So here we are again, bracing for a further downturn in the economy as a result of what I call the Treasury Single Albatross. Jobs are being lost already. Companies are closing down. We only hope the government will be imaginative, and quick enough to save people from these throes. As things stand, the overall impact of the policy has not been debated, much less provided for.
If instead of one’s child to grow tall and strong, one hand, leg or the head begins to grow on its own, in distended fashion and out of sync with the rest of the body, that would not be termed healthy growth, will it?
If also a child continues to grow, ad infinitum, without maturing commensurately, mentally, emotionally, and otherwise, leading to such a child being unable to undertake responsibilities, get a job and help sustain the family, one would have a problem on one’s hands, and nothing much to celebrate, right?
These are the problems with the world’s fixation with GDP Growth, by which the wellbeing of nations are measured. Economists (especially the ‘well-trained’ ones who run African economies) insist that this is the Holy Grail. GDP Growth. “5%, 7%, 3.433%”. These are unverifiable figures that makes them look learned. In the first place, we don’t have the infrastructure to measure most things here. I was in a hall of 200 people recently and asked them if anyone had been directly sampled – on anything – by the Nigerian Bureau of Statistics (NBS). Only three hands went up. It was a Business Meeting. How does NBS come up with its figures then? Shouldn’t we at least spend more time gathering data that is fairly credible before deluding ourselves about ‘growth’? When something grows, it is important to find out; is the growth balanced or is it just one part? Is it healthy or is it cancerous? It is apt to ask; is this sustainable growth or are we just ballooning out without a hope that the economy will one day sustain itself – without external borrowing or sharp and frequent booms and busts?
Examples of ‘cancerous’ growth in Nigeria include the ongoing bubble in the real estate sector, which threatens to burst with the pulling out of government money from banks, which itself will lead to bank branch closures in the very least; the banking sector having been a major driver of real estate acquisitions in the recent past. The banking sector is another cancer, growing and sophisticating disproportionately compared with the rest of the economy. Banks were only interested in competing for the position of ‘most profitable’ even when it was obvious that they were running a marathon like a 100-metres dash. The interaction between the bank and real estate ‘cancers’ don’t end there. Many of the bad loans in the banks are real estate loans. We got to see some of that when banks were made to publish their bad loans recently. The reason why there is a problem in the real estate sector is not because people don’t need houses, but because the sector focused on ‘luxury’ apartments in disdain, yes disdain, of the poor masses of Nigeria – millions of whom are living in ‘batchers’.
Nobody listens to people like us who try to question the status quo. The voices of those who negate the ‘GDP Growth cult’ are easily drowned out. The economy trudges along, like sheep unto its own demise, convinced that growth, debt, market forces, and privatisation will do the magic. Decades of getting it all terribly wrong couldn’t convince us otherwise.
What about the oil sector? Accounting for 25% of the economy (GDP), according to NBS figures, most of the ‘growth’ advertised for the Nigerian economy in the last few years have come from this sector. That was when the price of crude oil surged in leaps and bounds. Most of the foreign direct investment into Nigeria head for the oil sector – new explorations and so on. AGOA (the US-Africa multilateral trade agreement) contains 98% crude oil exports from Nigeria at a point. Now that prices have crashed, the growth, however badly-measured, has disappeared. The question is, were we wise to have celebrated the ‘good fortune’ of growth when we knew that growth hinged on a single sector of the economy, which probably fueled a few more elitist sectors? Why did we not notice that the underpinning substance was simply not there? Were economic managers only trying to look good all the time, to the detriment of economic sustainability? Our economic managers preened whenever it was announced that Nigeria’s economy grew by so and so percent. They promised more growth, even if it meant nothing. They ignored other measures of progress, as if there is a certain cult of ‘economic growth’, sworn never to allow the world notice the truth!
Cancerous growths leading to toxicity – leading to economic withering from time to time. The idea by which economic success is measured by yearly growth, presupposes that an economy must always grow. Whenever growth slows we go into mourning. Yes, there is the aspect of population growth to think about. But it can be argued that an economy may have negative growth in a year, yet make more progress – if such an economy manages to bridge the income gap for instance. Better equality leads to the empowering of more people, and more sustained growth in the future.
So here we are again, bracing for a further downturn in the economy as a result of what I call the Treasury Single Albatross. Jobs are being lost already. Companies are closing down. We only hope the government will be imaginative, and quick enough to save people from these throes. As things stand, the overall impact of the policy has not been debated, much less provided for. But if anyone wants to know, it is the small guys that are suffering already. Junior staff in banks, SMEs and multinationals. The big guys always protect themselves. The president asks for patience. But this is painful patience.
Nobody listens to people like us who try to question the status quo. The voices of those who negate the ‘GDP Growth cult’ are easily drowned out. The economy trudges along, like sheep unto its own demise, convinced that growth, debt, market forces, and privatisation will do the magic. Decades of getting it all terribly wrong couldn’t convince us otherwise.
Birth rate has dropped in Nigeria! Even in the villages. Use of contraceptives have increased. Globalisation has taken hold here. Education is having effect whether we notice or not.
Flowing from the above, is the problem by which Africans are not expected or allowed to really have a say in their own economic progress. A recent article titled “Economics Has an Africa Problem” notes that global intellectuals and institutions do not reckon with African economic voices, even on matters concerning Africa. The article notes that there is not a single African-based intellectual in the line up of 64 editors of the Journal of Economic Development, and only one, out of the 27 editors of the Journal of African Economies. He happens to be a white South African intellectual, based in the USA. Maybe it is like that in every discipline. Maybe it is another symptom of the collapse of our educational sector. Or maybe it is just that we aren’t pulling our weights enough. I reckon we should create our own platforms and get our stories out there in the open.
These omissions are costly. I read a senator’s recent write-up wherein he freely quoted another statistic foisted on Nigeria – that Nigeria’s population will hit 278million in a few years time. The innate view the rest of the world (western countries) have about us, is of a people who are mindlessly multiplying and crowding the earth. News like Emir Sanusi’s fourth wife doesn’t help us. We lose respect, and get judged harshly when it matters. Some extremists even use that as a good excuse to cause confusion among us; to sponsor wars, and sell ammunitions and other such evil deeds. Because they want to slow down our population growth, by every means!
But in a room of about 30 people, I recently performed an experiment and confirmed that Nigeria’s population may actually FALL in a few decades. In that experiment, NONE of the 30 adults present had as many children as their parents. Birth rate has dropped in Nigeria! Even in the villages. Use of contraceptives have increased. Globalisation has taken hold here. Education is having effect whether we notice or not. As a corollary, even by NBS figures, girl-child education has grown, with many states in Nigeria having more girls in primary and secondary schools (which is the education that really matters all over the world), than boys.
But no. Until one Professor “John Smith” tells us the narrative has changed, we will not attempt to so do, under any circumstance. We are not writing our own history, yet we blame Lord Lugard for joining our ancestors together ‘without their consent’… in that dark age of 1914, when according to our people “the eyes were still at the knees”. To make matters worse, each time we want to convene our own economic meetings here, we rush to look for answers from people like Paul Collier of Oxford University, a man who proposed in his book – The Bottom Billions – that western countries should constantly intervene militarily in African countries so as to set us straight from time to time. As in we are savages and cannot run our own political-economics. Our ‘inferiority complex’ on these matters, is touching, to say the least.
Well, we expect our new economic “First 11” to be announced soon. But from where I stand, I don’t think we are ready to take on these difficult subjects.
Tope Fasua, an economist and consultant, is CEO of Global Analytics Consulting.
