Nigerians need to subordinate consumption to accumulation for the economy to grow

By Ayo Akinfe

(1) Most Nigerians remain of the misinformed view that their country is immensely wealthy and the only problem hampering growth is corruption. President Buhari is the physical symbol of this manner of thinking, which is why fighting corruption appears to be the only coherent policy he came up with during his first tenure. However, figures do not lie and it has been proven that this argument cannot stand up to scrutiny

(2) Last month, accounting firm PwC, revealed that Nigeria was sitting on as much as $900bn worth of dead capital, which if invested would radically alter the economy. When you bear in mind that Nigeria’s gross domestic product (GDP) is only $375bn and her 2019 annual budget is a paltry $28.8bn, it is clear to even the blind that limited productivity and under-investment are Nigeria’s two biggest problems. They dwarf corruption the way a skyscraper dwarfs a bungalow

(3) Everyone has been celebrating Akinwunmi Adeshina, the president of the African Development Bank (AfDB) over the last week after his appearance at the G-7 summit but very few Nigerians took on board the dire warnings of the AfDB with regards to the Nigerian economy. According to the AfDB, Nigeria has an annual infrastructural deficit of $100bn. Can someone please explain to me how we invest $100bn in our infrastructure when our total budget is $28.8bn. Even if every penny of our budget was spent judiciously, we would still be a poorly and beggarly nation

(4) To get out of this rut, Nigeria needs to radically grab hold of capital wherever it can be found and invest it in infrastructure, income generating ventures and job creation. If we could just get hold of half of that $900bn PwC is talking about we would be home and dry. Personally, my favourite target are evangelical church tithes. If we could invest them in our economy, Nigeria would be a different place within a year

(5) Most Nigerians naively believe that how you spend private wealth is your own business and it has no impact on society. To that, I say fa, fa, fa, foul. Every dollar spent on an owanbe, on pilgrimages to Mecca and Jerusalem, on private jets, on Gucci handbags, building palaces for monarchs and on junkets to Dubai is a dollar taken away from investment in power, railway lines, roads, shopping ports, factories, etc

(6) Our government lacks the financial muscle to fill this $100bn infrastructural void so the private sector needs to step into the breech. However, you will only have a vibrant private sector when wealth is invested, it creates more wealth and this is then invested in income-generating ventures. If for instance, we spend money on toll gates that generate receipts, the Nigerian state benefits but when you spend money on a hajj to Mecca, it is the Saudi government that benefits and when you throw a birthday party in Dubai, it is the government of the United Arab Emirates that benefits. As you can see, no one impoverishes Nigeria as much as Nigerians

(7) In 2017 for instance, Nigerian state governments and private individuals spent a total of N136.5bn ($376m) on hajj pilgrimages. This is nearly one third of the 2018 education budget of N435.01bn ($1.2bn). If you combine the amounts spent on religious and social pilgrimages to Mecca, Medina, Jerusalem and Dubai together, you see that they dwarf our education budget. Now, no serious nation intend on eradicating illiteracy and equipping its populace with production skills operates that way

(8) It is delusional to think that we can keep squandering the little wealth we generate thanks to crude oil as we deem fit “because it is money we worked for” without any adverse consequences. For Nigeria to get off her knees, she needs a range of public-private partnerships (PPPs) but for this to happen, all this dead capital spend on consumption needs to be diverted to investment and production. If we are not prepared to do that, we have no right to complain about kidnapping, armed robbery, religious extremism, banditry, etc

(9) Aliko Dangote once said he does not know of any economy that has been developed by foreign capital, saying nations industrialise thanks to local capital. As we speak, Nigeria does not have enough mechanisms to capture local capital and to be honest, even if we did, are the populace interested? Will a newly wedded couple rather invest in a sovereign bond than throw a lavish party in Dubai for instance?

(10) Someone needs to look the Nigerian people in the eye and tell them the honest truth that their spending of private wealth on Gucci and Luis Vuitton handbags, going on religious pilgrimages, throwing parties in Dubai, having owambes every week, buying six SUVs, endless sewing of aso ebis and purchasing private jets is more injurious to the economy then Gandollar stuffing his agbada, Rochas claiming Imo State land or Tinubu loading billion vans with Lagos State cash. Their looting is limited to their state’s paltry budgets, while you are squandering $900bn that should determine the future of your grand children and generations of unborn Nigerians