• Time To Revive The Economy – Independent Newspaper Nigeria

    Time to revive the economy independent newspaper nigeria - nigeria newspapers online
    • 7Minutes – Read
    • 1301Words (Approximately)

    In the midst of Nigeria’s com­plex economic and political landscape, meaningful con­versations become crucial catalysts for change. My recent dis­cussion with Bolade Agbola, a dis­tinguished Agricultural Economist, stockbroker, banker and Business Administration doctorate holder, offered invaluable perspectives on the country’s pressing challenges.

    As we delved into the intricacies of Nigeria’s development trajecto­ry, Agbola’s multidimensional ex­pertise and cosmopolitan outlook shed light on the country’s poten­tial pathways toward sustainable growth. This conversation serves as a timely reminder that Nigerians continue to seek solutions, driven by resilience and determination. In this article, I reflect on our insight­ful exchange, exploring critical themes and actionable strategies for Nigeria’s economic revitalization.

    Let’s be frank, Nigeria faces com­plex challenges affecting citizens’ daily lives. Economic struggles, including inflation and unemploy­ment, are paramount. Political sta­bility and security are also pressing concerns, amid terrorism, banditry and kidnapping. This situation is unhelped by Boko Haram terror­ism, which has exacerbated secu­rity issues since the early 2000s. To alleviate these, Nigerians are seeking economic growth, a stable currency and reduced poverty.

    Despite the noises of despair, Agbola shared his optimistic vision for Nigeria’s future, citing potential milestones achievable by next year. He predicted that domestic petrol refining would increase, easing foreign exchange pressures. In his words, “This time next year, the inflationary rate would drop below 20% and racing towards single dig­its. Security concerns would also diminish as armed forces tackle clashes, banditry and kidnappings.” Not done yet, he emphasized the importance of state policing and local government autonomy in en­hancing security. Agbola also pre­dicted that economic fundamentals would improve, driving the naira exchange rate below N1000.00/$1. ‘E lo f’okan bale! The economy will soon witness a positive turn­around’, he concluded reassuringly!

    Obviously, Agbola’s perspective on ‘This time next year’ showcases humanity’s capacity for resilience, optimism and community solidar­ity. By embracing the present, this mindset inspires collective action toward a brighter, more equitable future. But then, this time next year, the journey to 2027 will have begun in earnest. Regardless of govern­ment policies, one doesn’t need to be a genius, or an econometrician, or a Nostradamus before knowing that, given current economic trends, the dollar-naira exchange rate is unlike­ly to drop below N1,000.00, which is at a best case scenario.

    His other predictions, while op­timistic, may similarly face signifi­cant hurdles, including infrastruc­ture gaps, regulatory frameworks and global market fluctuations. According to Nigeria’s National Bureau of Statistics, inflation rates have consistently exceeded 20% since 2020. Therefore, achieving sin­gle-digit inflation by 2027, as Agbola predicted, would require significant policy shifts and economic reforms. Furthermore, his emphasis on do­mestic petrol refining overlooks the need for comprehensive energy sector reforms. To address this, Ni­geria must prioritize investment in renewable energy sources and grid modernization.

    Talking seriously, Nigeria is cur­rently grappling with a balance of payments crisis; and, when one has a balance of payments crisis, one’s response will be like that of Jawa­harlal Nehru in 1958, when there was not much for India to export; or, Harold Wilson in 1967, when Brit­ain’s was more of currency crisis. Nehru’s quote, echoed by Wilson, remains relevant: ‘We have to export or perish’, thus emphasizing the need for export-driven solutions to rectify economic imbalances.

    Under the circumstances, Presi­dent Bola Tinubu should have prior­itized exports from the outset more so as competitive institutions are crucial to Nigeria’s success. How­ever, the decision to float the naira without diversifying production and strengthening institutions has been calamitous. Addressing these institutional deficits should have been the first order of business. To get out of the current economic challenges, the government needs to rethink its export strategies to mitigate the currency turmoil and alleviate the cost of living crisis.

    Advertisement

    The ‘Soludo Solution’ merged Cooperative Banks into larger in­stitutions, neglecting their potential as specialized financial intermedi­aries for farming cooperatives and hundreds of agricultural associ­ations. Simply put, while tempo­rary relief may come from global interest rate cuts, it is insufficient as speculative investments seeking high returns won’t drive sustain­able growth or employment, even if the Central Bank of Nigeria (CBN) cuts interest rates in the next few days. Instead, Nigeria should pri­oritize production and modernize its agricultural sector to create jobs and boost exports.

    The Netherlands’ success story offers valuable lessons, attributing its prosperity to two key factors: specialized financial institutions like RABOBank, which was credit­ed with knowing everything that’s worth knowing about agricultural finance, and world-class agricultur­al research institutions. These two elements are intricately linked. In contrast, Nigeria presently strug­gles with inadequate agricultural financial institutions and research entities, and these have been hin­dering its progress. A comic in­terlude comes from reports that the Cocoa Research Institute of Nigeria (CRIN) allocated funds for urban solar-powered streetlights. In a twisted harmony like ours, where contradictions blend into a unique melody, this is a tragic comic illus­tration and the complete absence of interest in the development of agriculture.

    In Nigeria, hope is vital amid eco­nomic uncertainty. Drawing from Prophet Elisha’s wisdom (2 Kings 4: 1-7), Nigerians can develop inno­vative solutions and collaborative problem-solving. Just as the people of Samaria persevered through famine and siege, Nigerians have continued to show remarkable strength in the face of economic instability, political turmoil and security threats. For Nigeria to achieve progress, strategic eco­nomic plans, addressing security concerns, strengthening institu­tions, promoting transparency and accountability in governance are essential.

    Across centuries, development has typically begun with a strong foundation at the local or communi­ty base. In other words, true devel­opment goes beyond monetary pol­icy and MOUs. It’s about building a strong foundation! Nehru advocat­ed for village development through initiatives like cooperative farming, rural electrification, and access to healthcare and education, setting the stage for broader economic progress. That’s commonsensical! Brazil’s transformation from ex­porting raw cocoa to chocolates is particularly admirable. This shift has boosted the country’s earnings, making Brazilian chocolates easily available in global markets like New York and Paris. By adopting similar strategies, Nigeria can improve its economic prospects.

    Nigeria’s economy is a complex, hydra-headed beast that requires a multifaceted strategy to tame. Thankfully, the wheel has been in­vented on these issues! The Tinu­bu-led government deserves credit for securing the Supreme Court autonomy ruling for local govern­ments. Think of it as a delicate rec­ipe requiring the perfect blend of export-led growth, financial sector reform, and strategic investments in agriculture and manufacturing – with a dash of institutional reforms and human capital development for added flavour.

    As 2027 nears us by the eyelids, the party in power must revisit its developmentalist manifesto com­mitments. By translating policy intentions into tangible outcomes, Nigeria will not only bridge the gap between rhetoric and reality but also ensure citizens’ well-being and improve lives. Meanwhile, while sustained commitment to develop­mental goals may be destined to de­termine Nigeria’s future prosperity, discussing a competitive economy is pointless when the foundational issues persist.

    Beyond any big transactional jargons, the next budget should in­clude an ‘Inflation Reduction Act’ with clear timelines to achieve single-digit inflation by 2027. This is the urgency of the now, more so as it is difficult to make informed decisions on an empty stomach. Beautifying the streets is futile, if basic needs remain unmet. As Mi­chael Afolayan emphasized, citing William Shakespeare, “Take the current when it serves, or lose our ventures.” And what’s the USA-based erudite professor trying to say? ‘A greened street is most likely to be disgreened by an ungreened stomach!’

    *Komolafe writes from Ijebu-Jesa, Osun State, Nigeria (ijebujesa@yahoo.co.uk)

    See More Stories Like This