tag:theconversation.com,2011:/us/topics/nigerian-economy-35659/articlesNigerian economy – The Conversation2020-06-24T16:48:52Ztag:theconversation.com,2011:article/1410792020-06-24T16:48:52Z2020-06-24T16:48:52ZBuhari’s COVID-19 economic plan: old wine in new wineskins<figure><img src="https://images.theconversation.com/files/343543/original/file-20200623-188916-t22ztm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">President Muhammadu Buhari raises his fist during an inspection of honour guards on parade to mark Democracy Day in Abuja, on June 12, 2019. </span> <span class="attribution"><span class="source">Pius Utomi Ekpei/AFP via Getty Images</span></span></figcaption></figure><p>COVID-19 is increasingly <a href="https://www.statista.com/statistics/1110879/coronavirus-cumulative-cases-in-nigeria/">wreaking havoc</a> on the health of Nigerians, but its economic impact may well be more devastating. Before the pandemic, the Nigerian economy was growing at an <a href="https://www.worldbank.org/en/country/nigeria/overview">anaemic rate </a>of 2%. The country has also been suffering from <a href="https://qz.com/africa/1313380/nigerias-has-the-highest-rate-of-extreme-poverty-globally/">high poverty</a> and <a href="https://www.aljazeera.com/programmes/countingthecost/2019/02/young-unemployed-nigeria-190216073358024.html">unemployment rates</a>. This is paradoxical for a country endowed with humongous <a href="https://www.legit.ng/1161400-list-natural-resources-nigeria-locations.html">natural resources</a>.</p>
<p>Determined to blunt the economic trauma of COVID-19 and minimise its impact on poverty, unemployment, insecurity and violence, Nigeria’s President Muhammadu Buhari announced the establishment of an inter-ministerial Economic Sustainability Committee. He gave it the remit to recommend measures that would prevent further economic collapse. Headed by Vice President Yemi Osinbajo, the committee submitted its <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">report</a> to the President in mid-June.</p>
<p>There are two main pillars to the <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">economic sustainability plan</a>. The first is job creation and the second an infusion of cash. These will be achieved through targeted investments in agriculture and agro-processing, manufacturing, renewable energy, housing, information technology. The proposal also included cash transfers as well as “survival funds” for medium and small scale enterprises. The plan is remarkable by its emphasis on the use of local contents to support its initiatives.</p>
<p>But most of what’s in the plan is neither novel nor ground-breaking. It includes projects that had been bandied around by previous administrations, with little success. </p>
<p>The difference appears to be the scale and intensity with which the projects are to be undertaken.</p>
<p>In fact the plan sounds very much like the doomed <a href="https://www.premiumtimesng.com/news/top-news/373321-analysis-why-nigerias-vision-202020-was-bound-to-fail.html">Vision 2020</a>, which was a long-term strategic intent launched by the Nigerian government in 2009 to promote economic growth, socio-economic development and structural transformation. The overarching goal was to enable Nigeria to become one of the <a href="https://nairametrics.com/wp-content/uploads/2013/06/nigeria-vision-20_2020_draftetb.pdf">top 20 economies</a> in the world, as well as achieve an annual GDP of at least $900 billion and a GDP per capital of $4000. These goals are far from being achieved. </p>
<p>Post COVID-19, what Nigeria urgently needs are initiatives and projects that instantaneously infuse massive cash into the coffers of severely cash-strapped individuals, households, traders, small enterprises and corporations.</p>
<h2>The gaps</h2>
<p>Perhaps the greatest shortcoming of <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">the report</a> is that it delegates implementation to government ministers, each of whom is expected to set up an implementation committee. This is very reminiscent of previous government efforts.</p>
<p>It is no secret that the wheels of the Nigerian bureaucracy grind excruciatingly slowly. The economic recovery plan should have set up a special implementation taskforce outside of the bureaucracy. </p>
<p>History may offer a useful lesson here. During the post-World War II when European economies were devastated, the US led its allies to launch the <a href="https://history.state.gov/milestones/1945-1952/marshall-plan">Marshall Plan </a> for Europe’s economic reconstruction. Rather than delegate implementation to government bureaucracies, the <a href="https://www.worldbank.org/">World Bank</a> and the <a href="https://www.imf.org/external/index.htm">International Monetary Fund</a> were specifically created to undertake the task.</p>
<p>In times of unprecedented crisis, your worst enemy is the bureaucracy. </p>
<p>Unfortunately, Buhari’s <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">Economic Sustainability Plan</a> has fallen into the same trap as its antecedents: it is likely to gather dust in government ministries and agencies.</p>
<h2>Murky roadmap</h2>
<p>Apart from the lack of novelty, the report is vague and speculative about how initiatives would be accomplished.</p>
<p>For instance, the <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">plan</a> proposes the creation of 5 million jobs within 12 months by bringing 20,000 – 100,000 hectares of land per state into cultivation. The private sector is expected to drive the process. But it’s unclear what mechanisms would incentivise profit-maximising enterprises to employ this number of farm workers. </p>
<p>And how might state governments be encouraged to provide land for farming, when many of them vehemently <a href="https://guardian.ng/news/more-states-groups-reject-ruga-settlements-for-herders/">refused</a> to provide land for the Federal Government’s botched Rural Grazing Areas scheme? </p>
<p>Some of the key provisions in the plan are not implementable without the cooperation of state governments. The <a href="https://www.premiumtimesng.com/news/top-news/283104-pdp-governors-condemn-buharis-refusal-to-sign-amended-electoral-act.html">frosty relationship</a> between the Buhari administration and states controlled by the opposition People’s Democratic Party, which now stands at 16 out of 36 states of the Nigerian federation, suggests this could be a bottleneck.</p>
<p>More intriguing, however, is the fact that most of the projects proposed in the report may not be completed before the end of the Buhari administration. One such example is the solar energy project. The plan proposes supplying <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">5 million Nigerian households</a> (or about 25 million individuals) with solar energy. The report requires that solar power equipment be produced in Nigeria. </p>
<p>This isn’t particularly realistic in a country that <a href="https://www.dailytrust.com.ng/nigeria-spent-n26m-importing-toothpick-from-china-germany.html">imports toothpicks</a>, <a href="https://www.worldoil.com/news/2019/10/21/africa-s-biggest-crude-producer-remains-stuck-on-imported-fuels">petrol</a> and <a href="https://nairametrics.com/2020/03/17/nigerians-spend-14-billion-on-generators-fuel-as-senators-seek-ban-on-generator-use/">generators</a>. The US, with its technological prowess, has been able to supply only about <a href="https://www.energy.gov/eere/solarpoweringamerica/solar-energy-united-states">12 million households</a> with solar energy since 2008.</p>
<p>Another proposal that has a very murky implementation plan is the goal of creating <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">1.8 million jobs</a> through the construction of 300,000 homes (400 in each local government area). The Ministry of Works and Housing is tasked with its implementation. But the report concedes that the ministry is yet to figure out the “design and template” for the houses. This is a manifestation of the lack of preparation for this project. </p>
<p>The report recommends an increase in the number of <a href="https://www.thecable.ng/understanding-nigerias-conditional-cash-transfer-programme">cash transfer</a> recipients. But it doesn’t say how big the cash transfers should be and what mechanisms will be used to transfer cash to the new recipients, many of whom are expected to be rural dwellers.</p>
<p>Furthermore, the funding of the plan is nebulous. Recognising that the Nigerian economy would <a href="https://nairametrics.com/2020/05/22/nigerian-economy-going-into-recession-might-contract-by-8-9-finance-minister/">contract by 4.40%</a> if no measures were taken, the recovery plan opted for a <a href="https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf">Naira 2.3 trillion</a> stimulus package. This, it’s been estimated, will ensure that the economy doesn’t decline by more than 0.59%. </p>
<p>But the report is evasive about how the proposed projects will be financed. While about 70% of the estimated cost of the plan is expected to come from “Special Accounts” and the <a href="https://www.proshareng.com/news/MONETARY%20POLICY/CBN-Issues-Guidelines-for-the-Implementation-of-the-N50bn-Targeted-Credit-Facility/50079">Central Bank of Nigeria’s</a> “structured lending,” the source of the rest is not clearly defined. </p>
<p>The plan calls for local sourcing of most of the inputs to be used in the various projects. But it does not discuss in detail the foreign exchange implications, especially in light of <a href="https://oilprice.com/Latest-Energy-News/World-News/IEA-Oil-Market-Recovery-Faces-Two-Major-Uncertainties.html">uncertainties </a> in the global oil market. </p>
<p>To hedge against foreign exchange risks and avoid inflation from high cost of imported goods, the plan should have specified a forward exchange rate at which participants in the plan can purchase foreign exchange. </p>
<h2>Solution</h2>
<p>The plan should have been divided into phases, starting with one devoted to initiatives that would immediately pump cash into the economy. </p>
<p>Without an instantaneous infusion of massive cash, the Nigerian economy risks an inexorable slide into stagflation, which is a lethal combination of a recession and hyperinflation.</p><img src="https://counter.theconversation.com/content/141079/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Onyeiwu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>President Buhari’s Post COVID-19 economic recovery plan is neither novel nor ground-breaking.Stephen Onyeiwu, Professor and Chair of the Economics Department, Allegheny CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1128062019-03-05T14:15:13Z2019-03-05T14:15:13ZNigeria: what Muhammadu Buhari’s re-election means for Africa’s biggest economy<p>Muhammadu Buhari was <a href="https://www.theguardian.com/world/2019/feb/26/muhammadu-buhari-to-claim-victory-in-nigerias-presidential-election">re-elected as president</a> of Nigeria in late February, winning 56% of the vote share in a poll shrouded in controversy. After polling day was <a href="https://theconversation.com/nigerias-election-delay-why-and-what-next-111962">delayed by a week</a> on the eve of the election, the result was met with <a href="https://www.aljazeera.com/news/2019/02/buhari-reelected-nigeria-president-electoral-commission-190227033031779.html">allegations of election irregularities</a>. Turnout was low, and only <a href="https://www.bbc.co.uk/news/world-africa-47381382">35% of those registered voted</a>, compared to 44% when Buhari was elected in 2015. </p>
<p>The competition was fierce. The race for the presidency was between the incumbent, Buhari, and a pro-market multimillionaire, Atiku Abubakar, the opposition leader. Before the poll, <a href="https://www.bloomberg.com/news/articles/2019-02-12/election-may-mark-turning-point-for-nigeria-s-battered-stocks">investors predicted</a> victory for Abubakar could have boosted Nigeria’s medium-term economic growth, though there were concerns over historic <a href="https://www.bloomberg.com/news/articles/2019-02-08/nigeria-s-tough-decision-former-dictator-or-alleged-kleptocrat">allegations of corruption</a> surrounding him. He denies any wrongdoing.</p>
<p>Buhari, a former military general, focused his first term in office on tackling <a href="https://www.cfr.org/blog/nigeria-sees-more-high-level-corruption-convictions-under-buhari">corruption</a> and security issues but was <a href="https://theconversation.com/buhari-failed-to-fix-nigerias-economy-but-he-may-still-have-the-edge-110196">widely criticised</a> for neglecting the economy. Some of his economic policies drove investors away and <a href="https://www.bloomberg.com/news/articles/2017-06-19/nigeria-s-half-measures-on-currency-regime-are-only-half-working">were detrimental to growth</a>. </p>
<p>In 2015, Nigeria introduced <a href="https://www.bloomberg.com/news/articles/2019-01-10/oil-fell-unemployment-soared-and-now-nigeria-votes-quicktake">capital controls</a>, measures to limit the flow of foreign capital in and out of the domestic economy. This was of concern to investors who feared they may not be able to repatriate funds out of the country. In the same year, the government pegged Nigeria’s currency, the naira, to the US dollar, which <a href="https://www.reuters.com/article/us-nigeria-currency/nigerian-naira-tumbles-30-percent-after-peg-removed-idUSKCN0Z61F7">significantly reduced foreign currency reserves</a>. The peg was eventually removed in 2016 – a decision welcomed by investors, though it <a href="https://www.ft.com/content/b0753e96-36cd-11e6-a780-b48ed7b6126f">sharply devalued the naira</a> against the dollar.</p>
<p>Since Buhari was first elected in May 2015, Nigeria’s stock market has been the world’s worst performer, losing <a href="https://www.bloomberg.com/news/articles/2019-02-27/nigeria-s-vote-the-numbers-the-surprises-the-market-reaction">almost half its value</a> in dollar terms, according to Bloomberg. And stocks <a href="https://www.bloomberg.com/news/articles/2019-02-28/bank-stocks-in-nigeria-fall-most-since-2016-after-buhari-victory">fell immediately</a> after Buhari’s re-election was announced. This came after the Nigerian stock exchange suffered a <a href="http://businesselitesafrica.com/trending/nse-loses-540-6-million-after-election-delays/">$540.6m loss</a> in one day after the elections were postponed by a week. </p>
<p>Still, international bond markets <a href="https://www.nasdaq.com/article/nigerian-bonds-rally-after-buhari-wins-reelection-20190227-00695">reacted positively</a> to the election result, and there was a rise in dollar-denominated bonds, often favoured by international investors. Naira bonds <a href="https://www.bloomberg.com/news/articles/2019-02-27/nigeria-s-vote-the-numbers-the-surprises-the-market-reaction">also rose</a> after the results were announced, indicating bond traders are more focused on the currency and bond yields on offer. </p>
<h2>Buhari’s priorities</h2>
<p>In his first term, Buhari focused a great deal on Nigeria’s security challenges. Knowing he faces a strong political opposition and that people are desperate for economic growth and its benefits, he now needs to turn his attention more squarely on the economy. This requires a shift in the government’s economic policy to embrace much more market-driven policies, such as the decision his government took in 2016 to remove the naira peg against the dollar. </p>
<p>To boost domestic business and investment, the government also needs to encourage private sector investment in infrastructure. So far, the government has permitted the private sector to invest in some infrastructure projects, particularly <a href="https://www.vanguardngr.com/2019/02/dangote-5-others-partner-fg-on-road-construction-across-states/">road building</a>, but this needs to be expanded to others, including rail.</p>
<h2>Finance and industry</h2>
<p>Buhari’s victory is likely to mean stability for the financial sector, particularly if the Central Bank of Nigeria governor, Godwin Emefiele, retains his position. Abubakar had <a href="https://www.bloomberg.com/news/articles/2019-01-16/abubakar-will-change-nigeria-s-central-bank-governor-if-elected">threatened</a> to remove the governor if he won. If Emefiele stays and his term, which comes to an end in June, is renewed, this would support stability in the financial markets. It would mean no radical changes to monetary and exchange rate policies, which can affect the price and value of financial assets, are likely to occur. Also, no major changes are expected to occur in the industrial sector, although there is continuing urgency to develop Nigeria’s manufacturing base to boost employment. </p>
<p>The country’s <a href="https://www.reuters.com/article/nigeria-budget-idUSL5N16V360">high fiscal deficit, debt levels</a> and <a href="https://tradingeconomics.com/nigeria/corruption-rank">corruption levels</a> could no doubt dampen investor confidence in Nigeria. Buhari also faces <a href="https://theconversation.com/buhari-failed-to-fix-nigerias-economy-but-he-may-still-have-the-edge-110196">criticism</a> over his inexperienced policy advisers, which could diminish the credibility of new policy announcements in the future. It’s also unclear whether there is going to be a cabinet reshuffle, or if key ministers, such as the finance minister, will remain in post. </p>
<p>Still, major changes in the policy environment are not expected under Buhari’s second term in office. As investors like predictability, policy continuity could help improve investor sentiment.</p>
<p>Nigeria’s governance also needs to be underpinned by principles built around the rule of law, which are critical for building any viable market economy. The six dimensions of governance, coined by the World Bank’s <a href="http://info.worldbank.org/governance/wgi/#home">World Governance Indicators Project</a>, speak to the heart of the challenges Nigeria faces. These are: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption. Strengthening these six dimensions could help set Nigeria along the path of recovery and then growth again.</p>
<p>With all its woes, Nigeria still remains the largest economy in Africa and the largest oil producer on the continent. With a huge market and a huge potential for foreign investment, every wise investor should have their eyes on this country.</p><img src="https://counter.theconversation.com/content/112806/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Iwa Salami does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Investors favoured Muhammadu Buhari’s opponent, Atiku Abubakar. So what are the Nigerian president’s economic priorities?Iwa Salami, Senior Lecturer in Financial Law and Regulation, University of East LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1115742019-02-15T11:09:19Z2019-02-15T11:09:19ZNigerian elections: why poor economic performance is front and centre<p>On February 16, more than 84m eligible voters in Nigeria go to the polls to elect the next president of the country and members of the national assembly. There are nearly 80 candidates competing for the country’s top job but the contest can be viewed to be mainly between the incumbent president, Muhammadu Buhari, aged 76, of the ruling All Progressive Congress (APC) and the former vice president, Atiku Abubakar, aged 72, of the People’s Democratic Party. </p>
<p>Buhari, a former military head of state from 1983 to 1985, was re-elected as a civilian president in 2015 and is campaigning for another four years at the helm. He has <a href="https://www.aljazeera.com/news/2019/02/nigeria-president-muhammadu-buhari-honoured-promises-190211144124045.html">vowed</a> to expunge the country of corruption, while Abubakar, who was the vice president from 1999 to 2007, is campaigning on the <a href="https://www.aljazeera.com/news/2018/11/working-nigeria-abubakar-launches-poll-campaign-181119141314962.html">promise</a> to get Nigeria “working again”. </p>
<p>Indeed, Nigeria is in dire need of all that has been promised. But given the past records of the two main candidates, it would be near delusional to hope for meaningful change if they are re-elected. </p>
<p>Buhari’s handling of the economy has been somewhere between poor and appalling. The same could be said of past administrations, including when Atiku was vice president from 1999 to 2007. </p>
<p>Nigeria is Africa’s most populous country, with more than 198m people. It is also the continent’s largest economy, with a GDP in 2017 of <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html">US$376 billion</a>. It holds the world’s tenth-largest gas reserves and eleventh-largest <a href="https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf">oil reserves</a> – some 37 billion barrels, as of 2017.</p>
<p>Despite this abundance of natural and human resources, the country’s development indicators are nothing to write home about. As I document in my book, Nigeria’s economy <a href="https://www.cambridgescholars.com/financialisation-capital-accumulation-and-economic-development-in-nigeria">faces a number of challenges</a>. </p>
<h2>Serious under-performer</h2>
<p>Over 75% of Nigeria’s population lives below the US$3.20-a-day poverty line and more than half of the population is multi-dimensionally poor – they are deprived of access to basic health, education and standards of <a href="http://hdr.undp.org/en/composite/MPI">living</a>. What’s more, the inequality gap in the country has widened over recent years, with the top 10% sharing more than 40% of the national income and the bottom 20% living on less than 5% of the national <a href="https://databank.worldbank.org/data/source/world-development-indicators">income</a>. According to Oxfam, Nigeria has the unenviable distinction of being at the bottom of the commitment to reducing inequality index (CRI) since <a href="http://www.inequalityindex.com">2017</a>. </p>
<p>Its record on social spending (on health, education and social protection) is also <a href="https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620553/rr-commitment-reducing-inequality-index-2018-091018-en.pdf">abysmal</a>. One in 10 children in the country does not reach their fifth birthday, and more than 10m children do not go to school. Of these, 60% are girls. Average life expectancy at birth in Nigeria is around 52 years, which is significantly lower than the sub-Saharan African region’s average of 62 years. </p>
<p>The country’s infrastructures are in a <a href="https://www.ft.com/content/064f9730-c8bc-11e8-86e6-19f5b7134d1c">very sorry state</a>. More than two thirds of the population does not have access to constant electricity, safe water and good sanitation. The roads and transport facilities are in poor condition despite the billions of dollars budgeted for their construction and maintenance. </p>
<p>The implications of this infrastructural inadequacy and insecurity is the decline of investment in the economy, which then results in high unemployment and underemployment. The inadequate provision of basic infrastructure means that private companies have to take on these costs, making it more expensive for them to do business in Nigeria. Plus, weak institutions, in the form of weak rule of law and poor quality regulations, also contribute to the increase in the cost of production. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=420&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=420&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=420&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=527&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=527&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259031/original/file-20190214-1733-1tmb6e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=527&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Nigeria’s unemployment rate.</span>
<span class="attribution"><span class="source">Ejike Udeogu</span></span>
</figcaption>
</figure>
<p>These inadequacies, together with fierce competition from low-cost production from abroad (China especially) and low domestic-demand for locally manufactured goods (due to the high poverty rate), all contribute to undermining the viability of any productive process in the country. The result is an under-performing economy that is overly-reliant on its oil and mineral wealth to prop up its GDP – but this does not benefit a large proportion of the population.</p>
<h2>Road to recovery?</h2>
<p>To solve this, whoever wins the Nigerian elections desperately needs an ambitious industrial policy. The country has huge economic potential that can be met if governed well. The state needs to play a strategic role in the development process, beyond just providing the right infrastructure and a conducive environment. Right now the economy is far too dependent on exporting oil and other minerals. Emphasis needs to shift to fostering knowledge-based, high-tech economy.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=509&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=509&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=509&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=640&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=640&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259033/original/file-20190214-1742-cfaqhu.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=640&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Nigeria’s exports in 2016.</span>
<span class="attribution"><a class="source" href="http://atlas.cid.harvard.edu/data#use-permissions">"The Atlas of Economic Complexity," Center for International Development at Harvard University</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Indonesia, for example, is at a similar level of development to Nigeria and is similarly rich in natural resources. But, as the graph below shows, it has a much more diverse economy.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=416&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=416&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=416&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=523&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=523&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259034/original/file-20190214-1758-1u7v96a.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=523&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Indonesia’s exports 2016.</span>
<span class="attribution"><a class="source" href="http://atlas.cid.harvard.edu/data#use-permissions">"The Atlas of Economic Complexity," Center for International Development at Harvard University</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>The next Nigerian government must follow the lead of many developed and emerging countries in funding research and development (R&D) activities that drive innovation. The current lack of R&D and innovation is one of the main reasons the country is still struggling to achieve any meaningful development. Lastly, the state also needs to create an environment that attracts, grows and retains talent. This means developing its dilapidated education and health infrastructure and creating institutions that recognise and reward talent. </p>
<p>And, amid all this, corruption must be tackled. Like a cankerworm, it has gnawed at Nigeria for so long and has also contributed significantly to its persistent underdevelopment. If Nigeria is to make any meaningful inroad towards development, more also needs to be done in the fight against graft. Buhari’s efforts on this front have been seen by his critics as selective. And Atiku, on the other hand, has been accused by his detractors as a ruthless businessman-politician who has milked the system for <a href="https://www.ft.com/content/1e9e9d52-2e0d-11e9-ba00-0251022932c8">decades</a>. So, Nigeria’s voters face two uninspiring choices in the coming election.</p><img src="https://counter.theconversation.com/content/111574/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ejike Bob Udeogu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Buhari’s handling of the economy has been somewhere between poor and appalling. But the same could be said of past administrations.Ejike Bob Udeogu, Senior Lecturer in Economics, University of East LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1118352019-02-15T09:05:48Z2019-02-15T09:05:48ZFela, Saro-Wiwa, Achebe: what Nigeria’s icons have said about its politics<figure><img src="https://images.theconversation.com/files/258991/original/file-20190214-1730-ren9c2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fela Kuti's Mr Follow Follow is the b-side of his album, Zombie.</span> <span class="attribution"><span class="source">YouTube</span></span></figcaption></figure><p>Nigeria, Africa’s most populous nation and arguably its largest economy, is in electoral crisis following the <a href="https://www.bbc.com/news/world-africa-47263122">11th hour decision by the electoral commission to postpone polls due over the weekend</a>. It’s a good time to celebrate democracy – but also to ponder what has become of the country since it wrestled <a href="https://www.bbc.com/news/world-africa-13951696#sa-link_location=story-body&intlink_from_url=https%3A%2F%2Fwww.bbc.com%2Fnews%2Fworld-africa-13949550&intlink_ts=1550135919278-sa">independence</a> from colonial Britain in 1960.</p>
<p>To do this, I find it helpful to consider what some of Nigeria’s most celebrated cultural icons, among them musician, commentator and activist, <a href="https://felakuti.bandcamp.com/">Fela Anikulapo-Kuti</a> – about whose political messaging <a href="https://www.igi-global.com/book/music-messaging-african-political-arena/205597">I have written</a> – the novelist <a href="https://literature.britishcouncil.org/writer/chinua-achebe">Chinua Achebe</a> and writer and activist, <a href="https://www.goldmanprize.org/recipient/ken-saro-wiwa/">Ken Saro-Wiwa</a>, might say about their country if they were alive today.</p>
<p>Arguably, Nigeria has come a long way in the past few decades. There have been important, positive developments in the <a href="https://www.worldbank.org/en/country/nigeria/overview">economy</a> and, crucially for a nation of nearly <a href="http://www.worldometers.info/world-population/nigeria-population/">200 million people</a> <a href="https://guardian.ng/technology/improving-end-user-satisfaction-in-nigerias-telecoms-sector/">telecommunications</a>. Yet it’s still racked by <a href="https://www.emeraldinsight.com/doi/abs/10.1108/eb025836">corruption</a>, dreadful <a href="https://theconversation.com/corruption-in-the-nigerian-health-sector-has-many-faces-how-to-fix-it-99043">health</a>
and <a href="https://www.bbc.co.uk/programmes/articles/3RbFXDdBw3g0HQG0fpyD0xF/why-nigerias-educational-system-is-in-crisis-and-how-to-fix-it">education systems</a>, and deep <a href="https://apsdpr.org/index.php/apsdpr/article/view/151/230">immorality</a> among some who style themselves as custodians of religion and politics. These issues have long haunted the nation, and its cultural icons like Achebe, Fela and Saro-Wiwa were among those who highlighted Nigeria’s failings in their work.</p>
<h2>Failure of leadership</h2>
<p>Probably Africa’s most acclaimed novelist, Achebe, articulated Nigeria’s woes in his book, <em><a href="http://www.africanbookscollective.com/books/the-trouble-with-nigeria">The Trouble with Nigeria</a></em>. In his judgement, </p>
<blockquote>
<p>The trouble with Nigeria is simply and squarely a failure of leadership.</p>
</blockquote>
<p>Few Nigerians would disagree. The country is prolific at <a href="https://allafrica.com/stories/201809200017.html">producing leaders</a> with questionable cognitive competence whose warped wisdom compels them to doggedly advance backwards. </p>
<p>And who could forget <a href="https://www.sahistory.org.za/people/kenule-beeson-saro-wiwa">Ken Saro-Wiwa</a>? He was an author, television producer and environmental activist, who led a campaign against the multinational petroleum industry in his home region, the Nigerian delta, which gave rise to severe environmental damage. On 10 November 1995, he was <a href="https://www.premiumtimesng.com/features-and-interviews/295004-remembering-ken-saro-wiwa-23-years-after-brutal-killing-by-nigerian-govt.html">executed</a> by the military dictatorship of Sani Abacha, for his non-violent campaign.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/258998/original/file-20190214-1730-163nv6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Vigil in 2012 at the Shell Centre, London, on the 17th Anniversary of Ken Saro-Wiwa’s death.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Vigil_on_the_17th_Anniversary_of_Ken_Saro-Wiwa_and_the_Ogoni.jpg">Martin LeSanto-Smith</a></span>
</figcaption>
</figure>
<p>I had the privilege to call him a friend and mentor when he was a contributor to Nigeria’s <em>Vanguard</em> newspaper where I cut my teeth as a journalist. He also wrote a book, <a href="https://muse.jhu.edu/article/26234"><em>Sozaboy</em></a>, and wittingly subtitled it A Novel in Rotten English. To many Nigerians, their country is rotten. It’s like Saro-Wiwa’s unintelligible tale told in rotten vernacular by a homeless prodigal son of unknown parentage, in a moment of insobriety in an unspecified city. </p>
<h2>What would Fela say</h2>
<p>But, let’s face it, the trouble with Nigeria also lies with her citizens. The late Afrobeat king, <a href="https://felakuti.bandcamp.com/">Fela Kuti</a>, described them as <a href="http://afrobeatdrumming.com/story-of-the-fela-kuti-africa-70s-mister-follow-follow/">“Follow Follow”</a> people. I articulated his wise thoughts in a chapter in <em>Music and Messaging in the African Political Arena</em>, a recent <a href="https://www.igi-global.com/book/music-messaging-african-political-arena/205597">academic book</a>, where I wrote this:</p>
<blockquote>
<p>Fela lived and died a committed political iconoclast and constant irritant to the political leadership in Nigeria… (but) Fela was not all about challenging political leadership. He also admonished his compatriots and Africans in general for being unassertive in the face of rampant systemic corruption, and not questioning their leaders’ flagrant ineptitude and bad governance.</p>
</blockquote>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/0nklCXMEj8k?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Fela Kuti’s ‘Mr Follow Follow’.</span></figcaption>
</figure>
<p>In the lyrics of some of his <a href="https://felakuti.bandcamp.com/">songs</a>, especially <em>Mr Follow Follow</em>, <em>Zombie</em>, <em>Original Suffer Head</em>, <em>Authority Stealing</em>, <em>Shufering and Shmiling</em>, <em>Teacher Don’t Teach Me Nonsense</em>, <em>Vagabonds in Power</em> and <em>Sorrow, Tears and Blood</em>, Fela was critical of Nigerians who simply look on as their leaders squander their nation’s fortunes.</p>
<p>Fela died in 1997. But his analysis and characterisation of Follow Follow Nigerians remain pertinent. These are citizens who cast their votes for discredited politicians and routinely return them to power. </p>
<p>The same citizens will never support the new breed of non-billionaire leaders with the potential to wheel Nigeria out of the political and economic intensive care unit. And even in the face of old breed leaders subverting the country with corruption, nepotism and inept leadership, the same citizens opt to remain docile. They swallow their hopelessness with spiritual equanimity.</p>
<p>But, it’s also true that Nigeria still has men and women of vision who are imbued with the fortitude, tenacity and assertiveness to redeem their country from the <a href="https://songmeanings.com/songs/view/3530822107858729564/">“Vagabonds in Power”</a>, as Fela labelled Nigeria’s leaders of his era. </p>
<p>The political messages in Fela’s songs and lyrics are constant reminders about Nigeria’s corrupt and lacklustre leadership. He was unequivocal that Nigerians could not realistically outsource the solution to their problems to the heavens. This, while they’re haplessly “Shufering and Shmiling” in some expectation of divine intervention to free them from their predicament and misery. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/yJ1hx88nz9M?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Fela Kuti’s ‘Teacher Don’t Teach Me Nonsense’.</span></figcaption>
</figure>
<p>Nigeria, as Fela saw his country, should not be governed by political Zombie leaders forever. That was why he <a href="https://felakuti.bandcamp.com/album/teacher-dont-teach-me-nonsense-1980">recommended</a> that it was up to her citizens to rise and</p>
<blockquote>
<p>do something about this nonsense.</p>
</blockquote><img src="https://counter.theconversation.com/content/111835/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Uche Onyebadi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cultural icons like Achebe, Fela and Saro-Wiwa were among those who highlighted Nigeria’s failings.Uche Onyebadi, Chair of the Journalism Department, Texas Christian UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1038642018-10-22T14:26:57Z2018-10-22T14:26:57ZSnap shot pictures of poverty in Nigeria aren’t accurate. Here’s the real deal<figure><img src="https://images.theconversation.com/files/241246/original/file-20181018-67161-q6ladm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ajegunle City, Lagos State Nigeria in 2018: Busy streets bustling with commercial activity.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Studies that reflect the movement of poverty levels at a particular point-in-time attract a lot of attention. They also inform academic and policy debates across the globe. In Africa, where poverty levels remain high, these snapshots of poverty levels are a big deal.</p>
<p>Grand new narratives emerge from snapshots of poverty levels. For example, the Africa Rising <a href="https://theconversation.com/the-africa-rising-story-was-based-on-faulty-logic-heres-how-to-fix-it-86327">narrative</a> was largely made on the back of numbers that reflected a massive wave of poverty reduction across the continent. Another is that Nigeria recorded remarkable success in its fight against poverty <a href="https://www.bbc.com/news/world-africa-17015873">between 1996 and 2004</a>. This is based on claims that the percentage of those living on less than $1.25 per day declined by 27.63% during this period. This would mean that about 27.13 million Nigerians escaped poverty. </p>
<p>While these snapshots can be useful, they are fundamentally insufficient and can be misleading. Our <a href="https://www.cgdev.org/publication/three-decades-poverty-mobility-nigeria-trapped-freed-and-never-trapped">study</a> of poverty numbers in Nigeria shows how unreliable the numbers are.</p>
<p>We took a different approach, one that’s been gaining traction in recent years – the study of the mobility of poverty, or the movement of people in and out of poverty over time. </p>
<p>It provides a much richer and nuanced understanding of poverty because it challenges the conventional view of “the poor” as a homogeneous and essentially static population. </p>
<p>Applying this approach, our study on poverty mobility in Nigeria found that between 1980 and 2010 there are more people falling into poverty than escaping it. And based on a related <a href="https://www.cgdev.org/publication/will-poor-nigeria-escape-poverty-their-lifetime">study</a>, about 72%-91% of Nigeria’s poor are at risk of spending their entire life below the poverty line. </p>
<p>The study also reveals useful nuances that can’t be realised from conventional approaches. For example, we found that chronic poverty (that is, being trapped in poverty) is less prevalent in Nigeria’s oil producing region and more prevalent in the country’s northeast. And we found that years of schooling has the strongest negative impact on chronic poverty – 74% of those never trapped in poverty have more than a high school level of education.</p>
<p>These critical nuances are important to understand if Nigeria – and other countries – are going to successfully launch an aggressive war on poverty. </p>
<h2>Underestimating the problem</h2>
<p>Our paper explored six sweeps of household surveys of Nigeria (1980–2010). The paper shows that a conventional measure of poverty tends to understate the actual number of people in poverty over a course of time. This is because it is unable to provide information on individual poverty experiences across time.</p>
<p>For instance, the study established that although the poverty rate in 2004 was 58%, around 85% of the population (made up of the trapped, the freed and those that moved into the poverty) had experienced poverty between 1996 and 2004. This means only 15% had never experienced poverty. </p>
<p>The majority of those who have never experienced poverty were schooled, lived in urban areas, and were found in the top 10% of the income distribution.</p>
<p>From this base we found that between 1980 and 1985, about 0.11% to 9.5% of the population escaped poverty, but at the same time, many more – 21.94% to 32.27% – moved into poverty. And the evidence we collected suggests that both transient and chronic poverty were higher between 1996 and 2010 than between 1980 and 1992. But transient poverty rose faster as the share of chronic poverty in total poverty declined to 55% from about 90%.</p>
<p>We also established that chronic poverty is less prevalent in Nigeria’s oil producing region and more prevalent in the country’s northeast and that 81% of those trapped in poverty <a href="https://www.cgdev.org/blog/poverty-nigeria-understanding-and-bridging-divide-between-north-and-south">were from the north</a>. </p>
<p>We found that poverty increased with household size. Having more children by poor families reduces their chances of escaping poverty because bigger households make a dent on their incomes. </p>
<p>We also found that 81% of those trapped in poverty were farmers.</p>
<h2>How to fix the problem</h2>
<p>Chronic poverty is also significantly determined by factors ranging from household size, to age, level of education, location and gender. Transient poverty is less affected by these kinds of household demographics. Rather, it’s linked to the ability to access safety nets such as social insurance or to be able to access funds through borrowing. </p>
<p>It is clear from our numbers that governments need to invest more in better schooling. This can help break the cycle of chronic poverty prevalent in Nigeria’s northern region.</p>
<p>This calls for government to put some effort into providing safety nets that makes households less vulnerable. And that institutions are developed that can cater for low-income households in a way that enables them to protect themselves against economy-wide shocks. One example is recession.</p>
<p>This goes to say governments must tailor policy interventions in the way that speaks to how people actually experience poverty, whether transiently or chronically. </p>
<p>Nigeria recently launched an <a href="https://www.vanguardngr.com/2017/01/presidency-begins-payment-n5000-monthly-stipend-poor-nigerians-9-states/">initiative </a>in its fight against poverty that illustrates perfectly how policies are designed that <em>don’t</em> do this. The government is running a cash transfer programme of 5,000 naira (US$13.76) per month per household. </p>
<p>This won’t deliver relief (or barely scratches the surface) for two reasons: firstly, only less than 1% of poor people are benefiting. And secondly, the amount isn’t enough to boost the welfare of the poor in an economy currently experiencing inflation.</p><img src="https://counter.theconversation.com/content/103864/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Zuhumnan Dapel does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A study of the mobility of poverty, or the movement of people in and out of poverty over time, provides a much more accurate picture.Zuhumnan Dapel, Priors: IDRC Fellow at the Center for Global Development; Public Policy Fellow, Woodrow Wilson Center, Scottish Institute for Research in EconomicsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/993042018-09-10T15:12:35Z2018-09-10T15:12:35ZWhy Nigeria urgently needs to grow non-oil exports<figure><img src="https://images.theconversation.com/files/234235/original/file-20180830-195304-1abwopm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The economy of Nigeria has had to navigate a major crisis that started with the collapse of oil prices in 2014 and was worsened by the <strong>_recurring youth restiveness</strong>_<a href="https://www.forbes.com/sites/uhenergy/2018/03/20/amnesty-and-new-violence-in-the-niger-delta/#7bfdae30263f">ongoing restiveness</a> in the oil rich Niger-Delta region. </p>
<p>The crisis of the past four years <strong>reaffirms</strong> the vulnerability of the Nigerian economy to oil <strong>related shocks</strong>. It underscores the need for Nigeria to look outward, diversifying its export base away from the volatile commodity if the country is to win its battles against poverty and inequality.</p>
<p>Oil accounts for 90% or more of <a href="http://www.worldstopexports.com/nigerias-top-10-exports/">Nigerian merchandise exports</a>. This heavy dependence of the Nigerian economy on oil as the dominant source of foreign exchange is widely <strong>acknowledged</strong>. But the mechanisms through which oil price changes affect the economy and the measures (or lack of them) available to the Nigerian authorities to counter oil price declines are less commonly understood. </p>
<p>We traced the impact of the recent price declines and considered what policy options were available to the Nigerian authorities to come up with counter measures. </p>
<p>The vulnerability of the economy to oil price shocks has been <a href="https://mpra.ub.uni-muenchen.de/16319/1/MPRA_paper_16319.pdf">known for years</a>, and the case for diversification has been made many times. But, as <a href="https://www.ifpri.org/publication/nigerias-macroeconomic-crisis-explained">our paper</a> points out, development of a <strong>robust</strong> non-oil export base is, in all likelihood, no longer a policy choice, it is a growth imperative. To grow and develop over the long term, Nigeria needs very rapid growth in non-oil exports.</p>
<h2>The good times (1998 - 2014)</h2>
<p>From 1998 to 2014, <a href="https://www.imf.org/external/np/res/commod/index.aspx">an oil price boom</a> unfolded that saw the price of Nigeria’s dominant export increase in nominal dollar terms by a factor of about ten – from about USD$10 per barrel to more than USD$100. While the boom period was characterised by some volatility, most notably in 2008, on average, the oil price rose persistently for more than 15 years.</p>
<p>In other words, in 1998, Nigeria got about USD$10 worth of imports for each barrel of oil exported. In 2014, Nigeria obtained about USD$100 worth of imports for each barrel of oil exported. </p>
<p>This strong upward trend in oil prices dulled incentives to diversify. Exports provide the foreign exchange for purchasing imports. Nigerians were able to significantly expand imports over time for the same volume of oil exports.</p>
<h2>The adjustment period (2015 - present)</h2>
<p>By the end of 2015, oil prices had collapsed. At that time, Nigeria got only about USD$40 worth of imports for each barrel of oil exported. By August 2018, prices had rebounded to about USD$65 per barrel or about USD$65 worth of imports for each barrel exported. This is still well below the levels of 2014.</p>
<p>Faced with persistently lower oil prices, Nigerian policymakers had, in principle, two options: increase exports or reduce imports. In practice, because increasing exports is effectively impossible in the short term, there was only one viable option: reduce import volumes to levels consistent with Nigeria’s reduced purchasing power. </p>
<p>This is exactly what happened. Between 2014 and 2016, import volumes declined by about 44%, an enormous reduction. Reduced imports meant fewer goods available in the economy, which in turn meant less consumption by households, less investment by business, and less government service. </p>
<p>This has been painful. We estimate that total real spending on consumption, investment, and government declined by about 12% per person between 2014 and 2016, a large macroeconomic shock. </p>
<h2>Changing course</h2>
<p>Looking forward, in the absence of a long term rebound in oil production or world oil prices, foreign exchange earnings from the sale of oil will remain relatively constant. In this (likely) situation, the economy must export more, of something other than oil, in order to import more. </p>
<p>It’s hard to see how the Nigerian economy can grow consistently without more imports. Businesses in a growing economy require more capital goods and more intermediate inputs. Without progressively more exports, there cannot be progressively more imports of efficient machines, tools, and other technologies that are critical for growth. </p>
<p>The only way Nigeria can avoid this stagnant state of affairs is if it does something dramatic about increasing non-oil exports. Nigerian businesses need to develop products of export quality at globally competitive prices. They must also develop the networks to market those products abroad. </p>
<p>This is difficult, and it will take time. But there are some clear initial options. </p>
<p>Agricultural products are potentially a part of the solution. This is particularly true in the relatively near term as global agricultural markets are relatively easy to enter if quality and cost are competitive. </p>
<p>Another potential area for development is providing regional services – for example, developing Lagos as an airline hub and shipping centre. </p>
<p>Given its large domestic market and its large labour force, Nigeria should also be looking at some longer term strategies to attract foreign direct investment into manufacturing sectors as the first step to learning to compete on global markets.</p>
<p>For more than a generation, Nigerian business, outside of oil, has focused almost exclusively on the domestic market. Looking forward, a significant segment of Nigerian business must look outward to the international market. Initiating, nurturing and growing this outward looking perspective is today’s key economic challenge for business, policymakers, and civil society.</p><img src="https://counter.theconversation.com/content/99304/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The collapse of the oil price in 2014 highlighted the need for Nigeria to dilute its exposure on the commodity.Channing Arndt, Division Director, Environment and Production Technology, IFPRI,, CGIAR System OrganizationAdedeji Adeniran, Senior Research Fellow at the Center for the Studies of Economies of Africa in Nigeria. , University of the WitwatersrandChuku Chuku, Lecturer at the Department of Economics, University of UyoDr. George Mavrotas, Senior Research Fellow, IFPRI and Head of IFPRI's Country Program and Office in Nigeria, CGIAR System OrganizationMorakinyo Adetutu, Lecturer in Economics, Nottingham Trent UniversityVictor Ajayi, Research Associate, University of CambridgeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/846202017-09-27T17:03:03Z2017-09-27T17:03:03ZEconomic inequality lies behind growing calls for secession in Nigeria<figure><img src="https://images.theconversation.com/files/187777/original/file-20170927-24154-141spub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Women carry goods across a makeshift bridge in the Ilaje slum in Lagos. Widening inequality is fuelling tensions across Nigeria.</span> <span class="attribution"><span class="source">Reuters/Finbarr O'Reilly</span></span></figcaption></figure><p>The rise of ethnic and religious nationalism in Nigeria in the last decade has led to such high levels of tension that it’s prompted people to ask if it will <a href="https://www.pri.org/stories/2014-03-10/roots-nigerias-religious-and-ethnic-conflict">survive as a country</a>. Or if Nigeria is on the brink of another <a href="http://dailypost.ng/2017/09/03/nigerian-christians-warn-another-civil-war/">civil war</a>. </p>
<p>What’s behind the growing tensions is <a href="https://www.oxfam.org/en/even-it-nigeria/nigeria-extreme-inequality-numbers">unequal</a> distribution of the country’s wealth. Inequality has caused mistrust among ethnic groups. This, in turn, has led to conflict and violence. </p>
<p>Nigeria has in fact been at war with itself for some time – a war that has become intensified in the last two decades. </p>
<p>A number of events illustrate this. For instance, militancy in the oil rich Niger Delta region started after the 2003 general elections where arms and ammunition were purchased by some politicians and handed to young people in an attempt to influence the elections. But after the elections, many young Nigerians, angered by high rates of unemployment, turned the weapons against their sponsors and the <a href="http://www.ibtimes.co.uk/nigerias-oil-war-who-are-niger-delta-militants-1520580link">Nigerian state</a>. </p>
<p>Another example is the role played by the Oodua Peoples Congress, a group that advocated for an autonomous region for the Yoruba speaking southwest Nigeria. The congress started its agitation in 1994, a year after the annulment of the 1993 presidential election won by M.K.O Abiola, a member of the Yoruba ethnic group. Their dominant message was the alleged marginalisation of the <a href="https://www.hrw.org/report/2003/02/28/oodua-peoples-congress-opc/fighting-violence-violence">Yoruba ethnic group</a>.</p>
<p>And in 2009 the Boko Haram insurgency erupted after <a href="https://www.theguardian.com/commentisfree/belief/2009/aug/06/mohammed-yusuf-boko-haram-nigeria">the brutal murder</a> of Mohammed Yusuf, an Islamic cleric based in Maiduguri who had started a movement seven years earlier to push for an end to corruption and action against inequality. He also supported Islamic practices in the northeast region of Nigeria. Yusuf was arrested by the police and died in custody in 2009. Many members of his sect immediately staged a peaceful protest. Protests later became violent when they started targeting police offices and police posts across the North. </p>
<p>Now there is a resurgence of opposition in Biafra. It echoes back to 1967 when the then military governor of the Eastern region of Nigeria, Col. Emeka Odumegwu Ojukwu declared the Igbo speaking East independent from Nigeria. This followed Igbos in the North being targeted after the first military coup d'etat that ended Nigeria’s first republic. The 1966 coup, mostly led by military officers from the Igbo speaking east of Nigeria, was perceived by many in the North to have specifically targeted and killed many Hausa/Fulani politicians from the Northern region. </p>
<p>Economic inequality cannot be separated from the root of all these developments. Nigerians are frustrated because they can see <a href="https://www.oxfam.org/en/even-it-nigeria/nigeria-extreme-inequality-numbers">economic inequality growing at a faster pace than ever before</a> and no one seems to be doing anything about it. </p>
<p>Will these agitations lead to an outright war in the scale of the 1960s civil war? There is no categorical answer to that. But I doubt that there will be another civil war on the scale of 1967-1970, although there may be large scale violence. </p>
<h2>A history of violence</h2>
<p>Violence has always been part of the history of economic and political marginalisation in Nigeria. </p>
<p>Examples can be drawn from the mass violence that led to the 1967-70 civil war as well as the ethno-religious violence of the 1970s, 1980s, 1990s and the 2000s. These included the <a href="https://www.onwar.com/aced/chrono/c1900s/yr90/fnigeria1992.htm">Zango Kataf conflict</a>, <a href="https://rlp.hds.harvard.edu/faq/maitatsine-riots">Maitatsine riots</a> in the North between 1980 and 1985, the Agbekoya farmers uprising in the West 1968-70, the first iteration of the resurgence of Biafra by the Ralph Uwazuruike-led <a href="https://www.ecoi.net/local_link/31666/262387_de.html">Movement for the Actualization of the Sovereign State of Biafra in 2000</a> and the national protests against the annulment of the June 12, 1993 <a href="http://www.nytimes.com/1993/07/07/world/rioting-in-nigeria-kills-at-least-11.html?mcubz=1">presidential election</a> won by Chief M.K.O. Abiola. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=449&fit=crop&dpr=1 600w, https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=449&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=449&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/187684/original/file-20170926-19342-1843y70.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A 2003 picture of current Nigeria President Muhammadu Buhari with Chukwuemeka Odumegwu Ojukwu who led the failed Biafran secessionist war in the 60s.</span>
<span class="attribution"><span class="source">REUTERS/Howard Burditt</span></span>
</figcaption>
</figure>
<p>Many of these mass actions started as protests against perceived injustice. But they were aggravated by the forceful response of the Nigerian government. The protests all paralysed state activities. But none threatened the survival of the Nigerian state more than the oil related conflicts in the Niger Delta. </p>
<p>Beginning with the state murder of Niger Delta rights activist <a href="http://www.nytimes.com/1993/07/07/world/rioting-in-nigeria-kills-at-least-11.html?mcubz=1">Ken Saro Wiwa in November 1995</a> and crystallising in the insurgency against oil corporations and the state, protest action in the Niger Delta have affected the production and sale of oil which is the mainstay of the <a href="http://www.africafocus.org/docs06/nig0608.php">Nigerian economy</a>.</p>
<h2>How Nigeria got here</h2>
<p>The resurgence of ethno-religious protests in Nigeria can be traced to the fact that wealth circulates among a small group of elites. Although they come from all ethnic and religious <a href="https://economicconfidential.com/editors-pick/12-people-who-control-nigerias-economy/">groups</a>, they resort to fanning ethno-religious sentiments when they feel there’s a threat to their wealth. Cries of marginalisation becomes the dominant cry when they’re out of power. </p>
<p>The election of President Muhammadu Buhari in 2015, triggered new tensions. This is because he is considered a member of the Northern elite. Immediately after his election protests began supporting self-determination or secession by various groups from the South. These included the <a href="http://dailypost.ng/2017/09/23/biafra-police-dare-ipob-members-protest/">Indigenous People of Biafra</a> in the South East as well as groups such as the <a href="https://www.cnbc.com/2016/05/20/niger-delta-avengers-who-they-are-and-what-they-want.html">Niger Delta Avengers in the South-South</a>. </p>
<p>Control of Nigeria’s oil resources in the Niger Delta always comes into the mix. Recent clashes involving the Biafra group in Port Harcourt – capital city of oil rich Rivers State – must be understood in that context. It is no surprise that once again, the Niger Delta is at the heart of the current clamour for secession just as it was between 1966 and 1970 when oil extraction started taking root in Nigeria. </p>
<p>But there are important differences between today’s protests and those staged earlier in Nigeria’s history. The main ones include the fact that people are mobilised differently, and the way in which information is disseminated and consumed. </p>
<p>News travel faster than it used to and unfounded rumours spread like wildfire. Fuelling the tensions is the fact that hate speech is rife. The state is as guilty as the agitators. Voices of reason and objective analysis are lost in the noise especially now that everyone with a smart phone has become a ‘journalist’. In the confusion, the road to anarchy looms large over Nigeria. </p>
<h2>What’s to be done</h2>
<p>An inclusive economic and political system is the only solution. The current public discourse is focused on political restructuring along ethnic lines. The calls for a political arrangement where major ethnic groups will have control over their geographical areas as well as resources therein might help. The danger is that rather than unify Nigeria, it would further divide the country along <a href="http://leadership.ng/2017/06/30/politics-intrigues-behind-restructuring-debate/">ethnic and religious lines</a>.</p>
<p>What’s missing in the conversation is the fact that the environment for violence and oppression of most Nigerians has come about because of the way in which the country’s economy is structured. The elitist economy cuts across all ethnic groups. The disenfranchisement, marginalisation and exploitation defy ethnic colouration. </p>
<p>For restructuring to be meaningful, Nigeria must create an inclusive economic and political system where ethnic and religious affiliation will no longer be a defining factor in economic and political participation. What Nigerians need, and are clamouring for, is a country that will accommodate them regardless of ethnic or religious creed. Political, religious and ethnic tolerance is the key to economic and political success, therefore economic and political inclusivity must account for greater tolerance for it to be effective.</p><img src="https://counter.theconversation.com/content/84620/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Omolade Adunbi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Protests are raising tensions in Africa’s most populous country, with agitators and federal troops clashing on the streets. But is Nigeria on the brink of another civil war?Omolade Adunbi, Associate Professor of Afroamerican and African Studies, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/708522017-02-12T10:02:18Z2017-02-12T10:02:18ZHow strong family ties play a role in sex trafficking in Nigeria<figure><img src="https://images.theconversation.com/files/155907/original/image-20170207-30934-1dxcexf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Nigerian former sex worker "Beauty" at a social support centre for trafficked girls near Catania in Italy. </span> <span class="attribution"><span class="source">Reuters/Tom Esslemont</span></span></figcaption></figure><p>Discussions about <a href="http://www.bbc.com/news/magazine-35244148">human trafficking</a> between Africa and Europe are frequently blurred by generalisations about villainous traffickers and their naïve young victims who have been misled into prostitution. But the world of sex trafficking is far more complex.</p>
<p>For example, several studies have shown that Nigerian sex trafficking rings are dominated by women, known as madams, and use of black magic rituals, known as <em>juju</em>, to <a href="https://www.researchgate.net/publication/284419256_Human_trafficking_for_sexual_exploitation_from_Nigeria_into_Western_Europe_The_role_of_voodoo_rituals_in_the_functioning_of_a_criminal_network">keep their victims captivated</a>. But little or no work has been done on other important dynamics. Two in particular are important.</p>
<p>The first is the active role that extended families play in helping women secure work in Europe. The second is the fact that women themselves are nowadays increasingly aware of the work that awaits them, even though they cannot imagine how brutal and miserable it actually is.</p>
<p>The lack of research has resulted in an incomplete understanding of the much more complex reality of the circumstances under which victims fall into the hands of traffickers. This has also compromised the effectiveness of prevention and rehabilitation projects in Nigeria, which seldom take into account the involvement of family members.</p>
<p>As part of my doctoral research I recently conducted interviews in rural communities outside Benin City, the capital of Edo State in southern Nigeria. Recruitment of women for work in Europe is <a href="http://www.reuters.com/article/us-nigeria-italy-trafficking-idUSKBN13301I?il=0">rife</a> in the area.</p>
<p>Many of the young women I interviewed knew that prostitution lay behind vague offers for work as hairdressers, cashiers or domestic workers in Europe. Nevertheless, out of desperation, some are prepared to take up the offers driven by the need to provide a <a href="http://link.springer.com/article/10.1007/s12117-013-9199-z">better life for their families</a>.</p>
<p>In rural Nigeria, widespread emigration aspirations are often fuelled by the high levels of joblessness, corruption, poor infrastructure and family <a href="http://www.migrationpolicy.org/article/nigeria-multiple-forms-mobility-africas-demographic-giant">struggles to make ends meet</a>.</p>
<p>My interviews with communities members and NGO representatives indicate that many young Nigerians see the opportunity of finding work abroad as their best, if not their only, means to a better future for themselves and their families. The dire economic situations which their families face, combined with a sense of obligation, is an important factor in the decision making process. Added to this complexity is the fact that extended family members often act as the link between human trafficking syndicates and their victims.</p>
<h2>The Nigeria/Europe nexus</h2>
<p>Nigerian sex traffickers have developed a highly organised and wide web of <a href="http://www.independent.co.uk/news/world/italian-and-nigerian-gangs-a-deadly-alliance-2361393.html">criminal contacts throughout Europe</a>. Over the years this has grown as they have found new ways of overcoming logistical and law enforcement obstacles.</p>
<p>Italy serves as the primary gateway for Nigerian migrants entering Europe.
In 2016, almost 38,000 landed on Italian shores. Just under 10,000 <a href="https://qz.com/885170/the-number-of-nigerian-women-arrivals-to-italy-via-sea-from-libya-has-increased-almost-tenfold-since-2014-says-the-international-organization-for-migration/">were women</a>. </p>
<p>This number represents the largest jump in the yearly total of Nigerian women arriving in Italy in the <a href="https://www.theguardian.com/global-development/2016/aug/08/trafficking-of-nigerian-women-into-prostitution-in-europe-at-crisis-level">last 10 years</a>. In August 2016 the International Organization for Migration reported that 80% of the Nigerian women who arrive in Italy would ultimately be <a href="https://www.theguardian.com/global-development/2016/aug/08/trafficking-of-nigerian-women-into-prostitution-in-europe-at-crisis-level">trafficked for sex</a>.</p>
<h2>The role of the family</h2>
<p>There is high awareness of sex trafficking in Nigeria thanks to the work of international organisations, local NGOs and the National Agency for the Prohibition of <a href="http://www.naptip.gov.ng/">Trafficking in Persons</a>. </p>
<p>But women continue to leave in large numbers to seek a brighter future in Europe. This is exacerbated by pressures put on them by their own families. </p>
<p>Family pressure is often the deciding factor in their leaving home. The struggle to make ends meet often leads families to view sending young women off to Europe as an investment, leading to future income for the household. Thus family members are involved in the recruiting phase of trafficking. </p>
<p>Women migrants – unlike their male counterparts – don’t have to finance their own trips to Europe. They are sponsored by their future “employers” and once in Europe are forced to work until they repay the debt incurred for passage. This can take years as the inflated sums can amount to as much as €60,000. This indebtedness also means that women are less likely to report their situation to the police. </p>
<p>Extended family members often mislead women into believing that their migration process will be different as their contact in Italy is a trusted one. </p>
<p>Unlike the Western “extended family”, Nigerian families are tightly knit through ancestral ties. This makes the closeness of the biological connection irrelevant in determining the <a href="http://eprints.covenantuniversity.edu.ng/4596/1/Mama2.pdf">importance of the relationship</a>. This creates a very profound sense of moral and financial obligation among family members, a factor which has great importance in the dynamics of sex trafficking. </p>
<p>In Nigerian families, for instance, the wealthier family members are both expected and feel obligated to provide financially for those who struggle. Nigerian “madams” use this to their advantage. For example they allow women to keep a small sum of money to send back home occasionally. </p>
<p>These remittances become a double-edged sword. They provide a financial incentive to the family in Nigeria to do whatever they can to discourage the women from escaping. </p>
<p>As long as the woman keeps sending money home, neither the community nor the family is likely to question the source of her income. Being unable to find success abroad and to live up to her financial responsibility to her family would be perceived as a failure and the source of significant shame and dishonour on a personal, family and community level. </p>
<h2>Fighting sex traffickers</h2>
<p>Several major international police operations and intelligence gathering projects funded by the EU and various EU member states are in place to fight Nigerian transnational sex trafficking.</p>
<p>But the increasing number of Nigerian women arriving in Europe suggests that their success is limited. The Nigerian criminal groups have proved to be very adaptable and to be able to quickly reconstitute themselves when put <a href="http://in.reuters.com/article/nigeria-italy-crime-trafficking-idINKBN134018">under legal pressure</a>.</p>
<p>Law enforcement operations should be combined with prevention and rehabilitation strategies for a more effective and holistic approach to address the Nigerian sex trafficking problem. </p>
<p>In Nigeria, projects to reintegrate the women back into their societies are often focused mainly on the re-empowerment of victims through either work training or access to micro credit grants for business start-ups. Too often little or no attention is given to the reintegration of the women in their families. </p>
<p>It’s undeniable that families play an important role in the sustainability of external sex trafficking. But the power of strong family ties could also be a great asset in preventing the women from joining the sex trade in the first place. Family based interventions and family counselling could play a pivotal role in the success of reintegration strategies for the victims as has been the case in addressing other issues such as <a href="https://www.drugabuse.gov/publications/principles-adolescent-substance-use-disorder-treatment-research-based-guide/evidence-based-approaches-to-treating-adolescent-substance-use-disorders/family-based-approaches">drug and alcohol abuse, bullying and gambling</a>.</p><img src="https://counter.theconversation.com/content/70852/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Valentina Pancieri receives funding from the University of Cape Town.</span></em></p>Nigerian women migrating to Europe are increasingly aware that work hidden in the form of menial jobs is actually sex work, even though they cannot imagine the brutality that comes with it.Valentina Pancieri, Ph.D. Candidate in Criminology, University of Cape Town, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.