Turning the Tide: Resetting Nigeria’s Economy, Post Covid-19

Covid 19 economy Nigeria
Image by Gerd Altmann from Pixabay

Covid 19 has become an enlightening and an unusual event.  What is incontrovertible is that there is a huge gulf, a chasm of indescribable proportion between the “Governors” and we the “governed”. Covid 19 has proven that. For one, the response from those in government was to lock everybody down, with the poor, locked out of corona virus, hopefully, but locked in with hunger. On the contrary, they (those in government who were not corona negative) stayed inside their gated houses with well stocked “barns”- fridges filled to the brim with products to last a year, possibly, and their bank accounts stuffed up. So much for leadership, at a time of crisis. The language was that the poor and the daily income earners may figure out how to come out of the deadly trap of corona virus.

And with the lockdown about to be lifted the government and the rich are baring their fangs. The Federal Government is bent on revisiting the long forgotten “ORONSAYE REPORT” otherwise called, “2012 Presidential Committee on Reform of Government Agencies Report”, as if it never ever mattered, then, when it was just released. Banks are downsizing, State Governors are taking pay cuts, while State Governments are looking at percentage slashing of salaries. It is all in reaction to the Covid – 19 global impact on a slack on oil demand, as well as a significant drop in global trade and demands. It is all too late and too little now. Those in Governments want to retain their high horse positions while cutting loose the poor and very vulnerable. I hope they know fully well, what is unleashing – social instability, social unrest and intensified criminality. I hope they can withstand what could become apocalyptic.

A sensible government in a post Covid 19 epoch would look were discerningly at the structure of the economy and address its more critical segments – the informal segment rather than the hitherto overemphasized and over attended, so called, “formal sector”. Whether those in government would love to admit it or not, real statistics would show why the informal sector has to be addressed frontally now. An attempt by the Federal Government to provide palliatives to 3.6 million households in a population of 200 million, with over 100 million poor is merely to make itself a laughing stock. It was a futile attempt of solving a difficult problem. The people on the informal sector, if aided to structure their individual and group economies, they would be in a better position to sort themselves out in moments of crisis and going forward. And also, they would be in a better position to contribute to the economy by providing more employment though hires and paying taxes, a quantum that can be available far beyond what the Governments gather for now.

There is a seeming relief in the horizon, if the Federal Government can be believed. The Federal Government, the Vice President, Professor Yemi Osinbajo, said in a recent virtual Conference, is looking beyond its conditional cash transfer program to tackling poverty challenge by providing support for the informal sector through financial support. But like Simon Kolawole added, it is hoped that beyond financial support, there should be a discouragement of draconian and extortionist policies by government agencies.

The need to pay frontal attention to the informal sector is borne out of these cold facts. Nigeria’s informal markets or sectors of the economy eclipses the formal economy in size and significance. In 2014 for example, AfDB Chief Economist, Mthuli Ncube  in assessing the sub Saharan African informal sector said, it accounted roughly 55 percent of economic activity, and 80% of its labour force. In Nigeria, the percentages could be slightly higher. And therefore, with a little fillip, the informal sector, could better account for and add to Nigeria’s GDP. Agreed for now, that the sector is much disconnected from banking services, accountants, and much of today’s I.T and enterprise technology, these are much the reasons, a Government that can acknowledge the potentials of such a sector and  realizing that it is that odd disconnect that has enabled the overall economy from not collapsing, would use any facilitation to formalize the informal sector and thereby bring about the most profound change and increased opportunities in transforming the economy, post Covid-19. And now with so many persons, likely to lose their employments in the formal sector, the only fallback position and safe bet is that, the majority would be drifting into that “neglected sector”. In any case, an invigorated informal sector could rebound to create enormous impact and demand in the “formal” sector. What is the secret of America’s or Germany’s resilient economies? It is their capitalization and numbers and the variety of their small scale enterprises.

If Nigeria’s leadership is any attentive, this is where the new “palliatives” should be headed; into the small holdings, small innovative ideas, the homesteads and cottage industries. This should be the new drive to sustain the millions of those losing their formal jobs, those in search for employments as well as those who have tenuously held on to their individual and self-enterprise holdings. Every one of those enterprises needs a shot in the arm for financial injections.

This should be the concerns of those humongous loans that the Buhari admin  keeps having a penchant for, for unending borrowings. This is where the IMF $3.4 BILLION BAILOUT financing and the N8.9billion Germany’s debt relief should be directed at majorly keeping the informal sector afloat would ensure the economy is not bankrupt and that no one would ever be in such dire straits as to contemplate suicide or such extreme thoughts.

We have for years been banging on Aso Rock door for a revisiting of the 2014 Confab Report and a “Restructuring” of Nigeria without any answer. The oil fueled binge and reckless spending over the years is all over. Forced restructuring and new regional mergers are on the horizon.

I could suggest a new possibility, social mobility. Since religion and ethnicity have for long rejected that Nigerians can live and be domiciled anywhere, the impending “starvation and doom” would force a new wave of migration, such that skills would move out in search for expression and fulfillment, anywhere the soil is fertile. At that point, a skill in Sokoto may find solace in Rivers State, and an Edo skill may find comfort and residency in Taraba State. At that point, national integration and unity that we have been preaching vainly for years, may become a sheer necessity of survival. So there is blessings of sorts behind the global economic contraction, or oil downturn, – the only mono-resource that has survived us but is now as near worthless as can be due to the impact of Covid-19.

Finally, we may need to rethink how an economy should look like and work. We have had an exogenous dual economy model foisted on us by colonialism and globalization. We may now have to deal realistically with our socio-economic condition. Perhaps a way out could be to revert the Nigerian nation to where Europe was in the 17th Century, which in any case is where, in time scale, is where we really are. We may now then have to ask ourselves the hard questions, developed economies had to address then – how do we make an economy? How do we have everyone engaged? How do we collectively progress? What are the obstacles for now? How do we deal with challenges going forward? What is and how do nations progress?

We have never collectively asked ourselves these critical questions. We must go back to the ab initio questions. We have been on a false start and route. The Vice President’s panel on getting the economy to work, post Covid 19 is not on the right track, I can assure everyone and can never dig us out of the hole. The perspectives from inside the Aso Villa is like a vision in a house of a thousand mirrors – all illusionary and false, as by tradition, it is the formal and public sector that would be their major focus; all about a political class self- preservation. We must ask the hard questions, otherwise, Nigeria, without getting down to the basics of reformatting the economy and addressing issues of greater concern to the poor and vulnerable, who dwell in the informal sector, could break to pieces, without a whimper, and the world will not miss us.

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Image by Gerd Altmann from Pixabay

Written by
Tony Abolo
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