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The Economics Of Painful Politics

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Its economy, political arena and society are in crisis mode. Abuja, its capital city, and other sections of the country are increasingly making headlines for the wrong reasons.

Meanwhile, representatives of Nigeria’s youth, political, traditional, religious, civil and business society are currently in a national conference (Confab) in Abuja. Their task over their three-month tenure: discuss salient national issues and recommend the way forward.

The most critical issue has been the dearth of safety and security in the land. On this point, a member of the Confab and former inspector general of the Nigerian Police Force, Muhammadu Gambo Jimeta, laments the failure of previous administrations to provide altruistic leadership.

“The country is sick, otherwise how will people organize themselves and kill innocent students, how could people gather together and rob, how will people gather together to vandalize pipelines? It means the central system is sick and that is national security,” he says.

The country’s defense budget ballooned from $625 million in 2010 to $6.25 billion this year.

Military muscle has however failed to curb the increasingly sophisticated insurgent group. Anecdotal evidence even suggests that some of this cash has fueled the crisis. The class of the impoverished community continues to outnumber the elite factions of society. Poverty afflicts more than 60% of Nigerians – around 100 million Africans. Twenty four percent of Nigeria’s employable population is effectively unemployed; for those between the ages of 15 and 24, it surges close to 40%.

Africa’s most populous nation is currently engulfed by a lack of social values. Homegrown terror gangs and Islamist insurgents ravage parts of northern Nigeria and violent criminals now roam through southern states, mostly outside Lagos, at will.

Nobel laureate Wole Soyinka has declared that Nigeria is essentially at war. Many who find this statement alarming struggle to disagree with the famous poet, playwright and ex-political prisoner.

In March, suspected members of the militant group Boko Haram executed a commando style operation to rescue their cohorts held in the Abuja cells of the Department of State Security, which is located within view of Aso Villa, the Nigerian president’s residence.

In April, economic analysts and pundits pontificated on the effects of the country’s rebasing exercise when terror struck again. Within one week, more than 200 girls were abducted by faceless rogues from a school in Chibok, in the north-eastern Borno State. In Nyanya, a densely populated district on the outskirts of Abuja, an early morning rush hour blast in the motor park killed more than 100 people and maimed many more.

Interestingly, the horrific situation has not halted progress on the quest to diversify the domestic economy. Apparently positioning for the long term, companies like Huawei, General Electric and IBM continue to ramp up their commitments and workload with Nigeria’s business, public, academic and scientific communities. Jim O’Neill, former chairman of Goldman Sachs Asset Management has invested some of his cash in Paga, a leading mobile payments service provider which has more than 1.3 million individual and 1,350 business clients.

While the nation’s image abroad continues to take a daily bashing, the paradoxical positives also need highlighting. GDP growth for the period between 2013 and 2015 is expected to hover between 6% and 7%. Ongoing reforms in power and agriculture look set to boost productivity. The fortunes of the capital market should be boosted by long term bond financing. Some sectors – telecoms, e-commerce, hotels, retail, real estate and construction – will continue to boom thanks to Nigeria’s head count. With a population of 167 million; consumer spending well in excess of $100 billion each year, and a fast growing middle class, Nigeria is definitely a promising African destination for business. According to the Ministry of Industry, Trade and Investment, more than $1.3 billion in fresh investments has come into the formal retail space over the last three years.

No doubt, a state of insecurity will continue to stunt domestic economic growth and attenuate the much needed peace of mind required for deep rooted investments. Poor governance has bred this terror monster. A crazily expensive, parochial and unprogressive political culture will continue to breed a heated and ignoble socio-economic landscape.

Being the 26th largest economy in the world will mean little to the hundreds of families still searching for their daughters in the forests of northern Nigeria.

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