Still on GDP data and realities facing Nigerians, by Adekunle Adekoya
OUR government, especially the one in office now, is fond of reeling out data, particularly data from multilateral institutions and global rating agencies to justify their performance in office. As you may know, government officials have been throwing macro-economic data at us to show that they they have been working in our interest. As if people eat data.
The latest in this regard is data about re-basing the country’s Gross Domestic Product, or GDP. The re-basing has generated a figure of N372.8 trillion as the overall value of the Nigerian economy. In fact, Minister of State for Industry, John Owan Enoh spoke during the week on this, and averred that the country has the challenge of translating the country’s N372.8 trillion re-based economy into higher manufacturing output, jobs and value addition, warning that a bigger economy on paper means little without stronger industrial capacity.
“The rebasing made Nigeria statistically larger. It did not make Nigeria more industrial. We got a bigger mirror; we did not yet get a stronger body,” Enoh stated.
That seems the closest thing to a truth that a top government official has said. Truth is, government has a challenge, and this challenge has a lot to do with the policies preferred by the president, which are generating more challenges for government and the governed.
I do not want to believe that people in government do not know that the single most potent driver of inflation in Nigeria today is cost of fuel energy. Whenever the pump prices of petrol and diesel rise, prices of food and other commodities needed in daily life and living rise after them.
Earlier in the week, the Chartered Institute of Bankers of Nigeria, CIBN, held the 19th Annual Banking and Finance Conference in Abuja. At the event, President/Chairman of the institute’s council, Dr. Dele Alabi said that the country’s improving macroeconomic indicators will amount to little if they failed to translate into lower living costs, more jobs, higher incomes and better living standards for citizens.
I surmise that Alabi’s assertions were in response to the many statements made by top government officials, including the president, that the economic indicators show a trajectory to recovery. Good for government, but not so good on the side of the people; purchasing power is at its lowest ebb, while disposable income has completely vanished. Every naira has something attached to it, and there is never enough, except for those in politics.
Many economic experts had said repeatedly that though the nation’s economy is stabilising and witnessing growth, it is not reflecting in the lives of the people currently facing harsh economic conditions.
The CIBN President said in reaction to these figures about the GDP that “they are milestones, not the destination. The true test is whether stronger fundamentals translate into lower living costs, more jobs, higher real incomes, affordable credit, reliable public services and reduced poverty.
“Macroeconomic progress must, therefore, be felt at the micro level in households, small businesses and the daily lives of ordinary Nigerians. Our task is to build systems that learn, adapt and emerge stronger.”
The CIBN boss couldn’t have said it better. It is pointless, and indeed, a road show meant for the World Bank/IMF and the global rating agencies to continue talking about rising GDP growth data and re-based GDP value at a time when the fundamentals staring Nigerians in the face indicate that things are really pointing south.
Back to the issue of rising fuel energy prices, petrol for instance has remained in the N1,300 range for the better part of two weeks. With another uptick in the price of crude oil in the international market on Wednesday, prices are set to rise higher. As a result of crisis in the Middle-East involving the US/Israel against Iran, crude prices surged past $100 per barrel. If that price rally is sustained, it looks we are heading towards buying one litre of petrol at N1,500. The implication of that on the price of food items is better imagined than said.
The issue for me, and for most Nigerians right now, I think, is for government to find a creative, sustainable way of managing market forces to the advantage of the hapless Nigerian. The unwillingness of government to do this is what has gingered the opposition into calling for a return to subsidy. I do not think that subsidy as operated before May 29, 2023 should return. But subsidy should return in other ways. One of them is to deliberately sell crude to local refiners below international price, and in NAIRA. That should be supported by a revised pricing template. The one currently in use favours imported petrol and diesel rather than locally-refined. If just these two are done, I think we can buy petrol for about N650. But will vested interests allow these? TGIF.
The post Still on GDP data and realities facing Nigerians, by Adekunle Adekoya appeared first on Vanguard News.