A trend analysis of Nigeria’s Gross Domestic Product (GDP) measured in constant prices shows that the country’s domestic output has been declining since 2010, after the Musa Yar’adua administration, while inflation has been rising lately.
Under the incumbent government of Muhammadu Buhari, growth in national output has returned to an all-time low of 1.2% average, comparable only to the 0.9% growth average under the military regimes that preceded the current civilian dispensation.
The low productivity of the people in the first term of the incumbent preceded the further drop in output caused by the pandemic in the year 2020.
Ghana took over the lead in output growth after the Obasanjo period. How?
The Obasanjo administration holds the best economic management records in recent times. One was for picking up a GDP growth rate which had dropped to 0.6% in 1999 to a peak of 15.3% in 2002 and achieving a 6.9% average by the end of his administration in 2007. The average GDP growth rate for the 6-year military regime before this was 0.9%.
The major shift in the Obasanjo regime was the liberalisation of the Telecommunication sector and the receipt of massive foreign and domestic investment in the same. Incidentally, the growth in the national output across the years mirrors the trend in output growth in the information and communications sector.
The best years for Nigeria’s information sector ended in 2010, and likewise for the general economy. From 2010 till date, Nigeria’s economic growth and communications growth have not matched the level before the decline in 2010.
It is not surprising that Nigeria’s general business environment suffers the more the government increases its sustained attack on the media and the civic space through legislation and executive actions that inhibit the freedoms of the press and the people.
Twitter Ban, Tighter Business: Lessons from the rice and rise of Ghana
Currently, the information ministry and the communications ministry in Nigeria are perceived as interested in clamping down on voices of dissent, constricting the social media rather than cultivating its growth potentials, and without considering the disincentive, this poses towards general investment in the country.
The clampdown on media freedom and the government’s invasion of people’s internet privacy is already straining productivity and shrinking profits in the telecommunications sector. All network providers recorded a negative quarter on quarter growth in the first quarter of 2021.
The government’s current actions and cumulative posture towards the freedom of the press and the people, together with other human rights violations, directly discourages individuals and corporations from investing in the country.
Little wonder Nigeria’s economic growth rate under the current regime is so low and compares closely only to that in the past authoritarian military regimes.
Many wondered why Twitter, the international microblogging company, opened its first office in Ghana, and not Nigeria, its larger West African counterpart, or any other country in Africa.
Dataphyte analysts unravelled the mystery – no big media company would invest in Nigeria if it simply profiled Nigeria’s repression of the press in the past 20 years.
The incumbent finally proved that Twitter was right to have invested in Ghana over Nigeria or any other African country when the Nigerian government banned Twitter in the country and proscribed its use by the citizens without considering how this worsens the already ailing economy now and in the long term.
The effect of actions such as this on economic agents and small businesses will begin to unravel in more unemployed people, lower profits and higher losses in businesses, lower productivity, scarcity, inflation, and every ingredient that feeds the current civil unrest around the country.
The Rice and Rise of Ghana
Nigeria lost the contest on which country had the best jollof rice to Ghana. A unanimous decision of three judges from Ghana, Nigeria and South Africa scored the Ghanian chef 95% and the Nigerian chef 75%.
The Nigerian Chef thought things could have been better if she brought her own rice and ingredients from Nigeria for the competition in Accra. Home advantage? Maybe or maybe not. The fact is Ghana won. A win for its already thriving tourism and hospitality sector. And Ghana wins fair on many other socioeconomic indicators.
Ghana’s economic rise is not about its population size or better-skilled labour; it wins because its government puts the country’s interest and its people’s economic prosperity first.
This is why it attracts not just the hosting of a jollof rice competition but also foreign investment than Nigeria lately.
Again, while Nigeria was ahead of Ghana all through the Obasanjo administration (2000-2007) in the amount of foreign direct investment (FDI) each person could benefit from (FDI per capita), Ghana took over almost immediately in 2009, and the difference between Ghana’s prosperity and Nigeria’s has been clear ever since.
The implication of this is that there would be more jobs in Ghana than in Nigeria due to the country’s more liberal and level-headed government.
Lessons for Nigeria
On all fronts, the economy has further worsened under the incumbent administration, besides its weak economic management of the COVID-19 crises in 2020, compared to Ghana.
General real income levels are lowest while the cost of food and fuel is highest since 1999. The foreign exchange rate is hurting the country’s import-dependent industries just as unemployment and youth restiveness is incomparable with any period in recent history.
The World Bank placed Ghana 13 places over Nigeria in its 2020 international ease of doing business rankings. Nigeria ranks 131st behind Ghana, the 118th in the world.
These ratings come at a time when Ghana lost 4 points from its ranking in the previous year 2019 and when Nigeria just gained 15 places from 146th in 2019 to its current 131st worldwide”, according to a Dataphyte report.
Nigeria can either learn from its past – the economic management in 1999 through 2007 that jump-started a similar economic downturn, hard done by a like control-minded regime – or learn from its increasingly formidable economic peer – Ghana.