ECONOMY: BEYOND THE WAR OF WORDS

The authorities should address high rate of unemployment and poverty

The war of words between the Presidency and former Vice President Atiku Abubakar over Nigeria’s economic indices is needless. It is important that the federal government focuses on the message rather than the messenger. In the statement that drew the ire of the presidency, Atiku had said: “In a situation where we are simultaneously the world headquarters for extreme poverty; the world capital for out-of-school children, and the nation with the highest unemployment rate on earth; there is a very real and present danger that we might slip into the failed states index – God forbid!”

It is difficult to fault Atiku. The National Bureau of Statistics (NBS) recently released its Gross Domestic Product (GDP) report which indicated that the Nigerian economy grew by 0.11 per cent in the fourth quarter (Q4) of 2020 from the previous quarter’s growth rate of -6.1 per cent. This represented the first positive quarterly growth in the last three quarters. While government officials and praise singers backslap one another, many Nigerians believe there is really nothing to rejoice about. As experts have pointed out, the economy actually suffered a 1.92 per cent full-year contraction in 2020.

For the record, the economy slipped into a ‘technical recession’ by the end of the third quarter of 2020, having earlier reported two consecutive negative GDP growth in the second and third quarters. At the end of June 2020, GDP growth rate was -3.62 per cent and by the third quarter it had worsened to -6.1 per cent. While the federal government and its officials continue to gloat over the Q4 2020 GDP report indicating that Nigeria had exited recession, economic indices do not indicate that there are positive developments to crow about.

It is trite that any growth in the economy that has no reference to the change in demographics, particularly population, would have told an incomplete or partial story. As some analysts have argued, in dealing with growth, a more useful measure would be GDP per capita, which measures output per head in the country, over a period of one year. Nigeria has a current GDP per capita of about $2250. South Africa, the second largest economy in Africa has a GDP per capita of $5,300, while Botswana, Gabon and Equatorial Guinea are $7,230, $7,400 and $12,400 respectively.

According to the Oxford Poverty and Human Development Initiative, multidimensional poverty encapsulates deprivations in many dimensions, including lack of education and job, poor quality of work and threat of violence. These are some of the stark realities that confront Nigerians. While it is soothing that Nigeria exited recession, it would do the government a lot of good to eschew the needless chest-thumping and get to work on the real challenges confronting Nigerians. It is an unassailable fact that so many things have gone downhill under the current administration. The NBS’ statistics reveal that 98 million out of 200 million are wallowing in multidimensional poverty. Inflation has gone to the roof. Unemployment has also skyrocketed by nearly 400 per cent since 2015, spiking from 6.75 per cent in the third quarter of 2015 to 33.3 per cent in the last quarter in 2020.

The federal government must realise that this is no time for empty platitudes over economic recovery. It is time to focus on achieving measurable growth that is also inclusive. More attention should be focused on jobs and reducing the high rate of unemployment and poverty. Above all, it is time to address the crushing debt problem, exacerbated by incredible debt service obligations that gulp over 60 per cent of government’s revenue. That is unsustainable and we must deal with it.