How was Nigeria’s economy destroyed? In looking back by asking this question, one will discover that free trade, uncontrolled imports coupled with deregulation of currency shut down, one after the other, industries in Nigeria. In a developing economy, dumping of subsidised and cheaper foreign products as well as factors of production’s lack of mobility will always lead to shutting down of industries, wastage of non-adaptable machines and tools (since they are not meant for general use to make them useful in other areas) and the skilled employees will become unemployed, or at best find themselves in low skill jobs (that’s if available).
Factor mobility will forever remain imperfect. No wonder in Nigeria in a period of about 20 years, machines were dismantled and disposed of as scraps and factories became worship centres.
This has been a problem of Nigeria since the early 1980s. With open eyes, the country’s leaders, new regime after another, watch transfixed while the industries shut down, one by one, while they concentrated on applying wrong medicines proffered by foreign elements.
Today, the country became so poor to an extent that the government cannot pay her employees from incomes directly generated through employees’ direct productivity, while resources yet untapped were already mortgaged in advance. Already, more than half of the entire population are confirmed poor with an army of able bodied working class roaming about as unemployed.
For years, Nigeria was deep in the economic quagmire and was without any implemented action-plan despite the leadership knowing that its wasteful governing style needs to change. It was in this hypnotised and mesmerised state that the country’s leadership that a new government took over in May 2023, which on its part and without due diligence, uttered policy changes that brashly weaned the already weakened, poverty-stricken, purchasing power-stripped population into a new life of astronomical costs of living and hyper-inflation. What Nigeria and Nigerians were thrown into was a perfect example of kick-and-follow in footballing – the shocks of which are still intractable.
The subsidy removal on energy supply and the foreign exchange rates unification (and floating), June/July 2023, was purely a ladder kicking, no more no less. The ladder kicking simply means those that are trying to climb the rungs of the economic ladder are thrown down with unimaginable fall, with various degrees of socio-economic injuries, by those that had scaled to the topmost other side. The effects of such falls are disruption of economic activities, destroyed businesses, destroyed purchasing powers, disrupted standards of living, disrupted lifestyles, hyperinflation, destroyed currency value, etc. After such serious ladder-kicking, the immediate response from those who did the kicking was mere giving of audio-rice as an antidote for a myriad of life-threatening economic injuries.
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When the economic activities of a people are disrupted and distorted with no prior plan to cushion the effects, it is expected of a visionary leadership that there will be a short term economic plan to help quick repositioning of the hard-hit MSMEs. It is expected that funds will be made available for the reconstruction of the economy – and not further taxing of already-battered people. Without sounding like a broken record, it is on record how the reconstruction of Western Europe was carried out with the pumping of funds through the Marshal Plan of 1947. However, since July 2023, it is yet to be adequately communicated the immediate short term action plan of the federal government to revitalise the badly-hit micro and small businesses that had been destroyed by the sudden increase in costs of doing business and the simultaneous destruction of purchasing powers of the people. Rather than making far-reaching funds available for effective stimulation of the critical sector, the Central bank of Nigeria has been mopping up scarce funds through its monetary policy in a cost-push, near-zero patronage inflationary period. The federal government needs to come out afresh to communicate what its economic reform plan is like, the number of years allocated for the short term nurturing and when results will be felt by the people.
Now to the ruined industries that led Nigeria to its present predicament. The federal government needs to share with the populace its action-plan for imports substitution industrialisation. Nigerians are entitled to know, in clear and unambiguous terms, what the government is planning and the timelines for the actions. If I may ask, is Abuja ready for this? Are the industry regulators ready for such or are they encumbered by pecuniary gains that importations conferred at the expense of building a home-grown, thriving economy where the working class are gainfully employed by a very productive manufacturing sector? By keeping this information away from the people, the government is only opening its flanks for unnecessary attacks.
One may need to ask: how effectively is Abuja using the MSMEs for the revitalisation of the economy? On this column next week, I shall examine how Nigeria has already walked herself into a cooperative economy and why the governments must work with cooperative movements for urgent revitalization of the economy.
. Emmanuel is a business planning consultant and founder of Leacent Incorporated Trustee, a network of entrepreneurs and group of cooperatives. He works with a team of international consultants to conceptualise and plan agribusiness and housing projects. As a certified trainer authorised to use the International Labour Organisation’s enterprise development modules, he trains entrepreneurs and organises workshops and seminars for potential and practising entrepreneurs as well as business managers and cooperatives. He also speaks and facilitates at leadership and management workshops on invitation. His book: “Business Planning Made Easy: Step by Step Guide On How To Turn Your Idea To Profitable Business,” is the latest of the books authored by him. Tel: +234(0)9068602954 (call and sms), +234(0)8023257707 (WhatsApp only).
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