By Prof. R. A. Ipinyomi, University of Ilorin, Nigeria
Generally we can refer to economic barometers as a series of indicators that can be used to describe and assess the present economic situations and also used as indicators of future conditions. Some of these indicators are Gross National Product, Level of Unemployment, Wholesale Prices, Consumer Prices, Industrial production, Volume of Bank Deposits and Currency Outstanding, Consumer Credit, Stock Prices, Inflation, etc. One indicator is not usually sufficient to represent the entire health of a national economy. However a depreciation of one indicator often suggests or leads to a depreciation in the others. A national or global economy can be described broadly as declining, in recession or collapsing, in that gradual order. On the other hand the best economy can be described as growing or stable and labeled with triple A’s or some others. Nigeria economy is probably in grade B or C+, whereas most developing economies, like India, Malaysia, even Brazil, and others that were in the same class with Nigeria in the 1960s can now be graded as A-, A or A+. Yet Nigeria truly remains the largest economy in African simply because of the size of its population and the performances of private individuals. Nigeria hasn’t got the best per Capita GDP in Africa. The high overall GDP is due to the economic activities of some individual Nigerians, who are highly innovative, enterprising and hardworking; whereas government institutions on economic development have remained the major burden rather than a good catalyst for growth.
The Nigeria National Income Accounting provides economists and statisticians with detailed information that can be used to track the health of its economy and to forecast future growth and development. Although national income accounting is not an exact science, it provides useful insight into how well an economy is functioning, and where monies are being generated and spent. Some of the metrics calculated by using national income accounting include gross domestic product (GDP), gross national product (GNP) and gross national income (GNI). The GDP and GNP are calculated based on very specific time periods, usually quarterly or annually. But not all the information is available at the same time. This forces the National Bureau of Statistics, the agency in Nigeria that reports official GDP, to rely on estimates from time to time. The National Bureau of Statistics collects all statistical information, stores, and disseminates same through its periodic publications and internets facilities. The last time I worked close to them in 2014 I noticed a number of their limitations, including inability to collect all relevant data as at when due and gross under reporting of information by other agencies.
Hence unreported income is another flaw in Nigeria, and the figure is very significantly high and one that is not easily remedied. Nigeria business men and women hardly keep their statistical information in tractable forms and no law mandates them to do so. In addition individuals may under-report income to minimize income tax liability, all of which will understate the GDP; others are simply never captured by law or by the national official statistics. This is a well known universal problem between countries as well, since under-reporting of income is more prevalent in some countries than in others. Here in Nigeria government officials need to brace up in data collection and storage while the national assembly should provide the enabling laws to improving data collection, storage and access to. A timely and correct address of the situation may save the country from the alleged data manipulations, data thieving, data plagiarisms and the like by officialdom. There is a time to temporarily use forecast data but no nation should live all her life using false data and false information, especially about the state of the economy or its population distributions.
This write up is not only a highlight on the dooms; developing a positive attitude towards economic data management is also a target. At present Nigerians’ marginal propensity to consume is almost 100 %. For example, we may consider a scenario of an average Nigerian called Abu. Whenever Abu receives his regular income, he puts it in a bank account, but whenever he earns extra income above and beyond his normal income, he puts a small part of it into a bank, a saving account. The rest of it, he puts away in his wallet, so it’s ready to spend the following weekend when he goes to the mall. In most cases Nigerians use any of their bank accounts as if using a current account, a wallet account, a ready to be used money. This is why the marginal propensity to consume is always very high, and also because the regular salary is too small, the increase is also always too little and too late to come. The citizenry must be developed towards saving, preparing for retirement, encourage participating in insurance and making personal investments.
Nigerians intending to invest may also be encouraged to benefit from the internet of things around them by collaboration, cooperation and healthy competition. Already we are aware of the existence of small scale cooperation amongst 5, 10, or more workers in establishments. This can be encouraged to include artisans, market traders and others as a basis for preparation for raining days and handling old age crises. The connection building should be backed by law for enforcement, protection and functionality. Once we are all connected in a genuine way the national economic environment can be managed more easily, from a single point of control, for smoother and smarter everyday running and getting updated. At present there is no economic connection between adjacent states or between the states and the central government; the apparent existing economic integration is strictly on monthly allocation, from federal to states, to pay the few civil servants whose economic contribution to the national GDP and the daily lives of common people is in doubt. Proper integration of economic activities of people, between local governments and states, states and the federal, and between the federal and various financial institutions, has huge potential but right now the only people that can afford the high levels of connectivity are the very wealthy ones like the Dangotes, and a few individuals. The advantage for economic connectivity is that, be it farm produce, industrial outputs, office or home to rent, its internet modules are going to be in demand irrespective of the products in and out of demand. Also in future, the application economic integration is going to get less and less expensive. This may improve significantly the performance of small-scale and middle-scale enterprises in the system. We believe that a better national economic integration can offer nice upside in the future.
Firstly, the present APC of President Buhari’s administration needs to be advised pointblank on how to walk the tight economic rope and cross the dangerous valley of woes and corruption-mined economic environments. Economic recovery can never be achieved simply by probing and punishments, or by compromising and begging foreign nations that are destinations of stolen and illegal monies. Treatment of a cancer, the class of the prevailing corruption in Africa and in Nigeria, requires amputation and not air-conditioned bedroom chemotherapy. There is a name we call a woman that collects money from the men she keeps her nights with. Similarly there is a name we call a method that is used to make a positive change for the good of the society. Selective and cosmetic probes of opposing views and individuals can never arrive at economic turn around for the Africa poor citizens but a draconic and dramatic change.
Secondly, the entire political class needs similarly to understand that there is a limit the citizen can tolerate their stealing and the consequences of the growing gaps of inequalities in the society. If nobody has told the political class that their time is up they may choose to ignore our advice and earn its consequences. The elections in Nigeria, that always follow a pattern of violence, then from High Court to Supreme Court, have their explanation in failed institutions and none existing ethical, uniformity in law interpretations, or common moral standards. Nevertheless everyone ought to know that violence is not the exclusive weapon for one class, we imagine that a revolting society, caused by injustice and hardship meted on them unjustly, would be more violent than the few politicians who spend to produce the violence. Hence we need to listen to each other at peace time and jointly work to improve the economic environment for mutual goal.
Therefore the Nigerian economy may not be classified as in recession. What we have always had is falsehood and falsification of figures. By definition the economy is in a recession if its GDP falls consecutively twice. But the point is that we have never had a correct reference or base point. The government may self benchmark and make their assessment public by giving us the GDP figures for the last six quarters, if Nigeria is assessing its GDP quarterly, or the last three years if annually. The national assembly also has an input by forcing successive governments to make public the national GDP as at when agreed to by law, quarterly or annually.
Prof. R. A. Ipinyomi