I have come again; the economist who insists that the Nigerian GDP must grow at double digits for us to make real progress. Today, I am a tad happy because one of the candidates in Nigeria’s upcoming 22023 presidential elections – Asiwaju Bola Tinubu – has listed as one of his targets, 12% annual GDP growth for at least 4 years. Many have tackled him, speaking about its impossibility. I think it is because people are now very vocal, with millions of followers on social media, who do very little research in spite of the ubiquity of information. They have not dug into history to know how some major nations performed when they were at our level, or indeed how countries become great economies. 12 % sounds very odd to them. I don’t blame them. But their vociferous rhetoric must not become received wisdom.
With the reactions to Tinubu’s promise as released by his campaign media group (I hear the final document is not yet out), why do most of our people believe that 12% GDP growth is impossible? I am sad. Because if Nigeria was to grow, the first thing we need is the cooperation of the people who must be able to think and dream for themselves, Let me lay out my thoughts and concerns in points:
- It is ABSOLUTELY imperative – a matter of life and death for Nigeria – that we target double digit growth…and achieve it. Why? For real progress, our GDP growth rate must cover our inflation and population growth rate. When we combine those two, we are 21.2%, where inflation is 18.6% and our population grows at 2.6%. Anything short of 21.2% is negative growth and self-deception, and we shall continue to see layoffs in companies, weaker Naira, and higher inflation if we aren’t careful. We shall also not have enough revenue to service our debts. Now, it is a tall order to call for 21% growth but by all means we should push for double-digit growth in the minimum.
- Other serious nations grew at this level when they were coming up. The USA grew at 15 – 25% in the 1960s. The UK grew at 12% in the 70s%. but from what we can see, it looks like those countries were at our level before the industrial revolution of the 1750s. We may not have access to the data of their growth then, but after the first industrial revolution, those countries exploded. Nigeria’s productivity and growth needs to explode. The data for the 1960s up till the 1980s for these great countries are all over the internet for us to confirm. We must never be afraid of taking the hard decisions that will transform our nation through economic growth.
- It is easier to grow when you are coming from a negative position – with a little seriousness that is. This is called the ‘base effect’. Minus 5, plus 5 equals 10%. There is much space for growth in Nigeria because we have not achieved much, but we have to turn the corner. We know where our excesses lie. We know where are strengths are. We don’t even have to become an industrialized nation to achieve double digit nation. We have only used 30% of our arable land, and we only feature in the export of a handful of crops when most crops can grow here. A serious focus on agriculture (meaning that we defeat our insecurity issues first), will get us this double digit growth quite easily. Finding a way to industrialize and owning our own technology could see our economy doubling every two years.
- Boiled to its essence, 12% GDP growth means 12% more productivity and profitability from most companies. In believe I could use 12% more money in a year. Businesses could do 12% more of the turnover. I think every Nigerian person and business should be targeting at least 20% more efficiency, profitability and earning capacity. And governments should be targeting that much 20% efficiency, productivity and cutdown of waste. This is for starters.
- We can also look at achieving growth sector by sector. Even starting with the basics; food, shelter and clothing. The government has invested billions of dollars into the textile sector. Most of the old mills and their owners simply cashed out from government intervention and did not come back into production. But we must not give up. Any achievements in our textile sector dovetails right into GDP growth. Granted that the sector is now very much automated. But we have endless possibilities in cotton farming and processing as well as the garment industry where Bangladesh, India and Pakistan are now doing so well. Mahatma Gandhi died so that they may enjoy that sector today.
- The food sector has been fairly described above. But to add to that, we suffer untold post-harvest losses yearly. We saw millions of mangoes wasting in Benue the other day. Same for citruses and cashew in Nigeria’s Middle Belt region and elsewhere. Cottage industries are needed which can add value to these crops. Leadership should set real standards in buying local, not mere rhetoric. Cottage industries will boost our GDP if they are properly established. The only downside is that we produce no machines or technology and have to import from abroad. Our housing sector has nothing for poor and middle class. Nigeria sits on over N100Trillion of dead capital (mostly unoccupied houses all over the country. Abuja alone had over 500,000 units of luxury houses abandoned, half-completed or just wasting away. These are majorly fruits of corruption. These are deductions from our national GDP. A policy that targets them and wrings value from them will dovetail straight into GDP growth. Cottage industries to preserve, package and add value to our cash crops may be the very next move we should make – to preserve waste and earn more dollars from our exports – given that 62 years after our independence as a nation we are yet an agricultural economy… a primary product economy.
- Technology – Whereas many of our youths would rather work in the field of tech, where they don’t get grease on their hands, they should begin to dovetail their efforts into value-addition beyond finance. The tech savviness of our youths should get into every facet of our lives and improve the lives of Nigerians. Innovation, innovation, innovation. Most of our smartest youths – if they are not in the business of trying to con people from their monies through ‘yahoo’ business, are in or trying to be in the fintech (financial technology) space. Many have provided solutions in the payment system space, some have opened online shops (where they are still mere middlemen to imported goods), and another set have actually duped unsuspecting Nigerians using technology by posing as ‘investment bankers’. Government needs to be harder in this area and help direct these young people to areas of real value-addition. We appear not to be building the apps that can solve our own problems. Those kind of apps are built by foreigners.
- Measurement – In a recent summit I attended, I found out there was a big lacuna in the area of how we measure our GDP. Good measurement, new insights into measurement will help us capture things properly and report effectively. Our services sector – which is 52% of the economy already – is hardly well-captured. When I visited the Dubai world expo in March 2022, I found out that the only industry that Nigeria showcased was her music industry. That is service. But how large is that sector? We don’t know. Our big musicians have very clever arrangements with their agents and managers and keep their monies outside the country. Whereas there may be little we can do to make them bring in proceeds of foreign shows, we could get closer and get an estimate on their online sales. They also know that if they give something back and the country gets better, then they get their monies back several folds. Nigeria has reached advanced stages in its own version of Europe’s ‘Facebook taxes’; by which we intend to claw something back from these large behemoths who make money from Nigeria just like other nations are doing. In fact, a statistic came out in 2021 that Nigerians were the second highest social media users, behind Filipinos. I think we may spend a longer time on social media than even the Filipinos. Many Nigerians are jobless but everybody finds money to get on twitter and Facebook – even if only to be able to vent their anger by insulting leaders and whoever else catches their fancies and ire. Nigeria needs a crack team in several parastatals that can help bring some of the ideas that are now mainstream in developing countries where they don’t joke with their economies.
The simple thing is to get it into our heads that growing the economy by 12% with a little more seriousness on the part of government and some elite consensus, is nothing. We should be able to grow our revenue by at least 20% year on year, and that alone drives the economy. I personally don’t know what came over our government in the last 8 years, but we could even extend that to 13 years – including the Goodluck era. But the last 7 years have been incredibly woeful and if we are not careful, we may shortly get swept into another depression – a record third under a single government. It could even get worse and the entire economy may collapse with one or two more wrong decisions. We have no reason to see our economy collapse. We need strong executive decisions, mass mobilization, strong communication, enforcement, accountability to the public, a carrot and stick approach that punishes defiance but also handsomely rewards compliance, and I believe this economy will soar.
We just don’t have much time on our hands.