That World Bank verdict on Nigeria’s economy

As the chief economist and senior vice president of the World Bank (WB), whatever position Dr Indermit Gill takes on any relevant matter publicly may well be the official standpoint of his influential organisation. So it was that a couple of days ago in Abuja at the 30th Nigerian Economic Summit, he declared, among other things, that Nigerians should patiently give the ongoing economic reforms at least between 10 and 15 years to produce lasting results. The response from his audience (largely made up of relatively rich people, it must be noted), both verbally and nonverbally, was overwhelmingly negative. If the privileged class he directly addressed could react to him that way, one can only imagine what their less-privileged compatriots felt about the speech built mainly on technicalities.

Mr Gill didn’t disappoint, actually. Over time, most Nigerians, like their counterparts in other developing and underdeveloped countries around the world, have learnt to be wary of the prescriptions of some global institutions, notably the International Monetary Fund (IMF) and WB. They have watched how desperate nations like Argentina, Ecuador and others have descended into hellish conditions under the so-called expertise of these groups which are yet to point to sterling examples as their handiwork.

The usual storyline is, IMF, WB and similar agencies are approached either by governments that have run down the socio-economic fabrics of their countries or those that inherit such from their predecessors. And then, bitter or sugar-coated pills are recommended with stiff conditionalities. If they’re accepted and administered, tales of woes especially by the downtrodden become the harvests. It’s a perfect picture of corporate captivity. Some nations only manage to escape the trap when pragmatic and visionary leaders emerge. Others never do. Whole schools of economics are built around establishing and propagating the notion that these bodies are, bluntly put, instruments founded by advanced countries, particularly in the west, to perpetually subjugate weaker ones.

For Nigeria, the fight to stay out of that circumference of subservience and slavery is not new. Flashback to the 1980s. The government of President Shehu Shagari, the only one that graced the Second Republic, mismanaged the economy badly and easily handed over to soldiers a major rationale for their incursion into politics. That was the inglorious era of the task force on rice headed by the late Alhaji Umaru Dikko. The quagmire created by the foreign exchange (FX) scarcity continued its grip during the government of Major General Muhammadu Buhari that toppled Shagari’s. It manifested, among other features, shortages of essential commodities and the attendant winding queues all across the country.

The seat that General Ibrahim Babangida took as head of state in 1985 had its job cut out for it. Nigeria was in dire need of something, just anything, that could give it some respite and return it to winning ways. The fact that even with all the powers available to him, Babangida couldn’t simply take the IMF loan by fiat spoke volumes. He turned the matter into a national debate. Yes, the apprehension about the Fund had always been that palpable. Even now, four decades after, that hasn’t changed.

So, how related is this old gist to the country’s present predicament? Successive Nigerian governments had had to manage their relationships with these international financial behemoths with tact as the overriding perceptions here are clearly not welcoming. The current administration hasn’t yet shown any desire for such caution. From the infamous May 29, 2023 President Bola Tinubu’s declaration of “petrol subsidy is gone” to the floating of the disadvantaged naira shortly afterwards and other policies that bear WB/IMF signatures, it has proceeded, enamoured against people’s reservations and genuine concerns. But that WB endorsement of Tinubu’s decisions will, of course, not confer acceptance in the minds and hearts of those at the receiving end of the divide.

Whatever its value, Gill’s outing is worth scrutinising, however. Of interest to me are the three main assignments he left behind for our policymakers. One, prioritising the growth of the non-oil sector. After praising the Central Bank of Nigeria (CBN) for being “laser-focused of inflation”, he advised against moves “that might push up the naira’s value too quickly and crimp non-oil growth.” Coming at a time that Nigerians are praying fervently for the speedy resuscitation of their gruesomely battered currency, he surely didn’t expect accolades. And he didn’t get them. Two, an admonition to “help every vulnerable household cope with inflation and high prices.” While Nigerian citizens are no strangers even to hyper-pricing, the sorts they’ve been exposed to in recent times are unprecedented. Nothing betrays the people’s hopelessness and helplessness than the rapid erosion of their purchasing power.

It’s interesting that Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, one of Gill’s listeners in Abuja, took the same message of the urgency of shielding the extremely poor from the consequences of painful economic surgeries to the G24 meeting on International Monetary Affairs and Development in Washington DC some days ago. But providing safety nets for the needy isn’t all talk. It’s instructive that Edun’s contribution at that forum came simultaneously with IMF’s downgrading of Nigeria’s growth prospects in its latest World Economic Outlook (WEO) from 3.3 percent to 2.9 percent, a disturbing outcome of the country’s existential struggles in the key areas of agriculture and oil.

Back home, the country’s multidimensionally wretched – the world’s largest – are not moved by the rhetoric in that cosy conference venue in the American capital. They’re too engrossed in the unending troubles that have besieged their lives for so long. They’re constantly confronted with questions begging for less esoteric answers. What manner of reforms bring the middleclass to its knees so speedily, cripple the manufacturing sector, impede growth in crucial socio-economic segments, literally impoverish the populace, spread hunger and humiliation like no other, and undermine the basic will to stay alive?

Gill’s final charge to the minders of the nation’s severely challenged economic profile is to “make the economy more business-ready.” It is doubtful if Nigerians know precisely what else to think of the persons managing this critical aspect of national life. Whether the experts assembled by President Tinubu are capable of pulling the country out of this massive mess is yet to be seen. Gill didn’t leave the stage without displaying the Bank’s love for statistics and projections. According to him, “Nigeria’s need for jobs is immense. In the next 10 years, more than 12 million young Nigerians – both women and men – will enter the workforce. Generating jobs for them will be greatly facilitated by large-scale domestic and foreign private investment in the non-oil sector.

“Attracting such investment means boosting the national power grid, improving transportation, and improving security. It means improving the rules and regulations for private enterprise and making compliance less onerous. Failure would set back reform efforts across the continent, besides ruining the future of yet another generation of young Nigerians…. The World Bank Group will help in every way that we can.” This tacit approval of the burdensome steps of this administration is, no doubt, soothing but mainly for its members and sympathisers.

Tinubu and his team can beat their chest about items like enhanced revenue, increased private participation in oil production, random palliatives and some others but they mustn’t forget that the implementation and sustainability are still being debated. The bigger picture should be to restore hope to the Nigerian people fast. They, not the WB or IMF, deserve to be the prime focus of government’s interventions.

 Ekpe, PhD, is a member of THISDAY editorial board.