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The obstacle to Nigeria’s post-COVID-19 economic revival 05 May 2021

Nigeria is trapped in severe insecurity. The country is the 3rd most terrorized country in the world, after Afghanistan and Iran, according to the 2020 Global Terrorism Index. War-torn Somalia and Syria have better ranking than Nigeria on the index. The country is also grappling with an acute economic challenge. To highlight the dire situation, about 40% of Nigerians are extremely poor, according to data by the National Bureau of Statistics (NBS). Inflation is in double digit. And the naira has continued to devalue.

How did Nigeria’s economy and society collapse so quickly? What tragedy dragged us quickly down?

The catastrophe is, in actual fact, not a sudden plunge; it is the result of a continuous slip, like in most of the countries in the Sahel and the West African region. These countries have been unable to successfully address the political crises originating in the incomplete resolution of their nationality, state, and religion challenges. Like Nigeria, Guinea, Mali, and Chad boils partly due to the burden of history. The ugly historical legacy is now worsened by transactional leadership that focuses on consolidating power rather than entrenching democratic accountability and empowering the citizens. Nigeria epitomizes this disastrous model of governance.

Since 2015, there has been a steady decline in the country’s political and economic stability. Long before the COVID-19 pandemic, the Nigerian economy had started a rapid decline. In 2016, Nigeria entered into recession and could not fully stabilize before the economic headwinds of COVID-19 caused another horrendous recession in 2020. In response, the government came up with the Nigeria Economic Sustainability Plan (NESP), which relies heavily on significant upgrade of infrastructure and its trickle-down effects on poverty and aggregate consumption.

The NESP presumes a stable political environment. But with the state of the polity, the fundamentals of the plan are no longer realistic. Boko Haram’s increased insurgency in the northeast and the spread of banditry and kidnapping across the major states of northwest and northcentral Nigeria have imperilled agriculture and food supply. Targeted attacks against law enforcement institutions and facilities in the southeast have given a dangerous twist to insecurity in the country.

In 2020, Nigeria ranked 98 out of 107 countries on the Global Nutrition Index (GNI). Given the economic disruption caused by the COVID-19 pandemic, and rising inflation resulting from drought and insecurity in the north, the Food and Agriculture Organization of the United Nations (FAO) estimates severe starvation is looming in Nigeria.

As Nigeria moves closer to a definitive general election in 2023 with the hope of replacing the highly disappointing administration of President Muhammadu Buhari, the lack of political will to undertake radical changes to the country’s political economy means the security and economic crises would worsen, potentially leading to a disastrous political fallout.

Meanwhile, Nigeria’s administrative state is very weak, which means that the instruments of regulating economic and social transactions are underdeveloped. To compound the issue, the politics of economic rent and extraction has weakened the middle class and made elite consensus difficult to forge. Therefore, kickstarting economic growth as well as ensuring equity and justice will continue to challenge the current administration.

If the elite cannot agree on basic structures of their society, especially those that relate to social justice and fairness, then the political stability needed for economic progress will be jeopardized. Vice President Yemi Osinbajo, who chaired the committee that produced the NESP, has hinted at the danger of vanishing elite consensus and the need to rebuild trust in government in order to raise social capital amongst Nigerians. However, the incompetent and biased policies of the government constitute an obstacle to his recommendations.

The Chandler Institute of Governance rating has newly highlighted the fact that Nigeria is in a governance quandary. Nigeria is rated the third worst governed country in the world, just ahead of Zimbabwe and Venezuela. The 2021 report says Nigeria is poor in governance, leadership, and foresight, and that the country’s leadership lacks the ability to innovate and develop long-term vision. Under the government that came into office on the promise to decisively fight corruption, the country is also found wanting in strict enforcement of antigraft measures.

The foregoing indicates that the most formidable challenge to achieving the economic sustainability plan is not the continuing impacts of the COVID-19 pandemic. Rather, Nigeria’s failing governance is the major threat its economic sustainability.

The prognosis is dire under the current governance scenario. If more and more Nigerians continue to become poorer and poorer, banditry and insurgence will increase. This will further fray national cohesion and drive a highly contentious political manoeuvring, which would further erode political stability, economic productivity, and poverty alleviation.

The way out of this gloomy scenario is simple: Nigeria’s best economic revival plan is actually effective and radical political reform.

Dr. Sam Amadi, a former Chairman of the Nigerian Electricity Regulatory Commission, is an Associate Professor and Head of the Private and Property Law Department at Baze University, Abuja.