The health of Nigerian economy was again the focus during the last week investors’ forum in London, which has President Jonathan in attendance and numerous other business individuals with eyes on the country. All the key actors in the management of the Nigerian economy were in attendance with the exception of few prominent faces. Just like during last week first Bank annual Conference in Lagos were speakers such as Finance minister Mrs. Ngozi Okonjo-Iweala and Investment Minister Olusegun Aganga announced to the world that Nigeria is on verge of achieving double digit growth, the London ‘get together’ echoed the same optimism on the Nigerian economy, deliberately de-emphasizing the risks ahead. Looking at nationwide economic barometers such as the Nigerian stock exchange index, GDP growth rate, and growth in assets of notable Nigerian business people like Aliko Dangote a lot many business savvy individuals will agree that Nigerian economy is doing well; thus giving it a pass mark, but deep down there are many questions that are begging for answers.
But before looking at some of these issues, the positive parts of the Nigerian economy need to be re-echoed here; Nigerian stock exchange is currently the second largest on the continent after that of South Africa and remains among the most buoyant of the emerging market stock exchanges around the world. The all share index currently stand at its highest peak a spectacular increase when one compared it to the bottom it sink during the financial crisis of 2008/9; achieving annual average growth rate at increasing dimension from the crisis period to this year. The Nigerian banking landscape has stabilized over the same period of time from the near disaster level it was in 2009 to current period of growth albeit at slow phase. Credit to private sector has started a slow movement up from the flat position it was in the past. Inflation has been brought down to a single digit the lowest in the last five years. The nation’s GDP growth rate currently hovers around 6% with a lot of contribution to achieving the rate coming from the growth been experienced over the years in the non oil sectors. Domestic investors such as Dangote, Elumelu, and Abdussamad Rabiu etc. have at various times in the recent past made announcements of investments worth billions of Dollars in the Nigerian economy. Forecasts by some few world renowned institutions such as Goldman Sachs put the growth in the Nigerian economy as being on course to make the country the biggest economy on the continent ahead of South Africa in few years time.
Coming to the risky side, two classes of risk stand out as most prominent of all the risks facing Nigerian economy: security and political risks ahead of 2015 election. Since the resumption of office of the current regime of President Goodluck Jonathan after 2011 general elections, it has been battling with different types of security challenges for its own survival. Most prominent of these challenges being Boko Haram security treats that originated from the North Eastern part of the country. Recently, when many Nigerians were happy that the hydra headed Boko Haram group has been brought to it knees, the group made surprising comeback with its leader Shekau coming out on the net to deny the claim by some sections of the Nigerian security apparatus that he has been killed as a result of an encounter in Sambisa forest of Borno state. While it is to the credit of this regime that the Boko Haram activities have been restricted to one corner of the country, it is still a real threat to the economy of the country. In the oil rich Niger Delta, Ijaw Militants operations still remain a threat, though at a more subdue level compared to what obtained before this regime, which also came from the same Niger Delta. Of recent, a number of foreign expatriates have been kidnapped in the region, with demands for ransom of millions of Dollars coming immediately after the kidnappings. Arm robbery and kidnapping for money still remains a major challenge in other sections of the country, especially the South East and South West.
As we approach 2015 general elections, the intensity and probability of incidences of heighten political risk has been increasing, rising the level of tension in the relatively calm political atmosphere of the last two years into another height; and if care is not taken putting it (political risk) at par with the security risk the country is currently battling with. Two major changes help brought about this heighten atmosphere: the formation of the mega party All Progress Congress (APC) with strength to march the ruling People Democratic Party (PDP), and the current crisis that is threatening to develop into a bigger explosion within the ruling party. Transition from one election period to another in Nigeria is not assuring and stable as is the case in other countries such as the US or South Africa here on the continent, where there are some relative certainties. Elections in Nigeria are full of controversies, the most intense of which is allegations of massive riggings in the elections conducted so far; that have continued to develop into crisis, killing of lives and destructions of properties. For the first time in the history of democratic transition in the country it now looks increasingly possible for the opposition to grab power from the ruling PDP come 2015. That in itself is a big risk as nobody knows which type policy the next regime after Jonathan and PDP will pursue. And if Jonathan were to win the 2015 election with the usual rigging, as the opposition alleges, there is possibility of some kind of upheavals like we have seen after 2011 election or something more serious than that.