What else could Nigerians wish for themselves in 2024 than a year stress free from economic woes and worries, which characterised 2023, with devastating high cost of living, job losses, business shut down, and many more.
Consequently, 2023 will ever be remember as a year of biting economic and extreme hardship, even as the year also marked a transition from one government to another, though same political party at the federal level.
Nevertheless, the election results of last year were not acceptable to many that lost out either on the ballot or at the courts. Interestingly, the rest for now is history as political gladiators look forward to the next elections in 2027.
The impact of the economy was beared by us all, supporters of the winning party and those of the losing party, best captured as the opposition, as well as the rest of us not aligning to any as party faithful.
For us, electioneering in 2023 was partly inspirational and partly learned. Inspirational because there was an emerging youthful voting block that was very much on course, clamouring for alternative that would retire the old guard politicians. The learning aspect comes with the need to enshrine an ideology of national patriotism that goes beyond personal interest and political acrimony.
Having said that, let’s now focus on the thrust of this article, that points to a prayer that was on our lips hours before the triumphant entry into the New Year, 2024.
Their is no doubt, many Nigerians think the New Year is for a shared and better economic prosperity. Essentially, citizens desire from the government across board policies to ensure an equitable wealth distribution, inclusive resource allocation, and abundance for all.
I am tempted to pinpoint the foregoing, due to evidence of huge gaps that exist in our our national wealth and resources that are being shared and allocated through a cyclical political elite, instruments of manipulation, tending to reinforce excessive wealth accumulation among the so called political actors and exposed individual to state power.
Hence, the poor is further deepened into poverty that has failed all targeted policy effort to address and redress it. Therefore, one is confronted to antagonise that government’s policy instruments must be in the interest of the citizens wellbeing.
Economic woes experienced by Nigerians didn’t just happen in 2023 alone. Evidence from previous years show that successive governments in Nigeria paid lip service to making life better for the citizens year in year out.
This brings to the fore these two fundamental questions that humble analysts like myself were asked in our television, radio and other stakeholders’ platforms in our contribution to the review of 2023. First, was there any time since the return to civil rule in 1999 that Nigerians enjoyed a good economic year? The second question was whether government in Nigeria ever fulfilled its yearly promise of better economy for the citizens?
My modest answers to the two questions were to go empirical by citing failed or partially successful government’s policies meant to address issues such as inflation, corruption and development projects. I will dwell on inflation for the purpose of technicality and misconception.
For instance, without mincing words, inflation was the biggest economic monster Nigerians contended with all through 2023, as a result of the President Bola Tinubu government’s removal of fuel subsidy and floating of the Fx market under umbrella of Fx market unification to end multiple exchange rates. Bringing onboard the full implementation of CBN Investors and Exporters Window and the resurgence of Fx market cowboys, Nigerian Autonomous Foreign Exchange Market (NAFEM), where the venoms of Fx round tripping and speculation determine how bullish or bearish the market would end daily.
The year started with double digits 21% and ended with 30%, and food inflation soared at 35%. Sadly, government’s effort to tackle inflation through its various policies rarely bring down inflation. Reason being that government’s policies are too technical and this sort of technical economic policies to address inflation ended up maintaining the status quo of inflation in the system. What we are saying is that government’s own policies and actions sustain inflation in the system.
Take, for instance, the tightening of monetary policies that ushered in cash withdrawal limit with the suggestion that Nigerians should embrace online banking.
As laudable as this policy is, it remains the potent weapon that fuels soaring inflation. In this case, one needs to ask what is the level of Nigeria’s internet banking penetration in rural, suburban, urban and city. Agreed, over 100million Nigerians are enjoying access to mobile phone network and close to 60million have bank accounts. The odds are how many Nigerians are interested in paying for goods and services online, coupled with the fear of poor network service, cybercrime and excesses on the part of commercial banks to attend to customer complains. Many cases of failed bank transactions were endured during this yuletide, one columnist called ‘Cashless Festivities’, this is a scary scarcity of cash period.
Seriously, how can the government bring down inflation by making cash difficult to access as an instrument to mop up excess cash in circulation? Citing the classical economy philosophy of too much money chasing few goods, a formula of demand outstripping supply equal inflation.
Another is the fiscal policy instrument that spells out how government makes money and spends it. Our interrogation of the policy in 2023 alone did show governmenty spending on critical economic sectors that supposed to engineer the economy was very discouraging. A case in point was the over N6 trillion debt owed to road contractors that abandoned project sites across the country. The power sector challenge was phenomenal even as we now have legal framework that unbundled power generation that subnational can now get involved peacefully. We see the government and its agencies misfiring, particularly the visionless agency called Rural Electricity Agency (REA) wasting resources on cosmetics and unsustainable solar project in the name of providing electricity.
On the other hand, it was disheartening to discover that loan was the biggest capital importation in the economy ended 2023, a situation that in nine months government borrowed N1.7 trillion. Let’s not forget to add the negative record of trade imbalance that favoured importation as against exportation. Painfully, fiscal deficit was paramount taking a look into quarterly data of fiscal balance in 2023, 1st N1.430 trillion, 2nd N2.660 trillion and 3rd stands at N2.3trllion.
Again, l am tempted to go technical in the above narration because many of my colleagues analysts, classical, orthodox and mises economists hold brief for inflation through this narrow and technical postulation on why inflation persists. Yet they drift away from the core reality that inflation in itself is a targeted growth objective many businesses are enjoying through profits reinvestment for operational and plant expansion.
Here, it is the end users of the goods and services that bear the burden, same as the value of the naira is impacted negatively due to over bearing unit cost price of goods, and excesses of imported luxury goods as well as one that can be easily produced locally but favour importation of same from China and others.
Yet, the current government is forecasting a better economy for 2024, but discouraging local manufacturers and cottage industries that could produce 43 items that can be comfortably producey locally to access subsidised dollar at the I&E Window. This implies that our trade policy is problematic and needs reorganising if the Tinubu government really had local business at heart.
What is to be done
Sincerely, never has there been a good year, even though people born and of age enough during the years of national abundance will still remind us of the days of austerity and famine of the military epoch.
However, we are anticipating a massive practical implementation of economic policies intelligent enough to combat inflation and bring far below government’s target of 21% this year. In this wise a combination of fiscal, monetary and trade policies would help, particularly for us to avoid economic catastrophy.
Exploring more economic opportunities that would help Nigeria’s business environment strive and thrive in job creation. This requires tackling the structural deficit obstructing healthy and competitive enterprise environment, that government also would contest intelligently not just as a regulator but worthy in participation and progress.
Therefore, against professional forecasters’ terrible prediction, for us 2024 for Nigerians should be a remarkably good year that Nigerians would rejoice about the prospect of a soft economic landing for all.
Olamilekan, a political economist, writes via [email protected]
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