Every country today is faced by daunting challenges. However, in spite of the tendency to look at issues with business-as-usual frame of mind, for Nigeria and Nigerians, these are indeed not the best of times. Our economy is in ruins, polity threatened daily by disintegration and dysfunctional socio-politico and economic institutions. Our educational institutions, handicapped by corruption and poor funding, churn out products with papers that can neither add value to their owners nor to the nation.
This write-up tries to identify certain general risks confronting Nigeria as nation herein referred to as systemic risks which confront every nation. Systemic risk is probability of loss or failure common to all members of a class or group or to an entire system. In other words, systemic risk is generally used in reference to an event that can trigger a collapse in an industry or economy. At national level, therefore, systemic risk can take the form of macro-economic risk factors that are beyond the control of a single group or groups of economic agents – individuals, organisations or governments. Thus, the only way to hedge systemic risk is to adopt holistic approach to effecting a change. The most disturbing systemic risk factors facing Nigeria today can be summarised as;
Currency crisis: According to Times Lexicon Dictionary, currency crisis is a monetary crisis that arises when the value of country’s currency falls sharply due to political concerns, speculative attacks or other factors, prompting monetary authorities to substantially raise interest rates to prevent capital flight. Currency crisis, also called devaluation crisis or an international financial crisis is a sharp depreciation of the currency of a country. The depreciation usually comes after a period during which the exchange rate has been very stable or even fixed. Currency crisis is a type of financial crisis which adversely affect the various sectors of the economy. The effect of a currency crisis can be mitigated by sufficient reserves or raising the level of output. In Nigeria, the Central Bank of Nigeria introduced consolidation programme in 2009, raising bank’s capital base to N25 billion or $500 million. Today, the N25bn capital base has been reduced to $81.97m (at the exchange rate of N305 to $1) or $68.5m (using the parallel market rate of N365 to $1).
However, if other countries suffered and survived a near collapse of their monetary system, Nigeria, with over 190 million people most of whom live below $1 a day without social security, cannot. In fact, currency crisis is a luxury the beleaguered nation can ill-afford because of its attendant social, political and economic repercussions. What is postponing the evil day is perhaps the combination of money illusion, low financial literacy, social sanctions and norms among the large spectrum of the population. Thus, the currency crisis, if not properly managed, can blossom into national catastrophe.
Insecurity: Another danger is the pervasive state of insecurity across the country. The socio-political and economic landscape in Nigeria, observed Fintell, a financial research centre, has been blighted by the endemic twin evil of crime and violence. The abysmal failure of successive administrations in Nigeria to address challenges of poverty, unemployment and inequitable distribution of wealth among ethnic nationalities, ultimately resulted in anger, agitation and violent crimes against the Nigerian state by some individuals and groups. Such crimes include; militancy, armed robbery, kidnapping, cultism and destruction (or vandalization) of government properties, among others.
Restructuring: With ongoing debate on restructuring, Nigeria seems to find herself inextricably between the devil and the deep blue sea. More worrying is the fact that there appears no gain or respite in the victory of either side of the debate for or against restructuring. In spite of this, with time the debate for or against restructuring is most likely to be more intense. This is however distractive and divisive and will continue to overheat the polity, fueling the embers of ethnic tensions, interregional suspicions, distrusts and apprehensions leading to general state of insecurity.
Youth restiveness: Youth restiveness in Nigeria has been a prominent issue in recent times. There has been an increase in the occurrence of acts of violence and lawlessness including acts like hostage-taking of prominent citizens and expatriate oil workers, as well as oil bunkering, armed insurgence, cultism etc especially in the Niger Delta region Stella N. I. Anasi (2010).
Collapse of morals and ethical values: Another danger facing Nigeria is collapse of morals and ethics in all fields of our national endeavours. The major news item from our media houses currently are domestic violence, drug addiction, fraud, rape and sodomy of women and children. Most of our daily newspapers dedicate pages to reports on crime. Business in Nigeria has turned to criminality characterised by activities such as adulteration, plagiarism and sell of expired and substandard products. Prices are arbitrarily set with intent to make illicit gains, largely due to greed and selfishness and ‘get rich quick syndrome’.
Western democracy without functional institutions: Observers of Nigeria’s politics opine that Nigeria is not ripe for western democracy. This is because Nigeria is not yet a nation but a conglomeration of multiethnic nationalities bound together by greed, violence and corruption each anxiously waiting for an opportunity to serve its narrow self-interest. According to Israel A. Ebije (2017), “Nigeria is practicing a democratic system where the ruling All Progressives Congress (APC) is acting as opposition within itself, while the Peoples Democratic Party (PDP) is performing worse than it ever did when it was in power. With ruling and opposition political parties in the country obviously programming objectives fashioned to satisfy their self-centered interests, a vacuum is created in the system where governance is steadily sliding towards anomie”. The present political situation, therefore, places Nigeria on a ticking time bomb set to explode once the spreading party implosion continues to spread like virus through the structures.
Rinji writes from Kaduna via [email protected] 09026169566, 08033581312
