Economy Expert, Prof Ndubisi Ifeanyi Nwokoma Says “Nigeria’s Economic Growth Is A Paradox.”

Ndubisi Ifeanyi Nwokoma is Professor of Economics and Head of the Department of Economics, University of Lagos.  He is a Fellow, Chartered Institute of Stockbrokers. Until recently, he worked at the United Nations Economic Commission for Africa, Addis Ababa , Ethiopia, as Chief of Financing, Industry and Investment in the Economic Development and NEPAD Division on a Leave of Absence from the University between 2010 and 2012. He also worked with Nigerian Stock Exchange, Lagos as the Special Assistant to the Director General/Chief Executive Officer.

He has a PhD Economics degree from University of Ibadan, with specialisation in macro econometric modeling and policy analysis. He participated actively in the construction and maintenance of econometric models for the Federal Government under the auspices of the Center for Econometric and Allied Research, CEAR, University of Ibadan. He speaks on the need for President Goodluck Jonathan to adopt the techniques of inclusive growth to enhance rapid economic transformation and sustainable development. Excerpt:

The Federal Government has said that the economy is growing at 7 per cent. As an economic expert, will you say Nigeria is doing well in the second quarter of 2013, considering that the rate of poverty currently stands at 70 per cent?

I will say yes and no. First, let me start with yes. The indicators at the macro level shows that government is doing well in some areas. For instance, in term of foreign reserve, the government is recording positive increase because we have a good foreign reserve, which is needed to cushion our transactions with the world. Currently, Nigerian foreign reserve is estimated at the monetary value of about N$40billion. This reserve helps to provide a cushion for the country’s international trade and other transactions. Aside from a robust foreign reserve, the growth rate of the economy stands at about seven percent, which is quite high and among the fastest growing in the world.

Nigeria also has a robust banking sector that has been cleaned up through various reforms to sustain the real sector of the economy by giving loans to the entrepreneurs. At present, Nigeria ’s foreign debt is at a manageable level because the country is not heavily indebted with foreign loans. When talking about foreign debt relief, we must acknowledge the effort of the Finance Minister, Dr. Ngozi Okonjo-Iweala, who worked hard for the debt relief, years ago.

The Telecommunication sector is doing relatively well and it is among the fastest growing in the world. This has paved the way for e-payments and electronic transactions across the country, which is quite good for our economy. For example, the cashless policy of the Central Bank of Nigeria (CBN) is thriving in some states of the Federation due to improved telecommunication services in the country. Also, there is positive outlook in the oil and gas sector of the economy, which is our major source of revenue at the moment. So, these are the areas I can say yes the economy is doing relatively well.

Now, coming to the side of no. I said no, because there are a lot of issues to be addressed in terms of growth at the micro level.  For instance, the high rate of economic growth at about seven percent has not helped to reduce the rising rate of unemployment in the country, at least, not as expected. What we have now is like a jobless economic growth situation. The poverty rate is also very high. Unemployment in the country is at the crisis level already. We are currently facing challenges of poor infrastructure as well as an unending crisis in the power sector, which has affected the entire economy with the multiplier effect seen in virtually every sector of the economy. What I am saying in essence is that, the existence of high growth rate, high unemployment and high poverty rate is a kind of paradox in the economy. At the macro level we are doing well but down the lane, we are not doing well because the growth rate has not reflected in reducing the high rate of poverty and unemployment in the economy.

You participated actively in the construction and maintenance of econometric models for the Federal Government under the auspices of the Center for Econometric and Allied Research CEAR, University of Ibadan. What will you advise government to do in tackling these persistent challenges in the economy?

The solution is quite simple. We need inclusive growth in order to create jobs for the citizens. Now government is saying we have low and stable inflation rate. But the issue is, if we have low rate of inflation and high level of unemployment, it is a big problem.

Corruption is another major problem that government must tackle for the economy to thrive and achieve the desired results. This also implies that government must ensure zero tolerance to corruption and government officials should live by example, such that individuals found guilty of corrupt practices must be made to face the full wrath of the law.

Can you give more insight into what you mean by inclusive growth?

Inclusive growth is one in which growth benefits all economic agents. The growth we have in Nigeria now is not inclusive because it does not reach people at the grass-root. Government should use income from oil to assist the people in their productive activities to generate more growth. Else, we will just be fighting for allocation of revenue. For us to achieve inclusive growth, it means the people must be directly involved in various economic activities and the actual production process in order to generate wealth. This implies that the policies and programmes of government must be people-oriented and should revolve around the people. That is why I called it inclusive. The term inclusive means all sectors of the economy and people must work in synergy to optimise outputs for greater productivity.

What is the difference between inclusive growth and development?

Growth is an aspect of development, which is about increase in the size of the economy, while inclusive development is a wider concept. Development has to do with improved living standard of the people, the efficiency in social services, the state of infrastructure and provision of social amenities in the country, life expectancy rate, the education system and  health condition of the people among many other services.

Government must give attention to the growth of Small and Medium Enterprises (SMEs), as this sub-sector is also capable of creating jobs. This implies that electricity must be constant for small scale businesses to spring up in various places across the country.

Is China-Nigeria bilateral business agreements a step in the right direction?

Well, China is the second largest economy in the world. The Chinese investors are everywhere in the International business arena. China has interest not only in Nigeria but in Africa generally. For example, the African Union building in Addis Ababa , Ethiopia was donated by China . So, you can see the interest and connectivity. My advice is for the Nigerian government to exhibit strong bargaining power to reposition our economy for greater prosperity. We must ensure a win-win situation because there is no free lunch anywhere. The Chinese investors are here because they have their own interest. So, we must protect our economy as well. For instance, we need investment in cassava and other areas.  So, the Chinese investors can be of great benefit in these aspects.