One of the main reasons newly-elected Nigerian president Muhammadu Buhari had been widely expected to lose his bid for a second term was the poor state of the country’s economy. Under his presidency, Nigeria’s unemployment rate more than doubled, from 10.4% in January 2016 to 23.1% in July 2018
In his first four years, Buhari also failed to address poverty. Under his watch, Nigeria overtook India as the country with the largest number of people living in extreme poverty. About 87 million Nigerians, or half the population, live on less than US$1.90 per day.
And economic growth has been lacklustre since his election in 2015. The country went into recession in 2016, with a negative 1.6% growth rate. There was a rebound in economic growth of about 2% in 2018. Nevertheless, the IMF forecasts that growth will remain anaemic at an annual average of about 1.9% from 2019 – 2023.
By reelecting Buhari despite his unimpressive economic performance, Nigerians are giving him a second chance. One of Buhari’s campaign catchphrases was “Next Level,” signalling his determination to build on programmes initiated in the first term. These include conditional cash transfers to vulnerable citizens, school feeding programmes, giving young people critical skills, and implementing a microcredit scheme for small traders and artisans.
But these initiatives, however noble, are not widespread and substantive enough to touch a majority of the Nigerian population. Buhari should be planning a massive stimulus package to jump-start the economy. This is particularly important given the fact that economic growth is going to be so lacklustre.
High unemployment
Nigeria’s high unemployment rate has created a bloated and unproductive informal sector, replete with millions of underemployed youths.
Buhari’s response in the first term was to create jobs by providing credit to micro and small enterprises, especially in the agro-processing sector. But job creation by small enterprises usually takes time. And the number of jobs is never on the scale of large enterprises. The end result has been that most Nigerians feel economically marginalised in spite of Buhari’s best efforts.
The Buhari administration is well aware of the bleak economic conditions. In February 2017 it launched the ambitious economic and growth plan. Its overarching objective was to restore growth and build a competitive economy through investment in infrastructure and creation of an enabling business environment.
Laudable as the plan might have been, there’s a cynicism about whether Buhari will get any of it implemented given that he only has another four years in office.
I believe that he needs to be a great deal bolder, and to come up with a new set of interventions that truly take Nigeria to the “next level”.
The next level
Nigeria urgently needs a massive economic stimulus programme. If he can summon the energy, Buhari should significantly increase spending in sectors, projects and programmes that boost the economy, generate employment and promote inclusive growth. He should prioritise infrastructure, labour-intensive manufacturing such as textiles and footwear, agro-processing, youth entrepreneurship projects, health and education.
Nigeria has a very large stock of human and natural resources that aren’t being used optimally. Meanwhile, there is a huge infrastructural deficit. These range from dilapidated roads, epileptic electricity supply, acute water shortages, crumbling public buildings, grossly underfunded public tertiary institutions and so on. The gap can be closed through public works projects executed with direct labour.
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