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Nigeria: Weathering the Economic Storms

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As Nigeria’s President Muhammadu Buhari-captained ship of state prepares to pull into port for the hand-over of the reins of leadership after February 2023 general elections, the media is agog over a flurry of mixed reviews of the outgoing administration’s performance and contribution to national development.

Discomfited by the dust raised in the riot of opinions on the administration’s approval ratings, President Buhari himself uncharacteristically blurted out his disappointment at his cabinet and public image makers’ inability to project the administration’s successes and achievements in the glowing light he thought it deserved: “This administration has done extremely well. Those who are supposed to say it are not saying it. I don’t know why”, he said plaintively, mid-September on a visit to inaugurate a road project in Imo State, in the volatile South-East region of Nigeria.

Not surprisingly, the Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed, is not one of those who the President’s not-so-subtle dig was directed at. She has had her own informed opinion of the administration’s performance and has always made protestations about the great work the administration has been doing since coming to office in 2015. Speaking specifically on the economy, after a marathon Federal Executive Council, FAC, meeting in July, “the administration has done well”, she told newsmen emphatically.

The minister reminded her audience that when President Buhari’s administration took over the reins of government in 2015, oil prices from which the government derived over 80 percent of its revenues had plunged to record low levels while oil production in the country’s troubled petroleum industry had dipped below the one million barrels-per-day (bpd) mark. She said the resultant recession had dealt the economy a telling blow, but by dint of hard work and sound policies, the administration had crawled out of it after only three quarters. The feat had been repeated over a shorter period when the dreaded COVID-19 pandemic tipped the economy into another recession a few years later. Now Mrs Ahmed believes the administration deserves some praise for embarking on a lot more big-ticket, strategically important infrastructure development projects than previous governments despite the cash-crunch caused by the unfortunate confluence of challenges emanating mainly from external sources.

However, oil prices have since firmed up to levels analysts never foresaw in the medium term. They have more or less levelled off and have been going for above $90 per barrel in the past few weeks due to the America-led embargo on Russian oil over its unwarranted attack on Ukraine and belligerent refusal to stop its expansionist ambition.

Oil boom: So, who’s benefitting?
Sadly, Nigeria has not benefitted in any meaningful way from high oil prices because of incoherent economic policies, thanks to the Buhari administration’s flat insistence on maintaining a treasury-bursting petrol subsidy regime, low crude production levels of just over half of the country’s OPEC-approved quota of 1.8million bpd at best of times, and blatant oil theft. A not-so-invisible oil mafia is thought to be robbing the nation of as much as 20 percent of official production volume worth some $7.3 billion a year, according to the Nigeria Extractive Industries Transparency Initiative (NEITI).

More baffling is that the Presidency and the administration seem comfortable with the fact that petrol subsidy payments rose by 349.42 percent from a lowly N350 billion in 2019 to an indefensible N1.573 trillion in 2021. In 2022, federal lawmakers, against all expectations, approved an improbable N4 trillion for subsidy hand outs to a few oil merchants out of a budget size of just N17 trillion — an incredible quarter of total expenditure. Critics are perplexed, while a vast majority of citizens are nonplussed by the administration’s decision to ditch the provision of the hard-won Petroleum Industry Act (PIA), by kicking the subsidy can down the road to June, next year when the administration would have left office.

The macroeconomic tale
In the second quarter of this year, official statistics put the growth of Nigeria’s gross domestic product (GDP) at 3.54 percent year on year. The National Bureau of Statistics (NBS) also put real GDP at N17.29 trillion (N45.32 trillion in norminal terms which amounts to about US$445 billion, according to World Bank) in the second quarter of 2022. This represents a marginal decline of 0.37 percent from the first quarter. The cheery news is that the country has maintained consistent growth in the last seven quarters since the unfortunate recession in the third quarter of 2020.

Regrettably, Nigeria has not done so well with its inflation numbers. Now at a 17-year high rate of 20.52 percent, it seems the 14 percent the monetary authorities inched up policy rate to in July did not stop prices of goods and services from their skyward trajectory in the economy. Unemployment figures have been even more depressing. At about 33 percent, Nigeria’s ‘jobless’ rate has shot up to be Africa’s worst. While this may come as no big surprise, given the country’s peculiar position as the continent’s most populous society by far, Nigeria’s headcount almost doubles Ethiopia’s, the next in line.

The naira exchange rate, perhaps the most economically significant indicator, has been so unsteady and controversial that critics have no kind words for the administration’s management of the foreign exchange market. The Central Bank of Nigeria (CBN) runs a complex exchange policy that has so kept speculators in business that they make close to 50 percent premium at the open but illegal parallel (black) market. Whereas the naira sells for about N435 to the dollar at the CBN-controlled official market, the dollar is worth about N700 at the open unofficial market dotted all over major cities in the country. The effect on the economy has been devastating, fueling galloping inflation that is making nonsense of the efforts of the administration to stabilize prices and the economy.

The President takes charge
The good news, however, is that President Buhari realizes the challenge and has demonstrated it with the recently inaugurated National Economic Council, with none but himself as chairman! While some say the move is coming rather late in the day, a few optimistic commentators like Dr. Olabode Ayorinde, a former lawmaker and ex-Chairman of the House of Representatives Committee on Economic Recession, think it is better than going on as usual with appointees he can’t get to perform. Now that the nation’s economy is at a tipping point, the President, analysts say, must focus on fundamental issues in the economy which revolve around policy rather than mere physical projects, including but not limited to fiscal and monetary policies bordering on government expenditure profile, debt, subsidies, and foreign exchange management. Attention must also be on the strategic, all-important oil industry, which everyone knows is poorly managed and “the real big elephant in the room” viz: the insecurity of lives and property brought on by the lingering insurgencies in the entire North and the South-Eastern parts of the country.

National Development Plan 2021-2025
It is probably true that the National Development Plan 2021-2025 is the prod that gingered President Buhari to inaugurate the newly constituted Presidential Committee on the National Economy, which he intends to take charge of, personally. The President, like most dispassionate analysts and commentators, has come to the unsettling conclusion that all previous committees on the economy have fallen short of achieving the objectives they were raised to tackle.

The new Nigeria National Development Plan 2021-2025 succeeds the Economic Recovery and Growth Plan (ERGP 2017-2020) and was presented to the public shortly before the commencement of the virtual meeting of the Federal Executive Council (FEC) held at the council chambers of the Presidential Villa, Abuja in December 2021.

Surrounding the President at presentation time were Vice-President Yemi Osinbajo, Secretary to Government of the Federation, Boss Mustapha, Governor Atiku Bagudu of Kebbi State; as well as Minister of Finance, Budget and National Planning, Mrs. Ahmed.

Speaking at the event, Mrs. Ahmed revealed that the NDP 2021-2025 was designed as “our” Medium-term Development Plan to succeed the Economic Recovery and Growth Plan (ERGP 2017-2020), which assisted the country to exit the economic recession in 2017 and sustain modest growth even during the darkest days of economic challenges occasioned by COVID-19 pandemic. She noted that the current challenges are products of many years of inappropriate policies, fiscal leakages, and global economic uncertainties.

“This administration is taking necessary actions that will fundamentally change the structure of the economy and how government businesses are conducted for efficiency and effectiveness,” the minister assured the nation. She said the plan would help Nigeria achieve robust development with the capacity to accelerate the attainment of various regional and global Agendas, including the AU Agenda 2063, ECOWAS Integration Agenda 2050, and the Sustainable Development Goals 2030.

At the domestic level, the plan provides for the implementation of major infrastructure and other development projects across the six geo-political zones and the opening up of opportunities for the rural areas to ensure balanced development and increased competitiveness.

Ambitious plan
The NDP 2021-2025 is nothing if not ambitious. It seeks to raise N348.1 trillion worth of investments. The three tiers of government are expected to chip in N49.7 trillion, while the private sector is expected to pull in N298.3 trillion. A breakdown of the contributions from the three tiers of government: Federal Government, N29.6 trillion, and sub-national governments, N20.1 trillion. While state governments will mobilize N13.4 trillion, local governments will provide N6.8 trillion. At a glance, this makes the contribution ratio for the federal, state, and local governments a ponderous 59:27:14, reflecting the responsibility levels each is expected to bear.

This level of resource-pooling, it is hoped, will enable the government to raise Nigeria’s per capita income from the current unflattering estimate of $2,227 to $3,706 at the end of the plan period in 2025.

Other numbers and outcomes are equally optimistic. The unemployment rate, currently at an uncomfortable 33 percent, is expected to slide down to 22.78 percent as the country’s labour force, growing at a modest 1.25 percent, soars to 70.49 million. All this means that an average of 6.98 million persons will be pulled out of poverty annually, as 4.2 million new jobs are created each year.

Talking of the Medium Term Expenditure Framework (MTEF), Minister Ahmed disclosed that the fiscal authorities assumed that from 2023 to 2025 crude oil prices will be at $70 bpd for 2023, $66 for 2024, and $62 for 2025. Crude production is projected to be 1.69million bpd for 2023 and 1.813million for 2024 as well as 2025.

Nominal GDP, that is the size of Nigeria’s economy, will rise to N225.5trillion, with 95% of this contribution by the non-oil sector, against the oil sector’s precipitous drop to only 5%. From the 2023 projection of N225.5trillion, the administration’s policy chiefs hope to maintain a steady increase onwards to hit N280.70trillion in 2025. This is indeed ambitious. Little wonder then that the Finance Act 2021 was quickly put together to mop up as much revenues for the government through better and proactive tax administration and monitoring of the activities of all government revenue-collection agencies. (See box: Finance Act 2021 – Quick takes).

Fiscal challenges
It needs to be. Nigeria’s finances have not been as good as the people, and even the administration itself would want them. “On the issue of the Excess Crude Account, in the past four years, because of volatility in the oil market, we have not had accrual to the account,” the Minister says ruefully. The account which was set aside for emergencies has had to be drastically drawn down from $35.7 million in June, this year to a paltry $376,665 a month later in July, owing to a heavy cash crunch Nigeria has been battling with over the years. The country has also been hitting the capital market, domestic and international, to meet mounting financial obligations.

Earlier, Mrs. Ahmed was constrained to warn that all was not well with the country’s financial position. She said debt service costs in the first quarter of the year amounted to N1.94 trillion, N310 billion higher than the government’s revenues for the period.

The minister has, however, been steadfast in assuring her compatriots that there was no cause for alarm despite her revelation and its implications. She has a supporter in the International Monetary Fund’s Chief Economist and Director, Research Department, Pierre-Olivier Gourinc, who understands how low and middle-income countries like Nigeria with a small fiscal space are battling the problem of global uncertainties. Nigeria, Mrs. Ahmed insists, does not have a debt problem; rather a revenue challenge, arguing that the nation’s debt-to-GDP ratio of 34.49 percent gives it a lot more room to pile than currently on its books.

Pulling in more revenues
Having pinpointed the real nature of the problem hindering the administration from fulfilling its pledge to revamp the economy through a palpable Change (the ruling party’s buzzword) in the way the government is run, the Ministry of Finance, Budget and National Planning came up with a strategic revenue growth agenda to achieve sustainability in revenue generation. The thrust has been to build a sustainable revenue generation ecosystem by ensuring resilient and optimal performing revenue streams while applying the right incentives, safeguards, accountability, and performance management systems. The strategy is also to identify new and enhance existing revenue streams, achieve cohesion in the revenue ecosystem (people and tools), grow revenues by implementing new taxes, broadening the tax base, and enabling strategic, growth-spurring investments. It is building a revenue generation operating model that enhances collaboration, synergies, capacity-building, use of data, and meritocracy in every facet of governance.

The primary vehicle for all these lofty goals is the Presidential Revenue Monitoring and Reconciliation Committee chaired by the Director-General (DG), Budget. It comprises 16 FGN revenue-collecting and reporting agencies, which diligently reconcile and closely monitor revenues monthly to produce critical information for decision-making and produce quarterly and annual reports. The Committee works with the recent data to establish baselines, track trends, and monitor performance while the Budget Office and the Office of the Attorney General of the Federation also enforce circulars and guidelines on remittances of Operating Surpluses from Government-Owned Enterprises (GOEs / SOEs) under Executive Order #2 of 2017 on ‘Submission of Annual Budgetary Estimates by Statutory and Non-Statutory agencies.

Fiscal Reforms
Back in May 2019, Finance, Budget and National Planning Minister, Mrs Ahmed reconstituted the National Tax Policy Implementation Committee (NTPIC) under the Chairmanship of the Executive Chairman of the Federal Inland Revenue Service (FIRS) and the Comptroller-General, Nigerian Customs Service (NCS), two of the government’s biggest revenue-collecting agencies. Since then, the NTPIC has been working through a Technical Committee to review various fiscal laws.
The Federal Government has since raised revenues for socio-economic development and public sector investment through a moderate rise in value-added tax (VAT) from 5% to 7.5% (still well below the West African average of 16%); curtailed arbitrage opportunities for corporate tax evasion; reduced tax incentives for structured foreign loans; legislated excise parity for imported against locally manufactured goods (vis-à-vis the African Continental Free Trade Agreement – AfCFTA); and moderate increases in penalties for non-compliance to deter tax evasion.

The Nigerian government has accelerated fiscal consolidation by optimizing priority capital and recurrent expenditure. The government’s revenues have increased largely due to fiscal reforms and the prioritization of non-oil revenue generation. Capital spending (at least 30% of FGN Budget) has also been jacked up at the expense of recurrent spending. The gains from the ongoing fiscal reforms are being consolidated with the Treasury Single Account (TSA) implementation; Integrated Payroll and Personal Information System (IPPIS) roll-out to more ministries, departments, and agencies (MDAs); Efficiency Unit in the Federal Ministry of Finance; Fiscal sustainability plans and Bail-out loans to support the States at the sub-national level.

The Presidential Initiative on Continuous Audit is running with the Project Lighthouse to mine data on taxpayers derived from the Voluntary Assets and Income Declaration Scheme (VAIDS) Tax Amnesty Programme and the FIRS corporate tax amnesty. And, Social Inclusion is prioritised through the N500billion Social Investment Programme that has been implemented through successive budgets. What is more, Human Capital Investments have continued to be prioritized within limits of the harsh realities of increasing spending requirements as governments throw more resources at quelling resurgent security breaches in parts of the country and the fast-approaching 2023 general elections.

Competitiveness
There has been increased investment in critical infrastructure such as rail, airports, power, roads, national housing programme, etc. to build a better foundation for future growth than what was laid in the past. The Presidential Infrastructure Development Fund (PIDF) has invested over N71billion of targeted N2.5trillion in: the Lagos-Ibadan Expressway, Second Niger Bridge Project, Abuja-Kano Expressway, and Mambila Hydro-Power Project. Also put in place is the Road Infrastructure Tax Credit Scheme (RITCS). Tax Credits (TCs) incentives for private sector investment have enabled over N205billion to be pumped into scores of roads and bridges in 11 States, with Dangote Cement Plc and Nigeria LNG Ltd leading the way into privatelypowered construction and rehabilitation works.

Diversification of the economy
The government’s commitment to achieving economic diversification, as a way of addressing reliance on oil and gas receipts, has been at the heart of the economic strategies since the advent of the ERGP, which has morphed into the new National Development Plan. This medium-term development plan charted the trajectory for the economy to exit recession and return to the path of sustainable, diversified, and inclusive growth. With these reforms, the economy was able to recover and witness successive quarters of growth since exiting recession.

The NDP is ensuring that diversification of the economy is concentrated, more inclusive, and sustainable. Today, the oil sector contributes no more than 8 percent to the economy. The whole balance of 92 percent comes from the non-oil sector. However, there remains the need to deepen the diversification. This is already being done with the expansion of support for micro, small and medium-scale enterprises (MSMEs) to achieve more sustainable growth.

The economy needs to deepen its diversification to enhance the growth of alternative exports to oil and gas. Today, the oil and gas sector still earns an inordinately overwhelming chunk of the forex for the economy, thus exposing the country to different externally originating hiccups and fragilities. Forex has effects on so many things, including production costs and inflationary pressures, because of inputs that need to be brought into the country by the manufacturers.

Poverty reduction; job creation
Another major objective of the NDP is to create jobs, deepen development of the agriculture sector, and enhance food security. How is the administration going about achieving these related goals? By concentrating more on developing agri-business: Agriculture over the years had been largely subsistence until 2015, when President Buhari after taking the reins of leadership, targeted some parts of the agriculture value chain to concentrate on. In the ERGP, three crops including the staple, rice, got picked for special treatment and self-sufficiency. The President was categorical in insisting that the country’s population of over 200 million people should be able to feed itself. “We must grow what we eat and consume what we produce,” he declared.

Of course, agriculture and food security are key priorities for Nigeria’s government. Whichever government is in power must concentrate on agriculture and food security and then the improvement of the welfare of its citizens, which is the third key objective of the new NDP. The key to achieving this is already figured out through the involvement of multiple stakeholders, including federal, state, and local governments, and without prejudice to the private sector.

The steering committee was chaired by the Finance Minister and an accomplished banker from the private sector overseeing the work of 26 technical working groups spanning several states, local government representatives, youth representatives, women, people with special needs, and different spheres of businesses for both a top-down and bottom-up approach. The consultations were truly wide and arrived at a total plan budget of N348 trillion, which the committee even considered moderate, considering the enormity of the objectives envisaged

Taking into consideration the volatility of oil prices, for instance, the committee used $40 per barrel across the five years plan span because it knew that the nation could not control crude prices. It reasoned that it made sense to cut its income expectation from crude oil sales to avoid overestimating resources that would be available for the plan since crude oil was still the largest earner of forex. It worked on the plan and the need to diversify the economy to support exports as alternative sources of forex from oil and gas. So, attention was particularly paid to such sectors as agriculture and solid minerals, to harness the great potential in the mining sector and also the greater potential in the agriculture value chain.

Human capital development
The plan also took care to look into the need to raise the country’s manpower level. In every sector of the economy, committee members saw the importance of developing the skills needed in the various sectors to realise objectives. It, therefore, took capacity and skills as cross-cutting issues. Other cross-cutting issues it took an interest in were innovation and technology, particularly ICT. The whole idea was based on remedying Nigeria’s record of poor human capital development indices.

The N348 trillion was a line-by-line costing of programmes and projects in each of the five years of the plan, which comes in three volumes: the policy itself, which is the plan; the costing and the reforms that must be undertaken as well as legislations that may either be amended or made to the targets achievable. For political correctness and balance, representatives from the (then) three major political parties were invited to be part of the process. The committee did not want the plan to be labelled a ruling party initiative alone. It sought to get the buy-in of all shades of stakeholders not only in the economy but also in the polity.

Major economic headwinds
As the administration prepares to give the final push to achieve the objectives of the Change Agenda sold to the electorate in 2015 and the Next Level Agenda in 2019, analysts and commentators are assailing it with comments and criticisms they think will help it move in the general direction it set for itself. They warn that it must not be deceived by some seemingly benign macroeconomic indices the official National Bureau of Statistics and allied agencies are churning out as they have no true bearing on the discontents in political economy. For instance, an outspoken public economic analyst and former President of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf scoffs at the official 2022 GDP growth rate forecast of 3.4 percent which he says is merely cosmetic as it does not tell the true story of a crumbling economy ravaged by uncertainty and galloping inflation that recently crossed the 20 percent threshold. The economy is at a tipping point, he says, noting that when food and the cost of goods and services, such as transportation are considered, the rate easily ranges between 50 percent and 100 percent.

He echoes the fears of many Nigerians with the rhetorical question: How many countries are experiencing the type of problems airlines are facing in Nigeria when they cannot repatriate their money? They’re stuck!”

Dr. Yusuf, of course, refers to the vexatious problem of shortage of foreign exchange which has been the Achilles’ heel of this administration since the monetary authority introduced the controversial forex management strategy of “managed” multiple exchange rates. Most businesses have resorted to patronising the unofficial (black) market where rates now hover around 65 percent above the official rate of about N430 to the US dollar. The consequences are easily visible: terrible distortions and dislocations in the prices of goods and services owing to cost-push inflation; drop in industrial output and capacity utilization, etc.

What is more, lacking a stable power supply, Nigerian businesses and manufacturers are forced to power production lines with expensive, imported diesel generators. They are, therefore, made uncompetitive producers with a low output.
Hon. Olabode Ayorinde, former House of Representatives Committee chair on Economic Recession, now and Pro-chancellor Achievers University, wonders if Nigeria would not fare better without its oil reserves. “If I were God”, he says in despair, “I would let Nigeria’s oil dry up!” He, like many critics of the country’s oil management strategy, thinks successive administrations have neglected virtually all other viable sectors of the economy only to feed on the easy pickings from oil.

Major headwinds and low-hanging fruits
The consensus among analysts of all stripes is that government can turn the economy around in the short to medium term if it concentrates efforts on tackling such major headwinds impeding the nation’s progress on all fronts: oil subsidy removal, rampant oil theft, and attack on oil installations; reduction of what might cascade into unsustainable debt; poor foreign exchange management; and chronic insecurity of life and property.

Oil subsidy politics
Of all the inconsistencies and flip-flop the Buhari administration is accused of, its recent walk back on the removal of subsidy in 2022 is the most outrageous and incomprehensible. When the President launched the 2022 budget with fanfare last year, many commentators were relieved that a provision for fuel subsidy was not included. More reassuring, the long-delayed Petroleum Industry Act was signed into law and it recommended that the subsidy would be done away with, and why not?

The latest figures from the Nigerian National Petroleum Corporation (NNPC) which recently transformed into a public limited liability company, now known as the Nigerian National Petroleum Company Limited (NNPCL), indicate a national consumption of 66.8 million litres per day on which government spends an insane N40.I billion in subsidies every single day. At this rate, Bismarck Rewane, Chief Executive Officer of Financial Derivative Company, reckons that the country’s subsidy bill for this year, estimated to hit $15.7 billion would exceed the total expenditure of all 36 states of the federation in 2021which came in at the equivalent of $9.8billion.

More than half of the N11 trillion budget deficit projected for the 2023 financial year will be swallowed by subsidy payments which virtually every Nigerian, to say nothing of international observers and multi-lateral finance institutions, are convinced are opaque and fraught with unspeakable corruption. Up to this day, no one understands or can give coherent reasons for the Buhari administration’s decision to back down on its pledge to end oil subsidy payments and kick the fetid can over to the next administration.

Director-General of the budget office, Ben Akabueze, is as blank and nonplussed at the policy flip-flop as the man in the street. He says if the government carries on with the profligate subsidy, it will end up approaching the IMF for assistance to the chagrin of most Nigerians. He, however, says the country is “not there yet”, with a wistful hope that the nation, caught up in a deep hole, “would stop digging”.

The feeling is that the fiscal authorities are figuring out a way to stop digging by reducing deficits and taking up more efficient spending measures. To tackle the perennial problem of oil theft and oil installation vandals, the government recently awarded a controversial multi-billion dollar oil installation security contract to Mr. Government Ekpemupolo aka Tompolo, a former Niger Delta insurgent. The justification is that the ex-militant is well placed to secure the region, whose people and dark spots he is familiar with.

Pulling in more foreign exchange
While the foreign exchange management in the economy is technically within the Central Bank of Nigeria’s remit, the Ministry of Finance is keenly interested in what happens in the foreign exchange market since its operations have telling repercussions on the economy at large.

Fiscal and monetary policies are so intricately intertwined that the Ministry has had to accommodate the monetary authorities’ several incursions on its turf through the so-called interventions in the economy. It is therefore not surprising that the Ministry of Finance has been working in tandem with the Bank to ease the bottlenecks in foreign exchange administration and the market. For instance, the Ministry collaborated with the Bank on the implementation of the policy to shut out importers of certain goods from the weekly official foreign exchange market.

The Ministry is also fully participating in the Race to $200 billion (RT200 FX) scheme, which the Bank hopes will attract $20 billion in foreign exchange repatriation from non-oil export proceeds over the next five years. The Ministry comes up with the government’s economic and financial plans and targets, which the Bank keys into initiatives designed to boost monetary policy effectiveness and the ultimate goal of price and financial system stability. Both the fiscal and monetary authorities know that the country’s economy must have adequate forex reserves to satisfy local manufacturers’ demand for raw materials, equipment, and tools for their industries, to say nothing of foreign investors’ profit repatriation.

Insecurity: bringing back the peace
As one presidential candidate in the upcoming 2023 general elections declared on the hustings, Nigeria’s lingering insecurity challenge that has all but paralyzed business and travel in over half its territory “is the big elephant in the room”.
In 2009, Nigeria’s longest-lasting Islamic terror group under the banner of Boko Haram burst into international attention when it started terrorizing people in the North Eastern region. It declared the region an Islamic enclave and pronounced all things Western, including formal education anathema.

Since then, the group has remained lodged in the government’s throat, refusing to budge, its influence and territorial ambition growing and ebbing as successive government efforts and success at crushing it yo-yos in tune with each administration’s political will. The insurgency has spread to cover the entire swathe of the Northern Nigeria, with copy-cat organisations and criminal elements engaged in banditry and kidnapping taking advantage of the inability of the government to quell the insurgency or their dangerous fundamentalist philosophy.

Down South, economic agitations in the oil-bearing Niger Delta have morphed into separatist movements in the Eastern region, further exacerbating the nation’s insurgency woes.

It is virtually impossible to get accurate numbers on the economy’s loss to insurgency since the Islamists started torching public infrastructure and homes in the North East. Assigning figures to the losses sustained by the economy is an exercise in futility. Millions of productive Nigerians have been made destitute and forced to live in refugee camps across the country; the impact on the economy is simply incalculable, spanning losses to all sectors too big and complex to fathom.
President Buhari, unarguably, won his two-term mandate to rule Nigeria largely on his pledge to curb insecurity. Less than a year to his exit, his administration is still hobbled by the flickering flame of insurgency nationwide. “I am living daily with the grief and worry for all those victims and prisoners of terrorism and kidnapping,” he said plaintively, in his address to the nation on June 12, at this year’s Democracy Day celebrations. This is nothing compared to the tens of billions of dollars in GDP, economic pundits reckon to have been blown away in the violent whirlwinds of insurgency.

Redefining the economy
But all hope is not lost. At the 58th anniversary of the Nigerian Air Force held in Kano, the President had been unequivocal in his commitment to finding a lasting solution. “This government will not rest until peace and security are fully restored to our nation”. He went on to announce a slew of initiatives, including the acquisition of military hardware to enable the armed forces to deal with security challenges just as the fiscal and monetary authorities are being mobilized and incentivized to deal with the discontents in the economy.

All said, the administration can only do so much as the county’s 200 million-plus denizens are sucked into the frenzy of politics and electioneering. The future of Africa’s largest country and economy will be redefined in the coming months.

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