Still, A Very Fragile Economy
to all intents and purposes. Diversification has failed to yield the desired results. Agriculture, which seemed to have some traction a short while ago, has slipped back to insignificance.
Matters are not helped by the uncontrolled attacks unleashed on farmers by herdsmen resulting in the sacking of a lot of farmers and the destruction of their crops and farm lands. The nominal growth of the economy has indeed not left anything to celebrate, given the published GDP growth numbers. Beyond the population growth which we had mentioned earlier, there is the issue of base year numbers, which seems to mask the fact that the economy may actually not be growing in real terms, after all. The base year theory simply explains a situation where it is easier to show growth where the numbers to compare with are very low or negative. In view of the fact that we were coming from a negative growth trajectory, any growth, no matter how minute, seems to attract recognition.
Putting it simply, it is easier to double N1000 than to double N1, 000,000. If we don’t understand and appreciate this, there is a tendency to exaggerate growth from a very low base like we have in our GDP. We had extensively dealt with the issue of government debt in previous interventions. I believe the government must begin to rethink its high exposure to lenders including our own Central Bank. The reason is that repaying those debts may pose a huge challenge to the economy if an inordinate percentage of our budget would be applied to debt servicing. Building a strong economy should also be at the heart of policy making. While the recent attempts at building infrastructure are commendable, the government must, and should, do more.
A situation where over 70% of our budget spending goes into recurrent expenditure, is very unhealthy for the nation. It means that we are just scratching the surface in terms of infrastructure. An economy that has lost 41% of its productive base between 2012 and 2017 - according to the African Development Bank - requires that things be done differently. Our unwritten de-industrialisation policy is the major reason for the very high level of unemployment.
All we have done here is to tell our story, the way it is from a political economy perspective. You must not agree with us, but the truth is that we are a poor nation. We drove the economy in the wrong direction through poor policy choices and ended up with a recession. We have struggled with it and have luckily been able to get ourselves out, at least for now. Nevertheless, the fundamental problems of the economy still remain unresolved. Grandstanding and self-deluding claims (including that of being the biggest economy in Africa) cannot resolve them either. We must now try and tell ourselves the truth and act in accordance with that reality.
In the Fragile States Index, we moved from No 17 in 2014, to No 14 in 2015 and to No 13 in 2016. In 2017, we maintained the 13th position. Put simply, we are the 13th most fragile nation in the world, out of the 178 countries measured. Failure, therefore stares us in the face. We must do something drastic to pull our country out of the brink of real and imminent failure. We may have been lucky in the past, but ‘Mother luck’ does not take permanent resident permit in any country or economy, much less, one that continues to blow its chances like ours.