Some few days back, the Jeddah based Islamic Development Bank in one of its releases ranked Nigerian economy as third fastest growing in the world after that of China (98.4%) and Mongolia (14.9%) with rate of grow of 7.68%; these figures has further cemented what other development institutions and economic agencies have reported earlier about Nigerian economy and its potentials. With population of about 170 million people, Nigeria’s domestic sector continues to growth despite the challenges of insecurity and poor infrastructures. The highest contributors to this grow are the manufacturing, construction, telecommunication, and services who have over the last one year continue to absorbed more capital and labour as they churn out higher output and services. By no means insignificant in this growth is the contribution of agricultural sector which grow continuously despite government neglect of the sector over the years. But, these growth figures, notwithstanding, the number of poor people in the economy refuse to come down despite government mantra about fighting poverty and unemployment since the coming of this administration over two years ago. Conventional method of fighting poverty has done little to reduce poverty even in more serious clime where the government implement budget religiously, not to talk of Nigeria that has serious problem with corruption and poor governance record. Recently, top official of federal government were found wanting on the case of corruption where billions of Naira of pensioners money were stolen by crook government officials in collaboration with official of some financial institutions. Currently, the senate in Abuja is investigating the matter; and economic and financial crime commission has already wed into the issue. In a release this week, the world bank observed that the percentage of poor people in the developing countries continue to remain high, the report observed that about 60% of the population in the developing world and nearly 80% in the poorest countries lack effective safety net.
The dwindling reserve in the excess crude account has reached a point of concerned that recently the Minister of finance Ngozi Okonjo-Iweala has raised the alarm on the possibility of Nigeria going bankrupt. This is happening when the total earning from the exportation of petroleum continue to increase (daily output stood at 2.5 million barrel per day), raising the question of what is really happening to the billions of dollars that the nation earn. Are all these money going to the so called fuel subsidy too, or is it the cabal that took all these money? Nigerian economy still depends substantially on imported (refine) fuel to power its vehicles and machines. What a shame! All the clamor for the establishment of sovereign wealth fund to manage excess fund has gone into the thin air, becoming a victim of among other things subsidy cabal, state governors opposition to it, and other wastages. With inflation rate falling to about 11% from the January high of about 12% the economy remain heated causing more frictions than expected earlier. The cost of consumer goods and other necessity has not show any significant change from their sudden jack during January fuel price increase. While inflation remain high (which according to conventional theory the rate of unemployment would have already been down with this inflation) the rate of unemployment in the economy remain high at about 25% (according the official figures which in reality must have been higher than that) despite government numerous promises to reduces it before the end of last year. The Nigeria’s external reserve has remain at around $36 billions, unable to move to its last two years point of about $45 billion, these among many other things can be attributed to wastefulness of our governments both at federal and state levels. This year annual budget of 4.7 trillion Naira is the highest in the history of Nigerian government and much of it is going to the so called fuel subsidy.
In bureau de changes around Nigeria, a Dollar sold for 158 Naira and about 156 in the official market; as expected numerous factors contributed to the deteriorating exchange rate of Naira against other world major currencies that includes declining foreign reserve, absence of conducive economic environment in the country, and happenings in the global economy. As usual domestic producers continue to complain about the cost of Dollar, that it is seriously affecting their domestic productions. But, for the cost of Dollar to come down in an economy such as that of Nigeria domestic infrastructures most be strengthen first. It is only after the resulting increase in export and reduction in import of that measure that the cost of Dollar will fall to the favourable level request by domestic producers. Though, Nigerian economy will continue to growth in the foreseeable future as it move to surpass South Africa as Africa biggest economy, the challenges and obstacles on the way to achieving that are numerous. Of no small importance is security challenges that continue to remain the major obstacle to the nation growth. But, of more organic significant is corruption that has affected almost all the sectors of the economy, more especially the public sector where rent seeking is the order of the day. These challenges, notwithstanding, Nigeria will continue to attract foreign investment taking into consideration the large market within its borders, abundant human and material resources, and foreign investors desire to diversify their portfolio.