The Nigerian Deposit Insurance Corporation released data stating that 99.4% of bank accounts contain less than N500,000—barely above $1000, using the official foreign exchange market rate, which most people do not patronise because of one constraint or the other.
This suggests that out of the 111.5 million bank accounts, only 669,000 have about N500,000 in their accounts. There are other metrics of savings that may not be captured by the formal financial sector, nevertheless, Nigeria’s population is youthful; you can only save while you have a job. This means we are a nation of spenders, not savers. Most Nigerian households are engaged in consumption, that is, spending on goods and services majorly.
The question now is why is this happening? This is a reflection of our economy. Most households do not have enough to live on, the disposable income of Nigerians is extremely poor and people are struggling because of economic policies, absence of security in some states, unfavourable conditions for businesses to thrive, quality of education, nepotism and many more.
The poor remuneration from both the private and public sectors makes households unable to save. Savings becomes a big problem as most households live a hand-to-mouth existence. The marginal propensity to consume is so high that most people don’t have any savings by the time they become senior citizens, which puts their survival at the mercy of their children.
The saver in any economy is a provider of capital through fixed deposits, bonds and stock. Capital is key for a business to grow. Low saving habit is not so good for the economy because investment cannot come without savings. Savings can be brought from abroad through foreign investment or sourced locally.
This low saving rate means there may be inadequate funds for investment through domestic savings, which may affect the economy adversely. The continuous increase in inflation and consumer price index is not helping the economy. Also, the high-interest rates discourage investment because the investment will have a higher opportunity cost.
We need to move from consumption to production and sharing to creating wealth. It is easy to destroy things. Our previous political dispensations contributed to this current economic woes through corruption as well as fiscal and monetary policies.
A government that shut down borders for all, but opened up borders for some selected oligarchs, paralysing academic activities by destroying the quality of tertiary education and exporting our taxpayers’ money to pay for scholarships in universities abroad by Petroleum Technology Development Fund is investing in the development of foreign universities; this makes no economic sense when we have a foreign exchange problem.
A number of firms have left the country while others are about to leave. This is due to the fact that the naira component of the profit might remain the same, while the amount of dollars to be remitted will be lower because of the differences in exchange rate.
There is no level playing ground for investors. People in the same sector get forex at different prices. No wonder Atedo Peterside once said, “This economy has been rigged by a handful of people. Interest rate is high. Human Development Index is below 0.55 index point benchmark, total public debt is around N39.55 trillion, population growth surpasses economic growth, states cannot pay minimum wage, business environment is poor and energy supply is low.
The question is how do households and firms survive in this flagging economy? Meanwhile, the Central Bank is giving ‘awoof’ money to people in the name of ‘Anchor Borrowers’ and also the bank is lamenting the farmers’ non-refunding of loans.
The so-called palliative funds (humanitarian ministry conditional cash transfer and ‘Tradermoni’) only increase national debts, when angel investors can be encouraged to provide the funds to equip Nigerian youths with skills, technical know-how, innovation and ensure corporate governance, which would lead to economic diversification.
The current regime of the President, Major General Muhammadu Buhari (retd.), is a government of disempowerment. It has disempowered people economically, psychologically and socially, by not being able to meet up with the basic functions of government like payment of salaries, provision of infrastructural facilities and basic health services, and security.
One question that disturbs the mind is: Is this country so sick that it cannot be healed? Youth unemployment (within ages 15 to 24) stood at 53.4% as of December 2020, yet, sadly enough, these youths still support the two main political parties—All Progressives Congress and Peoples Democratic Party. What comes to mind is a Negro Spiritual song titled, Which side are you on? The side of the slave master or that of the people that have been enslaved: the oppressor or the oppressed.
Today, everybody knows the troubles with Nigeria: A weak economy, insecurity, separatist agitations, injustice, selection bias, nepotism, tribalism and inequality, to name just a few. When the economy does not grow, the people suffer. Nigerians need to decide which government they want—government of empowerment or government of dis-empowerment and suffering.
The future belongs to the person, who does it right not fast. We have a cultural problem in Nigeria; nobody wants to go through the process. What we are interested in is the result regardless of the means. We need to cultivate a culture of patience; doing it right and following the right process though it might be a marathon. It should be preferred to this get-rich-quick syndrome.
For me, a political party’s manifesto is something to really consider. The APC promised change but brought devastating change and later rebranded it with ‘next level’ in poverty, cluelessness, tribalism, impunity, disregard for the constitution and rubber stamp legislature. The PDP, on the other hand, goes by the ‘power to the people’ mantra but there is nothing so interesting to say about it.
Now is the time for the Nigerian citizens to exercise their political power in the right direction and make sure they do not commit economic and political hara-kiri by voting for ideology-deprived parties. Character, competence and nationalistic solidarity should be what to look for in the next leader.
In view of the above, evidence has shown that the two major political parties are just two sides of the same coin. Both parties have failed woefully and there is no empirical evidence to show that putting them in power will lead to a drastic change in the positive outlook of our economy.
Nigerian problems are multifaceted; you cannot solve them with just one election. So we need to get our motivation right; the motivation behind our choice should not be because it is the turn of a particular zone or religion but growth and development. We need to know why we want to get rid of our previous political choices.
Since nothing good seems coming from these two political parties, one is likely to float the idea of a third force. Though (unfortunately) the inordinate ambition of our politicians will not make the formation and coalition of a third force easy, yet it is quite achievable.
It will only require a determined mind and a resilient attitude. The youths of the country must give it what it takes for the third force to thrive if they are truly ready for any significant economic changes come 2023.
This contribution was written by Omoferimi, a teacher in a secondary school in Lagos. He wrote in from oomoferimialoba@gmail.com. To write for Clariform, click here.
