Nigeria: Expanding Nigeria's Economy

18 November 2019
opinion

Abdulrazaq Hamzat argues that a broader economy is key to the country's prosperity.

"A 510billion-dollar GDP as at 2013 when we celebrated being the biggest economy in Africa is of course too small for 200 million population."

The above is a profound statement credited to Mr Gbenga Olawepo Hashim, the third force presidential candidate in Nigeria's 2019 general election and if you ask me, nothing could be truer than this.

To say it bluntly, Nigeria is a poor country, a very poor country.

It should be noted that, due to the economic recession that affected Nigeria few years ago, the country's economy has gone below $500billion to a population of over 200million and that places our Gross Domestic Product (GDP) per capital to less than $2500.

In a lay man's term, a less than $2500 per capital income means that the overall worth of a Nigerian citizen is less than $2500, approximately less than a million naira.

What this invariably mean is that, a Nigerian with about $2500 per capital income is more than two times poorer than a South African, who has about $6000 per capital income, three times poorer than a citizen of Gabon, who has over $7,500 per capital income, almost four times poorer than a citizen of Botswana, who has over $8500 per capital and more than eight times poorer than citizens of Seychelles with about $17000 per capital income.

These are African countries we are talking about not Europe or America.

If we are to compare Nigeria to America, our citizens are 25 times poorer.

This is the reality of our situation and even if no dime is being stolen by corrupt people in the country, we would still remain a poor country.

Let me say that, we may debate the genuineness of the data from World Bank and International Monetary Fund (IMF) due to its modalities, which many said doesn't factor in some peculiar situations in Africa, especially its informal economy which is yet to be integrated into its main system, but until we provide a reliable alternative data, the current data stands unchallengeable.

Statistically speaking, Nigeria has the highest economy in Africa in terms of size, ahead of countries like South Africa and Egypt, just like United States has the highest economy in the world ahead of China and others, but citizens of Monaco, a very small country with less than 40,000 populations are three times richer than citizens of United States.

In actuality, American citizens, with about $64 GDP per capital income are about three times poorer than citizens of Monaco with about $166 GDP per capital. As a matter of fact, US citizens are even far poorer than citizens of unknown countries like Liechtenstein, Luxembourg, Bermuda and Macau who have $162, $113, $98 and $90 respectively. Yet, this doesn't take away the fact that US has the largest economy in the world, worth about $21trillion.

The point here is that, even if you have a large economy like Nigeria currently do in Africa, provided the value of the economy is grossly disproportionate to the population, your citizens would still remain largely poor and addressing such kind of situation requires creativity beyond just fighting corruption and blocking leakages.

Yes, it is good to fight corruption, it also good to encourage local manufacturing, but nothing would really solve our poverty challenge like a clear understanding of our reality and articulating realistic approach to meet our obligation of expanding our economy to a proportionate level with our population.

In short, expanding Nigeria's economy is the only key to our national prosperity.

During the 2019 presidential campaign, one presidential candidate that aptly expressed solid understanding of Nigeria's economic challenge is Mr Gbenga Olawepo Hashim. The People's Trust presidential candidate, after succinctly capturing the key issues with our economy went on to state that, "We want to grow the economy of Nigeria to become $4trillion in 10 years and that will put us at par with Malaysia, Thailand, as middle income economies and these were economies that Nigeria was ahead of in our early independence. "We are not setting standards like we want to become the United States of America; we just want to be in 10 years, where we were in 1960. "Nigeria needs a 4trillion-dollar economy to become a middle income economy, and we have set up a strategy to achieve this," he said.

Did Mr Hashim really say he has a strategy to expand Nigeria's economy to $4trillion in 10 years? If so, what is the current government doing to explore Mr Hashim's $4trillion idea for Nigeria?

It is understood that the best ideas may not necessarily win an election, but obviously, we need the best ideas to build and grow the country.

Look at it from this angle, if Nigeria's economy is expanded to $4trillion GDP in 10 years as proposed by Olawepo Hashim, the per capital income of a Nigerian would have gone up to about $20,000, thereby taking Nigeria out of the third world category and very easily, we would have become the richest country in Africa, not only in terms of the size of our economy, but also in terms of wealth of individual citizens per capital income.

Additionally, it is important to note that, between 1982 till date, the average growth of Nigeria's economy is 3.8%, but currently it is only growing by 2%.

So, assuming the GDP grows by 5% annually which is very unlikely based on our current and historic growth pace, it would still take Nigeria more than 120 years to a have $4trillion economy.

This is what Mr Hashim said he has a strategy to achieve in 10 years.

To start with, how did Mr Hashim plan to take Nigeria's economy to $4trillion in 10 years? This should be the greatest subject of interest by those in government and all well-meaning citizens.

From the little we can pick based on his presidential campaign, he talked about an exclusive strategy to attract 5% annual global infrastructure funds to Nigeria, which he said is about $400billion.

If you multiply $400billion by 10 years, that gives us exactly $4trillion economy in 10 years and should our current GDP of about $500billion be added to this figure, Nigeria's economy would have grown to over $4.5trillion in 10 years.

To say it in a layman's language, Mr Hashim is proposing an idea that would almost double our current economy on annual basis for the next 10 years.

If you ask me, the current managers of country should be eager to explore Mr Hashim's idea because, he is a reputable global investor in four continents of the world, namely Africa, Europe, Asia and North America and a personality of his caliber, who is an active player in the global economy should be able to provide greater insight into his proposed idea.

Assuming that we cannot attract 5% of the global infrastructure fund as proposed, we can at least work towards attracting 2% of the fund, which is about $160billion, almost 30% of our current GDP.

Let me conclude by saying that, the economic implications on peace cannot be over stated. The more our economy expands, the less insecurity challenge we would confront.

Hamzat is an Executive Director at the Foundation for Peace Professionals

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