In this piece, EHIME ALEX writes that the growing seed of separatism and insecurity are choking Nigeria’s ailing economy
The Nigerian economy is likely to grow by 1.8 per cent in 2021, to be buoyed by rise in oil exports and domestic demand. However, the expected recovery from the Coronavirus Disease crisis is facing heightened socio-political and economic headwinds.
The country’s economy shrank to a record low by 1.8 per cent in 2020, since 1983, following the global economic disruption caused by the pandemic. As a result, the economy was marked by capital outflows, intensified risk aversion, low oil prices, and shrinking foreign remittances.
For the first time since August 2019, the Nigerian headline inflation dropped to 18.12 per cent in April 2021, to halt a 20-month successive rise, the National Bureau of Statistics reported in its April inflationary data.
In a recent conversation, the former Director-General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, noted, “Inflation is, perhaps, the biggest poverty accelerator because of the weakening of purchasing power. It weakens real income, erodes purchasing power, puts pressure on operating costs, aggravates production costs, reduces sales and negatively impacts profit margins across sectors.”
Also, Nigeria’s food security has suffered from the displacement of farmers due to persistent conflicts in northern food-producing states. While the food index was high by 22.72 per cent in April 2021, it, however, dropped to 22.28 per cent in June.
According to the Debt Management Office, Nigeria’s public debt stock widened by 0.58 per cent to N33.11tn ($87.24bn) in the first quarter of 2021, compared to N32.92tn in Q4 2020.
Amid the mounting economic headwinds, the country is further pressured by social and political disorders. Obviously, the activities of separatist movements in the country leave strain on the nation’s economy. Agitation for secession did not start today, as it started even before the Nigerian civil war between 1967 and 1970.
Occasioned by loss of confidence in the nation’s politics and economic exclusion from the commonwealth of Nigeria, the Indigenous People of Biafra and the recent agitation for a Yoruba nation further create an overwhelming burden on the economy.
March 2021 witnessed the blockage of food supply from the northern part of Nigeria to the south, exposing the flaw in food production, processing and marketing in the country, and the need to strengthen the nation’s agriculture sector in all the regions.
The North-based Amalgamated Union of Foodstuff and Cattle Dealers of Nigeria had blocked movement of food items to the south, in protest against the alleged killing of its members and destruction of their property during the #EndSARS protests and the Shasha, Ogun State, market crisis.
In a recent gathering organised by the Department of Economics, McPherson University, the Special Adviser to the Oyo State Governor on Economic Affairs, Prof Musibau Babatunde, speaking on a paper entitled ‘Disintegration in Nigeria: The Economic implications’ urged the Nigerian government to focus on building the country’s economy to stop the agitation for the balkanisation of the country.
His words, “The outcome of these negotiations and the uncertainty they bring will have severe economic implication for all the regions. The 2019 Annual States Viability Index by Economic Confidential showed that only six states of the federation were economically viable, including Lagos, Ogun, Rivers, Kwara, Kaduna and Enugu.
“If you break as a region, you have to set up your own monetary fiscal policy, immigration law, exchange rate and create your own currency as well as security system; all these will affect the provision of social amenities for the people.
“Secession often has significant transition costs; that is, setting up a new government and dismantling the old regime, and this is often an expensive process. The Nigerian civil war between 1967 and 1970 is a reference point.”
Babatunde suggested that in other to address the challenges of disintegration from the different secessionist groups, the government should adopt the multi-faceted approach of effective distribution of the surplus and fairness, and that equity must prevail in the society for the sake of keeping the regions together, given the huge economic cost of disintegration and restructuring.
“A democracy with strong institutions would be able to produce the essential elements of a fully democratic government through proper separation of powers, thereby enabling a system which allows for checks and balances of the various arms of government,” he added.
