- World Bank’s report on Nigeria says it all; there should be no controversy over it
AS it so often does, the World Bank has issued a salutary reminder that Nigeria’s exit from recession in the second quarter of 2017 does not mean that the fundamental shortcomings which hamper its economic growth have been fully addressed.
In a recent report titled Connecting to Compete and incorporated into its Nigeria Biannual Economic Update: Fragile Recovery report, the bank stressed that unemployment and underemployment increased in 2017, while poverty rose marginally, and declines were witnessed in most sectors, excluding oil and agriculture.
Nigeria’s Gross Domestic Product (GDP) rose by 0.8 per cent as a result of an expansion in oil output and continued growth in agriculture. However, there are persistent challenges of an infrastructure deficit which cripple the country’s capacity to operate effective economies of scale and properly leverage the obvious benefits of its huge population.
The inability to develop market specialisation along lines of productive advantage, as well as the absence of the necessary connecting infrastructure and policy support, has meant that Nigeria is essentially made up of a series of relatively small, competing markets rife with wasteful repetition instead of a large, cohesive market drawing upon the complementary energies of industrial and agro-allied hubs exploiting their strengths to the fullest.
At a time when political restructuring has become such a contentious issue, it is ironic that a compelling case for economic restructuring has been made by the World Bank. It is doubly ironic that the bank is arguing for policies and processes whose actual effectiveness was clearly demonstrated in the much-lauded regions of the First Republic, when economic growth was based on the development of local resources rather than a passive dependence on subventions from the centre.
Although the recent past has seen welcome innovations like the Development Agenda for Western Nigeria (DAWN), and the rice-purchase agreement between Lagos and Kebbi states, there is little doubt that the World Bank’s assertions are correct.
The routine wastage of agricultural commodities during harvest periods is directly attributable to the country’s long-standing inability to develop a viable agro-allied industrial complex in which the transition from the farm gate to the kitchen is smooth and profitable for every link in the chain, as well as the final customer. States prefer to waste scarce foreign exchange on the importation of goods that could be manufactured in Aba’s famed industries at a fraction of the cost. Governors insist on building unviable airports rather than urgently-needed roads.
The Federal Government should not waste time arguing with the World Bank over its contentions. Indeed, its own Economic Recovery and Growth Plan (ERGP) lays emphasis on virtually similar issues. It must seek to build upon its acknowledged successes in agriculture, paying particular attention to the development of connective infrastructure that would enable states to build upon their individual strengths.
In this respect, action on the Lagos-Ibadan railway line is especially important. Its completion would stimulate the construction of other lines, such as the Lagos-Calabar line and the new Lagos-Kano line, facilitating their eventual integration with other lines into a viable national rail network.
Then there is the vexed issue of electricity supply. Nigeria was ranked second-worst in the world in power supply in 2017 according to the Spectator Index, beating only war-torn Yemen. The rough average of 4,000 megawatts is utterly inadequate for a nation of 200 million people and incapable of facilitating the realisation of its ambitious goals. Perhaps it is time to pay greater attention to renewable energy, which has the advantage of relative cheapness, greater flexibility and environmental sustainability.
When economic opportunities expand, more citizens will find gainful employment, further stimulating growth, engaging the youth and reducing social tension. It is time for Nigeria to live up to its widely-acknowledged potential.
