BY LANRE OGUNDIPE
THERE is a curious contradiction in Nigeria’s economic story today.
From the distance at which economists, investors and international financial institutions observe the country, the picture is beginning to look considerably better. Inflation has moderated. The external position has improved. Fiscal conditions have strengthened. Economic growth has remained positive. The reforms of the past three years, difficult and deeply unpopular as some of them have been, are beginning to produce signs of macroeconomic stability.
That is worth acknowledging.
A country may attract greater investor confidence while the small business owner remains worried about the cost of credit. Government revenue may improve while the family budget continues to shrink under the pressure of food, rent, transport, education and medical expenses. Financial markets may respond favourably to greater stability without that stability immediately translating into greater purchasing power.
It would be intellectually dishonest to dismiss these developments simply because the ordinary Nigerian is yet to feel the full benefit. But there would be an equal dishonesty in celebrating the numbers and pretending that the experience in the marketplace and in the home is already corresponding to them.
The two realities exist together.
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That is where the important conversation begins. If the economy is improving, is the Nigerian family improving with it?
The question is not intended to diminish the reforms. Indeed, some of the reforms were long overdue. Nigeria could not continue indefinitely with an economy distorted by fuel subsidy, multiple exchange rate pressures, weak revenue mobilisation and structural inefficiencies. Something had to give.
It did.
The consequences were immediate and painful. Nigerians were asked to endure the adjustment on the understanding that the economy was being repositioned for a more sustainable future.
That promise now deserves to be examined.
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The World Bank has acknowledged the progress in macroeconomic stabilisation, including easing inflation, stronger external and fiscal positions and resilient growth. Yet the same institution points to the other side of the equation: household incomes have not fully recovered and poverty remains high. The challenge, in its assessment, is to turn macroeconomic stability into sustained improvements in livelihoods.
That is the bridge Nigeria has not yet crossed.
Economic recovery and economic relief are not necessarily the same thing.
A country may attract greater investor confidence while the small business owner remains worried about the cost of credit. Government revenue may improve while the family budget continues to shrink under the pressure of food, rent, transport, education and medical expenses. Financial markets may respond favourably to greater stability without that stability immediately translating into greater purchasing power.
This is why the experience of the economy cannot be confined to economic reports.
There is another account of Nigeria being written every day, mostly without the assistance of economists. It is written by the trader who goes to the market with a familiar amount of money and returns with less. It is written by the worker who discovers that an increase in salary has not necessarily meant an increase in what that salary can buy. It is written by the manufacturer calculating the cost of energy, transport, finance and raw materials before deciding whether expansion is still possible.
The figures do not invalidate these experiences. Neither do these experiences invalidate the figures.
They are measuring different points along the same economic journey.
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The National Bureau of Statistics now reports a much lower inflation rate than Nigeria experienced at the height of the recent price crisis. That is encouraging. But there is a distinction that matters greatly to the person shopping for food: a reduction in the rate at which prices rise does not mean that prices have returned to where they were.
The rate has slowed. The accumulated burden remains. That is why the improvement in the headline numbers has not automatically produced an equivalent improvement in household sentiment.
Perhaps this explains why the Federal Government is now looking beyond the conventional economic indicators and considering a “shared prosperity” scorecard that would measure such things as multidimensional poverty, real income per capita and inequality.
That is a useful direction.
Nigeria may well be moving in the right direction. The evidence increasingly suggests that it is. But the ultimate test will not be how convincingly we explain the recovery. It will be how unmistakably Nigerians experience it. Until the improvement visible in the national economy begins to find its way into the family economy, the story remains unfinished.
For ultimately, an economic reform programme must answer a question that no GDP figure can answer on its own: what has changed in the life of the citizen?
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This becomes particularly important as Nigeria continues to speak of the ambition of building a $1 trillion economy.
There is nothing inherently wrong with such ambition. Nigeria should aspire to greater economic scale. It should produce more, manufacture more, attract more investment and participate more competitively in the global economy. A larger economy can provide the platform for greater opportunities. But size should not become a substitute for quality.
What kind of trillion-dollar economy are we seeking? One that merely looks impressive to international investors, or one that creates productive employment, raises real incomes and gives businesses a fighting chance to grow? One in which food production expands sufficiently to moderate prices, electricity becomes more dependable and infrastructure reduces the cost of moving people and goods? One where access to credit is no longer a privilege reserved largely for those who already possess capital?
These are not peripheral questions. They determine whether economic growth becomes development.
There is also a generational question that cannot be postponed. Millions of young Nigerians are watching the economy not through the language of fiscal consolidation or foreign reserves but through the possibilities available to them. Can they find meaningful work? Can they start businesses without being crushed by operating costs? Can they build families without permanent economic anxiety? Can they look at their country and still believe that their future can be secured here?
The answers will matter more than the elegance of any economic report.
This is why the next stage of the reform agenda should be about transmission.
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The improvement must travel beyond the national accounts. It has to reach the productive sector, the small enterprise and, eventually, the household. That journey cannot be achieved by monetary policy alone. It requires productive investment, jobs, infrastructure, reliable energy, affordable credit, improved food production and public services that work well enough to reduce the private costs citizens currently bear themselves.
Government has done much of the difficult work of stabilisation. The political and economic challenge now is to make the citizen see the benefit. That will take time. But time cannot become an excuse for indefinite postponement.
Nigerians have already paid a substantial price for the restructuring of the economy. They have a legitimate right to ask when the return on that sacrifice begins to appear in their daily lives.
This is not an argument that the reforms have failed. Far from it.
It is an argument that stabilisation is a beginning, not a destination. The international assessments may increasingly tell us that Nigeria is on a better economic footing. Good. Let the government take the credit where it is deserved. Let investors respond to the improved fundamentals. Let the country build on the gains.
But the conversation cannot end there.
The economy ultimately belongs to the people who work in it, invest in it, consume from it and carry its burdens. Its success must therefore be visible beyond the statistical tables.
A stronger naira environment matters. Lower inflation matters. Better fiscal numbers matter. Growth matters. Investment matters. But so does the ability of a family to feed itself without anxiety. So does the ability of a young person to find productive work.
So does the ability of a small business to survive long enough to become a larger business. So does the confidence of a parent that next year’s household budget will not be another exercise in choosing which necessity to sacrifice.
That is the point at which macroeconomics becomes human.
Nigeria may well be moving in the right direction. The evidence increasingly suggests that it is. But the ultimate test will not be how convincingly we explain the recovery. It will be how unmistakably Nigerians experience it. Until the improvement visible in the national economy begins to find its way into the family economy, the story remains unfinished.
And perhaps that is the most honest place for The Compass to point: not away from the progress, but towards the people waiting to feel it.
Ogundipe is a public affairs analyst and former President, Nigeria and Africa Union of Journalists.
