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A new deal for Nigeria

Filed under: Analysis |

My fellow Nigerians, it is time to take high-level of poverty and insecurity in this Nation serious. If we continue to pretend about the fragile nature of these problems; Arab-Spring type of revolution might take place because the polity is getting hotter by the day. After almost two decades of continuous democratic governance, we have witnessed a microscopic progress across the board. We cannot continue to do business the same way with the same methods and expect better output. If we don’t abandon the old ways, we can’t innovate, thus leaders with broader vision are highly desirable.

Although, the emergence of the newly merged political party: All Progressives Congress (APC) establishes a paradigm shift in our political history. Moving forward, any political party that wins the forthcoming presidential and or national assembly elections will definitely faces a fortified opposition which is good for our nascent democracy. Nonetheless, our current and aspiring leaders must come to the realization that Nigerians need “A New Deal”.

President Obama once said that “Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for and we are the change we seek”, change in Nigeria will only crystalize through visionary leaders with deep sincerity of purpose and human empathy. Approximately 75% of Nigerians are in gloomy poverty, 14 years of democracy is more than enough to make a meaningful DEVELOPMENT regardless of the political party in power. We need better human development in Nigeria not just GDP growth with vastly disparate income distribution.

If the wealthy get richer too rapidly; the demand for goods and services also increases exponentially. The rise in prices will then skyrockets beyond what majority of the citizenry can afford. Nouriel Roubini, a renowned economist predicted the financial crisis that bemused the world in 2008; he warned that any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Tunisia and Egypt are perfect examples, and I pray not for Nigeria.

Roubini’ s prediction is what we’re presently experiencing in Nigeria, despite an average of 6% annual economic growth for almost a decade; a sterling performance considering recent global meltdown, wage employment is estimated to have dropped by over thirty percent within the same period according to a recent World Bank publication titled “Putting Nigeria to Work”. Our strong economic performance over the last decade has not translated to more jobs nor improves our obnoxious human development index.

Companies are spending more on borrowing costs than business expansion costs. That means lower profit margins, less hiring, and more layoffs. Concurrently; employers are concerned about fresh graduate’s skills vis-a-vis job requirements. These problems emanated from our dysfunctional educational system which does not connect with the current reality, hence Nigeria parades University graduates with distanced skill gaps to present-day market demand. South Korea is a knowledge economy which has bootstrapped its way up the world economic ladder through education and the development of her human capital, we could learn from South Korea on how they got it right. Samsung and LG products are now the de-facto electronic gadgets around the globe surpassing Japan in the past two decades.

The oil industry which contributes about 40% to national GDP employs less than 5% Nigerians, it is absolutely nonsensical. Evidently; major causes of Nigeria’s jobless growth are mainly inadequate physical infrastructures, energy and shortage of skilled workforce. Substantial infrastructure upgrades could generate approximately 11 million new jobs within the next 5 years; these are the areas that needed urgent attention.

President Dwight Eisenhower of United States of America enacted National Interstate and Defense Highways Act of 1956 which gave birth to America’s interstate highway system. He used Highway Trust Fund (HTF) as a conduit to construct nationwide highways and 90% of the fund came from taxes on gasoline and diesel fuel. The aforesaid Act produced more than 44, 000 miles highways nationwide through HTF, those Highways are still the bedrock of United States transportation system till today. Millions of jobs were created in the process and HTF could be compared to SURE-P and Petroleum Technology Development Funds (PTDF), these funds could also make EPIC impact.

Taking advantage of time; Indian also used ICT empowerment initiative to amplify her economy. Indian ICT-Business Process Outsourcing (BPO) revenue stood at $59 billion for Y2011. Total direct employment by Indian ICT-BPO sector in the same year was 1.98 million and indirect employment was 7.5 million (Source: The Economic Times; Apr 28, 2012).

The Groupe Speciale Mobile Association (GSMA) found that if governments in sub-Saharan Africa could allocate more spectrums for mobile broadband over a 10-year period from 2015, it would result in $235 billion of additional Gross Domestic Product (GDP) and $50 billion in additional tax revenues. The GSMA report also reveals that the release of more mobile broadband spectrum could create up to 27 million new jobs by 2015, which will directly lift 40 million Africans out of poverty by 2025. Nigeria account for 20% of Sub-Saharan GDP and 18 percent of its population, this implies that 20 percent of the $235 billion could be additional GDP to Nigeria’s economy, and approximately 5.5 million new jobs could be realized in Nigeria.

Conversely; the rising supply of U.S. Shale oil is further exposing Nigeria economy to enormous turbulence, the Organization of Petroleum Exporting Countries (OPEC) predicted that its member’s share of the world oil market will shrink in 2014 and beyond. The Nigerian government’s gross revenue also dropped 42% month-on-month to N497.98 billion ($3.1 billion) in July, 2013 because of disruption to oil production caused by oil hackers, according to the Finance Ministry.

These are critical reasons to get our economy maximally diversify swiftly. Considering Nigeria’s abundant human and natural resources, her GDP as of 2011 could have been around $557 billion if strategic short-term economic policies were judiciously implemented with effective monitoring in the previous 8 years. Nigeria has been identified once again as part of the Next-11(Countries with high potential of becoming among world’s largest economies in the 21st century) by Jim O’Neill of Goldman Sachs who coined BRIC nations in 2001.

However, this is not the first time that Nigeria has demonstrated such potentials; faulty policies and its implementation thereof have derailed us copiously. Most Tiger Cub Economies (Indonesia, Malaysia, the Philippines, and Thailand) and Singapore have recorded significant successes in the development of their economies since 1965 when they were at par or even behind Nigeria. Correlatively; Mallam Sanusi Lamido stated that Nigerian economy has grossly underperformed relative to her enormous resource endowment and the achievements of her peers/other developing nations with similar characteristics at the 2012 Yakubu Gowon Foundation’s distinguished annual lecture series.

He further stated that in 1970, Nigeria GDP per capita (PPP) was $233.35 while China per capita (PPP) was $111.82 in the same year. As of 2012; China’s GDP per capita was put at $7,958 while Nigeria was $2,294 in the same year (Source: www.tradingeconomics.com), should Nigerians consider this data as progressive or retrogressive? In my opinion, Nigeria needs a platform with deep social-liberal ideology; this ideology seeks to balance individual liberty, social justice and validates a market economy.

I often challenge the Mass-Affluent at social gatherings that they’re the group with innovative ideas but they rarely participate in the political process. Case in point, majority of this class of citizens participated in the subsidy protest through Champagne and Hennessey gathering under Falomo Bridge in Lagos State while the masses protested differently with agony nationwide. 2015 is another opportunity for all Nigerians; especially the so-called Mass-Affluent (approximately 16 million people) to fight for a better Nigeria by participating in the political process to actualize the CHANGE we frantically need.

After 14 years, a platform that would give Nigerians “A NEW DEAL” is urgently needed in 2015; the new deal must be focused on Relief, Reengineering, and Reform NOT gazillion point of agenda. Relief for the unemployed, pensioners and the aged, Reengineering of the economy with substantial income distribution through massive infrastructure enhancements, and Reform of the judicial system to amplify accountability and guarantee contract enforcement.

Once again, Change will not come if we wait for some other person or some other time. Nelson Mandela did not wait for his grandchildren to fight Apartheid, Martin Luther King did not wait for his grandchildren to fight for Civil Rights, and Nigeria Founding Fathers did not wait for our generation to fight colonialism. We are the ones we’ve been waiting for and we are the change we seek”. To effect change; a political platform with better approach or at best a stronger opposition for constructive checks and balances is extremely desirable.

Bashir Are

bashirare@yahoo.com

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