Nigerias Growth and Economic Experience - Essay Example

? Nigeria’s Growth and Economic Experience s Submitted by s: Introduction Nigeria has a vast of rich resources, the valued of them all being oil wealth. The country achieved political independence in 1960 and though it was expected to have vast influence thanks to the oil wealth, this has not come to pass.it is the social and class fractionalisation, instability, mass poverty, class conflicts and antagonism, foreign domination and exploitation, the increasing vulnerability in every hostile global system that contextualises the inability of the country to promote development (Ihonvbere and Mbaku, 2003). Further, the predominant issue in post-independent Nigeria has been how to maintain political stability and an attempt to manage economic development, (Falola and PaddockBottom of Form , 2011; Mbaku, Ihonvbere and Association of Third World Studies (U.S.), 1998) Nigeria’s brief history In the wake of political uprisings and pivotal movements in Nigeria in the year 1999, the country show remarkable struggle with formidable challenges of political reform against a background of economic malaise and social violence. The country embarked on tenure of democratic change through repeated elections and competitive political structures set in place. However, the new institutions are weak and inchoate, political allies appear divided and self-serving, popular legitimacy is fragile at best and these fledging regimes face numerous challenges including detrimental economic conditions, (Lewis, 2007). The economy had a detrimental decline due to slow growth, joblessness; slack investment, institutional disarray and fitful policy changes. These pressures have contributed to mounting trends of ethnic, religious and local conflicts. Economic outlook A critical look at poverty measurements shows a grim picture. Statistics focus on just 0.2 per cent of GDP on health care and 0.7 per cent on education. This allocation of the Gross Domestic product did not favour over 69 per cent of the population as it left them living below the poverty line. Development indices and a closer look at the social sector places Nigeria the seventh largest exporter of oil but on the other hand the poorest countries in terms of human development. Poverty in Nigeria can be attributed to a shortage of vital resources and the endurance of harsh and inhospitable conditions including the breakdown of economic, demographic, ecological, cultural and social systems and bad governance. A community living in the oil producing areas in south of Nigeria displaced by pollution or the migration from rural to urban areas which undermines infrastructural facilities is a good example. A publication courtesy of the UNDP categorised Nigeria as one of the poorest countries in the world. Moreover, there also came a report of the central bank of Nigeria reporting 69.2 per cent of the population being poor. Proportionally this statistics will conclude that two thirds of the Nigerian population are experiencing income poverty. As well in the remote areas of the country, to be specific those in the north east felt that 50 per cent of them were poor and the corresponding figure for the south east was 54.5 per cent (United Nations Development Programme (UNDP), 2009). The poverty gaps are widening and a greater proportion of the wealth is being concentrated in the hands of the wealthiest 20 percent.it is thought that the highest income earning statues is enjoyed by just 10 per cent of the population who have a 31.4 per cent share of the total national income. Nearly 50 per cent of the total income is owned by the twenty per cent of the highest income earning group. Only an insignificant ten per cent of the national income is owned by an estimated 20 per cent of the poorest portion of the population. Reports done by organisations such as UNDP highlights how the poor in Nigeria experience and understand their poverty as quoted by (Pyke and Ali-Akpajiak, 2003). This is so despite the fact that Nigeria’s average growth rate between 2003 and 2006 was at the rate of 7 per cent, close to what was reported in neighbouring countries such as Botswana back in the 1990 (United Nations Development Programme, 2006).. Nigeria’s average per capita income growth compares favourably with the world average during the 2001 – 2006 periods but as well below the world average during the 1960 – 2000 periods (International Monetary Fund 2005). Foreign Integration Across the period 2001 to 2006, Nigeria has sustained commodity export boom as exemplified by skyrocketing oil prices. In the new millennium, leadership was a main cause of a reported exemplary performance. This was as a result of the implementation of sound economic policies (Brady, Spence and Commission on Growth and Development, 2010). Good governance and institution building have also been part of the Nigerian success story. Obasanjo architected a fiscal rule, the main aim being to delink the public expenditures from oil revenue earning. As a result, the domestic economy was insulated from international transmitted business cycles. Institutionalisation of this will be by passing a fiscal responsibility act. Reforms in this area followed such as establishment of a due process mechanism for public procurement and the adoption of extractive industries transparency initiative as a means of promoting transparency in the oil and gas sector. Two anticorruption agencies, The Independent Corruption Practices and other Related Offences Commission and the Economic and Financial Crimes Commission were established to promote accountability and governance. Back then, Abacha’s government like previous government paid significant attention to international economic bodies such as the World Bank in dealing with Nigeria’s international debt situation. In other circumstances however, Nigeria differed with views from industrialised countries. An example is a meeting held in Abuja, 1995 to select a new president for the African development bank. According to Inamete (2001), Nigeria made a bid to stop efforts of the industrialised western countries to increase their influence and the role in the bank. The New York Times On Friday May 26th 1995 reported this news. Interest was generated among policy elites. They converged through conferences and workshops to explore ways of enabling The Economic Community of West African States to reach its full potential. As a result, member states which include Nigeria would be at a better place to improve economic conditions through improved regional economic integration. Conclusion Nigeria addressed the problem of food shortages back in the early 1980s, a military government led by Olesegun Obasanjo having launched an initiative dubbed “Operation Feed the Nation”. Further the campaign was continued under the green revolution which had the main aim of diverting the Nigerians to grow food. Migration of the unemployed urban dwellers started as they headed to the rural for the purpose of growing food crops. Fertilizers and loans were given to farmers and this improved the food situation further, though Nigeria still imports food. Back in the 1970s, an oil boom helped the nation to rapidly recover from civil war as well as become a catalyst to industrialisation. There was further shortage of labour and migration to the urban areas occurred once again. The economy was as well severely depressed due to mismanagement and corruption, this made the crude oil prices fall. Unemployment rate in the urban areas rose to 28 per cent, increasing crime. The country is currently overwhelmed by the high cost of doing business which taking a toll on both tourism and investment. Unemployed university graduates as at 2000 ranged from 30 to 40 per cent. Though the country has its own share of problems, external investors have the capacity to contribute positively to its share of long-term investment through joint ventures. A huge beneficiary as an asset is the current high price of crude oil. Proper management and governance has the potential of sustaining Nigeria’s development and prosperity in this century and far beyond. Reference lists Pyke, T. And Ali-Akpajiak, S. C. 2003. Measuring poverty in Nigeria. Oxford: Oxfam GB. Brady, D. W., Spence, M., and Commission on Growth and Development (2010). Leadership and growth. Washington, DC: World Bank. Falola, T., and Paddock, A. 2011. Environment and economics in Nigeria. New York: Routledge. Inamete, U. B. 2001. Foreign policy decision-making in Nigeria. Selinsgrove, PA: Susquehanna University Press. International Monetary Fund, I. 2005. Nigeria: Poverty Reduction Strategy Paper - National Economic Empowerment and Development Strategy. International Monetary Fund. Lewis, P. 2007. Growing apart: Oil, politics, and economic change in Indonesia and Nigeria. Ann Arbor: University of Michigan Press. Ihonvbere, J. O and Mbaku, J. M. 2003. The transition to democratic governance in Africa: The continuing struggle. . Praeger: Westport,. Mbaku, J. M., Ihonvbere, J. O., and Association of Third World Studies (U.S.) 1998. Multi-party democracy and political change: Constraints to democratization in Africa. Aldershot: Ashgate. “United Nations Development Programme (UNDP)”, 2009. Human Development Report Nigeria 2008 - 2009 Achieving growth with equity. Retrieved November 5, 2013, from http://www.ng.undp.org/documents/NHDR2009/NHDR_MAIN-REPORT_2008-2009.pdf United Nations Development Programme 2006, November 5. Niger Delta Human Development Report. Retrieved November 5, 2013, from http://www.ng.undp.org/publications/nigeria-delta-hdr.pdf Read More