Recession: Welcome To The Real Economy
In 2014 when Nigeria’s economy was rebased and assumed the status of the largest economy in Africa. Skeptics like me questioned the obvious disconnect between economic growth and national development: a situation where the economy was said to be growing and poverty was also growing at an alarming rate.
Fast-forward year 2016, the same economy is in recession. How did this happen, how did we get here? The answer is simple: we lost ownership of our own economy a long time ago. Nigeria is an extremely blessed country that has plundered its wealth through lack of strategic economic plan, bad government policies, and inappropriate citizens’ lifestyle.
Our problems started when we stopped creating wealth as a nation, we became very lazy and depended on ephemeral oil money. Or how else can we describe a people that shut down their manufacturing plants, turned them to event and religious centers, and import virtually anything and everything money can buy, including toothpicks. Just like in other sectors, we grounded our own refineries and import the finished product of the crude oil that we export, thereby growing other economies to the detriment of ours.
Nigerians lost share of their own economy. The construction sector and the manufacturing industries are largely dominated by foreigners. The largest retail chain, satellite pay TV, mobile telecoms network are all owned by Non-Nigerians. We import and promote foreign brands instead of ours.
Another critical area of worry is the knowledge industry, we consciously killed our own education system and Nigeria became the destination of choice for foreign schools seeking students, and of course foreign exchange. And sadly, we became the largest African exporter of students, seeking quality education in US or UK, even in Ghana and Ivory Coast next door.
It is no longer news that most of the Nigerian states are not viable. Despite the monthly federal allocations from crude oil sale, state governments can’t pay salaries of their employees, talk less of meeting the developmental needs of the electorates. Very few states are able to generate revenue internally to sustain themselves. In the last sixteen years of democracy, we have maintained less than one percent of our population with over 50% of our national budget. Public service became a licence to steal, with civil servants stealing public funds to buy choice properties all around the world. Government officials wasted tax payers’ monies, gallivanting all over the world flying first class, sometimes private jets in the name of “looking for foreign investments” while tax-payers fly economy. There is no doubt that the current federal structure is unsustainable.
This our reality, this is the real economy. We did not just get here overnight, and we are not likely to get out of this present situation overnight, we need to learn the hard way, and make a lot of sacrifices, as there is no quick fix, the Nigerian state requires economic surgery. We need to take our destinies in our hands and reduce our over-dependency on government because government does not create wealth, entrepreneurs do. Government only need to build the critical Infrastructures for entrepreneurship to thrive. However, for us to get our economy back on track, we need to take urgent steps at structural reform:
- Close the knowledge gap, aggressively develop human capacities.
The real wealth of a nation is its human capital. Today’s world is competitive and driven by knowledge and innovation. To compete in this emerging new world, nations are building knowledge war chests. Interestingly, about 70% of Nigeria’s population is made up of youths. Two out of three are jobless, underemployed, unskilled, improperly educated or unemployable. Here in lies the real opportunities or better still, the time bomb. Those who are out of jobs have already taken up arms against the state in form of Boko Haram, Niger-Delta militants, kidnappers, cultists and robbers.
For Nigeria to stay relevant and globally competitive there is need to urgently close the knowledge gap, and build skilled, youthful workforce. The education sector needs serious attention and intervention by both the government and corporate Nigeria. We need to create linkages between our higher institutions and the industries by producing graduates that the job market needs, commercialising our research and fund innovative ideas. The much talked about Silicon Valley is an example of how the synergy between the ivory towers and corporate bodies can lead to economic revolution, today California, a state in US is the 6th largest economy in the world, soon to become the 5th, many thanks to Brexit.
- Provide local alternatives for foreign products that we consume.
To truly create wealth and stabilise our currency we need to meet our own local consumption demands like food, education, clothing, health and other basic needs. The young Nigerian artistes have shown us that this is truly possible, today we dance to our own music and watch our own movies, and the rest of the world now pay attention to us. Even though a lot of work needs to be done to commercialise the entertainment sector to translate the growth to national wealth and to also replicate same across other industries such cottage, food etc.
Nigerians daily pay millions to foreign service providers, it is time for us to find or develop local alternatives to these services in the face of rising cost of foreign exchange. We need to embrace and encourage local content, patronise Nigerian internet host and tech companies; Pay Google (which has operation in Nigeria) in Naira instead of in Dollars; Choose IrokoTV and AfriNolly above Netflix; Wear Ouch, Yomi Casual, Baldon, Vodi, Deola Sagoe and other Nigerian brand in place of TM Lewin, Hawes & Curtis, Gucci, Prada etc; Consume Ofada and Abakaliki rice instead of Uncle Ben’s; Fly Arik instead of BA. Go on holiday in Obudu, Olumo Rock, Yankari instead SA, UK, US and Dubai. However, Buy-Nigeria must not be construed for Buy-Inferior, if we want Nigerians to buy Nigeria, quality must not be compromised.
- Grow local brands that can compete globally.
When America talks Facebook, Twitter, Instagram, Ford, GM, Apple, Google, Oracle, JP Mogan, CNN talk, same with China. One of the biggest challenges with Nigerian businesses is the failure to evolve to become brands that will not only make money but become part of our identity as a nation. Few years ago some companies were celebrated for manufacturing or assembling personal computers locally, a decade after, one would have thought that by now we would have at least a Nigerian brand competing for the market share locally, if not globally. Nigerian companies need to move from just doing business to growing brands, we need to build local brands that are recognisable locally and internationally, brands that can earn us respect and foreign exchange.
But despite all the challenges the likes of Dangote, Innoson, ChannelsTV and others have shown us that the Nigerian brand is possible. Today, Nigeria currently ranks 169 globally, behind Iraq, Togo, Sudan, Sierra Leone, Benin, Niger on the “Ease of Doing Business” list. Entrepreneurs are groaning under multiple taxations and lack of infrastructures that make business extremely difficult. For businesses to thrive we need to make the environment conducive enough to encourage entrepreneurial development through the enactment of the right laws and policies.
In conclusion, this situation, though very tough provides the opportunity for us to innovate and create our own future, because the change that we desire is not going to come from government, but from ordinary people like you and I, the entrepreneurs. It is time for us to lead the entrepreneurial revolution. #LeadPreneur
God bless Nigeria!