Time to reverse Nigerians’ low-level existence

In a swift move, the federal government has taken two key steps towards reversing Nigeria’s current low-level condition of life.

First, the government inaugurated the Presidential Economic Coordination Council, planning to spend N2 trillion within six months. Three days later, the government announced the waiver of taxes, levies and other payments on selected imported food items.

President Bola Ahmed Tinubu set the tone for the engagement with a candid acknowledgement of Nigeria’s low-level existence: “As a nation, it is so shameful that we have about 4.5 gigawatts. We must increase our oil production too to two million barrels per day within the next few months. Remove all barriers hindering investments into the sector to enhance competitiveness. We’ve had a challenge thrown at us and all of us will have to be careful.”

This acknowledgement should be the catalyst of a new beginning in Nigeria. We have virtually become a nation of people who “manage” just anything thrown at them. It is okay that our leader has publicly, once again, admitted that certainly all is not well with the Nigerian society. The people of the land have endured so much deprivation, and the time has come for a big turnaround to begin.

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From food to electricity; from housing to healthcare, Nigeria’s identity has unfortunately become that of a nation whose citizens are hungry but cannot access food; and sick but cannot afford health services. Many are homeless but cannot find accommodation. The reason for these gaps between demand and supply is the inability or failure of the economy to produce enough for the citizens. That is a fundamental defect because the essence of an economy is simply to organise the production, distribution and consumption of goods and services. Therefore, if an economy is unable to perform these functions, its relevance becomes questionable.

The production here should be seen in terms of domestic production and a component imported to supplement the local production. After all, the resources used to import foreign goods must be produced at home. And still, even if we stretch it to an extreme case of foreign loans being taken to import, that would still be done in the hope that at some point domestic production would yield enough resources to repay the debts.

The point above is to emphasise the primacy of production in an economy, and to the extent that is being done well in any economy, to that extent will the economy be relevant.

This column has over the past few months argued that Nigeria needs, in addition to other measures, a certain minimum quantum of government spending to be pumped into the economy. That would act as a lever to raise the economy from the abysmal level to which it has fallen. When economies tank, when there is a depression or an economic downturn, the best option is not for the government to withdraw or stand aloof while urging the people to brace up or roll up their sleeves and work. The government’s actions, such as the announcement to invest the N2 trillion into the economy, are a signal to the private sector so that investors can take a cue from it.

As the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, explained, the expenditure package is broken into sectoral allocations: N350 billion for Health and Social Welfare, N500 billion for Agriculture and Food Security; N500 billion for the Energy and Power sector, and general business support of about N650 billion.

It would be a shame indeed for Nigeria to be regarded as a nation that cannot feed itself, despite all the resources available in the country. The key to averting this tag is to ensure an optimal utilisation of the nation’s resources, ensuring that going forward, more of these resources are deployed to the production process. Goods and services are produced when human power, interacting with the relevant technology, converts resources to useable and beneficial products. In agriculture, for instance, Nigeria’s arable land is put at over 70.8 million hectares. Less than half of this is currently put into agricultural use. So, there is a large room to expand production in this area. There is a high level of sub-optimisation of resource conversion that characterises our economy, which means it is not surprising that the demand for products exceeds the supply.

The significance of this Marshall Plan kind of government intervention is its multiplier effect on the economy and signalling effect. It will create infrastructure such as power and energy plants to address the dearth of some of the services that Nigerians currently lack. If more power plants are constructed across the country, this will lead to increased power supply, which will lead to improved levels of economic activities throughout the country. It is the same for roads, health, etc.

However, the immediate impacts of these amounts being injected into the economy or specific sectors will come through the daily or weekly wages that Nigerian workers will earn through selling their labour power.

The reality now is that many Nigerians are willing to sell their labour power in exchange for daily or weekly incomes. Unfortunately, there are not many people or companies willing and able to buy the available manpower. This partly explains the prevalence of so much hunger and destitution in the country. The planned expenditure package will address this, to an extent. Efforts from the private sector will add to that.