Ladies and gentlemen, I am delighted to have been availed this opportunity to share my thoughts and insights on the primary concern of the economic recession we are currently faced with in Nigeria. I will like to start here by saying that I am a strong believer in the entity called Nigeria. It is my country, my homeland, and will forever be. I still believe in our common shared goals and aspirations; I still hold that our position and place as the Giant of Africa is not in doubt, as we become more influential in spearheading the drive for a more robust continent able to hold its own among the comity of other continents. This is to assuage the doubts on the minds of my fellow countrymen and others who, for any or the subject reasons, think that we may have lost it.

Are we troubled?

Yes, and it is unfortunate that we find ourselves where we are now.

Are we down?

Yes.

Are we out?

I will respond with an emphatic No!

Plato, the great Greek philosopher, who lived between 428-348 BC, once said: “One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” Having spent a better part of my working life in the private sector, the above quote with a desire to be part of a group that influences and installs good governance and healthy politics drove me into seeking an elective position in order to bring succour to my people, who have been living under the heavy burden of poverty occasioned by misrule. More importantly is the fact that I could no longer stomach the nauseating effect of seeing my beloved Nigeria gradually sinking into an abysmal ruin; not for reasons that can be adduced to an “act of God”, but for the unforgiveable reason that we could have avoided this entire problem if we had men who had the nation at heart holding public offices, for the main purpose of properly managing and appropriating our vast resources. I have delved into politics in order to contribute my own quota to ensure that the collective aspirations of every Nigerian, the vision of our founding fathers who fought and laboured so hard to ensure our emancipation from external rule and the entrenching of a free, united and prosperous Nigeria is not in vain.

I must say that I am proud (notwithstanding how others may view us) of how we have, in the midst of internal and external challenges, come thus far as a nation. A lot has threatened and continues to threaten the very existence of Nigeria; and one can only conclude with me that remaining together despite these odds is a result of a divine destiny of greatness at play for this nation. This understanding fuels my ambition to give my all in ensuring that our pride of place in Africa and the world in general is maintained and enhanced. I see in my vision a greater Nigeria.

For those who are yet to come to terms with our designation as The Giant of Africa, in the light of our present predicament, I wish to say it is no fluke. It is earned. May I quickly run you through some interesting facts about this colossus.

A recent finding by ‘Trading Economics’ reveals that since 1960, after the nation gained independence from Britain, her human population has grown steadily from 45.2 million to 182.2 million people today. Making her the most populous country in Africa and the most populous Black nation in the world. By the above statistic, the current figure represents about 2.35 per cent of the world’s total population, and a ratio of one Nigerian resident to every 43 people in the world. Her population, which is also one of the fastest growing, is projected to hit 444 million by 2050. And by this it surpasses the USA to become the fourth largest population in the world.

By extension, therefore, Nigeria has one of the largest youth-population in the world; and has Africa’s largest university-educated population of approximately 35 million. A 2006 census found Nigerians to be the highest educated ethnic or racial group in America. These abundant human resources make the country a force to be reckoned with globally. We are blessed with abundant human resources that have been proven to be very industrious.

Nigeria is home to Lagos, the sixth largest urban centre in the world — after Tokyo, Mumbai, Mexico City, Sao Paulo, and New York City. Lagos has the highest GDP and houses one of the largest and busiest ports in the continent.

Nigeria is divided roughly in half, between Christians and Muslims. And, with over 500 languages, she has the fourth highest number of languages in the world. Notwithstanding these diversities, the country has remained strong and united, despite having undergone a period of civil war, over 30 years of coups and military rule; religious and ethnic disturbances and nervy political and economic challenges. Not many nations have been able to manage same situation and remain unscathed.

Following a rebasing of the economy in 2014, Nigeria effectively became Africa’s biggest economy. By available statistics from ‘Trading Economics’, Nigeria’s 2015 annual GDP stands at 481.07 billion dollars, still retaining the number one spot as the biggest economy in Africa.

Following the latest 10-year forecast from Global Construction Perspectives and Oxford Economics, Nigeria has the fastest-growing construction industry in the world

Apart from its numerical size, the country boasts one of the most formidable forces in terms of military might in the continent, enabling us play the ‘Big brother role’, while it is advancing to become a force to be reckoned with globally. The nation’s military asset has been key in the maintenance of regional peace. It has spearheaded most of the peace-keeping movements, especially within the West African sub-region, where her troops formed the crux of the Economic Community of West African States’ Monitoring Group (ECOMOG), as seen in their various efforts in Liberia and Sierra Leone, as in other nations in the continent. As of April 2016, according to the world rankings by Global Firepower, Nigeria is 44^th on the list, 3^rdbehind Egypt and Algeria in Africa (12^{th and} 26) respectively, in world ranking)

Nigeria is heavily endowed with huge deposit of natural resources, ranging from petroleum to coal, bauxite, gold, tin, iron ore, limestone, lead, zinc and a host of other precious metals. This has attracted lots of investment. Although our solid minerals deposit is still significantly under-tapped, it is a potential source of great strength for the country. At 125 trillion cubic feet, Nigeria has the 7th largest gas reserves in the world – after Iran, Qatar, Saudi Arabia, United States, Algeria and Venezuela – which, therefore, makes it a major player in this area.

Nigeria was the first country among those affected to effectively eradicate the effect of the Ebola virus and extended their hand of fellowship and assistance to other countries in Africa that were being ravaged by the scourge of the disease. Playing the ‘Big brother’ role effectively, nations like Sierra Leone and Liberia got up to a 100 volunteers and over 70 volunteers respectively from this Nigeria, helping a fellow nation in need. We may recall that Ebola came into Nigeria through a Liberian. And the Ministry of Health in Nigeria wasted no time in pooling every resource to tackle it. Worthy of mention is the selfless service of one of our own, Dr Adadevoh, who will be forever remembered by many in Nigeria and Africa as a whole, for the ultimate sacrifice she paid to ensure that the disease was contained.

Still on the ‘Big brother’ role, we have been prominent in bringing political and economic stability to other countries in Africa, even helping some to gain independence. A First Republic Aviation Minister, Chief Mbazulike Amaechi, had provided shelter for former South African President, Nelson Mandela, for six months in Nigeria, to evade arrest by the apartheid regime. Nigeria went ahead to play a significant role by leading several boycotts to certain international events, mobilising forces and putting pressure on the apartheid regime in South Africa and such nations as were in support of the regime, until they gained their freedom. These roles and interventions have earned her huge respect by the international community.

The above are just a few of the very many justifications for the Giant of Africa status. However, notwithstanding the above, the designation is not just about being the most populous nation in Africa or the most populous Black country in the world, which by extension has endowed us with a huge human resource base; neither is it in our natural resources capacity nor our economic and scientific advancements that have improved over the years; the significant impact in bringing all of the above to bear in playing key impactful and influential roles for the benefit of other African nations in the areas of politics, economic support, state and nationhood emancipation, security and peace-keeping efforts which has endeared her to and got her international recognition is the critical factor. It is more about the impact we have made in the development and advancement of the region that makes us tick.

The issue of the present challenges we are currently facing as a nation is, therefore, not a concern for Nigerians alone, but for the entire African region and the world at large. Not only as it relates to the benefits we all jointly stand to lose, but it becomes a concern for all African nations as it is a wake-up call to pay critical attention to the red flags that pop up everywhere indicating imminent danger, and to proactively take steps in curbing same. During a recent speech by the ECOWAS chairman, it was glaring that the impact of the recession was being felt in other African nations, especially the West African sub-region, where the GDP has significantly dropped.

It is my duty through this paper to share my take on our current position by looking at where we are now in the light of our expectations, how we got here, what we need to do to get out and get ahead and what we have done so far. While we groan under the weight of the impact of our economic woes I want us to, however, see this occurrence as a good thing, as it wakes us to the reality of the effect of our individual and collective choices; with the concern of graver consequences keeping us all on our toes, while jointly fighting to ensure that we not only salvage the situation but move on to establish the right framework for economic growth and sustainability.

We all agree that things are no longer what it used to be. There was creeping in a new form of colonialism that was not orchestrated by outside forces and aliens, but by an internal machinery of deep-seated corruption. It is for this reason that the electorate gave this present administration of His Excellency Muhammadu Buhari, under the All Progressives Congress (APC), the mandate to bring the desired change that we have so long dreamed of – a change that breeds transformed minds and attitudes; a modification and adjustment of flawed means and processes and a galvanisation of revolutionary ways that will cause the actualisation of a desired new and prosperous Nigeria. To dismantle the foundation of this new force that is almost taking hold of persons and systems and to bring forth a healthy nation built on a sound foundation of good governance, transparency, accountability and probity.

Where we are

Nigeria is currently going through one of the worst times in her chequered history as a nation. Presently Nigeria - which as at 2014 was ranked as the biggest economy in Africa after a rebasing effort and 26^th in the world - is in a recession. Economists are in agreement that a recession sets in when the GDP of a nation declines consecutively for two or more quarters. The National Bureau of Economic Research (NBER), defines recession as: “A significant decline in economic activities spread across the economy, lasting more than a few months, normally visible in real Gross Domestic Product (GDP), income, employment, industrial production and wholesale-retail sales.” By inference, therefore, during such times, businesses begin to contract due to a general decline in economic activities; production levels drop, there is rise in the rate of unemployment occasioned by job losses;mounting inflation, government revenue dips and, ultimately, the citizenry suffers. This condition is traceable to a lot of avoidable issues, which we are going to examine here.

Where are we? Our economy has taken a nosedive, and the following statistics mirror the actual situation of our economic health. The nation slumped into recession effectively after the National Bureau of Statistics (NBS) report revealed that the country’s overall economic activity shrank by 2.06 per cent in the second quarter of 2016 (June 2016), following a 0.36 per cent decline in the first quarter (March 2016). According to the NBS annual report, the 2016 annual GDP numbers for the nation shows a contraction of about -1.51 per cent for the full year ended December 2016, being Nigeria’s first negative GDP growth rate in decades; against a 2.8 per cent growth rate for the same period in 2015.

Comparatively, according to the NBS report, the GDP in the fourth quarter of 2016, contracted by -1.30 per cent (year-on-year) in real terms, from N18.53 trillion in Q4 2015 to N18.29 trillion in Q4, 2016. This decline was, however, slower than the decline recorded in the previous quarter ended September 2016, of -2.24 per cent, N17.57 trillion occasioned by an improved performance in the Agriculture, Information & Communications Technology, and Financial Services sectors, which grew by 4.03 per cent, 1.38 per cent and 2.68 per cent respectively.

On a sector-by-sector basis, the Oil and Gas sector declined 12.38 per cent year-on-year (2015 to 2016), while the non-oil sector declined slightly 0.33 per cent year-on-year compared with growth of 0.03 per cent in Q3 2016. The Agricultural sector was the dominant sector, accounting for 25.47 per cent of total output; followed by Trade (16.65 per cent) and Mining & Quarrying (7.31 per cent), while the oil sector accounted for 7.15 per cent.

Where are we now? The country’s misery index is on the rise, as a result of the impact of other macro-economic indicators: inflation, the combined forces of increasing unemployment and underemployment rates, which is a result of the contraction of most companies’ profitability in direct reaction to low consumer spending. There is also the impact of rising interest rates. The spill-over of this meant that the capital market was in contraction, as the equity sector shrunk in the face of treasury bills reaching over 20 per cent.

As a result of perceived uncertainties, we have also lost the attraction to considerable foreign direct investments (FDIs), and we have experienced increased capital flight: all of these are putting pressure on the naira. In September 2016, Standard and Poor, a global credit rating agency, downgraded the nation from a B+ to a B, which is five levels below investment grade. Frightening is the description of the above reality.

Where are we now? In a recent paper entitled ‘Nigeria in search of a new growth model’ and presented by Mallam Sanusi Lamido Sanusi, former governor of the Central Bank of Nigeria (CBN) and currentt Emir of Kano, he noted: “ …. from the Latin American structure economics, that over the long term, any economy that specialises in exporting primary products and importing manufactures would end up having terms of trade shifting against it.” He maintained that as a result of engaging in raw material exportation, the nation may have a temporary boost. But if the boost is not engaged to structural adjustment that would make for prudent management of the economy, it would be courting trouble. In effect, what he was saying was that instead of developing policies that would encourage us to utilise our abundant raw materials and converting them to finished goods for exports, we got laid back to enjoy the quick money that commodity export afforded us.

We are a country of great potentials, diverse and abundant resources, but have been ensnared by just one of the numerous revenue streams thus effectively representing us as a one economy nation. Every meaningful effort of government has been channelled towards just this one area, such that all other resource areas with equal potentials have been neglected.

The 1970s oil boom brought about the neglect of our agricultural roots – the groundnut pyramids of Northern Nigeria, the cocoa plantations of the West and the palm produce of the East. These were our neglected national pride, which in other parts of the globe are actually major revenue earners.

In his write-up, ‘Nigeria and Economic Recession: The Way Out’, Chief Afe Babalola (SAN) pointed out that Nigeria today orders maize from far away Argentina to feed poultry farms, and rice worth over several billions of naira annually. He estimated that at the moment only 12 per cent of arable land in Nigeria is cultivated, and the remainder is un-utilised.

Since the discovery of oil, we have abandoned the potentials that abound in our solid minerals sector. All other sectors of the economy have significantly been abandoned without adequate investments.

Where are we now? We are grappling with the effects of insecurity in certain parts of the nation. A direct fall-out of corruption and mismanagement of the nation’s resources have seen uprisings in the oil-rich Niger Delta region, with oil pipelines vandalised, cutting down significantly on the production capacity of the nation. In the North-east, the nation is fighting to curb the insurgence of terrorism in the garb of Boko Haram. It is a fact that the north is one of the most neglected regions in Nigeria, not minding the fact that a lot of the nation’s leaders have come from that part. Lack of basic amenities, jobs, lack of sound adequate education and failings of past leaders are part of the contributing factors to the emergence of this sect. There, definitely, are external factors. But it is instructive to take responsibility for our actions before considering the impact of external forces. The Boko Haram scourge has crippled the economy of the north, and by extension has had its impact in the overall growth of the nation. It has set an already disadvantaged region further backwards, and it is going to take a lot to rebuild the affected areas.

Where are we now? Having highlighted the woes, I must also say here that we are on the path to recovery. A lot is being done. Policies are being re-jigged to resuscitate the ailing economy. Ours was a country that was once termed “fantastically corrupt” by the previous British prime minister, but we are gradually and resolutely pulling up that foundation of the new form of colonialism and setting in its place a structure that will sustain the new glorious identity of our dreams. I want to say here that these efforts are beginning to yield desired results that will in a little while from now take us from this present situation to one of recovery and hope.

How did we get here?

A lot of reasons have been adduced as to the source of our woes. As earlier mentioned, predominant among them is the overdependence on oil revenue. According to (Anderson, 2007), Nigeria is the most oil-dependent of all established federations. The present circumstance upon us is a direct evidence of this fact. All we are going through were envisaged. However, we ignored the red flags and continued to indulge in frivolities. The consequence is that the oil market sneezed, and we caught cold. The sudden drop by up to 70 per cent in oil prices (from $115 in July 2014 to a low of $27 in February 2016) resulted in the plunging of oil revenue and government spending. One time governor of the Central Bank of Nigeria and former Minister of Finance, Mallam Adamu Ciroma, said during a chat with correspondents of Daily Trust Newspapers, that oil practically destroyed the economy, in a manner of speaking.

As the nation was grappling with the effect of the fall in oil prices, a more vicious challenge erupted in the mould of the Niger Delta Avengers who feel shortchanged and, thus, went about shutting down trunk lines and vandalising pipelines. As a consequence, the country was unable to meet its production quota due to production losses. A drop from 2.2 million bpd to about 900,000 bpd resulted in a significant decline in foreign reserves and resultant scarcity in foreign exchange. Even right now, we are in precarious times as in October 2016, the Nigeria National Petroleum Corporation (NNPC), the state-owned petroleum outfit, warned of the depletion of the nation’s oil reserves. It, therefore, means that current oil levels may not hold in a short time from now. Our dependence on it may soon be at an end. We may have to begin to look at other areas of income by diversifying the economy or discover fresh oil deposits.

As I mentioned earlier, it is interesting to note that before the discovery of oil, Nigeria was blessed with other mineral deposits such as tin, gold, coal, bauxite, limestone and a lot of other minerals, with agriculture as the mainstay of the economy, which earned the nation appreciable income. There was cotton and groundnuts predominant in the north. The East was blessed with abundance of oil palm, so much so that it has been famously rumoured that Malaysia’s major revenue earner, oil palm seeds, originated from their coming into Nigeria to take their first seeds. Though this claim has been refuted, it is yet informative that what we have in high abundance sustains another country while here it has been abandoned and grown mostly on a subsistence level. It is interesting to also know that on GDP per capita basis, Malaysia ranks 66^th in the world, while Nigeria is 133^rd(2016 IMF World Economic Outlook). Though an oil producing nation, Malaysia is also the second largest exporter of oil palm produce, after Indonesia. It is, therefore, left to the imagination what the nation’s economic outlook would be if we had a share of the global oil palm market. It would have served as buffer in trying times like this.

Furthermore, we had cocoa in the South-west. These agricultural resources, early in the life of the nation, generated enough revenue that the regional governments at the time were able to cater to their needs and also execute programmes for the benefit of the people.

Suddenly, with the discovery of oil and the huge revenue derived from it, the various governments (military and democratic) that have overseen the economy of the nation threw caution to the wind by ignoring what has been the nation’s existing source of revenue for the newer more lucrative find. So much money meant that a lot of vested interests needed to be secured. This gave rise to the creation of states and more states.

Afe Babalola observed: “Overtime, successive military governments created more states, mostly out of political exigencies rather than economic realities.” Furthermore, numerous parastatals and governmental agencies carrying on overlapping functions were created. Babalola also maintains that there was the belief that we would always be assured of a never-ending source of income from oil revenue, which led to large percentage of government revenue being channelled towards the maintenance of political structures. There was massive exodus of people from the rural areas migrating into the cities seeking a slice of the oil cake, abandoning the opportunities provided by agriculture that contributed over 60 per cent of the nation’s resources. Our budding workforce became stooges and willing tools in the hands of politicians, being wielded at any time for the purpose of carrying out their corrupt and fraudulent activities and in maintaining their hold on power. These young, vibrant graduates who have been frustrated by the flawed system created by these same politicians saw this as their quick means to wealth. A lot others abandoned school altogether to become a menace to society.

In all of this, while the oil craze with corruption and mismanagement gained ascendancy, other viable sectors and resource areas, including the prospect for raising a quality human capital resource base declined. We, instead, by design churned out lazy people who one way or the other felt that the management of the future of the nation did not depend on skills, talents or qualifications, but on the god-fatherism factor, whether they had what it takes or not. Thus, we built a system where the inferiors make the policies that bind us all, and we groan silently.

The new oil regime turned our economy on its head. The foundation for corruption and mismanagement was laid from the very day oil came on the scene. This discovery coinciding with the increase in price of oil at the time of discovery meant instant wealth and over time it became the major revenue earner. The immediate past CBN governor, Muhammed Sanusi II, noted that the once obscure Nigeria soon gained world recognition, on account of this new-found wealth from commodity export.

While I agree that the unfortunate drop in oil prices and the loss of production due to vandalism played a significant role in setting us up with a date with recession, the current economic difficulties could have been avoided if appropriate measures were taken to create a buffer by previous governments, notwithstanding the rot in the system. We must come to terms with the fact that while we intend to lay the buck on the external, yet out-of-our-control-oil-price factor, much more of it lies squarely on what we failed to do; especially previous handlers of the economy who did not take the right proactive steps to prepare for a shock in the event that it arose, considering that they had already known and were well aware that the oil sector contributed less than a tenth of GDP.

A former military head of state, in the midst of this wealth discovery, announced to the world that, “Money is not our problem, but how to spend it.” How true those words ring aloud today and haunt us. This was the foundation for the gross mismanagement of resources because it created this sense of infallibility: an on-top-of the-world mindset like nothing could ever go wrong.

A system was created such that states were not encouraged to develop their natural resources with a view to being self-reliant. As already mentioned, resources were utilised majorly to promote political structures. There is this overdependence on the centre for the monthly float of every state. Today, all the states of the federation, with the exception of Lagos, cannot confidently and conveniently rely on their internally generated revenue. With the drop in revenue at the centre, what is being shared among the 36 states of the federation is greatly impaired. Recently, the Federal Government engaged in the bail-out of state governments, and much of this bailout fund is expected to be plugged into taking care of recurrent expenditure, mostly salaries of a bloated workforce cut across the nation.

Previous governments and greedy politicians at both the state and federal levels squandered whatever savings there were, which could have been useful in plugging in the vacuum created by the revenue shortfall. So, instead of saving for the rainy day, the government was busy depleting its oil revenue-base and increasing its domestic debt, to finance a consumption-led growth.

As an avid watcher of events in the country, I recall clearly that at a certain period, 2005 precisely, the nation got debt reliefs from external bodies such as the Paris Club, which wrote off over $18 billion in debts. This was a landmark achievement, and it was expected that this could have given the country the needed breather for a proper planning of the economy in the light of the development. However, it was not to be. According to Sanusi, “what this did was that it freed up government balance sheets and in that decade of Africa rising, the countries went back on a borrowing binge…… we were able to borrow because the balance sheets could accommodate more debts.” This time around, the government at the time decided to engage in internal borrowing. A borrowing which was not channelled to building roads, improving power, developing refineries, or enhancing infrastructure, but these borrowed funds financed higher recurrent expenditures thus sustaining consumption, rather than an investment boom. Put differently, we were borrowing to fund our appetite.

As Sanusi revealed, public sector wage bill went up from N443 billion in 2005 to N1.7 trillion in 2012, especially as minimum wage was increased to N18,000. Money was borrowed to finance this spending in order to attract favourable outcome in the 2011 elections were around the corner. The government now spends about a third of the nation’s revenue to service same. If you consider this fact, it becomes difficult to determine what part of the total resources can be channelled to fund infrastructure and other capital spending needed for long-term sustainable economic growth.

The result is that critical infrastructure, especially power, severely suffered. At a time the cost of doing business in Nigeria was so high as industries suffered the brunt of our ailing power production that a lot of them exited to neighbouring countries, where they were welcome with open arms and juicy deals which included low electric tariffs that were encouraging. In effect, power became an albatross to the nation’s manufacturing industry. The country has experienced an unprecedented number of closures of factories and production plants due to lack of required infrastructure, lack of investments and bad trade policies. According to analysts at Proshare, they quote that Ghana lists Nigeria as their 9^th highest source of FDI. In effect, our public administrators played fiddle while the city burnt. There was capital flight that should have been retained within our economy.

One question that has remained unanswered in my mind has been: What was the motivating factor for our past administrations when they sought office and when they lobbied for appointments? Was there a sincere desire to serve in nation building? Or was it a premeditated and calculated strategy to amass quick wealth by abusing power?

The nation stagnated because its governments were captured by elites that undermined market forces and used public services to provide employment patronage for their cronies. Since independence, ruling elites also did not find it in their interest to develop state institutions or public infrastructure. National resources generated large resource rents for ruling elites, thus making the rationalisation of institutions unnecessary (Fosu, 2004).

It can, therefore, be deduced that the crux of our problems is purely self-inflicted, driven by corruption and mismanagement of our resources. A capital intensive system was created. It was such that the oil sector gave rise to a setting where we relaxed to rent-seeking activities. The massive interests that it generated from within and without saw people agitating for the allocation of oil blocks at frightening resolves. As someone recently noted, “there has been a serious shift from real production activities to rent-seeking activities by the Nigerian entrepreneurs as the lure of easy revenue becomes irresistible even so as with the price of oil appreciating, which means more income. It comes with the economic consequence of dwindling number of production activities, creating an avenue for massive corruption and the mismanagement of resources in Nigeria.

It draws tears from my eyes when I consider that while the government of that period complained of scarce resources and used it as reason for the underdevelopment of the nation, a few of them representing an infinitesimal part of the entire population lined up their pockets shamelessly and without conscience and regard for the plight of the larger populace. Such was it that these people were openly celebrated, while what they stole could have gone to serve as a shock absorber for the entire nation in times like this.

It is heart-wrenching to hear the kind of reasons why the nation’s hard-earned resources were discovered with some politicians. They ranged from monies given for spiritual purposes, consultations, individuals engaged to protect oil pipelines, procurement of arms, gifts for party delegates, some claimed the millions or billions found on them were personal funds or rather gifts from friends. Yet, they were hidden away in soak-away pits or personal safes, as the previous NNPC boss would have us believe after over $9 million and 750,000 GBP cash were discovered at his home, to mention a few.

Our resources were laundered in faraway countries. And these countries colluded with the Nigerians to rape their economy. A prominent Nigerian politician recently released was sometime jailed in the UK for massive looting of funds. A report by the United Nations office on Drugs and Crime (UNDC) has it that by some estimates, close to $400 billion was stolen between 1960 and 1999. A former military head of state alone is estimated to have stolen the equivalent of 2 - 3 per cent of the country’s GDP for every year that he was president. And these were periods when social and infrastructural developments were low

Is oil, therefore a curse? I will say no. As El Rufai puts it, “the discovery of crude oil was supposedly a blessing of nature expected to accelerate the development and growth of the Nigerian economy. Our oil revenues provided avenues to invest in the future through massive infrastructure build-out, educating our people, ensuring their health and well-being, and equality of opportunity for all. That was the dream and promise of Oloibiri (where oil was first discovered in Nigeria) through the lens of our founding fathers. We are a victim of deficiencies in human capital.”

It will be of benefit to have some knowledge of what corruption is. Ojaide (2000), defines corruption as: “Any systematic vice in an individual, society or a nation which reflects favouritism, nepotism, tribalism, sectionalism, undue enrichment or amassing of wealth, abuse of office, power, position and derivation of undue gains and benefits. Corruption also includes bribery, smuggling, and fraud, illegal payments, money laundering, drug trafficking; falsification of documents and records, window-dressing, false declaration, tax evasion of any kind to the detriment of another person, community, society or nation.” It is the use of legislated powers by government officials for illegitimate private gain.

Distortions and inefficiency are direct products of corruption and the perpetrators do everything possible to close their tracks. What this leaves behind are all sorts of distortions in investment plans and executions. Corruption within the economic system of Nigeria, especially as it relates to wealth being generated from the oil sector is the major reason for Nigeria´s lack of economic progress since oil was being extracted, starting from late 1950s in commercial quantity. (Xavier and Arvind)

In the same UNDC report, it was stated that: “Nigeria is Africa’s biggest oil exporter, but its natural resources make it particularly vulnerable to corruption. Huge revenues from oil or gas reserves mean low taxes, but also low accountability and a lack of transparency, as well as limited public services.” It means, therefore, that corruption drives investments away.And for as long as this structure exists, we will have a reoccurrence of self-influenced recessions and probably relapse into a depression.

This is true because what we are experiencing now is not new to us as effectively, Nigeria has not learnt from history. In the 1980s a similar collapse of oil prices led our economy into a recession. Like I mentioned earlier, Nigeria discovered oil in the 70s (sic), almost at the same time the price of oil was rising, hence the boom. (Dele, Mufu, Victor) in their research work commissioned by the African Association of Public Administration and Management (AAPAM) on “the Nigerian Economy and Economic Responses since 1980’ wrote that between 1973 and 1981, crude oil prices rose significantly from $2 to $14.33 per barrel by 1978. In 1979, its posted price had changed six times to $29.27 by December of same year. It further rose to $37 in 1980 and hit $40 by January 1981. Soon after that, the prices tumbled to $18 by 1983 and $10 by 1985. Similarly, the production capacity was reduced as the nation’s quota fell from 2.3 million bpd to about 1.3 million bpd.

Because of the increasing flow of cheap money and the neglect of agriculture, which before then was contributing 48.79 per cent to GDP but later fell to 29.75 per cent, the nation’s food import bill rose astronomically from N100 million before 1973 to N1.5 billion by 1981 (Aribisala, 1983)

Our military administrators did not know what to do with money, yet they did not save such that by the time the cut in quota set in, accompanied by drop in prices, it was evident that we were in a serious situation without any buffers. Then came the balance of payment crisis, mounting debt and debt-servicing burden, deepening food shortage crisis, mounting unemployment, galloping inflation and deteriorating standard of living. Nigeria became classified as a low income country. In all of this, we did not think to diversify our economy even when it had been obvious that overdependence on oil is like sitting on a keg of gunpowder.

It is a grave indication that we have not got it right with the governance of the economy, which at best has been very poor at all levels. It has been riddled with mismanagement and funds channelled away from high need areas such as Health, Agriculture and Education. By 2010 estimates, 70 per cent of the Nigerian population live below the poverty line while our GDP per capita at 2015 stands at $2,548 representing 20 per cent of world average, according to statistic from ‘Trading Economics.’

Michael Ogbeidi, an Associate Professor in the Department of History and Strategic Studies, of the University of Lagos, in a published work for the Journal of Nigerian Studies said: “Indeed, it is a paradox that Nigeria, the world’s eighth largest exporter of crude oil, a country endowed with many resources, still has more than 70 per cent of its population living below the poverty line as a result of corruption and economic mismanagement. Pathetically, the logic of the Nigerian political leadership class has been that of self-service, as some of the leaders are mired in the pursuit of selfish and personal goals at the expense of broader national interests. Consequently, emphasis has been on personal aggrandisement and self-glorification with the result that corruption has become a euphemism for explaining political leadership in Nigeria, in relation to the management of national wealth.”

A lot still needs to be done to lay the foundation for economic recovery, sustainable long-term economic growth and inclusive prosperity. The economy must, indeed, be diversified. The problems that have arisen have not been handled in the way that it should, either to minimise the problem or eliminate it. The value chain for strengthening higher revenue and export earnings from agriculture to light manufacturing, from oil to petrochemicals and refining, from solid minerals to industrial production, from ICT to other services, including education and tourism, needs to be tapped.

Recession and the war against terror

Emir Sanusi said: “Our economy, at least in part, created terrorism by simply not creating the opportunities for these young people.” An idle mind, they say, is the devil’s workshop.

Set up in 2002, but gaining prominence 2009-2011, the Boko Haram sect has been a pain in the sides of the country. They took control of certain parts of North- eastern Nigeria (Borno, Yobe and Adamawa states) and had roots in a few neighbouring countries such as Cameroon and Niger. They grew to be branded a terrorist group by global standards and at one time classified as the most deadly terrorist group after ISIS. Their aim was to establish an Islamic State and eradicate all forms of Western education.

The tale of the mayhem they unleashed in the northern part of the nation is alarming, as it has been reported that over 20,000 people have been killed and of that number 86 are children; 2.3 million have been displaced from their homes while of that number 250,000 have fled the nation to other countries. In 2014, the world woke up to the shocking news of an attack at a school in Chibok, Borno State where they kidnapped 300 school girls, drawing the concern and ire of the international community.

While we grapple with the above scene, the effects of this group’s insurgency have been felt significantly on the growth of the economy, as there was a drop in foreign direct investment into the nation. According to the World Investment Report (WIR) 2013, FDI flows into Nigeria dropped by 21 per cent in just one year, from $8.9 billion in 2011 to $7 billion in 2012. This monumental loss was created by the lack of confidence in the minds of foreign investors on the security situation in the nation. At a time some foreign governments advised their citizens to be wary of Nigeria, because of the security concerns.

As a direct result companies, especially those operating within the region, closed shops. There was massive loss of jobs, mass exodus of people from the area, while the transportation and tourism sector was badly affected as no one in his sane mind was ready to place himself or family in harm’s way, venturing into the region.

Coupled with the above, the Nigerian government had to pool its dwindling resources in order to quell the insurgency. The result of government’s effort today is that security has gradually returned to the affected areas in the North-east of the nation, normalcy is gradually returning as a lot of those displaced have come back to rebuild, which is a testimony of the military’s success in taking control of the situation and eradicating every trace of the sect. Although there are pockets of violence in the area, they are being effectively contained.

Winning this war on terrorism is a necessity, as it is one of the ways of improving the economic position of the nation. Companies will return, jobs will be restored as unemployment reduces; there will be significant increase in FDIs, tourism and the income from same will be boosted and those who had abandoned their farms will return to same thus, lifting the revenue from agriculture.

We must, however, acknowledge that it will take a lot to rebuild and resettle the area. I want to use this medium to say that we owe a debt of gratitude for the assistance of some countries to the success of the fight against terrorism in our land, and to say that as we rebuild the region and the nation as well, their assistance will be highly invaluable. Evidently, poverty in that region needs to be eradicated, while the citizenry need proper education. The abundant resources available in that area need also to be harnessed in order to create gainful employment for the youth. If we correct the effects from the misrule of past administrations and provide these basic needs to the people, it will go a long way in improving their lot.

What have we done so far?

Presently, our government under the able leadership of President Muhammadu Buhari has taken immediate giant strides in order to recover the economy. Below are some of the major moves which have begun to yield positive results:

1. This administration has taken urgent steps to save the poultry and other food industries from collapse. A federal task force on food security was set up and mandated to reduce prices of food items in the country. These are not just good on paper but implementable. I also foresee a similar measure being taken to salvage all other sectors in order to alleviate the challenges the people are facing

2. This administration has also taken quick steps in bridge-building efforts, by visiting the oil producing restive areas such as Yenagoa, the Bayelsa State capital and Port Harcourt, Rivers State to meet with stakeholders. It is expected that this effort will restore confidence in the area of government’s preparedness to bring development to them and hence contribute to a sustained increase in oil production output.

3. The war on terrorism has been won. As we rebuild the ruins, its positive effect on the economy will begin to reflect, although it may take a while to settle in.

4. By a directive of the Federal Government, the CBN reviewed the foreign exchange policy by adjusting exchange rate policy to attract more foreign investments within the last year, despite the challenging economic climate. US$250 million was injected into the Sovereign Wealth Fund, while it released $500 million through the interbank market where the 23 banks in the nation bought $371 million to be accessed, to meet dollar demands for school fees, medicals and personal travel allowance, among others. This has immediately impacted on the value of the naira as it gained N75 shortly after. With the increase of crude oil price and the injection of dollars into the economy, there is available dollars in the system boosting liquidity. If the special intervention of the CBN is sustained, I believe that the naira is in for further strengthening.

5. The Federal Government of Nigeria recently successfully floated a $500 million Eurobond, which was nearly more than eight times oversubscribed. This reflects confidence in the minds of investors on the efforts of the present government and the prospects of the Nigerian economy. This level of confidence is fuelling further moves to take advantage of the scenario to float more bonds. There is plan for another $64 million ‘green’ bond for April. By this the government is committed to sustainable development. The beauty of the green bonds is that it offers the country a means of plugging funds into other specific sectors that can drive her economy, especially the non-oil sector, with the aim of poverty reduction and enhancing the nation’s capital market.

6. There are strong moves to improve the ease of doing business in the country. Currently, Nigeria is ranked 169^th out of 190 countries by 2017 index. This is worrisome considering that we are trying to get out of recession and we need to build confidence in the minds of our prospective investors. The Presidential Enabling Business Environment Council (PEBEC) approved a 60-day National Action Plan to focus on quick win reforms to deliver tangible changes for Small and Medium-scale Enterprises (SMEs) and help improve Nigeria’s entire business environment within the shortest possible time under three broad areas: the entry and exit of goods, entry and exit of persons into Nigeria, and general government transparency and efficiency in government agencies and parastatals. Given this, there should be considerable improvement to the 2018 World Bank Doing Business Ranking Index.

7. The fight against the corruption scourge has been a successful one so far. Although actual recoveries have not been very significant, we believe that if we encourage this administration, so much more will be sitting in the coffers of the nation. With the humongous recoveries of stolen monies, things will look brighter. Recently, the ‘whistleblower’ policy was reported to have led to the recovery of over $151 million. It is no longer convenient for fraud to thrive. The foundation for a corrupt-free nation is being laid, and it may take a while. But the impact will be felt. This is also part of the efforts in improving the ease of doing business in Nigeria. It is expected that these recovered funds will be channelled towards stimulating the economy by improving health-care, education, power, strengthening the naira, etc. Though it may not be enough, but it will contribute immensely in alleviating the suffering of Nigerians.

8. The government has also launched a CBN Anchor Borrowers’ Programme, targeted at farmers. This is expected to grow the Agricultural sector significantly and create more jobs. The fund will go to cover the training and funding of 100,000 farmers of priority agricultural products in its first phase and provide a guaranteed market for their produce.

9. Out of an approved N150 billion earmarked for the government’s Social Investment Programme, N65 billion has been released so far. The scheme will cater for the feeding of school children across the nation, a N30,000 stipend to over 200,000 graduates – beneficiaries of the government’s N-Power Programme designed to drastically reduce youth unemployment, and a further 1,000,000 traders are to get subsidised loans to support their operations.

10. Massive developmental projects have been carried on across the country since the inception of this administration and further planned infrastructural spending will help boost economic growth. It is evident that the government intends to engage in massive expenditure, going by the proposed loan requests it has sent to the National Assembly and the bonds issued and proposed. This increase in public spending assumes that it wants to spend its way out of the recession as part of its strategies.

11. The Federal Government just recently released its Economic Recovery Strategy, a Medium Term Development Plan 2017 – 2020 that focuses on economic stability and diversification. A GDP growth of 7 per cent and inflation rate of below 10 per cent by 2020 is envisaged by the increasing of oil output, as the oil sector is reformed, opening up of new farmland and boosting investment in power, roads and ports in order to diversify revenue. The plan states the government’s determination to create 15 million jobs by 2020. As part of the move to reform the oil sector, the Federal Government plans to cut its stake in joint-venture assets and other holdings. Selling the assets will “optimise their efficiency and reduce fiscal burden on the government,” according to the Ministry of Budget and National Planning’s website.

Conclusion and way forward

There are indications that the Nigerian economy is well on its way out of recession, considering the 2016 overall and last quarter Gross Domestic Product reports. With an expected sustained increase in oil production output, the gradual gain in oil prices, planned infrastructural spending, Social Investment Programmes and passage of the 2017 budget, there is going to be gradual rebound of the economy.

From our statistics above, the trend in nearly all the sectors showed a nominal growth improvement and with inflation expected to moderate, GDP growth will return. These figures also show that the recession may have bottomed out, as seen from the improving trend. It is worthy of note that the IMF and the World Bank project that Nigeria will experience a modest 1 per cent growth in GDP in 2017 given the present circumstances.

Furthermore, there is a better outlook for revenues from the petroleum sector, with revenues set to increase with oil production now over 2 million barrels per day, while oil prices are relatively steady, at an average of about $55 per barrel. This improved outlook for the oil and gas sector is closely linked to the on-going engagement and dialogue between the Federal Government and various communities in the Niger Delta.

With an ever-increasing population, there is need to expand earning and production base of the economy. And, as Sanusi rightly points out, “through wise investment and very difficult, but appropriate decisions,” or we will end up in a classical Malthusian situation, where the resources cannot support the population, and we start having wars and pestilence. We need to improve on our capital expenditure by improving and investing more in power, roads, schools, hospitals, housing, etc.

The present administration has been very effective in their war against corruption, although it had been accused of being selective, the truth is that it has done more than all the other past administrations in recent times put together, and performed far better in the quest to sanitise the system. It is no longer business as usual. One of the ways to revamp the economy is the fight to end the scourge of corruption.

If the present regime will effectively pursue and execute its proposed agriculture roadmap, as well as the solid minerals sector roadmap, there will be real economic, export, and revenue diversification as well as import substitution. It will help us take a model that is investment-driven, rather than consumer- or consumption-driven. A high investment to GDP will deliver high growth that is also inclusive.

We should further the creation of an encouraging atmosphere for our domestic industry competitiveness and establishing protection for our industries. We should properly align our companies with national interest by changing the incentive system within which they operate. The tax structure should encourage industrial revival, particularly in industries which have been hit worst by unfair foreign competition.

The leadership of the CBN has tried in steadying the ship in the face of the storm. The raising of interest rates has been a move at stabilising the currency. The truth is that where we are today, the only way we are going to reverse this recession is to increase liquidity in the foreign exchange markets and reduce the gap between the official rate and the parallel market rate. And this is what I think the Central Bank needs to keep doing.

A flexible exchange rate regime and a positive real interest rate will combine to bridge that gap, bring in the dollars that we need to finance imports, and those imports of raw materials are the things that will increase production, and that production is what will lead to growth.

In order to boost production, efforts need to be stepped up in the area of adequate power generation and distribution, with appropriate tax policy that will encourage the required conducive atmosphere for increased investment. Enough needs to be done in these areas if we must achieve our aim of properly diversifying our economy. Some states of the federation have begun to respond positively to the need for self-reliance and sustenance, especially as they have stepped up efforts in enhancing their agricultural output capacities. Such efforts must be encouraged so that they can perform better.

Simon Kolawole (2016) wrote on ‘Recession, Recovery and our Relapsing Fever’, that there are three options to the path of recovery, dubbed the 3Ms: the miracle, mayday and the marathon. This present administration is harnessing every tool in restoring the economic greatness of the nation. And to do this, it is focused on dismantling the defective structures that crippled us and putting in its place proactive, healthy, sustainable and conducive structures. These efforts of government may not be the quick fix strategy (Mayday) that everyone is looking to, in order to immediately get out of the burden of hardship. But it has to be a conscious, careful effort aimed at restructuring the economy. It is a long-term, long-run strategy (Marathon). According to Kolawole, “We want to stop importing hay, but we cannot plant grass today and get the feed tomorrow, especially as we did not make hay when the sun was shining. You can’t diversify government revenue base overnight.”

Former President Olusegun Obasanjo added: “There is no reason why any Nigerian child, at this point in time, should not have basic education, food and nutrition. And not only the Nigerian child, any Nigerian, should not go to bed without food. We have the resources to achieve all that. If we are not achieving it, does not mean we don’t have the resources, it is because we haven’t managed our resources well.”

We have been through difficult economic times, but with some of the actions the present administration has taken, there is hope for the Nigerian nation. The sleeping giant is rising again. Her economy is poised to take a turn for the better. As Nigerians groan under the burden of the recession, we are comforted to know that respite is in sight.

•Hon Chike Okafor, member, House of Representatives and Chairman of the House Committee on Healthcare Services, delivered this lecture at the Centre for International Interventions, Department of Political Science, University of Surrey, United Kingdom, on Wednesday, March 29, 2017.

Update news