Nigerians are currently hard at work. What sort of work, you might ask? Economic reconstruction and the quest for social and political rebirth. The new sheriff in town seeks to sweep the dregs of a shattered polity into the cesspit of history. Clearing the skeletons and cobwebs of the past is, however, proving to be a delicate dilemma for the good people and managers of the Nigerian nation.
Grappling with sluggish growth, dwindling external revenues, double-digit inflation and a prolonged currency constipation, Nigerians must now wrestle with the seen and unseen forces of corruption and ineptitude, the gods of inertia and impunity, and the innumerable anti-development demons in its social democratic space.
A nation which was once embroiled in a two-and-a-half-year civil war in the 1960s, without borrowing a dime and without experiencing a run on its national currency, now finds it difficult to maintain a healthy balance sheet in peace time. No doubt, Nigeria has earned its spot in global economics by virtue of its position as Africa’s largest economy. This status will, however, not produce social harmony, wealth and economic growth for Nigerians.
Nigeria’s one-year-old government continues its search for the Chibok girls (#BringBackOurGirls), abducted two years ago from their school in the north east of the country. President Muhammadu Buhari has embarked on a global search for the country’s missing money, embezzled by past leaders and cronies of previous governments. Currently struggling to wean itself off crude oil addiction and diversify its productive base, it’s taken almost a year for the president and his All Progressives Congress (APC) party to begin to translate their social and economic agenda into a “SMART Framework”.
In what seems to be a blueprint and agenda-setting address to selected private and public sector leaders during a National Economic Council (NEC) retreat in March, the president listed agriculture, solid minerals and infrastructure investments as the fulcrum of his agenda, with national targets for self-sufficiency in tomato paste production by 2016; rice production and milling by 2018; and wheat by 2019. He also introduced a new phrase into the lexicon of governance: “import competition”, where states focus on growing selected crops in which they have natural comparative advantage.
These confidence boosting steps notwithstanding, Nigerians are increasingly wary of the future. They have come to terms with that fact that the path to the future is riddled with dead promises.
On the political rostrum, campaigning for votes between 2014 and February 2015, APC big wigs made numerous promises to Nigerians. Granted this was all done in the heat of politicking, Nigerians now want the current Lords of Aso Villa to quit blaming previous administrations and simply execute their well-intentioned strategies.
The president has been blamed for not ‘radicalizing governance’ fast enough, which was one of the reasons Nigerians voted for his party. He has also been blamed for reneging on a campaign promise to provide a monthly allowance for unemployed youths. The APC’s manifesto also promises to: “create additional middle-class of at least two million new homeowners in our first year in government and one million annually thereafter; by enacting a national mortgage system that will lend at single digit interest rates for purchase of owner occupier houses.”
Good idea. But have two million new homes been built in the last year?
In just one year, the national mood has swung from politically-induced hope to a calm and unnerving anxiety about “personal survival in a regressive system” as it becomes increasingly clear that things will get worse – for much longer – before they become better. Thankfully, Buhari has also said this much, as he pleads for patience against the growing wave of disappointment and despondency.
So, El Nino has finally caught up with the nation’s 2016 fiscal budget, as GDP growth for the 2016-2017 period is likely to remain below 3%, according to the IMF, unless of course global crude oil prices shoot up to $100 per barrel.
This is very unlikely, observes Bismarck Rewane, renowned economist and CEO of Financial Derivatives Ltd.
“That era is gone for good. The chickens (of decades of economic profligacy) have come home to roost. We are now going into a likely prolonged phase of belt tightening,” he told members of the Harvard Business School Association of Nigeria recently.
The smart, hard, work must go on.

Recalibrating Expectations

In the last two years, a steady decline in the price of gold has brought the operations of many mining companies in Ghana to an abrupt halt. As a result, job losses and a reduction in royalties and tax revenues have been felt. Ghana is Africa’s biggest gold producer after South Africa, and with the mining sector contributing to 5% of Ghana’s economic output, the downturn in the sector has served a serious blow to the nation’s coffers.
Chinese investors, often depicted as parasitic investors, are keen to tap into this opportunity. The Chinese owner of the Akroma Gold project recently completed the purchase of Viking Mines in Ghana for $10 million. There are other new discoveries taking place and, while the sector might not be buoyant now, requisite preliminary studies should be done to mechanize deposits there.
Despite the tough economic climate, gold mining companies are able to meet their obligations, with Goldfields recently paying a $4.5-million dividend to the Ghanaian government and a total of $25.3 million since 2010. The fiscal framework that governs the mining sector in Ghana is a shining example to mineral-rich countries with a porous system due to a lack of transparency and regulation.
The Chinese have pumped billions into the Ghanaian economy. Mining in Ghana is integral to the development of communities; it brings jobs and economic vibrancy. But, for all the synergistic Sino-African trade partnerships being developed, an ability on the part of the Chinese to disregard the honesty and statutes that govern Ghana, especially in the mining sector, raises concerns over whether these agreements are lopsided.
Also, the Ghanaian government’s clampdown on illegal mining has only been marginally successful. Chinese companies use locals to front their mining activity, thus appearing to be credible operations. The lack of rehabilitation done by these companies also further exacerbates the problem. Many sites are left abandoned with no consideration for the environment.
Many large firms neglect their duties to rehabilitate the areas they have worked in, making them inhabitable. Companies, surveyed between 2009 and 2012, failed dismally to keep in line with the environmental protection agency requirements – a damning indictment of the attitude adopted by many foreign firms.
The inability of most locals to get finance to start their own enterprise ensures that development remains at an artisanal level.
Other areas in West Africa are showing promise though. Both Liberia and Sierra Leone are showing signs of reviving their mining sectors. Sierra Rutile is a company that was able to withstand the pressures brought by the Ebola epidemic. They recently raised $44 million to construct a dry mine at Gangama in Sierra Leone. The funds will be used to expand the existing mine. Rutile is used for the production of metal, specifically titanium. The investment will increase production and will provide more jobs.
Another mining company, Aureus Mining, has also signaled its intent to bring a new mine in Liberia into production. With the relative successes emerging in the region, there is confidence being shown by investors to reignite their interests in the mining sector and with it the hope that the sentiment spreads to other countries across West Africa.
The next step for the region is to engage stakeholders to develop concessions and form strategic partnerships. With industry being the buzzword for Africa to reach its full economic potential, the fact remains that infrastructural challenges are still an obstacle. Poor roads affect the transportation of materials. A lack or railways reduces the amount of goods that can be transported. The lack of power is another thorn in the side. The Economic Community of West African States (Ecowas) must integrate by encouraging free trade between the regional countries. By identifying the above issues, governments can make a concerted effort to tackle them.

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Recalibrating Expectations

Work To Be Done But There Is Hope