By Sani Nahuche
After the Boko Haram militant Islamist group abducted over 200 schoolgirls in 2014, this led to lots of negative press for Nigeria all over the globe. For those keeping tabs on the country, they will have seen this abduction alongside bombings, murders, and several kidnappings in the months and years leading to this story. Despite this negativity, and the international concern that has rightly led from such events, there are two outcomes that should never be allowed to occur;
- Countries shouldn’t turn its back on Nigeria in the coming years
- The economic progress of Nigeria over the last 15 years shouldn’t be forgotten
While the tragic and terrible stories have been filling news bulletins in many countries, we shouldn’t forget that the McKinsey Global Institute (MGI) suggested that Nigeria has ‘major global economy’ potential over the next ten to fifteen years.
For many years, Nigeria has been the most-populated country in Africa with over 170 million people but they’ve only recently claimed the title of ‘largest economy’. According to new data, their GDP now exceeds $500 billion and this puts them in 26th position on the global stage.
Nigeria’s Potential and Current Problems
What does MGI predict for Nigeria? According to the statistics, GDP could exceed $1.6 trillion by 2030 with their current average annual growth rate of 6%. If they were to fulfil these predictions, the country would enter the top 20 and poverty would no longer be an issue for 30 million Nigerians (if growth is inclusive, of course!).
Unfortunately, the realistic picture isn’t quite as clear as what the ‘statistics’ and ‘data’ suggest because foreign companies are being put off investing due to outdated assumptions. For one thing, only 14% of GDP comes from the resources sector but there’s still a general belief that Nigeria relies on the world oil market as a ‘petro-economy’. Sure, oil production is an important export for the country but they have a diverse array of products on the global market.
Furthermore, another story told about Nigeria is that the performance of the economy can change wildly from one year to the next. Again, this is nothing but a myth because it has become fiscally and economically stable in recent years. How? In 2004, a budget reform detached public spending plans from oil prices and diversified the whole economy. As a result, having favourable demographics is no longer important because productivity has increased and GDP growth has stabilised at 6-7%.
Thirdly, we should also mention the growing consumer class who will be essential to the economy in the coming years. Though poverty is still common and productivity is still low away from the resources sector (despite improvements), average salary is expected to increase to $7,500 per year which means they’ll have more disposable income than ever before. Affecting 160 million people across nearly 35 million households, this increased spending power is expected to create consumption figures of $1.4 trillion (now just $390 billion).
With all these facts in mind, multinational retailers and producers are starting to see the value of investing in Nigeria. Thanks to a brilliant location in Africa, they also find themselves located centrally to take advantage of the increased demand across all of developing Africa. With experts suggesting an entrepreneurial spirit and large population increases, it’s fair to say Nigeria has incredible potential over the next decade and a half.
How Nigeria Can Ensure Success
Can Nigeria meet the predictions and live up to the hype of the statistics? In order to do so and reduce poverty for all citizens severely, all reforms proposed by Nigerian leaders will need to have the ultimate goal of boosting income, improving productivity, and delivering high-quality and effective education and health care to all.
With productivity in mind, a land title reform in the agricultural sector could allow deforestation to be replaced by farmland. What’s more, it could encourage growing profitable crops while expanding all mechanised and fertiliser equipment. Even after the farming itself, farms could be helped in the marketing and distribution process so they keep a large portion of the profit to reinvest in the industry.
Away from the agricultural sector, urban areas would benefit from a change in stance towards informal employment. Currently, even some major corporations are preventing small and medium-sized ventures to flourish and this is keeping many skilled and talented employees in low-paying jobs. In recent years, there has been a rapid increase in internet startups in Nigeria and this goes to show the entrepreneurial spirit developing in many cities.
Additionally, Nigerian leaders should consider improving the infrastructure through a working relationship with the private sector and aid agencies. By doing this, and making it easier for Nigerians to register a legal business, the right environment is created for individuals to thrive. Of course, corruption is another problem that needs a swift resolution so businesses aren’t taxed unfairly and then forced into giving up.
For all this to be successful, however, Nigeria will need to encourage inclusive growth. To prevent political and social tensions and put an end to human suffering, Nigerians must be offered a better delivery of public services. Despite spending similar amounts on public services to other countries, they have still fallen behind so this needs to improve. Whether it’s immunisation or seed subsidies, all levels of assistance need to reach those in need. For all Nigerian leaders, this should be a commitment regardless of where those in need reside; this can come from transparent government agencies.
As far as the global community goes, Nigerians aren’t looking for sympathy (and they’re trying hard to ignore the outrage). Instead, they need encouragement, motivation, and a helping hand along the way. As inclusive growth is garnered, in a stable way, Nigeria has a chance of proving doubters wrong and not being characterised by the stories of Boko Haram that shock the world.
With the right environment, Nigerians will have the prosperity and stability of which they’ve dreamed for many years!