The recent economic statistics released by Bloomberg, a global financial data organisation to the effect that Nigeria’s economy has tremendously increased so much so that it has overtaken that of South Africa and now the largest in Africa, has engendered a new economic discourse.
According to the international organisation, South Africa had fallen into another recession within two years, even as it ranked Nigeria as the continent’s biggest economy.
Further, Bloomberg predicted that, in 2020, growth would recede in South Africa, while Nigeria would grow faster.
The international organisation posited that “Nigeria witnessed a 2.55 per cent growth in Q4 of 2019. Not only did that beat the forecasts, it was the highest growth in a quarter since the recession of 2016, and gave Nigeria the advantage of ending 2019 with a GDP of $476 billion (parallel rate of N306 per $1) or $402 billion (official rate of N360 per $1).”
Since the release of this data, a lot of economic discussions have littered the social media on the veracity of the data and the reality on ground. Those who did not see anything good in the economic palliatives of the current government saw the statistics as vague and unrealistic, but those who benefited from the new economic paradigm shift were happy that their economic situation has changed.
The Nation investigation revealed that some of the proactive economic policies embarked by the Federal Government through the Central Bank of Nigeria (CBN) have gone a long way to change the face of economic reality on ground.
In the past, the country has been a dumping ground for all manner of foreign goods to the extent that the local industries closed shop.
Against this background, the CBN went to the drawing board to turn the situation around and this might have informed the new statistics on the global level. Speaking to The Nation on this, an Agronomist, Dr. Tunde Ariyo explained that only the uninformed will fault Bloomberg statistics because such people did not follow the economic trend in the last 10 years.
Ariyo noted that some of the CBN interventionist policies have direct impact on the economy.
“A breakdown of the apex bank’s development intervention showed that the Real Sector Support Facility (RSSF) received N300 billion; the Micro-Small and Medium Enterprises Development Fund (MSMEDF) received N220 billion; the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) received N75 billion; and the Nigeria Electricity Market Stabilisation Fund received N213 billion,” he said.
According to him, the real sector is the engine of the economy and since the government has invested heavily on this, the multiplier effects on this will add value to the domestic economy and consequently serves as a source of wealth creation in the area of agricultural value chain.
Speaking in the same manner, the Executive Director, Finance, Standard Chartered Bank Nigeria Limited and the Regional CFO, West Africa, Yemi Owolabi in a recent seminar argued that a strong financial sector leads to higher savings and provides access to investment outlets, wealth creation and preservation; as well as promotes economic growth.
She said: “The Nigerian banking sector has undergone remarkable changes over the past two decades, emerging stronger, bigger institutions with bigger capital levels achieved through mergers and acquisitions. This has enhanced the capacity of the sector to create higher amounts of risks assets to support growth.”
While admonishing the intervention roles by the CBN, a textile industrialist Alhaji Bako Abubakar who has his operational base in Kaduna noted that the saving grace for the sector was the N300 billion anchor borrower schemes which, to a greater extent, refocused the industry towards its glorious past.
While speaking to The Nation on phone, Abubakar explained that the textile industry has gone comatose to the extent that its employment generation value has almost gone zero before the CBN came to its rescue.
He argued that though it is not yet a glorious dawn, if the tempo of subvention is sustained, the multiplier effect on the textile value chain will grow the economy.
Though most of the economic improvements may not be physically seen of felt argued Mr. Emeka Okoro, an economist, but the overall benefits and effect has affected the economic statistics of the country in a positive dimension.
Okoro, who is a maritime business man, noted that the recent closure of the borders was one of the economic policies that really boost up the economic development of the country.
According to him, this act which still remains operational was one of the best economic steps taken by the Federal Government in recent times.
He explained that being in the maritime industries for many years he knew some of the havoc which smuggling has wreaked on the industry to the extent that he was almost frustrated out of the business.
“But today, the situation has changed. It is no longer business as usual and there is reasonable element of sanity in the sector now, unlike what used to be in the past.
Okoro lamented that he was one of those people who thought the policy of border closure will not work, especially when the situation was becoming uncontrollable
“Do you know how many goods that are dumped here every week in the past? The situation was so bad to the extent that we genuine business men have to go on compulsory holiday in order to keep afloat in business. There is no way any industrialist within can cope with this competition in terms of price of goods because the country has been turned into a mere dumping site of all sorts of commodities that have no bearing to our survival.”
In his own assessment of the recent economic data, a retired school Principal Deacon Joseph Ireyemi who lived most of his life at Owode area of Ogun State pointed out that the volume of smuggled goods such as rice through the ldi Iroko border in the past was unimaginable.
“But today, you can see that most of the youth in the areas who are mostly engaged in smuggling of goods such as rice and tomatoes through that route have taken to other trades because of the border closure.
“If you see the volume of rice importation from this axis, you pity this country. That was why the local rice farmers were groaning. But currently, they are smiling to the banks because they cannot meet the local demands because of the border closure. With that alone, you can see that the economy is improving.
Giving an insight to the reason for the improved economy in the last few years, an agriculturist in Lagos Mr. Benjamin Kayode explained that the ability of government in the last few years to have a paradigm shift from old mono-economy to diversification to agriculture has done the magic.
Kayode said most of the previous agricultural policies excluded the farmers and made them to be at the receiving end in a business they ought to be decision makers.
“Since the narrative has changed, it’s obvious that it will impact on the total economy. Lagos with GDP of $136 billion as of 2017, which is higher than 42 other African countries, is conservatively estimated to consume at least N3 billion worth of fresh agricultural produce daily,” he said.
He noted that against this background, the state not only promote agricultural relationship with a state such Kebbi which resulted in Lake Rice which has not only provided direct money to the farmers, it has also filled the gap of the imported rice smuggled to the city almost on daily basis before the closure of the borders. According to him the cumulative effect of this, combined with all the beneficiaries along the value chains, is enough to improve the economy.
