The economy is slowing down. And inflation is creeping up. So, it’s a bit difficult right now for interest rates to know which way to go – is it down, to make loans cheaper and stimulate the economy? Or is it up, to support the Naira and choke off inflation? They say, because Nigeria is so heavily dependent on imports, it is best to go up, and strangle local businesses, so we can continue to afford the things we cannot help but import right now.
I know, it’s slightly schizophrenic – prop up our currency to make imports cheap but use import controls to discourage imports. Imagine. Use import controls to encourage production but raise interest rates to strangle production. Which is it? Don’t ask. You see, around here, we have a very conflicted relationship with Trade, on one hand, and Manufacturing, on the other. Ask anyone. We are born Traders (and by “we” I don’t just mean Igbo people), buying and selling comes naturally to us. No surprises, then, that after Agriculture the biggest contributor to our GDP is? Trade!
Manufacturing, on the other hand, is something I think we’ve been told we should be doing. Yes. Because the textbook teaches that growing the Manufacturing Sector is how low-income, agrarian societies are transformed to industrialized behemoths. Fine. Let’s forget India for a second and it’s slightly uncharacteristic leapfrog from subsistence agriculture to world provider of cost effective I.T services. But like a left-handed child in a right-handed world, we feel the need to starve Trade to feed Manufacturing. It is why we keep banning (and un-banning) foreign rice, looking expectantly to States like Ebonyi and Kebbi to step in and fill the gap.
I tell you, it could be a classic case of the quick diagnosis. Because, well, corruption is not the reason the economy is slowing down. How can? This time last year, we were just as corrupt, but still growing at twice today’s rate. Yes. The only thing that has changed (no pun intended) between then and now is that the Federal Government has lost 67% of its income to the fall in oil prices. So, imagine it, one economic actor (the F.G.) was severely hit in one income area (oil) and the entire economy has started to nose-dive. My brother, that one fact tells you all you need to know about the vibrancy of our Private Sector.
Listen. It cannot step in and fill any gaps at the moment (except, of course, by importation). And it is not because of any crippling lack of courage to start new businesses. No. The problem is in this simple statistic – for those who keep telling me how light has improved, let me tell you, at 4000 megawatts, if we distribute it EQUALLY amongst all 150 million of us (not like now where you enjoy 20 hours of light because I get only 2), we will each get enough power to fire up one (yes, one) light bulb. True. It is the infrastructural deficit that is killing us.
So let us think twice before interpreting economic recovery simply as recovering Federal Government money. Without doubt, things will improve when oil prices bounce back in 2017, maybe even before then if the government manages, by other means, to claw back the missing 67% (you know, by reducing its wastage, expanding its tax base, and/or – its schizophrenic favorite – tinkering with duties). But there is a reason why a decade of fantastic growth has given us no jobs. It is simple. No power. No roads. No rail. My brother, not one single bank in the whole country able to lend in single digits. Don’t you see? It is the infrastructural deficit that is killing us all. And until we remove it we will never stop living in this country of millions and millions of broken people – plus one very rich government. No need to ask. This is the definition of a Developing Country.