The election season in Nigeria is approaching. The campaign to succeed President Muhammadu Buhari at the Aso Rock Villa in 2023 has heated up with the conclusion of party primaries and the emergence of presidential aspirants. Many structural issues, such as insufficient infrastructure, tariff and non-tariff trade barriers, investment barriers, currency valuation uncertainty, and low foreign exchange capability, limit Nigeria’s economic potential. Its economic stability depends on long-term broad-based growth and poverty alleviation.
On February 25, Nigeria will have general elections to elect the President, Vice President, House of Representatives, and Senate. On March 11, twenty-eight gubernatorial elections will be held in all 36 states, along with elections for state houses of assembly. Later this year, two further gubernatorial elections will be held, as well as possible rerun elections for regularly scheduled elections that were canceled earlier in the year. Atiku Abubakar of the Peoples Democratic Party (PDP), Bola Tinubu of the All Progressive Congress (APC), Peter Obi of the Labour Party (LP), Rabiu Kwankwaso of the New Nigeria Peoples Party (NNPP), and Yele Sowore of the Africa Action Congress (AAC) are among the top presidential contenders.
General elections in the next year are expected to raise expectations for significant political change by over 200 million inhabitants. Nigeria’s economy is based on extractive industries. As a result, when a country’s political and economic structures are inclusive, economic growth is likely. When they are extractive, on the other hand, they stifle economic progress. Nations fail when extractive economic institutions are backed up by extractive political institutions that stifle or even stop economic growth. Nigeria’s economic backwardness is based on this. Nigeria, despite its vast natural resources, continues to stutter and grope in the dark on the economic front. Her lively youths are unable to find work following their education, and the country lacks a credible social welfare plan.
Significant domestic challenges, such as rising economic hardship, unemployment, food insecurity, infrastructure deficits, power outages, sub-optimal productivity, a large national debt (N38.6 trillion as of December 2021), and terrorism, frequently conspire to thwart well-intentioned foreign policy goals. As a result, if Nigeria is to project any meaningful international clout, its internal affairs must be continuously properly handled across all essential parameters – visionary leadership, law and order, security, economic management, national development, food security, and so on.
A World Bank Report noted that, the Covid-19 pandemic is disproportionately affecting the poor and most vulnerable, women in particular. In the absence of measures to mitigate the impact of the crisis, the number of poor could increase by 15 to 20 million by 2022. Food insecurity has increased substantially and economic precarity is on the rise because unemployed workers have migrated to the low-productivity agricultural sector. Thus, young Nigerians see emigration as the only viable option in the face of economic difficulties.
Economic Diversification in Nigeria: Developing Resiliency Before & During Covid-19 Pandemic
Thousands of Nigerians seek safety and asylum every year, and some migrate illegally via North Africa before crossing the Mediterranean to Europe. Poverty is at the heart of most of this movement: more than 70% of Nigerians live in poverty. Moreover, despite the installation of a democratic government in 1999, which followed several years of military control, millions of people have been internally displaced as a result of religious and ethnic strife, mainly in the north’s cities. Similarly, Nigeria is home to a huge number of foreigners, including those displaced by political crises and civil wars in West Africa and lured by the oil-export boom of the 1970s.
Human capital accounts for between 10% and 30% of the disparities in per capita income between countries, according to studies. The economic impact of malaria in Nigeria is estimated to be 13.5 percent of GDP, including direct and indirect expenditures but excluding fatalities. Nigeria, like many other countries, has underinvested in human capital in its pursuit for long-term growth. While physical capital is still important, it does not entirely account for growth.
Nigeria needs to refocus on economic diplomacy in order to take advantage of her economic position in order to seek external economic assistance that will help the country develop. The Nigerian Foreign Policy Principles must be restructured to fit the country’s economic development agenda. While increasing foreign exchange management, eliminating trade restrictions, and building a better business environment, private investment will be catalyzed.
Experts in economics have stated that: leveraging trade integration to harness the benefits of the Africa Continental Free Trade Area; improving the efficiency of spending in education; monitoring the impact of conflict to protect the poor and vulnerable; and leveraging digital technologies to diversify the economy and create jobs for young workers are strategies to boost the productivity and resilience of the Nigerian economy.
Nigeria’s year 2023 will be historic. However, the new government will take office at a difficult moment, with global oil prices falling sharply and insecurity in the country is persisting. This creates a difficult context for realizing a new administration’s ambitious reform agenda for job creation, the power sector, oil and gas, agriculture, and public administration. Nigeria now requires critical leadership to embark on such a difficult path of economic development.
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