ONCE UPON A TIME: WHEN 1 DOLLAR WAS EQUAL TO 1 NAIRA

This article has been written to raise some fundamental economic issues especially as the current democratic dispensation marks its first 100 days in office. The writer takes us down the memory lane to reveal our current economic situation and offer recommendations.

This article argues that the first fourteen years (1960 – 1973) remain the golden years of Nigeria in terms of the economy. Then, you didn’t need up to one naira to exchange for a dollar. The naira was competing favourably with the British pound and our economy was regarded as an emerging economy. Today, the naira is not faring well against foreign currencies and the economy is still ranked among developing economies. To some, the economy is even considered among underdeveloped economies.

The average inflation rate between independence (1960) and 1973 was around 5%. You could call that creeping inflation, which may just be relevant for the economy to move on. Even if the 5% average inflation rate is considered high, it could be attributed to the military takeover of 1966 when we recorded 9.69% and the effects of the civil war that resulted to 10.16% inflation rate in 1969, 13.76% in 1970 and 16% in 1971. Sparring all that, we might not have recorded more than 3.1% average inflation rate as recorded between 1960 – 1965 in the 1960 – 1973 review period. In comparison with the ‘golden years,’ the 1974-2014 review period has witnessed over 20% average inflation rate.

Let’s review the external debt as a ratio of GDP (at current basic prices) for the two periods. Between Nigeria’s independence and 1973, the only year the external debt as a ratio of GDP exceeded 5% was 1968 with 5.32%. The rest of the years (in the period) recorded values below 5%. The average for this period is 0.16%. On the other hand, the average foreign debt as a ratio of GDP for the period 1974 – 2014 is 35.72%. The figures were very high especially in the 80’s and 90’s until the debt relief in 2005 with some years recording over 100%.

The lofty years are also better off in terms of income per capita, employment generation, living standards, education and health. Some of our senior lecturers and professors fondly inform us of the special privileges (e.g. free tuition, free meals, scholarships and automatic employments) they enjoyed when they were studying. And unfortunately, those privileges are almost non-existent now even for the most brilliant students.

Those lofty years (1960-1973) witnessed government’s commitment to development planning. It was not just about setting goals and targets and stating policies, it was about achieving the said targets. For instance, the second national development plan set the target of 6.6% annual growth rate but surpassed the target by achieving 8.2% GDP growth rate. The 1st and 2nd national plans saw the successful completion of many trunk A roads, the construction of the 2nd Niger Bridge, the Federal Scholarship Scheme, the establishment of refineries, the now moribund Ajaokuta Steel Mill and the successful take off of the NYSC scheme in 1973. The period also saw the establishment of first generation universities like the UNN, ABU, OAU from proceeds from cocoa, cotton, groundnut, rubber and palm produce. Cities like Kano, Kaduna, Enugu and Ibadan that are not endowed like Lagos witnessed remarkable developments and became commercial centres.

After those lofty years, we continue to grapple with high and rising unemployment rate and poverty level, declining manufacturing production and poor infrastructure. Today, Nigeria is no longer a major exporter of cocoa, groundnut, palm oil, rubber and cotton. I don’t think we can still call Benue “The Food Basket of the Nation” the same way Borno may no longer be “Home of Peace.” The iron and steel industry is dead and the manufacturing sector is ailing. There is over reliance on oil. Over the years, our development planning efforts have been stalled by endemic corruption in the system. Today, there are no accurate data to plan the economy.

Recommendations
• There has to be a turnaround where sound economic policies will be put in place to diversify the economy. I have previously recommended the institution of the Council of Economic Advisers (in this post) like it is done in the US.
• The years of the short term national development plans should be brought back where measurable targets are set along with time frame for their achievements
• The only thing the ‘lofty years’ (1960-1973) and the years of comparison (1974-date) seems to have in common is corruption and nepotism. These monsters must be relentlessly fought
• Attention seems to be focused on the federal government alone. And the current reality has shown the ineptitude of most state governors. The idea of “vote for me and I will give you light” should stop. Henceforth, campaign promises should not just be able projects but they should tell us how they intend to generate revenue to implement those programmes.

...................
If you have superior opinions about economics/economy, check my signature and send me your articles.

JЦsτ PΛssIПG Ө. ΛβΣG MΛKΣ PΣЯsӨП ΉΣ└P MΣ ЩIτΉ PIП MӨЦτΉ ©ΉΛЯGΣr P└s Ө. JЦsτ ΣMΛI└ Iτ τӨ MΣ. τΉΛПK ψӨЦ

Lolzzzz at the comment above me.... op well said, the economy of this country only God csn take control..

Be a millionaire as an entreprenuer with just 2500.
www.nairaland.com/2596729/millionaire-2500-guaranteed-within-4months