Economic experts have urged the Nigerian government to tackle the various impediments to development, as a way of achieving the better deal promised to Nigerians by President Umaru Yar’Adua in his New Year message.
“If we are going to be one of the top 10 economies by 2020, the government said we have to grow the economy by 13% a year, but in 2007 we didn’t achieve that, I think we grew it by 7 per cent,” said Ogho Okiti, an economic analyst with the privately-owned Businessday newspaper.
”If you look at the history of economic growth in Nigeria, it (the 7%
growth) is commendable. But in terms of where we want to be, it is not OK,” he said.
Okiti identified some of the major impediments to economic growth in
2007 as policy inconsistencies, over dependence on oil revenue and security challenges in the Niger Delta region.
“There was a general decline in oil production by about 4% because of the crisis in Niger Delta. However, the non-oil sector grew by 9.5%, which is commendable.
The Niger Delta crisis was one of the reasons we could not reach our economic growth target.
”If the government wants economic growth beyond what we have now (7%), we have to address the security issue boldly,” the analyst added.
In retrospect, 2007 was a mixed bag for Nigeria
For the first time in long while, the local currency, the naira, appreciated against the US dollar, mainly because of the depreciation of the American currency.
Even though the economy did not grow by the expected 13%, the banking sector and the capital market witnessed tremendous growth, as market capitalization at the Nigerian Stock Exchange (NSE) hit about 10 trillion naira for the first time, while the All-Share Index also grew above 50,000 points.
The maritime, transportation and insurance reforms, which led to re-capitalisation of the sector, was another highpoint of 2007.
However, the real sector, represented by the manufacturing, agriculture and industrial sectors of the economy, cannot be said to have achieved much, due to low purchasing power and inadequate power supply.
“One of the lessons of the economic reforms is that the private sector can do a lot if allowed. Before 2005, nobody can imagine the type of banking sector we have today with enormous capital base across the sector,” Okiti said.
Critics however said much of the gains of the economic reforms, particularly in the banking sector, have not been reflected in the living standard of the people.
They argued that rising inflation, which is currently put at 5.2% by the National Bureau of Statistics, had rob off the little success achieved.
Nigerians therefore want the 2.4 trillion naira 2008 budget, which is still before the National Assembly for scrutiny and approval, to be fine tuned to address the failure of last year’s budget.
“Government and the National assembly should understand that it is not the amount of money spent by it that brings about economic growth. The most important thing they can do is to create the enabling environment for the people. This government is found wanting in that direction,” another economic expert added.
Also contributing, Giltima Liman, a policy analyst, said the government in the new year should discard what he described as ‘cosmetic approach to policy implementation’.
He said the increase in the salaries of the President (1.5 million
naira) and the Vice-President (1 million naira) will only add to the already over-bloated recurrent expenditure, which is put at 65% of the 2008 budget.
“What the government has to do in 2008 is to address basic issues that affect the people in the areas of poverty reduction, in particular.
”One will expect to see a lot of commitments in revamping the nation’s ailing refineries. This is because substantial part of our foreign exchange earnings goes on importation of fuel. I believe that the capacity to turn around the economy for the better will depend on spending less on importation. So the refineries have to be address and more need to be build to meet current local demands,” Liman said.
Meanwhile, Nigerians have urged the Yar’Adua administration to go beyond promises by showing a serious commitment to efforts to address the problems of development in Africa’s most populous nation.
In his new year message, President Yar’Adua promised that 2008 would be an eventful year in the nation’s development.
“A lot must be done to reduce graduate unemployment. Electricity should be improved upon so that the other sectors of the economy will be energised. Agriculture is another area that must be addressed. Farmers need to be encouraged with a lot of incentives that will make food available at less cost,” Akintunde Akinremi told PANA.