NIGERIA'S ECONOMY: INFLATION, GDP GROWTH AND JOBS

Nigeria’s grip on inflation rate is becoming consistent at third quarter with a single digit at 9.3 percent, and with an impressive economic growth rate at 7.72 percent in August. So far a significant development and good track record is brewing, for at the beginning of third quarter inflation rate was 9.4 percent in July, and the latest recorded 9.3 percent shows a slightly declining inflationary trend. But looking at the country’s misery indicators intrinsically – overwhelming poverty and crushing unemployment; these fabulous numbers are not making impact to the suffering masses that are without jobs and are etching out a living with less than two dollars per day. Economic experience by average Nigerian, who can barely feed his family three decent square meals per day cannot correlate with the economic expansion of the country’s GDP.

Positive economic growth should fundamentally ameliorate the misery index, lest it become senseless and insignificant to the majority of Nigerians. Before Nigerian financial and economic policy makers beat their chest and celebrate with their talking drums they should realize that the country is not yet from the wood. The much talked removal of oil subsidy and its implementation has not been resolved and neither the recapitalization of collapsing banks has been ceased. Let’s not overlook the increasing growth in food prices, which is the biggest contributing force to the consumer inflation rate. The food inflation rose from 7.9 percent in July to 8.7 percent in August and that is not good. With these enviable numbers on inflation and GDP rolling out from the National Bureau of Statistics (NBS), the life style and economic wellbeing of 70 percent of Nigerians are stagnant and deplorable. There is no adequate housing, the food prices are going beyond the reach of the poor while the scarcity of the expensive kerosene makes life unbearable.

Nigeria is in the midst of confidence building news on economy and one cannot downgrade it. With decreasing turmoil at the Niger Delta; oil production in the second quarter of this year is averaging 2.45 million barrels daily. This is an improvement compared to 2.35 barrels of the previous year with more turbulent Niger Delta. Bloomberg reported that “Inflation in Nigeria, Africa’s biggest oil producer, stayed near the limit of a central bank target and the economy expanded 7.72 percent in the second quarter, keeping pressure on the bank to raise interest rates. The inflation rate fell for a second month to 9.3 percent, the lowest level in more than three years, from 9.4 percent a month earlier, Yemi Kale, head of the National Bureau of Statistics told reporters today in Abuja, the capital.

“Much of the improvement in headline consumer price inflation can still be explained by the positive influence of domestic food prices, and this should continue in the months ahead,” Razia Khan, the London-based head of African economic research at Standard Chartered Bank Ltd., said today in an e- mailed note to clients.”

Rising unemployment The numbers on joblessness is not forth coming and the tabulations by National Bureau of Statistics (NBS) may be misleading. The last number I saw on unemployment was 19.7 percent in 2010. The National Bureau of Statistics website is not current with the unemployment figures. The last number it recorded was 40 percent unemployment in 1992. The 19.7 percent was provided by the former minister of Finance Mr. Olusegun Aganga last year. He did acknowledge that almost half of Nigerian youths at the age group of 15-25 years were without jobs. And with the massive unemployment devouring the youths of the country it might be fastidious to peg the unemployment at an extremely conservative number of 19.7 percent. The 19.7 percent is not a realistic number when the rural unemployment is put into consideration and effectively tabulated. Even with conservative extrapolation the joblessness in the rural Nigeria where most people live will make the tendered number laughable. The low technology and paucity of technical know-how makes the collection of data cumbersome and sometimes out of reach.

Writing about jobs in Nigeria, Nasir El-rufai the former minister of capital territory Abuja, could not arrived at the exact unemployment figure but nevertheless he used the official numbers and also made his own realistic extrapolation. This is the way he put it,

“The jobless rates in Nigeria have not fallen. On the same day but at different functions, the Minister of Trade and Investment put the unemployment rate at 14-16 per cent, while the Finance Minister put it at 21 per cent. The actual figure may be much higher than both numbers. The millions of people with no jobs represent a serious impediment to Nigeria’s economic development. Apart from the immense waste of the country's human resources, it generates losses in terms of lower output which results in poorer incomes and increased poverty. It also causes social decay and inhibits national cohesion. In fact, unemployment in Nigeria is a national security threat.”

He also wrote that, “Nigeria has about 90 million people who are willing and able to work, but about 70 million of them have no gainful employment. This is an alarming figure, but when the 4.7 million people captured in the formal sector in the latest statistics from the Pensions Commission is increased by the three to four times standard multiplier to capture those in the informal sector, it means that only about 20 million Nigerians have jobs, out of a population of 162 million. This simple fact causes the country a loss of about N2 trillion annually from the absence of commercial activities that ordinarily should have taken place but did not.” The lack of job is one thing that cannot be politicized for real people are suffering .Job creation must be initiated by government by creating the fertile environment that will attract capital and investments. Government does not necessary create jobs but does aid the private sector in making job creation possible and imminent. Nigeria’s favorable economic indicators on economic growth and inflation can become a precursor in solving the problem of unemployment.

Emeka Chiakwelu is the Principal Policy Strategist at Afripol Organization. [email protected].