Nigeria’s huge economic potential is no dream. It will not materialize on its own. It requires determination. The Buhari era can make or break the path to the Nigerian dream.
When retired Muhammadu Buhari took over from Goodluck Jonathan, it marked the first peaceful transfer of power between rival parties in Nigeria.
Unlike most advanced nations and many emerging nations, Nigeria has extraordinary economic potential. But even favourable demographics are of little value without productivity, growth, and jobs.
As the Buhari era begins, Nigeria suffers from severe economic turmoil, painful political polarization and devastating security threats. What should be the administration’s priorities?
Ensuring security and stability
One reason why President Goodluck Jonathan lost the 2015 elections was his failure to respond to Boko Haram early enough. As long as scores of young girls remain kidnapped and enslaved, no Nigerian can feel truly secure.
Not only does Boko Haram pose a serious danger in north-eastern Nigeria, it also threatens the cohesion of the multicultural nation. The belated efforts by President Jonathan to contain the terror, including regional initiatives, are a good start but far from enough. Moreover, full security also requires end to sectarian violence, which is fuelled by religious and ethnic tensions.
As the anti-corruption, pro-security candidate, President Buhari must now deliver. Most importantly, the administration must find the precarious balance – hit hard but with a sense of justice, proportion and future.
Initiating anti-corruption struggle
Today, every decent Nigerian is frustrated with pervasive corruption that strangles this beautiful nation. No corruption can be eliminated overnight, but all corruption can be contained over time.
President Buhari needs to establish a long-term path for the anti-corruption struggle, with clearly-defined medium-term objectives. That path must strengthen key institutions, including the National Assembly, political parties, the electoral commission, the private sector and the civil society.
In the short term, the integrity of President Buhari’s rule requires a broad and deep anti-graft campaign that will spare neither individuals nor institutions. In this struggle, the key focus should be on the transparency of government bodies, particularly the Nigeria National Petroleum Corporation. By the same token, President Buhari should push the international community to support the recovery of stolen assets which belong to Nigerian people.
Unleashing economic potential
Without security, stability is not possible. With corruption, any semblance of stability will soon corrode. Consequently, successful economic policies require tough security policies and zero patience for corruption.
Given the recent plunge of oil prices and the subsequent fluctuations, President Buhari needs to clean up the nation’s oil sector and to ensure that fuel shortages in the energy-rich nation will become relics of the past.
Success in industrialization and urbanization is predicated on a modernized agricultural sector.
Most importantly, the new administration needs to establish a sound, firm basis for a more diversified industrial structure. That is necessary to realize Nigeria’s economic potential.
These changes are inconceivable without a more responsive business environment that can truly support Nigeria’s greatest asset – its invaluable family and small-and-medium size enterprises (SMEs) that can create jobs and future for millions.
Overcoming poverty and polarization
As long as too many Nigerians live in poverty and hopelessness, the nation’s economic potential will remain an elusive dream. No nation – and particularly poor emerging economies – can offer full equality. But all nations should aspire to offer equal opportunities.
As emerging economies take off, income polarization has often deteriorated, at least in the short term. But that’s not inevitable, as President Lula’s Brazil demonstrated not so long ago. When the poor and the hopeless are truly included in the official economy, lower middle class will begin to expand and fuel more resilient growth and flowers will bloom even in the favelas.
In Nigeria, efforts at greater equity are vital for the economy, important for politics and critical for stability. As long as regional and religious differences serve as common denominators for economic inequalities, the roots of resentment and terror will linger on.
Deepening regional cooperation, broadening international ties
In the past, the United States has been Nigeria’s most important energy client and security partner. More recently, economic cooperation with China has taken off. In the Jonathan era, regional cooperation has increased as well. In order to realize its full economic potential, Nigeria needs broad-based cooperation regionally and internationally.
As the nation has now bypassed South Africa as Africa’s largest economy, it is well-positioned to become an increasingly important actor in sub-Saharan Africa and internationally.
These regional and international ties are not something external, but vital for domestic economic prosperity, political vibrancy as well as security. In the past, these ties allowed many Nigerians to create a better life outside their home nation. In the future, they could bring back much of the entrepreneurial and high-skilled Nigerian diaspora.
Toward the Nigerian Dream
Today, Nigeria has an economy of $574 billion; about the size of Sweden. In the former, average per capita income is only $6,200; in Sweden, it is $47,200, adjusted to purchasing power.
However, the Swedish population amounts to less than 9.8 million and is rapidly aging. In contrast, the Nigerian population amounts to almost 180 million and is overwhelmingly young.
In favourable conditions, Nigeria’s population has potential to surpass that of the United States by 2050. It could reach 900 million at the end of the 21st century. That would create a foundation for a huge economy.
That’s the Nigerian Dream – and one that the Buhari era could unleash.
Dr Steinbock is the research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and EU Center (Singapore). For more, see http://www.differencegroup.net
The original commentary was released by BusinessDay, Nigeria’s leading business daily, on June 1, 2015