SINCE 1980

In the years since independence, Nigerian economy has changed from its largely agricultural state of 1980s to an import depended mono-economy. Nigeria single most important export for more than forty years has remained crude oil. But, in the period since independence various economic models have been tested, as many as there were changes in governments.

Nigeria as one of the most populated West African nation with an estimated population of 200 million people, an average home survives on a minimum wage of ₦30,000 monthly, as an increasing number of Nigerian households have become food insecure as a result of the downturn of the economy, rising inflation and escalating food prices that erode their purchasing power with an increase in Nigeria’s unemployment rate to 33.3 per cent in fourth quarter (Q4) 2020.

A data from World Poverty Clock in November 2020 showed that Nigeria with a total population of 205,323,520 people, about 105,097,856 representing 51% now live below $1.90 or N855 a day. This means that more than 105 million Nigerians are living in extreme poverty. Current estimates show that nearly 690 million people are hungry, or 8.9 percent of the world population – up by 10 million people in one year and by nearly 60 million in five years.

While the adaptations of some economic programs were domestically inspired, others were forced on Nigeria from the outside. A good example of an externally inspired economic model is structural adjustment program (SAP) of Ibrahim Babangida military regime. Nigeria has experimented with economic models that include, largely raw materials exporting mixed economy, import substitution industrialization, structural adjustment program, guided deregulation, export promotion to privatization and liberalization of the economy.

Efforts to diversify Nigerian economy have been on the Nigerian government agenda since 1980s, but not much has been achieved. Despite the billions of Dollars in oil revenue, Nigerian governments have failed to use the resources to develop other areas of the economy.

The liberalization of the economy by Obasanjo and Jonathan governments has not achieved the desire effects, instead resulting in more unemployment, poverty and made Nigerian economy more import depended.

There have been a long decline in agricultural sector as Nigeria’s oil and gas resources stand as the major focus for government revenue and foreign exchange earnings. Nigerians rely on food produced by farmers of which majority are peasants who lack capital, skills, energy and other viable supplies to produce food in large quantity to meet the requirement of the growing population.

The figures released by National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN) supported the Buhari government claims of huge reduction in importation of rice, a fall of about 90% from the importation figure of 2015. The exportation of agricultural output increased between 2015-2018. Agricultural sector provided about 21.6% of Nigeria GDP and the largest share of Nigerian laborers (70%) work in the sector more than any other sector of Nigerian economy.

Meanwhile, Nigerian agriculture still suffered from the problems of used of old farming implements, low level of technology, low level of literacy characteristic of most Nigerian farmers, poor financing (government and banks inability to make credit available to poor farmers), subsistent nature of Nigerian agriculture and the slow take off of commercial agriculture.

Briefly after taking power in 2015, president Buhari has tried to reverse government economic policy and adopt some of the economic policy he used when he was military head of state in 1984-1985. In the 1960s and 1970s, Nigeria followed the same industrial policies adopted by South Korea, Malaysia and Brazil, but forty years after, these nations have made economic progresses while Nigeria is left stagnant, adding little to its 1970s economic status when Nigeria depended on the export of her newly found wealth: crude oil.

Though, Nigerian population has increased more than four times since that period. In between the periods, Nigeria became very important exporter of crude oil in the international markets. Recently, European leaders from Angela Michel of Germany, Theresa May of UK to Emmanuel Macron of France have visited Abuja Nigerian capital to discuss ranging issues from trade, security to migration. Theresa May was motivated by the need to make adequate preparation ahead of UK exit from the European Union in 2019. UK is looking back strategizing on how to strengthen its old relationship with its former colonies in Africa.

Germany and France were looking for ways to increase trade ties with Nigeria in view of the increasing inroad China is making into Africa. European leaders have begun to see things from the others perspective, that it is in their best interest to help African countries to deal with the economic and humanitarian crises facing the continent. In the last one decade, China has become the largest investors in Africa.

In August 2019, President Muhammadu Buhari ordered the closing of the Nigerian border to prevent smuggling of rice and other products. This affected trade between Nigeria and other African countries with which it had signed the African Continental Free Trade Area (AfCTA) agreement. The President Buhari ban on food importers from accessing dollars from the Central Bank of Nigeria (CBN), has left importers of food with no choice than to source for dollars at a high rate at the parallel (black) market.

As Nigerians continue to battle trade restrictions with other African countries whose products are blocked from entering Nigeria’s borders, high Dollar exchange rate to Naira, unemployment, violence, insecurities and insurgency, the cost of living is expected to increase and the economy depreciating.

Government should invest more in agriculture; provide farmers with more capital intensive, mechanized farming practices as well as educating farmers on how to improve productivity using digital tools to meet local demand in Nigeria.