Nigeria must improve governance to build resilient economy
Friday Udoh, a chartered economist and chief coordinator of the Institute of Chartered Economists of Nigeria (ICEN) in the south-south region, says Nigeria’s current leadership led by Muhammadu Buhari’s All Progressives Congress must work hard to implement improved governance system, to give the country a resilient economy. He cited a recent World Bank research paper on improved governance that proves that there are growing evidences that improved governance leads to a better economic outcome for a country.
According to the World Bank’s research paper, an improvement in governance matter corresponds to increase in per capita income. Beyond sharing defining characteristics, governance is a process underlying a mutual, committed relationship among the people at large and the government through its institutions, and the basis for commitment – a social contract, via the Constitution. For Nigeria, according to Section 14 (2) (a) of its 1999 Constitution “Sovereignty belongs to people of Nigeria from whom the government draws its authority.
“A successful economy depends on value system and the attitude of government, as well as the people, including the radius of trust of members of the society on the government, the ethical system and the way authority is exercised, and the disposition toward work, saving, innovation and profit. Investment money move freely around the world, governance effectiveness becomes highly priced and demanding by investors; and this is where Nigeria is losing out,” Udoh said in a note to inquiry by business a.m.
Udoh, a gas value-chain expert, said, one of Nigeria’s biggest challenges is to foster growth in non-oil sector of the economy. Indicators have it that the most populous nation in Africa is not politically ready in achieving resilience economy,” he said with tinge of lamentation.
He said Nigeria experienced a major oil price boom in the late 1970s, early 1980s and 2010 which saw the prices hiked $113 to $147 per barrel. But the incomes from these booms were all squandered, as the economy was sorely mismanaged, reaching unprecedented heights, thereby making the economy to hobble worse before the boom, failing to pick up, despite the 2010 boom which lasted till about 2015.
“As worse as it is in 30 years, there have been no significant investments in the non-oil sector by any administration in the country, as a source of efforts in creating a resilient economy to compensate for the drought in the volatile commodity market price bug,” the ICEN coordinator said.
Udoh said, unfortunately, Nigeria over the years, has refused to appropriate revenue realized from crude oil sales efficiently to expand the non-oil sector to compensate for oil-propelled financial crises, pandemic and sector-specific demand shock as it is now; but has sadly chosen to engage in borrowing. “Debt is dangerous and opting for synthetic financing options including oil swap, regulated asset base funding make the economy to contract,” he added.
He particularly frowned at President Buhari administration’s penchant for borrowing. “Though debt in its entirety is not bad, but how and the capacity to manage it is what matters. Nigeria is saddled with frightening debt profile conservatively put at $83.88 billion; coupled with the proposed $22.7 billion approved by the current Senate in the face of dwindling revenues, with no cognate source for repayment. This would rather drive the country into deeper poverty. Already, more than 87 million Nigerians are extremely poor. In the same manner, over 70 per cent of the country’s 76.9 percent working population operate under extremely poor conditions, with rising unemployment, high school drop–out and 10.2 million out-of-school children, among the highest in the world. These are very disturbing narratives,” he said.
He recommended that Buhari administration should set up what he called “standard performance measuring act,” an enhanced measuring tool that measures the performances of the Ministries, Departments and Agencies (MDAs) of government at the three tiers.
Added to this, he posits that communities and regions should be encouraged to engage in economic projects that would engender a healthier competition among the federating states. At the same time, he called for a policy that allows for development of “farm shelters.” Also, the National Youth Service Corps participants should be made to dedicate 87 percent of their service period to agricultural and related fields.