By Austyne Duru
World Bank projects Nigeria economy will expand by 2.8% in 2019 which is slightly below the Nigeria’s federal government’s assumption of 3% growth. We are hopeful that better days are ahead, although the realities on ground suggest the opposite.
Nigeria’s population grows at about 3% per annum. The implication of GDP growth of 2.8% is that our Per Capita Income stays at $2,020 hence more persons slide below poverty line. I assumed a GDP and population figures of $400 bn and 198 million respectively.
The bigger challenge is that GDP growth in Nigeria benefits an estimated top 2% who own the stakes in multinationals and politics. The remaining 98% are unable to find their feet, and in fact the additional population of 3% are born into poverty.
Policy executors know this truth but don’t act due to bad governance and deliberate effort to keep majority impoverished. Incentives meant for SMEs don’t reach the intended recipients because of sharp practices between government agencies, commercial banks, microfinance banks, and multinationals. The informal sector which accounts for 60% of job creation and economic transactions has been totally relegated in the scheme of things.
Nigeria has the potential to grow beyond 4.5% as projected for EMDEs (Emerging market and developing economies) which we are based on our SSA (sub-Saharan Africa) region and MINTS class. We need to harness the inherent potentials in our people – capacity, capability, and competency. The system must deliberately encourage startup businesses and nurture them to the next level. Politicians must stop the habit of cornering capital expenditures to their pockets while the projects are not executed. SMEs must ask more questions about the monies voted to the likes of BOI, DBN, and BOA.
2019 is even more interesting as Nigerians go to the polls to elect for the quadrennial ritual – a make or mar decision beckons.