The growth of agriculture for the periods 1960-70 and 1970-78 was unsatisfactory. In the early 1 9605, the curricular trial sector suffered from low commodity prices while the oil boom contributed to the negative growth of agriculture in the 1 sass. The boom in the oil sector lured labor away from the rural sector to urban centers. The contribution of agriculture to GAP, which was 63 percent in 1960, declined to 34 per cent in 1988, not because the industrial sector increased its share but due to neglect of the agricultural sec tort. It was therefore not surprising that by 1 975, the economy had become a net importer of basic food items. The apparent increase in industry and man factoring from 1978 to 1988, was due to activities in the mining sub-sector, especially petroleum.
Capital formation in the economy has not been satisfactory. Gross domestic investment as a per centre of GAP, which was 16. 3 per cent and 22. 8 per cent in the periods 1965-73 and 1973-80 respectively, decreased to almost 14 per cent in 1980-88 and increased to 18. 2 per cent in 1991 -98.
Gross National Saving has been low and consists mostly of public savings especially during the period 973-80. The current account bal encase before official transfers are negative for 1965-73, 1980-88 and 1991-98. The economy never experienced double- digit inflation during the sass.
By 1976, however, the inflation rate stood at 23 per cent. It decreased to 1 1. 8 per cent in 1 979 and jumped to 41 percent and 72. 8 per cent in 1 989 and 1995, respectively. By 1 998, the inflation rate had, however, reduced to 9. 5 per cent from 29. 0 per cent in 1996. Unemployment rates averaged almost 5 per cent for the period 1976-1998.
However, the statistics especially on unemployment, must be interpreted with caution. Most job seekers do not use the labor exchanges, apart from the inherent distort actions in the country’s labor market. Based on some basic indicators, it appears that the economy performed well during the years immediately after independence and into the oil boom years.
However, in the 1 sass the economy was in a recession. The on-going economic reform programmer is an attempt to put the economy on a recovery path with minimal inflation. The analysis that follows tries to discuss the developments in the economy for different periods. POLITICAL PARTY FOR NIGERIA ECONOMY. I In a multi-party democracy, political parties are the vehicles for acquiring power, and for governance and development.
For any democracy to endure, the parties must deliver prosperity to the citizens. A seminal article by Oppressors and his colleagues in 1 996 concluded that “ Once a country has a democratic regime, its level of economic development has a very strong effect on the probability that democracy will survive… Democracy can be expected to last an average of about 8. 5 years in a country with per capita income under $ 1000 per annum; 16 years in one with an average income between 1 000 and 32000; 33 years between $2000 and $4000, and 100 years between $4000 and $6000…
Above $6000 democracies are impregnable and can be expected to live forever. No democratic system has fallen in a country where per capita income exceeds $6055″. While the quote is not a prediction, the message is strong for Nigeria with per capita income of less than SSL , 500. If we are lucky and the oil boom continues, then the economy will continue to ‘ grow. The structure of the economy is such that any sustained collapse of oil prices in the medium term will lead to a catastrophic implosion Of the economy. Here lies the challenge.
DO we have any political party with a credible plan for the emergence of a new economy? Can such a party emerge from the current reenter, consumption-oriented political economy? Currently, the party system in Nigeria is going through an important evolution. The ruling PDP is fighting for survival and will either fundamentally reform its machinery or risk implosion. Major opposition parties are ‘ merging’ into the ARC– to provide a strong challenge to the dominance of the PDP. Are these posturing merely to strengthen the platform to retain or grab power? Will any of the two parties – APPC and PDP-? for the first time since 1999 provide a platform for embroiling the masses around alternative visions and credible, means-tested plans for a better future? So far, political parties in Nigeria since 1 999 have functioned purely as platforms to grab power, and not as platforms for national transformation or development. There are many reasons for this, but I will focus on one which most analysts ignore. It is the oil resource curse: the easy money from oil which has created a culture of helpless dependence on manna from the Delta, and the consequent political economy based on sharing and consumption rather than baking the cake or wealth creation.
Under such a system, production-oriented politics is an anathema. This is not peculiar to Nigeria As evidence, I posit that there are very few (if any) countries in the world where more than 50 per cent of government revenue comes from such natural resource rents as oil and the political parties and national politics are ‘ developmental’ in terms of their ideology and plans. If there are such countries, they constitute the useful case studies for Nigeria. The question is: are there useful examples of how democratic governments have been able to escape the indolent culture or the lottery effects of easy money from oil to create competitive economies and sustainable prosperity? This is a huge research agenda and a subject for another day. In the first republic, politics and political parties Were largely developmental.
The regional governments and the political parties that controlled them were concerned mostly about wealth creation because that was the only way they could derive their revenue and survive. Oil money was only beginning to eremite our national body politics when the second republic emerged. The five political parties – NP, UPON, NP, GNP and PR had distinct ideologies and manifestoes. Most people knew the four cardinal programmers of the UPON. Once elected into office, every UPON state implemented the free education and free medical care. There was rigorous debate.
I recall Baffin Allow being questioned as to how he would finance the ‘ free’ education/ health at all levels. He showed a detailed grasp of government finances to a point Of telling Nigerian how much it cost to serve tea and coffee in government offices. He outlined all the areas of waste he would cut, and the new revenues he would develop in order to fund his programmers. The point is that they thought it all through. Even the NP (largely believed to be a conservative party) had its key programmers summarized on its logo (a house, with two corns by the side (agriculture), and a crown (governance). The NP-controlled Federal Government launched its green revolution, a national housing programmer, and insisted that it would offer good governance. The Nap’s neo-welfare’s ideology/manifesto was symbolized in its logo (the people). Each party had its ore intellectual ideologues and powerhouse.
Dry. Chubb Goading published a book on “ The Mission of NP”. Chief Benzene Abettor and co led the LISP’S scientific socialism (? ; Chief Chris Fiddle was the brain of Prep’s democratic humanism, etc. Each political party contested the elections with a clear manifesto which was its contract with the people, and once elected, it sought to implement it to the letter. Every state controlled by a political party implemented the party’s programmers to the letter. As students in those days, we relished in the intellectual debates on the alternatives offered by different arties. Regular campus symposia involved high ranking members of different political parties explaining and defending their party manifestoes. As students and lecturers, we interrogated them to explain HOW each of those programmers would be funded/implemented, and what impacts were expected.
Not anymore! Today, the political parties are a patchwork of unholy alliances, hurriedly put together to grab power and ease the military out. The PDP chairman, Banana Tutus, aptly described the PDP in 2011 as an amalgam of diverse groups united only by one purpose -? to grab power-? but had note fused onto a functional political party for development. It is the same story for other parties. Don’t ask the members what their parties represent: they don’t know, and probably don’t care to know. I have always joked that if you take five governors of either PDP or CAN and lock them in a room, bring them out one by one to address a live TV programmer on what their respective party’s manifesto and cardinal programmers are, as well as HOW their party intends to fund/implement such programmers, you would have the comic relief of the decade.
At the party level and in government, parties largely operate “ as the spirit erects”-? to borrow that famous phrase by Remit Balloon. The major opposition to every government in power are usually members of its own political party. When election approaches, each party hires consultants to write up a glossy ‘ blueprint’ or ‘ manifesto’— with everything in it, except telling Nigerian HOW they will implement/finance them. In content, they all promise the same thing. Politicians talk about what to ‘ give’ the people, but hardly anyone addresses the question of ‘ HOW’. Elections therefore come down to choosing between ‘ Mr..
A’ or ‘ Mr.. B’ and largely based on some armorial considerations and not because of what they represent.
This is the classic politics in a society dominated by natural resource rents. Because development financing does not come largely from the people’s pockets, their demand for accountability is low. Politics is about ‘ giving or ‘ sharing, and since you don’t require any skills to do either of these, just about anyone can be ‘ there’. In today’s Nigeria, how will you know a PDP state if you see one? How will you know an CAN state if you see one? It just depends on ‘ who’ is there, not about which party is in power. That is the tragedy. The political party system is the foundation for policy and programmer coherence, coordination, implementation and sustainability. Without political parties with clearly thought-through national plans for prosperity -? not just in terms of a horde of platitudes but one in which the ‘ how questions’ are credibly addressed, Insignia’s march to prosperity will continue to be a haphazard, ad hoc process, depending on the whims of any combinations of technocrats’ at any point in time: not rooted in any systematic, coherent plan agreed to by the party and on the basis of which the citizens periodically give them a mandate.
Imagine for a moment that our political parties were purpose-driven like those of the second republic, and imagine how far Nigeria would have moved if all PDP states implemented clearly defined ‘ party manifesto and programmers’ as well as by the Federal Government The reality is that hardly any PDP state sustained the programmers of its predecessor – even when most of the successors were part of the previous government -? think about it! Abandoned projects and policy reversals even when the same party maintains power is a clear proof that we don’t have a party system, and yet we want our democracy to endure. In a democracy, the choice of a political party is a choice among alternative plans for the future. Will the APPC provide the alternative plan (assuming PDP had one)? It remains to be seen. Nigerian are waiting to see what is ‘ progressive’ about the new alliance. During the second republic when parties had clearly differentiated ideologies/manifestoes, the PAP (Progressive People’s Alliance) of the UPON, NP, PR, and GNP could in some sense merit that name.
Is the APPC truly made up of ‘ progressives’? Seriously? Many earnestly hope that it will not end up as another PDP -? in the sense of being just an amalgam of diverse groups united only by one purpose -? to grab power from PDP. It will be tragic if the major slogan of APPC is that it is not PDP. What is its soul made of? Yes, Nigeria needs two strong parties. That will be an important first step.
But what Nigeria does not need are two parties whose only differences are their names. If anyone loses party nomination in either of the two, he quickly defects with his ‘ numerous supporters’ to the rival party in the quest for power. Nigeria and its democracy will never move forward this way. Natural resource curse is not destiny.
The political economy of cake sharing that has emerged since oil money dominated our national consciousness is also man-made. As the new merger takes root, and PDP struggles to re-invent itself into a true political party, perhaps this is the opportunity to think long and deep and give souls to these contraptions for power and transform them into conscious engines of development. Which party is the true Federalist Party? Where do they stand on fiscal federalism and fiscal policy? Where do they stand on state creation? What is their strategy to eradicate poverty and over what time frame? What is their job plan? What is the health/education plan? How do they intend to secure the nation better -? eradicate kidnapping and Book Harm? What is their plan to industrialist Nigeria, and provide affordable housing? What is their strategy to create a sustainable new Nigerian economy without oil over the next 15 years? The questions are many, and unless we can see HOW they differ on these matters fundamentally, Nigerian Will be right in asking (borrowing the biblical metaphor) whether these political parties are the ones to come or should we still wait for another! House Seeks Diversification of Insignia’s EconomyMinister of Environment, Mrs. Hading Malaysia By Monika Enmesh The House of Representatives Committee on Climate Change has urged the Federal Government to diversify the economy by exploring alternative sources of revenue outside the petroleum sector. The committee said that with the looming threat by some western countries to cut down on their importation of Insignia’s crude oil, it was high time the country began to explore the lucrative potential of green economy.
The chairman of the committee, Hon.. Quiche Band (PDP/ABA), gave the advice Monday when the committee received the new National Policy on Climate Change from theMinister of Environment, Mrs. Hading Malaysia, at the National Assembly. Band applauded the development of the policy but argued that the country could only reap its benefits if it was painstakingly implemented and all stakeholders fully aware of their roles.
The lawmaker said apart from keeping our environment healthy, the country would also generate revenue from climate change through forestation, carbon tax and carbon sales. He said with the policy in place, Nigeria could invest in renewable energy, become a net exporter of solar power because of the abundant sunshine in the county. Implementation is always the problem of comprehensive documents like this but if well implemented, Nigeria stands to gain a lot. The opportunities are enormous. It may not be immediate but the expanding opportunities are huge. ‘ We can get carbon zinc which we can exchange for carbon allowance for those who emit to come and buy,” he said. According to Band, Nigeria must not rest on its oars because the development of the policy was just the first step of a long journey to green economy.
Nigeria, he said, must be prepared to tackle impacts of climate change on the environment and other sectors of the economy. We need to keep in mind that a policy framework is just but one leg of the tripod that holds national climate change governance system. “ The rest are the institutional framework, as well as broad-based legal framework that specifies responsibilities of the Nigerian State and its agencies to combat adverse climate change and also set up structures to maximize opportunities in climate change,” he stated. Band said going forward, there would be need for massive awareness campaigns to enable government agencies and the rest of Nigerian know what climate change entails, what the government is doing and what is expected of the citizenry. In the implementation of the policy, Band said, special consideration must be given to coastal communities whose environment have been severely impacted by climate change.
Minister of Environment, Mrs. Hading Malaysia, expressed delight on the successful completion of the policy framework and commended the National Assembly for its roles towards making the document a reality. Animally assured the lawmakers that the Ministry of Environment would endeavourer to carry along the parliament and implementation agencies in the execution of the policy.
Security challenges pose risk to Insignia’s emerging economy The nation’s economy is at the receiving end of the continued specter of insecurity in the country, especially in the North. Amid this scenario, ZEBU ZOOMING asks whether Nigeria can achieve the Vision 202020 project. In the midst of rising interest and actual investment into Insignia’s economy, security is emerging as the biggest challenge to sustaining the tempo of investment inflow. The bombings and killings in the northern Nigeria and kidnapping in the south are gradually emerging as a trend that Insignia’s security agencies seem incapable f dealing with decisively.
More worrisome is the silent suspicion that the security agencies are actually involved in the business of kidnap for ransom in the South while in the North, the fear is that the security agencies may have been compromised and giving vital security information to the violent Book Harm sect members. So far, the security challenges seemed not to have deterred investments inflow into the country. In the first nine months of 2012, data from the Central Bank of Nigeria (CENT) shows that portfolio investment stood at IIS$4. 6 billion while foreign direct investment stood at $1 .
44 billion. Foreign investors also controlled an average of 60 percent of all trading done on the Nigerian Stock Exchange in 2012 despite rising insecurity. What is however, difficult to evaluate is how much investments would have come into the country without the current security challenges. This is the opportunity cost of the current insecurity which because it is difficult to measure, maybe ignored by economists and thus the government. History of insecurity post, democracy Since the return of Nigeria to civil rule in 1 999, security challenges have posed a serious threat to smooth governance, reaching new highs in 2012. Different militia groups had at one point or the other held the country to ransom.
There is the Gibes Boys in the Niger Delta; the Basis Boys, in the South- East and the Dodo people’s Congress (ORCA) in the South West, and now the Book Harm sect in the North. At different times in the past, these different groups have held the Nigerian nation to ransom. In each of these different times, the groups reigned, the nation’s security agencies were unable to deal with them or quell their lawless conduct through superior fire power. The government has always reached a form of settlement with these organizations.
The trend is that each time the government reached a compromise with these lawless groups, it became weaker and new groups emerged to use violent means to extract a commitment from government. In a typical behavior of a nation that thrives on a rent economy, the government has always sought to buy peace and always ended with the peace of the graveyard like the current situation in the Niger Delta where former militants have been transformed into either top level government contractors or emergency crude oil refiners in the creeks or kidnap merchants, despite an amnesty programmer that still costs the government lions of Naira every year. In the North, the lingering Book Harm insurgency, which started in 2009 in Maturing, Born State, North East ego- political zone, has brought the economy of the North to a standstill. Major consumer goods’ companies have seen their distribution chains destabilize as the distributors of their goods in the Northern part of the country have been forced to relocate to the south. The violence in the north has spared no one, as the recent attack on the Emir of Kane shows. The telecoms companies have seen their telecoms facilities destroyed while bank branches have been attacked and robbed. Several road construction companies have seen their expatriate staff kidnapped and in some cases killed. Although the actual figure of deaths arising from the deadly strikes by the Book Harm sect may be difficult to pinpoint, media reports estimate that over 3, 000 people have been killed since 2009.
The economic cost of the violence may however be difficult to evaluate immediately in terms of lost investment opportunities and actual cost of damage done to existing infrastructure and human lives. Resolving the security challenge So far, the government has concentrated its efforts at resolving the security halogen faced in Northern Nigeria by deploying the military in what has become one of the largest peace time military operations in Nigeria. The deployment has not however, stopped the bombings and in some cases have increased resentment in the local community where these soldiers are located. Security agencies however, claim their efforts have reduced the bombings. The bigger question though, is how sustainable is the current drop in bombings without the massive booths on the ground? Only this week, the media reported of an acceptance by the Book Harm sect of a ceasefire. The halogen with such a claim however, is that it cannot be verified since the sect has no known face to dialogue with. It is not just Book Harm While the government is focused on tackling the Book Harm challenges because it is in the front burner in the media, it is clear that Insignia’s security challenges go well beyond Book Harm.
For example, a new group that calls itself Nanas Dine has started claiming responsibility for recent attacks in the North. This may indicate that even if government reaches ceasefire with Book Harm, there may be an Nanas Dine to deal with thereafter. Outside the North, there is endemic violence that the security agencies look incapable Of dealing with. The crude oil theft and refining in the South is a form of organized criminality, which the government has not shown it is capable of dealing with. The South West seems calm but close observers say that the calmness has come with the political pacification of the Dodo People’s Congress (OPAC).
Remove that pacification, and there may be a new form of violence in the South West. The same form of political pacification seems to have been achieved in the South East with the Basis Boys who have also en turned into an unofficial police force by most governors. Fuels for insecurity A high level of unemployment is blamed for Insignia’s rising insecurity. Though the official unemployment rate is 23. 9 percent, some economists say it could be as high as 50 percent of the workforce. The high unemployment rate is fuelling poverty level which is as high as 60 percent in some states in the North, data from the National Bureau of Statistics (NBS) shows. The second challenge in tackling Insignia’s insecurity is a weak and poorly trained security agency. Data from Businessman Research shows that the Nigerian police Penn an average of 94 percent of its budget on paying its personnel.
The Army and Navy spend an average of 76 percent of their budgets on personnel cost. This leaves the security agencies with little or no budget to get the sophisticated weapons and training to fight insurgency especially when such insurgency is funded by crude oil theft or foreign interest with deep pockets. The threat to the economy No economy develops in the midst of high insecurity. Insignia’s case however, looks deceptively different as the economy has sustained a significant 6.
1 percent growth in 2012 despite the level of insecurity. This growth is however, deceptive because the opportunity cost of the insecurity is difficult to capture. The opportunity cost of insecurity is the lost growth rate that would have occurred without the rising insecurity in the country. A breakdown of economic growth rate based on geography may also place into perspective the rising cost Of insecurity on the nation’s economy. Security outlook There appears to be some cracks in the membership of Book Harm in the North with the recent media report that faction now seeks peace with government. The hope is that this faction will not only drop its arms but give information about other factions.
If this really happens, then there is a chance that the violence generated in the North will weaken in 2013. The French intervention in Mali may also be good news for Nigeria as there were some established links between the Mali insurgence and the desalination of Northern Nigeria. Hopefully, with the Mammalian rebels on the run, they may not be in a position to train the militant that end up as bomb throwers in the North. The security agencies will however, have to watch out and ensure that the Mammalian rebels do not end up seeking refuge in Nigeria and causing more violence in the North. In the southern part of Nigeria, the recent conviction of Henry Okay in South Africa seems to have raised the specter of more violence in the South South. MEND, the organization that Okay set up threatened to start violence again on his conviction.
Feelers are that MEND is not in a position to carry out the level of insurgence that it was once known for. For now, the South West looks like the calm zone in the country with the politicians having been able to reach a form of live and let live arrangement with their main militant group, the ORCA. What to watch on security – How the current alleged acceptance of ceasefire by a sect of Book Harm ill develop. Will it translate into some form of negotiations and what will be terms of negotiations?