The American Great Depression began by the complete collapse of the stock market on October 24th, 1929 when about 13 million shares of stock were sold.
The damage was extended on Tuesday, October 29 when more than 16 million shares were sold making the day forever known as Black Tuesday.
The value of most shares fell sharply, leaving financial ruin and panic in its wake.
There had never been a collapse in the market that has had such a devastating and long-term effect on the economy.
Businesses closed and banks failed by the hundreds due to the collapse, putting millions out of work.
Wages for those still fortunate enough to have work fell sharply. The value of money decreased as the demand for goods declined.
By 1932, the unemployed numbered upward of thirteen million, with many living in the primitive conditions of a preindustrial society stricken by famine, and by 1933, one in four Americans was out of work – roughly 15 million workers.
American President Franklin D. Roosevelt, who took office in 1933, responded to the calamity of the Great Depression, by launching the New Deal.
It was a series of new programs designed to respond to a wide range of problems facing the country: stabilizing the banks and stimulating the economy, creating jobs and raising wages, investing in public works and modernizing lagging regions, and giving ordinary Americans a new sense of security and hope.
The New Deal lasted until American entry into the Second World War at the end of 1942.
In a sense the state that Nigeria is in today is as bad if not worse than America was during the Great Depression of 1929 – 1942.
The stock market is now trading at two year lows.
The latest Labour Force report by the National Bureau of Statistics (NBS), released in December 2018, shows the number of unemployed Nigerians rose from 17.6 million to 20.9 million.
According to the report, the unemployment rate accordingly, increased to 23.1 percent in the third quarter of 2018, from 18.8 percent a year earlier and 5.1 percent in 2010.
Worse still, youth unemployment and under-employment was 55.4 percent in the third quarter of 2018.
The economy expanded 1.9 percent in 2018, and the International Monetary Fund (IMF) projects growth will be 2.3 percent in 2019.
However because the population is growing much faster at around 2.8 percent per annum, the tepid GDP growth rate is not doing much to move the needle on jobs or poverty reduction. GDP Per Capita is down 37 percent since 2014.
The country with a population of almost 200 million people, has the world’s highest number of people living in extreme hardship, according to a report released last year by the Brookings Institution.
Inflation has remained at double digits since 2015.
Without reforms, Nigeria risks “a lost decade” of flat economic growth, the Brookings Institution, said in its report.
Add the growing insecurity from kidnappings and herdsmen attacks on a daily basis, poor health facilities and inadequate schools, and worsening insecurity and a lack of decisive victory over the Boko Haram insurgency in the Northeast, and it reveals a country in dire need of a plan to restore growth, law and order and hope to millions of its citizens.
In essence a Nigerian New Deal is needed, which would require bold and visionary leadership from the top. But what would such a plan entail? Perhaps we can learn a bit from the American experience.
The American New Deal used an array of federal agencies, local governments, and private contractors to upgrade and expand the America’s infrastructure.
It built hundreds of thousands of new roads, bridges, and tunnels (the American interstate highway system still in use today), city halls, libraries and post offices; hospitals, schools and auditoriums; dams, water works and sewage systems; and airports, parks and military installations.
It spread these improvements across the country, bringing lagging American regions into the 20th century with paved roads, electric wires and telephone lines.
This means that every region of America was deemed important in doing its bit to lift the whole out of depression.
For Nigeria it would mean an infrastructure plan that eschewed favouritism/ nepotism and the politics of the 5% vs 95%, but truly embraces Nigeria as one nation, perhaps starting with an infrastructure audit across the country from Sokoto to Uyo, Lagos to Maiduguri, Enugu to Ibadan, Kaduna to Yola and everywhere in between.
How to raise the capital (perhaps in tranches), needed for such a massive infrastructure undertaking should also be part of the plan, as well as the role of the private sector.
The Ministerial nominee Babatunde Fashola has already proposed a N10 trillion infrastructure bond which is highly welcome.
The plan should have at its core the empowerment of the Nigerian people and restoration of our dignity.
Leadership is largely about inspiring citizens to believe in a better tomorrow. Roosevelt did it 86 years ago and today the American economy is the largest in the world. There can be no excuse today for the seeming lack of leadership, coming out of Abuja as Nigeria totters on the brink!
Patrick Atuanya
