A lot can happen in just one year.

A whole lot…

I love putting things in perspective in my little effort to help us keep our eyes on the ball. Why this drastic drop makes news for me is that the media has been too quiet about it. That in itself sounds conspiratorial to me. I hate conspiracies. Second, if the opposite was the case, the government would have milked it till last drop in celebrating their achievements in such a short time.

And Ajuri Ngelale who has been busy lately mouthing how more Nigerians are presently enjoying the economic benefits of Tinubunomics as their purchasing power has risen ( imagine) would be busier singing it from UBA rooftop, ably reechoed, and effectively rebroadcasted by their multiple vuvuzelas on social media.

I do not need any in-depth analysis for readers to understand that actually something is wrong with our economy. At least every man and woman, even children feel the pang daily. Some teeth gnashing can be heard by neighbours, even though we all put a brave face and step out every morning hoping for a “Hope” that has become elusive in less than a year.

That the country’s GDP crashed from a height of $488,964,000,000 (constant, inflation adjusted) as at the end of 2022 to a low of $253 billion (based on current prices this year), almost half its size, falling from its position as the biggest economy in Africa, to the current position of 4th biggest economy, behind Algeria ($267 billion), Egypt ($348 billion) and South Africa ($373 billion), now the number one. With their elections at hand, whether they would remain table top is a focus for another day.

The IMF forecasts also points to an increase in Nigeria’s government debt-to-GDP ratio to 46.6% in 2024, up from 46.3% in 2023. You know what that means. I was there in Washington D.C. when the latest figures were released, and Nigeria’s economic team was equally represented at the occasion. They heard it, and they acknowledged the figures with nodding of the head.

This development requires a quiet introspection.

But an introspection from a place of humility.

A trait we all know is so scarce, and not part of the present leadership. Afterall, no be statistics we go chop. Remember two weeks ago, many of you were publicly humbled into acquiescence by chants of Cardoso is a wizard, Cardoso is a genius. And any effort to ask “the how” was shouted down with accusations bothering on lack of patriotism.

Fortunately, that strategy adopted by the crowd cowed many courageous and vocal citizens. The present monetary policy contributed about 65% to this economic crash, followed by other “reforms”.

Does size matter?

Yes. It does matter, especially where it reflects the strength of growing economic activities within a given country. Meaning that a great percentage of the population is productively and actively engaged in economic activities.

Let me make a confession.

I am a journalist with bias to human development, and my interest when analyzing economies is geared towards trickledown effects policies; to what extent is the growth impacting on the lives of the people. That is basically why I have preference for data on human development index, than the comparative size of the GDP of a country.

Many people I know would prefer to live in Luxemburg than in the United States, even though if Luxemburg was one of the states that make up the United States, its $84 billion GDP would place it at number 45, lower than Maine with a GDP of $91billion but higher than North Dakota with a GDP of $74 billion.

Yet most people I know would prefer Luxemburg to the United States with its $27 trillion economy. That is why I have preference to growths that impact social status of the citizens more than just recorded growths.

I hope you get what I mean. If you do, let us proceed. But if you don’t, wait for my next post.

I know there is this debate about the actual importance of GDP size beyond bragging rights. In actual fact, changes in the GDP base may directly increase other metrics used to capture income status such as GDP per capita, though actual welfare status may not change much given the very large informal and non-monetary economy that is characteristic of African countries.

However, growth in GDP and being the leading economy in size has its own advantages. Do not let anybody tell you otherwise. It helps a country to attract more foreign direct investment (FDI) especially from multinationals who consider investment destination based on the size of the economy. But other things must be right; we are all witnesses to the number of multinationals leaving the country in the last one year. Is there a correlation? We will discuss this another time.

Add to attracting foreign investment, being the numero uno gives a country a certain level of negotiating power on geopolitical and economic issues. Moreso, bragging rights comes with many other pecks both at national, international, and sociocultural levels, especially at a time soft power plays a very commanding role in geopolitics.

I have to admit that almost every economy in the world suffered from the effects of Covid-19, and every economy shrank. However, some countries have been hiding under the excuses of Covid longer than others. As Igbo elders say, let us agree that Mosquitoes are the culprits of every bite experienced in the night.

But do not forget, no be statistics we go chop.

Sent from Total Fuel Station at Onipanu.

Kelechi Deca

God please free Nigeria in the hand of it wicked politicians