Feature

THE NIGERIAN ECONOMY: WHERE ARE WE NOW?

Published

3 years ago

February 4, 2022

By Matthew Eloyi

As Nigeria’s economic fortunes seem to be waning below expectations, it may not be out of place to question the country’s economic pathway.

For several years, the catchphrase of ‘economic diversification’ has been strolling about in Nigerian government’s lexicon but despite several reforms, restructuring programmes and international loans, millions of Nigerians still live in abject poverty plus an unabated monolithic dependency on oil. The recent coronavirus pandemic complicated by the growing debt profile of the country and falling Gross Domestic Product (GDP) give new urgency to this issue.

Since the discovery of Oil in 1956 at Oloibiri in the Niger Delta, Nigeria has not gotten it right in getting value for the product. Instead, the government has solely relied on selling the crude oil only to import refined petroleum products for domestic use amidst subsidy outrage and uncertainty as to the total number of litres being used for domestic purpose, among other concerns.

According to experts, Nigeria’s economic potential is hindered by many operational issues, including obstacles to investment, inadequate infrastructure, tariff and non-tariff barriers to trade, limited foreign exchange capacity, and lack of confidence in currency valuation. Many are also of the opinion that Nigeria’s economic growth is held back by insufficient electricity generation capacity, which results in a lack of a reliable and affordable power supply.

Economic experts and other stakeholders have also stressed the need for the government to create policies and implementation strategies to tackle the challenges posed by the coronavirus pandemic while providing an enabling environment for investments to thrive. According to them, these would enable Nigeria to quickly come out of recession and improve the standard of living for the citizens.

The current issues causing hyper-inflation

One of the ultimate goals of a modern economic system is to keep prices of goods and services stable at rates that would not be injurious to the economic system. This is one goal that Nigeria has been finding difficult to attain as prices of goods and services keep rising continuously, thereby encouraging hoarding of unspent income, increasing the cost of borrowing and constraining investment spending by businessmen.

It is no longer news that the Nigerian economic environment is currently experiencing inflationary episodes and this has raised questions on the credibility and efficacy of the country’s monetary policy. According to experts, inflation can emanate from several sources including the ability of labour unions to use market power to demand for wage increases in order to correct parts of the profits accruable to entrepreneurs. Inflation is also said to be caused by developments in the product markets because of the existence of monopolistic market structures. It also occurs as a result of some form of internal or external shocks that may be driven by either exchange rate depreciation or an upward surge or spike in the prices of commodities. According to reports and expert opinion, however, the upsurge of COVID-19 pandemic has been the major cause of inflation since 2020 till date.

Despite the obvious continuous increase in prices of goods and services, the National Bureau of Statistics reported that the annual inflation rate fell for the eighth straight month to 15.40% in November 2021, from 15.99% in October. Meanwhile, the yearly core inflation rate, excluding the prices of agricultural produce, rose to 13.85% in November, from 13.24% in the prior month.

COVID-19 and downward spiral of the economy

Since the entrance of coronavirus (COVID-19) into Nigeria on February 27, 2020, the Nigerian economy seemed to have witnessed a lot of commotion. Few days after the importation of the virus from Italy, specifically on March 11, it was declared a global pandemic by the World Health Organisation (WHO). As the virus continued to spread globally and became more alarming, governments at all levels seemed to focus mainly on curtailing the spread within the country by imposing social isolation policies, which include closure of schools and businesses, movement restriction, etc. The shutdown of work and businesses as a way of curtailing the virus seems to have worsened the plight of Nigerians, as many were and are still struggling to afford food and meet other basic needs. According to reports, the palliatives provided by state and federal governments reached only a fraction of the vulnerable.

Most of the major effects of the COVID-19 pandemic on Nigeria have been economic, rather than health related. The earlier phase of the pandemic led Nigeria to its worst recession since the 1980s, with services and industry hit especially hard. This relatively stemmed from lockdown policies constraining people’s ability to go to work. As if that is not enough, the price of oil – which is more than 80 percent of Nigeria’s exports and more than 50 percent of government revenues – dropped more than 60 percent between February and May 2020.

In the later phases of the pandemic, even though economic activities began to recuperate, inflation started stepping in, especially for food items that are vital for consumption. By impeding economic activities, COVID-19 has worsened pre-existing operational distortions that were already causing inflation, even before the pandemic hit.

Monolithic dependency on oil and the imperative for diversification

Africa’s most populous nation, Nigeria, is blessed with numerous natural resources spread across different geographical States in the country. Agriculture and Extractive Minerals were the country’s major source of revenues in the 1950s but this soon changed after the discovery of oil in 1959.

According to research, the origin of oil exploration and exploitation in Nigeria started in 1959, at Oloibiri in present day Bayelsa State where the first oil well was discovered and the subsequent increase in demand of oil in the world market made the country to neglect agriculture, extractive minerals and other viable sectors of the economy, leading to over-reliance on crude oil. Today, oil and its associated products account for about 90% of Nigeria’s export revenue, and funds over 80% of the national budget.

With the ever-growing uncertainty of global crude oil prices and sluggish growth of the Nation’s economy, much opportunity to move away from underdevelopment despite its well established and abundant natural and human resources endowments has been lost due to varying reasons. Consequently, federal government inflow has been on a steady decline resulting from declining global oil prices, expanding population, slower economic activity, and hence leading to lower corporate taxes, declining consumption, lower value added taxes, exchange rates adjustments, lower trade related tariff revenues, as well as reduced portfolio and foreign direct investment accretion.

Diversification of the Nigerian economy remains the only way out of its present economic predicament and the best viable strategic option for the country in light of her many developmental challenges. The need for diversification is nothing new, as there has been a sustained push for several years to further grow and diversify the country’s economy, with the aim of improving the revenue base towards unlocking sustainable development.

Nigeria as a country must develop new ways to grow its economy by encouraging more investment and drawing attention to the non-traditional oil base to the Agricultural and Solid Mineral sectors, increasing its range of products for the international market and engaging new economic and trade Partners distinction to oil. As a matter of urgency, the Federal Government of Nigeria must encourage the diversification of its economy, as it is the only alternative and sustainable means to survive the international economic vagaries with the persistent volatility of global crude oil price with its attendant drop in net oil price over time. It is important that the nation must not accept erroneously the myth that oil provides a never-ending source of revenue as usual.

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Feature

Google and Nigeria: Collaborating for a Digital Tomorrow

Published

2 months ago

February 19, 2025

Matthew Eloyi

Google and Nigeria: Collaborating for a Digital Tomorrow

In an era where digital transformation is defining economic growth and global competitiveness, Nigeria is positioning itself at the forefront of Africa’s technology revolution. With an ambitious partnership with Google, the country is set to harness the power of artificial intelligence (AI), cloud computing, and digital infrastructure to drive innovation and economic diversification.

According to a report by Punch Newspaper, President Bola Ahmed Tinubu recently announced Nigeria’s commitment to leading AI innovations in Africa. His announcement came after a high-level engagement with SundarPichai, the Chief Executive Officer of Google and Alphabet, during a meeting in France. This partnership, as highlighted by the President, is designed to advance Nigeria’s role in AI and digital technology, reinforcing his administration’s Renewed Hope Agenda, which prioritisesindustrialisation, digitisation, and innovation.

Beyond governmental rhetoric, this collaboration aims to materialise into practical initiatives that will empower businesses, create jobs, and enhance Nigeria’s digital economy. The Federal Ministry of Communications, Innovation, and Digital Economy is expected to oversee the implementation of these initiatives, with the National Information Technology Development Agency (NITDA) playing a lead role in execution.

According to the Director-General of NITDA,KashifuInuwaAbdullahi CCIE, the partnership between Nigeria and Google is a critical step towardtowards making Nigeria a digitally empowered nation , fostering inclusive economic growth through technological innovation. . Speaking in a televised interview, as reported by the News Agency of Nigeria, he emphasised that the collaboration will focus on infrastructure development, upskilling Nigerian citizens, fostering AI innovation, adopting cloud technologies, and creating an investment-friendly environment.

One of the major areas of focus is the establishment of data centres to support Nigeria’s growing digital infrastructure, putting the country on the path of digital sovereignty The NITDA boss noted that no data centre globally relies solely on grid electricity. Thus, the integration of renewable energy sources and carbon credit initiatives will be key to the sustainability of this project.

Furthermore, the partnership aims to enhance digital literacy by embedding digital skills training across Nigeria’s educational system, from primary school to tertiary institutions. This initiative aligns with the broader goal of preparing the Nigerian workforce for emerging opportunities in the global digital economy.

While the collaboration with Google is extensive, Nigeria is also making strides in AI research through other strategic initiatives. President Tinubu highlighted Awarri Technologies as a key player in the AI space, with ongoing efforts to build critical AI software infrastructure tailored to Nigeria’s unique market needs.

The strategic partnership between Nigeria and Google represents a significant leap toward positioning the country as Africa’s digital powerhouse. By leveraging AI, cloud computing, and scalable digital infrastructure, Nigeria is on course to becoming a major player in the global technology landscape.

With the Federal Ministry of Communications, Innovation, and Digital Economy providing oversight and NITDA spearheading implementation, the collaboration promises to create new economic opportunities, enhance digital access, and equip Nigerians with the skills needed to thrive in a rapidly evolving digital world. As Nigeria embraces this digital revolution, the partnership with Google may well be the catalyst that propels the country into a future where technology drives inclusive growth, innovation, and sustainable development.

Feature

Edwin Clark and Ayo Adebanjo: The End of an Era of Fearless Advocacy

Published

2 months ago

February 18, 2025

Matthew Eloyi

Edwin Clark and Ayo Adebanjo: The End of an Era of Fearless Advocacy

The deaths of Chief Edwin Kiagbodo Clark and Pa Ayo Adebanjo, two of Nigeria’s most vocal and unyielding statesmen, mark the end of an era of relentless advocacy for equity, justice, and true federalism. These men, who dedicated their lives to championing the rights of their respective regions and the Nigerian nation as a whole, leave behind legacies that will continue to shape national discourse for generations to come.

Clark, the leader of the Pan Niger Delta Forum (PANDEF), was a towering figure in the struggle for resource control, regional autonomy, and the equitable treatment of the Niger Delta region. His voice echoed through the corridors of power, demanding fairness in the distribution of the nation’s wealth, particularly in the oil-rich South-South region. His efforts to mediate peace among warring factions in the Niger Delta and his role in national reconciliation positioned him as a statesman whose influence went beyond his immediate region. Even at the age of 97, he remained unwavering in his pursuit of justice, exemplified by his recent intervention in the political rift between Rivers State Governor Siminalayi Fubara and former Governor Nyesom Wike.

Pa Ayo Adebanjo, on the other hand, was the enduring face of Afenifere, the pan-Yoruba socio-cultural group. Adebanjo embodied the struggle for restructuring, consistently advocating for a return to true federalism—a cause he believed would address Nigeria’s persistent governance failures. He was a key figure in the push for the full implementation of the 2014 National Conference report, which he saw as a blueprint for resolving the country’s political and socio-economic challenges. His unapologetic stance on national issues, particularly his insistence on power devolution and fairness in political representation, made him a formidable figure in Nigeria’s political landscape.

Beyond their regional advocacies, both men shared a broader nationalistic vision. They were instrumental in uniting voices from different regions in the call for a South-Eastern presidency in 2023, recognizing the need for inclusivity and balance in Nigeria’s leadership. Their participation in the Greater Nigeria Conference and subsequent campaigns for restructuring underscored their commitment to a Nigeria where no group felt marginalized.

Their deaths, coming just days apart, are a significant loss to Nigeria’s political and ideological landscape. In a country where compromise often overrides principle, Clark and Adebanjo stood firm in their convictions, offering a rare brand of leadership rooted in history, experience, and the unwavering pursuit of justice. Their absence leaves a void that must now be filled by a new generation of leaders with the courage to speak truth to power and fight for the nation’s collective progress.

As Nigeria mourns these two titans, it must also reflect on the issues they fought for. The calls for restructuring, resource control, and fair governance remain as relevant today as ever. If anything, their passing should reignite the debate and inspire those who believe in a better Nigeria to pick up the mantle. Clark and Adebanjo may be gone, but the ideals they championed must not die with them.

Feature

Hon. Olushola Olofin: A Visionary Leader for the Nigerian Social Insurance Trust Fund (NSITF)

Published

3 months ago

January 24, 2025

Matthew Eloyi

By Zachariah C.H

The appointment of Hon. Olushola Olofin as the new Board Chairman of the Nigerian Social Insurance Trust Fund (NSITF) by President Bola Ahmed Tinubu on January 24, 2025, marks a new dawn for the organization. Hon. Olofin is a seasoned professional with an impeccable track record in Information and Communication Technology (ICT) and management, boasting over 20 years of experience both within Nigeria and internationally. His unique blend of expertise, visionary leadership, and unwavering commitment to excellence positions him as the ideal leader to steer NSITF toward greater heights.

Hon. Olofin has been a driving force behind Nigeria’s digital transformation. As an ICT and management expert, he has consistently demonstrated the ability to harness cutting-edge technology to address complex challenges, fostering innovation and efficiency in every organization he has led. As a Fellow of the Chartered Institute of Management Consultants, his strategic insights have revolutionized operations across sectors, leaving a legacy of progress and sustainability

Hon. Olofin’s extensive leadership experience spans multiple industries. He has served as Board Chairman, Managing Director, and Executive Director of prominent organizations, including Aquasilica Limited and Enrich Systems Limited. Currently, he serves as the Managing Director/CEO of SatCom Integrated Resources, a globally acclaimed ICT company, where his innovative leadership has propelled the company to new heights in the global marketplace. His ability to build, manage, and transform organizations makes him uniquely suited to lead the NSITF into a new era of accountability, transparency, and service delivery.

Hon. Olofin’s academic and professional credentials underscore his capability to excel in this pivotal role. He holds a Bachelor’s degree in Business Administration from the University of Abuja and a Master’s degree in Management Information Systems from the University of Espoo, Finland. Additionally, he has earned numerous professional certifications from world-renowned institutions, including:

•London Graduate School: Business Management

•AIRBUS SLC: Core Skilled Engineer and Programmer

•Certified SALTO Engineer: Spain

•Microsoft Certified Solutions Expert (MCSE)

These certifications reflect his commitment to continuous learning and staying ahead of global trends in technology and management.

Hon. Olushola Olofin’s appointment comes at a critical time for the NSITF, an organization tasked with providing social insurance to Nigeria’s workforce. His extensive expertise in ICT and management will undoubtedly drive the modernization of the NSITF’s operations, ensuring efficient service delivery and increased accessibility. His leadership will foster innovation, strengthen transparency, and enhance the Fund’s impact on Nigerian workers and employers alike.

As a forward-thinking leader with a proven track record of excellence, Hon. Olofin is poised to transform the NSITF into a world-class institution, setting new benchmarks for social security administration in Nigeria. With his wealth of experience, strategic acumen, and passion for service, the NSITF is on the cusp of a brighter, more impactful future.

The Nigerian workforce can look forward to enhanced trust, efficiency, and innovation under the capable leadership of Hon. Olushola Olofin.