Nigeria Will Need An Economic Miracle!

Image credit: Financial Times Nigeria
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Nigeria will need an economic miracle similar to what Germany enjoyed after World War Two with a 15% annual growth rate over the next decade to recover from the Covid-19 crisis

(1) Like the rest of you, I saw those videos of Nigerians being humiliated in China. They were treated like animals simply because they are Africans. They are regarded as inferior beings and herded around like they are livestock

(2) It is no surprise to me that we are treated this way internationally. We are considered a burden and a nation of parasites by industrialised countries. Make no mistake about it, this will continue for as long as we remain an eternal consumer producing nothing

(3) China or any other developed nation will never treat the nationals of a country that manufactures industrial goods, propping up the global economy that way. I am actually glad that this COVID-19 has shone a mirror in our faces and shown who we really are. Responsible nations can take care of their people in these trying times, while irresponsible and parasitic ones like Nigeria cannot. We should all take a collective vow today to turn our economy around post-coronavirus to earn the international respect we think we deserve

(4) Reading through the budget revision published yesterday, I shuddered. Our 2020 budget has been significantly revised downwards. It was a paltry $28.8bn to begin with and is now $13.4bn as a result of falling petroleum prices and a collapse in global crude oil demand

(5) Given that about 70% of the Nigerian budget goes on recurrent costs like salaries, transport, building maintenance, administration, etc, this basically means that not one dollar will be spent on infrastructural projects in Nigeria in 2020

(6) It gets worse, however because unless we find a way to generate extra income this year, 2021 will even be bleaker. As a nation, Nigeria needs an annual budget of at least $100bn to take care of her 200m people. As things stand, we cannot even generate $15bn. Is it any surprise that we are treated in this racist manner worldwide? Why will the rest of the world respect a nation that cannot pull its own weight?

(7) After World War Two, Germany was in utter ruins, with her cities bombed, her industry in tatters, the population dispirited and no government in place. However, within five years, the nation was back on her feet, with both West and East Germany becoming thriving economies again. Nigeria simply has to follow suit if we want to get out of this rut

(8) With crude oil now selling for about $25 a barrel compared with the $57 in our budget projections and the $100 a barrel that dominated the Goodluck years, we are in dire straits. Global consumption is also going to remain weak as supply far exceeds demand, meaning we will struggle to sell the 2.1m barrels projected on our 2020 budget. I think Nigeria will be lucky to sell 1.5m barrels of crude in 2020

(9) When you do the arithmetic, you cannot but despair. We will need something like 15% annual gross domestic product (GDP) growth year-on-year over the next decade to get out of this morass. If between 2020 and 2030 Nigeria enjoys 15% economic growth every year, we will be able to recover. It is either that or we perish

(10) We do not even have the foreign reserves to prop us up as at the moment, as we only have about $37bn in the kitty. No matter how you look at it, Nigeria needs to launch a radical and unprecedented industrial economic diversification plan after this Covid-19 crisis. It is either that or we descend into becoming another Somalia or Afghanistan. With no jobs, our youth will revert to armed robbery, kidnapping, communal violence, ethnic hatred, religious bigotry and terrorism. Isis will just be licking their lips now as they have a very fertile ground to spread their hatred and indoctrination.

Now is the time to start thinking how to avoid that doomsday scenario.

Written by: By Ayo Akinfe

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