Last week, the most populous nation Africa celebrated its 55th independence from the British colonial masters. While there were many reasons to celebrate (such as unity), arguably there are also countable reasons not to have celebrated. One of the gloomy reasons for some Nigerians not to celebrate independence is the state of our economy. Salaries have not been paid in many states and the exchange rate of the Nigerian Naira to the United States dollar is at an all-time high. One dollar can now purchase two hundred and twenty-five Naira (225).
When the Northern and Southern protectorates were amalgamated to produce the new bright baby christened Nigeria, I am sure the founding fathers had a different idea. Also, those that fought for the independence of the country had greater expectations. I am sure the Late Pa Anthony Enahoro that moved the motion for the Country’s independence will be saddened at the current state of affairs.
Wealth and poverty are sides of the same coin. In a civilized society, the wealth of the country is expected to trickle down to its citizens. Nigeria, the largest country in Africa with a population of over 160 million, will be at the brink of bankruptcy, if it was a privately run company. With all the talk about empty treasuries, both at the federal and state levels, it becomes imperative whether the largest country in Africa is rich and whether the plight of its citizens is commensurate with the economic state of the nation.
To get an insight into the wealth of Nigeria, it is important to look at its annual budget and statutory allocations, poverty level, Gross Domestic Product (GDP) and per capita GDP.
In April 2015, the International Monetary Fund published figures for its 187 member nations for the year 2014. Also, the World Bank provided similar statistics for the 193 members of the United Nations. China was ranked number one in both figures with almost $18 trillion GDP, while United States was ranked number two in both figures with approximately $17.4 trillion. Nigeria, with a little over $1 trillion GDP was 21st in the IMF figures and 20th in the World Bank figures. We surpassed Ghana and South Africa that were ranked 79th and 29th respectively. However, these are two fellow African countries that people are rushing to invest in because of better infrastructures and standards of living.
Essentially, GDP (Gross Domestic Product) is a measure of national income / national output and national expenditure produced in a particular country. See http://www.economicshlp.org. So, GDP is everything that a country’s economy produces in a year.
A related term is per capita GDP. Investpedia educates us that ‘Per Capita GDP is a measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country. The per capita GDP is especially useful when comparing one country to another because it shows the relative performance of the countries.” About.com sheds more light by stating that “GDP per capita is a measurement of how prosperous a country feels to each of its citizens. GDP per capita takes a country’s production, as measured by GDP, and divides it by the country’s total population. Hence, it is the output of a country’s economy per person. GDP per capita allows you to compare the prosperity of countries with different population sizes. For example, U.S. GDP was $17.46 trillion in 2014. However, one reason for America’s prosperity is because it’s the third most populous country (after China and India). The United States must spread its wealth among 319 million people. As a result, its GDP per capita is only $54,800, making it the 19th most prosperous country per person.”
Nigeria’s per capita GDP (in US dollars), using a population of 170 million, is 3,187.5 with the rebasing (510 billion GDP), while it is 6,375 before rebasing (1 trillion GDP). According to the World Bank, the 2013 per capita GDP for South Africa, Egypt and Ethiopia are 6,617.91, 3,314.46 and 505.05 respectively.
Nigeria’s annual budget has been hovering above four trillion Naira in the past five years. For example, the total budget for the 2014 fiscal year was N4.962 trillion, while 2012 was N4.749 Trillion, 2011 was N4.2 trillion, and 2010 was N4.4 trillion. See my article titled Comparative Analysis of 2012 Federal Budget. I will defer to the Economists and Accountants, but I am presenting figures to buttress my point that Nigeria is a rich country.
In fact, in his pre-election Speech at Chatam House London, our President had this to say, “After the rebasing exercise in April 2014, Nigeria overtook South Africa as Africa’s largest economy. Our GDP is now valued at $510 billion and our economy rated 26th in the world. Also on the bright side, inflation has been kept at single digit for a while and our economy has grown at an average of 7% for about a decade.”
On the monthly allocations between the three tiers of government (Federal, State, Local Government), there is no doubt that over N3 trillion has been shared by The Federation Account Allocation Committee (FAAC) since the beginning of this year, and we are now in the fourth quarter. For example, data available reveals that FG, States, LGs, shared N409bn for May 2015. It was distributed as follows in June: FG got N151.805bn (52.68 percent), while states and local governments received N76.998bn and N59.362bn respectively, representing 26.72 percent and 20.60 percent. Comparatively, N581.498bn was shared in January 2014, N715.8bn for July 2013, and N1.014 Trillion for June 2013. The largest amount shared to date will be N1.3tn for June 2011. Of course, the price of oil has fallen, but we are still rich and sharing a lot of money because N518.5bn was shared in June 2015.
The figures are astronomically boring, but insightful. Many nations are not blessed like Nigeria. As I travel to various parts of the world, I am even more convinced that Nigeria is a very rich country. Without mincing words, we are a rich nation, but unfortunately, the average Nigerian is poor and does not enjoy the wealth of the country. That is the sad story. This is 101 years post-amalgamation and 55 years post-independence. We can all agree that our development does not reflect that of a man who is 55 years old, and definitely not that of a 101yr old man.
Given all this wealth, it is inexplicable that we have so much poverty in the country. According to the National Bureau of Statistics (NBS) report, as of 2010, the poverty level of the country was 69% and 71% for 2011 by extrapolation. Using a conservative population estimate of 160 million Nigerians, it means that 113.6 million Nigerians are extremely poor. No one will argue that the primary population still survives on less than $2 USD per day.
Everyone must be tired of the saying that leadership is the problem, not followership. Yes, oil may have been the bane of our development as a nation, but what else are we not doing right. We even had a leader that boasted that Nigeria’s problem was not money, but what to do with it. He was under the misguided illusion that oil will last forever. When you implement a mono-product economy, you are doomed to failure when anything adverse happens to that commodity.
A country’s leadership must make sure that the wealth of the nation trickles down to the citizenry. If it does not, that the leadership has failed and by implication, the Nation State becomes a failed Nation.
What will we be celebrating at 56 years of Independence? The father of the Preacher said, “So, teach us to number our days, that we may apply our hearts unto wisdom.” (Psalm 90:12). Tick! Tick!! And time continues to go by.
Atawa-Akpodiete, a public Affairs Analyst, wrote from United States.