What else could Nigerians wish for themselves in 2024 than a year, stress – free from economic woes and worries that characterized year 2023, with devastating high cost of living, job losses, businesses shutting down, and many more?
The year 2023 will ever be remembered as a year of biting economic and extreme hardship, even as the year also marked a transition from one government to another, though same political party at the federal level .
Nevertheless, the election results of that year arguably was not acceptable to many that lost out either on the ballot or at the courts. Interestingly, the rest for now is history as political gladiators look forward to the next election come 2027.
Nevermind, the impact of the economy was borne by us all, supporters of the winning party and that of losing party best captured as opposition, as well as the rest of us not aligned to any as party faithful.
For us, election event in 2023 was partly inspirational and partly learned. Inspirational because there was an emerging youthful voting block that were very much on course clamouring for alternative that would retire the old guard politicians.
The learning aspect comes with the need to enshrine an ideology of national patriotism that goes beyond personal interest and acrimony from party politics.
Having said that, let now focus on the thrust of this article, that points to a prayer that was on our lips hours before the triumphant entry into the New Year 2024.
No doubt, many Nigerians’ thoughts for the New Year are for a shared and better economic prosperity. Citizens desire from the government across board, effective policies’ implementation to ensure equitable wealth distribution, inclusive resources allocation, and abundance for all.
I’m tempted to pinpoint the foregoing, due to evidence of huge gaps that exist in our our national wealth and resources that is being shared and allocated amongst the so called political actors, including ones in state power through instruments of manipulation, tending to reinforce excessive wealth accumulation.
The resultant effect is that the poor is further deepened into poverty that has failed all targeted policy effort to address and redress it’s making while the rich are getting richer in leaps and bounds.
Therefore, one is bound to canvass government policy instrument in the interest of the citizens’ well-being.
Economic woes experienced by Nigerians didn’t just happen in 2023 alone. Evidence from previous years show that successive and even current government in Nigeria paid lip service to making life better for the citizens year in year out.
This now brings to the fore, two fundamentally hard questions that analyst like myself was asked in our television, radio and other stakeholders platform in our contribution to the review of 2023.
First question was that, was there any time since the return to civil rule in 1999 that Nigerians enjoy a better economic year? The second question was whether government in Nigeria ever fulfilled it’s yearly promise of better economy for the citizens?
My modest answers to the two questions was to go empirical by citing failed or partially successful government policies meant to address issues such as inflation, corruption and development projects.
I will dwell on inflation for the purpose of technicality and misconception.
For instance, without mincing words inflation was the biggest economic monster Nigerians contended with all through in 2023, as a result of President Tinubu’s government removal of fuel subsidy and floating of the Fx market under umbrella of Fx market unification to end multiple exchange rate.
This brought on board, the full implementations of CBN Investors and Exporters Window and the resurgence of Fx market cowboys, Nigerian Autonomous Foreign Exchange Market (NAFEM), where the venom of Fx round tripping and speculation determine how bullish or bearish the market would end daily.
Succinctly put, the year started with double digits 21% and ended the year with 30%, and food inflation soared at 35%.
Sadly, the Nigerian government’s efforts to tackle inflation through it’s various policies did not bring it down.
Reason being that government policies is too technical and at most, this sort of technical economic policies to address inflation ended up maintaining the status quo of inflation in the system. What we are saying is that government – owned policies and action sustain inflation in the system.
Take for instance, the tightening of monetary policy that ushered in cash withdrawal limit with the suggestion that Nigerians should embrace online banking.
As laudable as this policy informed, it remained the potent weapon that fueled soaring inflation. In this case, one need to asked what is the level of Nigerians internet banking penetration in rural, suburban, urban areas?
Agreed, over 100million Nigerians are enjoying access to mobile phone network and closed to 60million with bank accounts. The odds is how many Nigerians are interested in paying for goods and services online, coupled with the fear of poor network service, cybercrime and excesses on the part of commercial banks to attend to customer complains.?
Many cases of failed bank transactions was endured doing this yuletide, which one columnist called ” ‘Cashless Festivities’, this is a scary scarcity of cash period.
Seriously, how can the government bring down inflation making cash difficult to access as an instrument to mop up excess cash in circulation, citing the classical economy philosophy of too much money chasing few goods, a formula of demand outstripping supply equal inflation.?
Another is the fiscal policy instrument that spell out how government make money and spend it. Our interrogation of the policy in 2023 alone did show government’s spending on critical economic sectors that are supposed to engineer the economy was very discouraging.
A case in point was the over N6 trillion debt owed to road construction contractors that abandoned project sites across the country. The power sector challenge was phenomenal even as we now have legal framework that unbundle power generation that subnational can now get involved peacefully.
Curiosity, we see the government and it’s agencies miss firing, particularly this visionless agency called Rural Electricity Agency (REA), wasting resources on cosmetics and unsustainable solar project in the name of providing electricity.
On the other hand, it was disheartening to discover that loan was the biggest capital importation in the economy ended 2023, a situation that in nine months, government borrowed N1.7 trillion.
Let’s not forget to add the negative record of trade imbalance that favoured importation as against exportation.
Painfully, fiscal deficit was paramount taking a look into quarterly data of fiscal balance in 2023, 1st N1.430 trillion, 2nd N2.660 trillion and 3rd stand at N2.3trllion.
Again, l am tempted to go technical in the above narration because a lot of my colleagues analyst, Classical, Orthodox and Mises economist hold brief for inflation through this narrow and technical postulation on why inflation persist. Yet, they drift away from the core reality that inflation in itself, is a targeted growth objective many businesses are enjoying through profits reinvest for operational and plant expansion.
Here, it is the end users of the goods and services that bear the burden, same way the value of the naira impacts negatively due to over bearing unit cost price of goods, and excesses of imported luxury goods as well as one that can be easily produced locally but favour importation of same from China and others.
Yet, the current government is forecasting a better economic output for 2024, but discouraging local manufacturers and cottage industry that could produce 43 items that can be comfortably produced locally to access subsidized dollar at the I&E Window.
This is suggestive of the fact that our trade policy is problematic and need reorganizing if Tinubu’s government really have local business at heart.
What is to be done
Sincerely, never has there been a better year, even though people born and off age enough during the years of national abundance will still remind us of the days of austerity and famine of the military epoch.
However, we are anticipating an immersive practical implementation of economic policy that is intelligent enough to combat inflation and bring it far below government target of 21% this year.
In this wise, a combination of fiscal, monetary and trade policies would help, particular for us to avoid economic catastrophy.
Exploring more economic opportunities that would help Nigeria’s business environment strive and thrive in job creation will require tackling the structural deficit obstructing healthy and competitive enterprises environment, that government
also would contest intelligently, not just as a regulator but worthy in participation and progress.
Therefore, against professional forecasters’ terrible prediction,
for us, 2024 for Nigerians should be a remarkably good year, that Nigerians would rejoice about, withprospect of a soft economic landing for all.
Adefolarin A. Olamilekan
Political Economist [email protected]