By AKPAN H. EKPO
The National Bureau of Statistics recently informed Nigerians that the country’s Gross Domestic Product, GDP, grew by 7.68 per cent in the fourth quarter of 2011 which is slightly higher than the 7.40 per cent growth in the third quarter of the same year. What is also interesting is that the growth has been propelled by the non-oil sector comprising telecommunications, solid minerals, wholesale and retail trade, building and construction, hotels and restaurants, real estate and business services. In the last five years, the growth of the Nigerian economy has never been a problem.
In 2007, the country’s GDP grew by 6.0 per cent. Even in the heat of the global economic crisis in 2008, the economy registered a growth rate of almost 6.4 per cent. The major challenge of these increasing growth rates is that they are non-employment-generating: they are jobless growth rates.
In 2007, the rate of unemployment was 14 per cent, jumping to 19.7 per cent, in 2009 and skyrocketed to 23.9 per cent in 2011. In 2011, about 16 million Nigerians who were able and willing to work could not find employment. With rising rates of inflation, is the growth rate of 7.68 per cent worth celebrating? The very high rates of unemployment coupled with the rising rate of inflation suggest that the economy may be in a state of stagflation despite the impressive growth rates. The rising incidence of poverty in the country further confirms that the growth in the economy has not translated into economic development.
This is not to argue that growth is not important. It is important to bake the cake (growth) before sharing it. However, it is also crucial to examine how and what factors need to be considered in the baking of the cake. There is a global trend showing that increased growth rates are not translating into concrete economic development. Increased growth rates have failed to answer questions like: What is happening to employment/ unemployment? What is happening to the quality of education? What is happening to the provision of health services? What is happening to housing/shelter? What is the quality of governance, particularly the participation of citizens in how they are governed?
To get around these questions, concepts like (non-) inclusive growth are used to explain the failure of the so-called trickle-down effect. There is no growth trajectory that is not inclusive. All sectors of the economy contribute to growth whether such growth is decreasing, increasing or remains the same. Growth without development is empty. In any economy, particularly a market type, deliberate government intervention is required to ensure that increased growth addresses the issue of equity, if there is to be meaningful and sustained improvement in the standard of living of the people. Economic development centres on sustaining increases in per capita income of citizens over a period of time. It is not a linear process. It oscillates but when smoothened over time, one can ascertain that the standard of living of the people is trending upwards. Economic development showcases the deliverables of growth.
The Nigerian government, over the years, has taken deliberate actions through policies, programmes and strategies that would not only grow the economy but also address matters of economic development. Vision 20:2020 is a good example in recent times. The expectation is that proper implementation of the Vision 20:2020 economic blueprint would improve on a sustainable basis the standard of living of Nigerians and that by the year 2020, the country’s economy would be among the top 20 largest in the world. It seems that President Goodluck Jonathan’s Transformation agenda derived from the Vision 20:2020 and the National Implementation Plan 2010 – 2013 may ensure that growth translated to economic development.
Is the country, however, on track? The manufacturing sub-sector is expected to grow by more than 25 per cent, for example, if the objectives of Vision 20:2020 are to be realised. In the fourth quarter of 2011, the manufacturing sub-sector grew by 7.50 per cent – a decrease when compared to 7.67 per cent in 2010. This sub-sector, as part of the industrial sector, remains one of the most dynamic employment-generating component of the economy. New factories must be built to employ persons to produce goods and services. How we transform ideas and innovations into products remain a big challenge for all stakeholders.
Another sub-sector that would generate mass employment is housing. If all levels of government (federal, state and government) would make deliberate efforts to construct residential accommodation, thousands of Nigerians, skilled and unskilled, would find employment. A visit to a typical housing construction site would illuminate the potency and vibrancy of this sub-sector in employment generation. The small and medium-scale sub-sector is another driver of growth and it is employment-generating. The Nigerian economic problem is mainly structural and if increased growth cannot alter the structure in favour of building a modern industrial economy that exports finished or semi-finished goods, then the economy would remain primitive, backward and the development of underdevelopment would continue.
(Ekpo is Professor of Economics and Director-General, West African Institute for Financial and Economic Management, Lagos.)