Nigeria’s economic aspirations have remained
that of altering the structure of production and consumption patterns,
diversifying the economic base and reducing dependence on oil, with the aim of
putting the economy on a part of sustainable, all-inclusive and
non-inflationary growth. The implication of this is that while rapid growth in
output, as measured by the real gross domestic product (GDP), is important, the
transformation of the various sectors of the economy is even more critical.
This is consistent with the growth aspirations of most developing countries, as
the structure of the economy is expected to change as growth progresses.
Successive governments in Nigeria have since
independence in 1960, pursued the goal of structural changes without much success.
The growth dynamics have been propelled by the existence and exploitation of
natural resources and primary products. Initially, the agricultural sector,
driven by the demand for food and cash crops production was at the centre of
the growth process, contributing 54.7 per cent to the GDP during the
1960s. The second decade of independence
saw the emergence of the oil industry as the main driver of growth. Since then, the economy has mainly gyrated
with the boom-burst cycles of the oil industry. Government expenditure outlays
that are dependent on oil revenues have more or less dictated the pace of
growth of the economy. Looking back, it is clear that the economy has not
actually performed to its full potential particularly in the face of its rising
population.
In general, economic growth and population
growth rates are very close that the margin cannot induce the required
structural transformation and economic diversification. The Nigerian economy has grossly underperformed
relative to her enormous resource endowment and her peer nations. It has the 6th
largest gas reserves and the 8th largest crude oil reserves in the
world. It is endowed in commercial quantities with about 37 solid mineral types
and has a population of over 160 million persons. Yet economic performance has been rather weak
and does not reflect these endowments.
Compared with the emerging Asian countries, notably, Thailand,
Malaysia , China, India and Indonesia
that were far behind Nigeria in terms of GDP per capita in 1970, these countries have transformed their
economies and are not only miles ahead of Nigeria, but are also major players
on the global economic arena. Indeed, Nigeria’s poor economic performance,
particularly in the last forty years, is better illustrated when compared with
China which now occupies an enviable position as the second largest economy in
the world. In 1970, while Nigeria had a GDP per capita of US$233.35 and was
ranked 88th in the world, China was ranked 114th with a
GDP per capita of US$111.82.
The major factors accounting for the relative
decline of the country’s economic fortunes are easily identifiable as political
instability, lack of focused and visionary leadership, economic mismanagement
and corruption. Prolonged period of military rule stifled economic and social
progress, particularly in the three decades of 1970s to 1990s. During these
years, resources were plundered, social values were debased, and unemployment
rose astronomically with concomitant increase in crime rate. Living standards fell
so low, to the extent that some of the best brains with the requisite skills to
drive the developmental process left in droves to other nations, and are now
making substantial contributions to the economic success of their host
countries.
However, since 1999, the country returned to
the path of civil democratic governance and has sustained uninterrupted
democratic rule for a period of over 11 years. This in itself is a great
achievement and gives reason for hope in a country that has been burdened with
almost three decades of military rule. It has provided an opportunity to arrest
the decline of the past and provide the launch pad for the take-off into an era
of sustainable and all-round economic development. The successive civilian
administrations since 1999 have committed to tackling the daunting challenges.
Economic growth has risen substantially, with annual average of 7.4 per cent in
the last decade. But the growth has not
been inclusive, broad-based and transformational. Agriculture and services have
been the main drivers of growth. The implication of this trend is that economic
growth in Nigeria has not resulted in the desired structural changes that would
make diversification of the economy create employment, promote technological
development and induce poverty alleviation. Available data has put the national
poverty level at 54.4 per cent.
Similarly, there has been rising unemployment with the current level put
at 19.7 per cent by the National Bureau of Statistics (NBS). Furthermore, the
country lags behind her peers in most human development indicators. For
example, while China and Thailand are on the 5th and 22nd
positions, respectively, on the 2009 Global Hunger Index, Nigeria was ranked 46th. This can be traced largely to the huge
infrastructure deficit, rising insecurity, mass corruption and widespread
poverty.
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