From the Presidency, to Finance Minister Okonjo Iweala, up to the least in hierarchy of this regime, there has been ongoing murmuring about the economic tsunami that is fast approaching. Nigerians seem not to be too bothered about this inaudible cry of the regime; it has been a case of Government just crying to itself. This apathy of the people might prove catastrophic when this economic disaster eventually hits, because it is not a mere rumour mongering of the regime, incoming economic disaster is real and it demands that we adequately prepare.
The situation is moving at lightning speed on a world scale. After the Arab Revolution, events followed in quick succession: the movement of the indignados in Spain; the wave of strikes and demonstrations in Greece; the riots in Britain; the movement in Wisconsin and the Occupy movement in the U.S.; the overthrow of Gaddafi; the fall of Papandreou and Berlusconi; all these are symptoms of the present epoch. (See Perspectives for world capitalism 2012 (Draft discussion document) – Part One); and, if we may add, there was the magnificent movement of millions of Nigerian masses in January of this year.
These sudden sharp turns indicate that something fundamental have changed in the entire situation. Events are beginning to impinge upon the consciousness of ever-broader layers of the population. The ruling class is increasingly divided and disoriented by the depth of a crisis they never expected and have no idea how to solve. Suddenly, they find themselves unable to maintain control of society by the old methods. This description succinctly captures the current Nigerian situation.
Although the Nigerian economy has been officially growing at over 6% for the past 5 years, the poverty rate keeps increasing; youth unemployment has risen to an unprecedented 47% and over 80 per cent of Nigerian youth don’t have more than a secondary school certificate.
Infrastructure is collapsing with power generation hovering between 1,000 to 3,500 mega-watts, when Nigeria actually needs over 75,000 mega-watts to power its size. Out of over 160,000 kilometres of secondary and tertiary roads in Nigeria, with an average registered network of 4,000 kilometres per state, only about 10–15 per cent is paved. While a large proportion of this network remains in poor or very poor condition with only 15 per cent of federal roads in good condition.
In 2005, during the tenure of Obasanjo with Okonjo Iweala as Finance minister, Nigeria paid a whopping sum of 12 Billion dollars to buy back 18 Billion dollars debt owed Paris club. This prepared the ground for Nigeria to completely pay off its debt by April 2006 and made her first African country to fully pay off its debt (estimated at $30 billion) owed to the Paris Club. This “exit” from debt trap was celebrated both nationally and internationally; the celebration alone was estimated to gulp 2.4Billion Naira.
This further confirmed the subservience nature of Nigerian ruling elites to their foreign masters in the west. This 12Billion Dollars would have gone a long way in solving many infrastructural challenges, the health, education and power would have positively benefitted immensely from this windfall, but those become completely unimportant when the interest of Nigerian ruling class or their masters are involved. Despite the fact that, over 35Billion dollars already paid in interest and the destination of this debt cannot be rationally traced, yet it was still the priority of thieving gangsters to dole out such a huge amount, under a dubious buy back deal.
On Wednesday, 15th December 2010, Nigerian President Goodluck Jonathan presented the 2011 budget for the approval of the National Assembly. The budget has been nicknamed “budget of consolidation”. The nickname, is a source of concern for every thinking Nigerian. For, what are we consolidating?
Recently the world’s central bankers gathered in Jackson Hole, Wyoming for their annual meeting. Having experienced the biggest banking crisis in history, there was a sense of relief at having avoided a complete collapse. The talk now was of the dust settling. Ben Bernanke, chairman of the US Federal Reserve, despite saying a month earlier that the outlook was “unusually uncertain”, said he was now “confident”. But such confidence is very much misplaced. With the world economy facing at best a painful recovery, and slow anaemic growth, the world’s bankers are deeply troubled as to what steps to take next.
Wednesday, 28 March 2007
Nigeria has never had it so good, at least that is what the economic strategists of this regime say. Nigeria economy has been growing at an impressive rate of 6.5% since 2003 as against 2.8% in the 1990s, (how reliable this figure is, is another question) the inflation rate has dropped from 26% to 9% (December 2006), and the Naira has now appreciated against international currencies. Foreign reserves have grown from $4 billion in 1999 to $43.5 billion as at December 2006, even after paying $14 billion to the Paris and London club. This regime has also celebrated a huge debt relief of $33 billion from Paris and London club.
According to their figures - and only their figures using their own formulae - the unemployment rate has declined from 18% in the 1990s to 5.3% in 2006. Even more laughable is the figure on the percentage of the population living below the poverty line, which according to them moved down from 70% in the 1990s to 54% in 2004, while the figure for 2005-2006 has to be kept from the public for "strategic reasons".
Capital inflow has been doubling every two years and stood at about $4 billion in 2006. Suffice it to say, that the budget has always been based on the price of oil at $40 since 2003, whereas the price in the market has been between $67-$71 for the larger part of the period in consideration, and this fact the Nigerian ruling class always leaves out of its analysis.
The reality of the Nigerian situation
71% of Nigerian workforce engages in Agriculture. Over 90% of Nigeria’s Agricultural output comes from peasant farmers who dwell in remote rural areas where 60% of 150 Million of total population lives. Agricultural landholdings is generally small and scattered, average number of farm plots per household ranges between 2 and 28 plots increasing from South to North. Nigeria cultivates over 25 Millions hectares of land for various food crops.
Despite all these obviously abundant human and natural resources, Nigeria is still unable to feed her citizens. Nigeria produces only 500,000 tonnes of rice while the annual consumption is 2.5 million tones. Nigeria is the world's second-largest rice importer after Singapore. Before now, Nigeria spent over $350 Million on rice importation alone. Now there is a global food crisis; can Nigeria ruling class turns things round overnight?
Nothing can be truer than the graphic description of the present economic mess, as described by Mick Brooks on “World economy in crisis - The financial panic: where are we now?” of 23 of January, 2008, as published on www.marxist .com, he said and I quote:
“The upswing since 2001 has been one of the most lopsided in the history of capitalism. It has been powered by the American consumer, referred to by some economists as ‘the consumer of last resort,' so important are they conceived to be to the functioning of the world economy. Though comprising less than 5% of the world's people American consumers' demand has been responsible for an incredible 19% of the growth of the world economy in recent years. How is this possible? After all American workers' incomes (and most American consumers have to work for a living) have not risen in real terms for three decades. Yet they have more money in their pockets to spend, and to buoy up a world economy of six billion souls in the process. The answer to this question is because of what is called the wealth effect. House prices have been going up so Americans have felt richer. Consumers have been able to borrow against the rising value of their houses. In effect they have been using their homes as ATMs, spending like there's no tomorrow. Now tomorrow has arrived.”