Nigeria is currently buffeted by all manner of crisis. The crisis spans from the political, social, economic, religious, and developmental to the intellectual. But its manifestation in the economic sphere is the most threatening and seems to reinforce a crisis of history, nationhood and survival. We also seem to be more divided today than at any other time in our history since the civil war. Furthermore, we lack the popular and elite consensus in major spheres of national life. However, this consensus is needed to propel a nation to new heights and move it out of the doldrums of under-development.
What do the economic statistics of today tell? We are experiencing gloom, poverty and relegation from the league of countries whose future seems to be bright. We are in uncharted waters, without a guide and roadmap. Four recent reports released by the National Bureau of Statistics attest to this gloom. The Gross Domestic Product report in Quarter 1 of 2016 tells the story of an economy in disarray. All the major indicators are headed south and buffeted by strong headwinds. The National Bureau of Statistics reports that in the First Quarter of 2016, the nation’s Gross Domestic Product grew by -0.36 per cent (year-on-year) in real terms. This was lower by 2.47 per cent points from growth recorded in the preceding quarter and also lower by 4.32 per cent points from growth recorded in the corresponding quarter of 2015. Thus, quarter on quarter, real GDP slowed by 13.71 per cent; it is pertinent to mention that the NBS computes the GDP as gross output minus intermediate consumption used in the production of the goods and services. By the time we have negative reports for the second quarter; we will be on way to a recession. It is clear that oil and gas and electricity generation and distribution sectors output will further decline in the second quarter considering the onslaught of militant action in the Niger Delta in the last couple of weeks. This has shut down hundreds of thousands of barrels of oil production and export and blown up pipelines that supply gas needed to fire the thermal electricity generating stations. It will be recalled that the Monetary Policy Committee of the Central Bank of Nigeria had forewarned about this decline in the third quarter of 2015.
The Consumer Price Index (which is the inflation indicator) recorded by the NBS for the month of April 2016 shows an increase in the cost of living for the third consecutive month. From 12.8 per cent in March, the figures rose to 13.7 per cent in April 2016. The increase in inflation was recorded across all divisions with the exception of the hotels and restaurants division which increased at a slower pace. Energy prices in the increased electricity tariffs, premium motor spirit, kerosene, etc; food prices and the unofficial devaluation of the naira contributed in no small measure to the increased cost of living. In a country that imports virtually most of its needs, this was bound to be so in view of the paucity of foreign exchange from the sub-optimal dollar earnings arising from diminished oil revenue. When the factors responsible for the increased inflation for the month of April are considered against the background of the increase in the price of PMS by over 60 per cent in May, then the certainty of further increase in the cost of living becomes obvious by the time the Consumer Price Index is calculated for the month of May 2016.
Again, the Unemployment and Underemployment Watch for the First Quarter of 2016 released by the NBS indicates that unemployment rate increased to 12.1 per cent in Q1 2016 from 10.4 per cent in Q4 2015, 9.9 per cent in Q3 2015 and 8.2 per cent in Q2 2015. Essentially, there were a total of 24.50 million persons between the ages of 15 and 64 that were willing and able to work and actively seeking work that were either unemployed or underemployed compared to 22.45million in Q4 2015, and 20.73 million in Q3 2015. Although the methodology of computing the percentages and statistics employed by the NBS are open to challenge, these figures are all heading south and indicative of an economy performing below expectations. The NBS acknowledges that if it had used its old methodology of calculating unemployment (which seems more reliable), the unemployment rate would have been 31.2 per cent in Q1 2016, from 29.2 per cent in Q4 2015, 27.3 per cent in Q3 2015, 26.5 per cent in Q2 2015, 24.2 per cent Q1 2015, 23.9 per cent in 2011 and 21,4 per cent in 2010. With the negative economic growth, these unemployment figures are bound to increase in the coming quarters.
The Capital Importation Report for the Q1 2016 shows that a total of $710m was imported into the country in the first quarter which is a 54.3 per cent decline compared to the $1,577m figures of Q4 2015. Compared to the same period in 2015, it was a 73.4 per cent decline against the figure of $2,672m. The same report indicated that the fall may be due to tougher economic conditions in Nigeria due to decline in oil prices or possible investor uncertainty or discouragement due to current currency controls and slowing growth. This is coming at a time the government is seriously wooing foreign and local investors to take advantage of the opportunities in the Nigerian economy.
What do all these figures in the above reports have in common? They speak to one and the same set of facts. The economic policies that produced these results are not the optimal policies and choices needed to move Nigeria away from the doldrums. They are not good enough to change the narrative of economic decline. They merely reinforce decline and stagnation. Also, the underlying political choices made by the Nigerian leadership which facilitates the economic decline are not the optimal choices for the Nigerian people. The political choices are non responsive to the political challenges facing Nigerian. They seem to be stuck in the mindset of old era. They need updating to be in sync with extant realities and meet modern challenges. The extant policies are not working and will not work. You cannot be wrong and get right.
Where do we go from here? It is one year in the life of the new administration and new thinking should come on board. We have entered a period of serious economic decline and as such, we need an economic and political war plan. The plan needs our best brains, thinkers and implementers on board its formulation and implementation; it needs to be informed, empirical, dynamic and flexible to respond to the mutations of economic and political challenges facing the nation. The plan should be inclusive and carry on board all citizens as no one should be left behind; this means fighting inequality as we ramp up production, service delivery and value addition in Nigeria. We need an economic plan which indicates certainty, not the extant piecemeal approach that cannot offer a medium term projection for investors and rational economic agents. We need a political landscape that recognises our diversities, competencies and capacities and feeds on that as a basis of development; rather than using diversity as the basis of holding back the entire country with the crab mentality.
To the leadership, figures that come from the official Bureau of Statistics will definitely not want to portray official economic performance in bad light. Fellow Nigerian, there is a consensus of official figures and we need to use them as a basis for change.