Just as the economic outlook for Nigeria for the 2021 fiscal year came with multiple predictions, depending on the author, the country’s 2022 economic growth outlook varies between 2.7 and 4.2 percent, depending on the source of information. The economic prognosis is based on buoying recovery in crude oil prices and production.
Based on the latest report of the World Population Review, Nigeria is currently the 27th largest economy in the world, with a GDP of $445 billion. The report also revealed that Nigeria retains the position of the largest economy in Africa.
With Nigeria’s current population put at 212 million, according to the World Bank, the country constitutes 2.7 percent of the global population, which stands at 7.75 billion. On the other hand, with Nigeria’s GDP ratcheting around $445 billion the Nigerian economy constitutes 0.483 percent of global GDP, which currently stands at $91.98 trillion.
Nigeria has over the last several years been drooping in GDP growth. Hence, judging by the target set by the federal government, the country has failed woefully to meet up with its ambition of being among the 20 largest economies in the world by 2020.
Vision 20:2020 was a dream statement that Nigeria would become among the first 20 economies in the world by the year 2020. The 2020 goal was sequel to a research conducted by economists at an American Investment Bank, Goldman Sachs, a fall-out of which was a prediction that Nigeria would be in the league of 20 top economies by the year 2025. This was based on the assessment of her abundant human and material resources and on the assumption that the country’s resources would be properly managed and channeled to set economic goals. The then-president, Chief Olusegun Obasanjo, next mooted the dream as Vision 2020.
Not only has the country failed to meet up with her own set goal, but has actually fallen in GDP value over the last eight years since she assumed the premier position in Africa in 2013.
It may be recalled that the rebasing of the economy in 2013 shot the country’s GDP up from $270 billion to $510 billion. That assent catapulted Nigeria to claim a share of sub-Saharan African GDP from 21.3 percent to 31.7 percent. Since then, Nigeria had maintained the 26th position globally until recently toppled by Argentina, whose GDP has appreciated to $515.35 billion.
Interestingly, it would seem like the country has hovered about that position since then, far from the 20th position occupied this year by Switzerland, whose GDP now stands at $740.70 billion.
Even more interesting is the fact that at the time of rebasing the economy in 2013, Nigeria’s GDP stood at $510 billion; as of late, the country’s GDP stands at $445, down by almost $65 billion. This is even as the country’s population increases by more than 2 percent annually. The implication is that the country has become poorer in terms of GDP per capita.
There can be no gainsaying the fact that the fortunes of Nigeria have depended, and largely continue to hinge on the price of crude oil on the international market. It may be recalled that at the time of rebasing the economy in 2013, the price of Nigeria’s Bonny light on the International market hovered around $115.00 per barrel. As of the time of ascent to power of the current administration, the price of crude oil had fallen to below $70.00 per barrel. The situation was exacerbated by the ruinous COVID-19 pandemic, which has impacted virtually the entire world economy. The general fall in the price of crude oil has propelled the southward path of the country’s GDP over the past half-decade.
No doubt, an economy that depends on one product for sustenance, in the case of Nigeria, crude oil, is exposed to economic uncertainties. The current administration has strived to diversify the economy, especially in the areas of agriculture, energy, and transportation. As a matter of fact, Nigeria’s GDP is mainly driven by abundant crude oil, finance, transport, and infrastructure. Sustained diversification will serve as a veritable economic buffer in the long term in the instance of falling crude oil prices.
But diversifying the economy for optimal impact would require making the best of the country’s talents, or latent talents. That would imply training and retraining for productivity.
As per solution to ramp up productivity, International Business & Project Development Consultant at Ant Hill Concepts Limited, Dr. Emeka Okengwu identified factors of productivity to be the right education and training, as well as the right environment and the application of science, skills, and technology to raw materials. He said the right kind of training, when juxtaposed with internal demand for goods and services, would determine the right output for development.
Dr. Nnaemeka Onyeka Obiaraeri, recently argued the total value of domestic goods and services produced by every Nigerian in the whole of 2021 is N59,960/$113 or N164/$0.30 per day.
Obiaraeri queried the fiscal, socio-economic, governance, and resources production and distribution framework of the 1999 constitution that directs states to the federal government for monthly federal allocation for the under-productivity the country is suffering.
According to him, rather than continue to make a mess of everyone in the system, by deliberately pushing a majority of Nigerians to parasitically leech and depend mainly on the crude oil from the Niger Delta and Value Added Tax from Lagos State, the national and state assemblies should quickly lean on the High Court ruling on VAT collection by states to totally restructure Nigeria and return her to the 1960/1963 Republican Constitution, socio-economic and governance architecture.
He said if Nigerians are truly honest to themselves, they should agree on how to devolve more powers, resources, and authority to the constituent units and the people and check the massive roguery and political banditry going on in Nigeria since 1999.
He said this will be done in such a way and manner that can enable Nigerians to have a daily per capita productivity of goods and services of at least N2,000 a day or N720,000 a month by 2023/2024.
“If we restructure today and return Nigeria to the 1960/63 fiscal and governance framework that engendered productivity and healthy competition amongst the constituent units in the First Republic, by 2023/2024, Nigerians at home would be able to generate about N79,640,000,000,000/$150.2 billion if all the estimated adult working population of 110 million Nigerians are put to active productivity of goods and services within the system.
“At a worst-case scenario, even if we are able to put 50 percent of the working population to active productivity of goods and services, Nigerians at home will still be able to generate at least N39.8tn/$75.13bn annually,” he said.