Declining Nigerian Economy
Toyin Falola
Cornelius Hamelberg
Inexplicably, USA Africa Dialogue Series seems to be in the doldrums right now, contributions are fewer and far between, even as this most serious piece of news comes sailing in, the three horsemen of the Apocalypse vying to be elected the next Prezzo via a free and fair Nigerian Presidential Elections looming on the horizon. some forum contributors taking a holiday/ leave of absence, while Abuja burns...
Moody's global ratings agency has downgraded Nigeria
This is a wakeup call, not a “fairytale “of the kind that Rishi Sunak attributed to Liz Truss’s proposed tax cuts and state borrowing to service further debts being incurred by the UK , in one of their head-to-head debates, long before Kwasi Kwarteng entered the picture.
Just a few weeks ago, it was more than distressing and heartbreaking to learn that Ghana, the Black Star Nation had actually arrived at the brink and gone ahead to apply for an IMF loan, with 98% of all the Gold that Almighty God buried in Ghana, in the hands of foreign “investors” mostly from Canada, and some predictable others.
As Ayi Kwei Armah titled it, “The Beautyful Ones Are Not Yet Born”, Ghana’s gold is already mortgaged as collateral for the as-yet-unborn, future generations. That’s what even an optimist would refer to as a bloody mess. A more down-to-earth, straight-shooting critic, down to this earth my brother where the gold, diamonds, oil is buried, I said, a more down-to-earth, even one parachuted from the heavenly abode of big, highfalutin grammar, in all honesty of mind and emotion would have no other choice but recourse to the single syllable expletive that greases Armah’s novel,“ The Beautyful Ones Are Not Yet Born ” as both metaphor and reality: SHIT! … the not beautyful ones, the ugly ones, the excrement, the cause of so much pain and suffering to others: The Lootocracy !
In frustration, people curse and swear, hate, abuse, vilify and denigrate, but that doesn’t help much. Apart from a slight, less than the cathartic release of some personal tensions, mere cursing doesn’t punish the looters. What's needed is a careful diagnostic analysis, and the rule of law has to be the backbone of the solution. It simply has to be crime followed, unmistakably by punishment - and in the case of the looters, shouldn't they have to “vomit” the money - or should we abide by effete and ineffectual grammatical niceties, some missionary jargon about forgiveness of their impunity and treasonous praise-singing hymns, encomiums and homilies about “ love thy enemies”?
Only two words are missing in Moody’s consideration of downgrading the sleeping giant’s economic growth potential in the world’s financial league, and the words are “ recession” and “ bankruptcy”...
One wonders what is Nigeria's relationship with the IMF and the World Bank. How credit-worthy is Nigeria?
This wake-up call reads like a sober, realistic assessment that our ace Nigerian commentators such as Professor Toyin Falola himself, Ayo Olukotun, Bolaji Aluko, and Jibrin Ibrahim. Salihu Moh. Lukman and Auwal Musa Rafsanjani who are occasionally or regularly featured in this series and our would-be leaders such as the three aspirants to Aso Rock, have to grapple with - realistically.
How wonderful it would be if the three - and the country would agree ( unity of purpose) that they eschew the next winner-takes-all presidential elections and they form a triumvirate instead - a unity government - all together, all hands on deck, along with the various teams of advisers, think-tanks, for the betterment of Nigeria.
On the agenda
“The constraints on oil production increasingly appear structural, caused by repeated theft and lack of investment in infrastructure.”
This has not been quantified for us to get a fair idea of the extent of the hemorrhage's debilitating effect on the sum total called the Nation’s annual revenue from oil exports and domestic consumption. Back in the day of President Goodluck Jonathan, and at a time when the World Bank’s Dr. Ngozi Okonjo-Iweala a close source of sane, sound advice, was his Minister of Finance, his Oil Minister Rotimi Amaechi informed the whole world on BBC Hardtalk, that the Nigerian Government loses more than $ 1 Billion a month to oil theft, local bandits…
the painful reality which has been eloquently discussed endlessly but Moody’s neutral estimation is there for the powers that be to consider :
“In particular, the cost of oil subsidy will soon absorb the whole revenue flow from the sector unless the subsidy mechanism is wound-down—a task that has been delayed multiple times despite the country’s intensifying credit pressures,” Moody’s said.
It explained that Nigeria’s Ministry of Finance has recognized the pressing need to remove the oil subsidy, but its removal from mid-2023 onwards would likely prove difficult politically and to implement in practice.”