“By 2020 Nigeria will be one of the 20 largest economies in the world, able to consolidate its leadership role in Africa and establish itself as a significant player in the global economic and political arena.”- Vision 2020 document.
Welcome to 2020, dear reader. Welcome to the year when Nigeria said that it would achieve significant progress on all indicators. 2020 was supposed to be the year of health for all, housing for all and all-round progress on various indicators for all citizens of Nigeria. Alas, we enter the year with stakeholders, local and international, lamenting the missed opportunities and fretful about the risks ahead.
All the reports, analyses and prognoses about Nigeria point to a difficult year. It starts with the federal government. A recent report by global ratings agency Fitch thumbs down the economic policies of the government as contributing more to knock than to uplift the economy. The economy is more vulnerable and the Naira a low-value currency.
There is a high risk of a devaluation of the Naira. Devaluation is bad news ordinarily but given the statistics of Nigeria, devaluation would be devastating. Yet the possibility hovers over the economy.
There is no clarity in the economic policies that the government is implementing. Fundamental policy measures are not subjected to any debate before Mr President or other official such as the boss of the Customs announces them and begins rushed implementation. The National Assembly looks on.
The country is steadily going back to the era of massive debts. The National Assembly is committed to approving the president’s request for Nigeria to take a loan of a huge $29billion ostensibly for funding infrastructure projects. It will add to the $80b that Nigeria currently owes and the weight of debt servicing and debt repayment.
Inflation would likely spike in 2020 given policy measures such as the 50 per cent increase in
Value Added Tax, the increased minimum wage, the continued closure of the Western border and restrictions on forex financing for a wide range of imported goods.
GDP growth at 2.4 percent would be below the rate of population growth. In real terms we would have negative growth in the economy. The key ratios look bad. Inflation is high. Interest rates do not support enterprise. We have already mentioned the low value of the Naira as a tool of global trade.
There are dire warnings from multilateral institutions about the trajectory of our economy. We enter the new year and new decade tremulous. BusinessDay believes we should take a different stance.
“Sweet are the uses of adversity, Which, like the toad, ugly and venomous, Wears yet a precious jewel in his head”, William Shakespeare got Duke Senior to exclaim in As You Like It. The many aphorisms of the peoples of Nigeria affirm this with expressions such as tough times reveal the content of the man.
Stakeholders of Nigeria must see 2020 as a call to arms. They cannot bow to the headwinds of the economic situation, even as it is clear majority of the challenges are self-imposed.
Fresh ideas, new thinking, new strategies must spring forth from operators of the economy. Players in other areas of life must weigh in with positivity. The times call for cooperation and collaboration. Professional bodies that have focused only on member relations must rouse to the challenge of national engagement. Associations focused on the economy should also do more.
Economic history shows that serendipity often comes into play when there is a national resolve. It is heartening that President Muhammadu Buhari is suddenly mindful of the need to have a united country and worries about his place in history. He could give the nation a New Year gift by changing the character of the administration with new appointments that reflect the diversity of our peoples while enthroning merit.
Enterprises in the country must embrace true research and development to tackle the shortfalls and changing dynamics of the economy and market. The experts such as Morgan Stanley also forecast calmer waters in the global economy, growth in emerging markets and a positive outlook. Nigeria must be a part of this positive outlook once more.
Happy New Year 2020.
