Absence of Actionable Blueprint And Nigeria Illusion of One Trillion Dollar Economy

BY AVM RTD AKUGBE IYAMU MNSA fsi 

Any country economy which does not manifest in a positive microeconomic variable cannot be headed towards a one trillion dollar economy. A country that have the desire for a one trillion dollar economy cannot depend solely on prayers and guesswork without the huge need for actionable blueprints. Currently in Nigeria, that is sounding like a difficult composition.

The road to one trillion dollar economy cannot exist in the environment where interest rates is above 30%, certainly this is not the pathway to one trillion dollar economy. At this rate, small and medium scale companies will find it near impossible to borrow and repay with interest without government intervention. We have seen how Large companies like UBER are relocating while others like Shell are closing shops. One would have thought that the increase in foreign reserves $54 billion dollars was enough guarantee for a sustainable business environment, however, a debt of $118 billion dollars can not be an attractive option for foreign investors. The strategy of keeping the foreign exchange reserves while the country embark on borrowing will not be the most decorated way for a trillion dollar economy. This is an economic illusion of a net deficit of $63.09 billion dollars and the whole essence is borrowing to sustain the reserve.

We need to step backward to look at the economic policy of Obasanjo/Atiku era. The duo inherited a debt of $40 billion dollars. With a savings of more than $18 billion dollars from the oil windfall, they negotiated and paid $12 billion dollars with a forgiveness of more than $18 billion dollars. This situation exited the country from debt.

With the current huge debt burden and near absence of electricity, the cost of production is becoming the highest in the world. This have escalated a cost of production induced inflation. Take for example the average price of production of a barrel of crude oil globally that is about $12 but in Nigeria, it is about $30.

According to the World Bank, Nigeria poverty rate stands at 63% equal to more than 140 million people out of the 250 million population. The national poverty headcount has risen from 56% in 2023 to 61% in 2024 and racing to 63% in 2025/2026. A one trillion dollar economy cannot be achieved with a vulnerable population of about 79% that are either poor or vulnerable to poverty. Neither will extreme poverty of ($2.15/day) affecting affecting 61.2 million people support a one trillion dollar economy.

Overall, when a country simply rebase her economy with a formula the exclude instability in prices, that cannot be an asset to one trillion dollar economy. On the other hand, a weak job growth, modest GDP gains that feature mostly in services will not translate into enough productivity for a one trillion dollar economy.

A one trillion dollar economy is farther away when the agricultural sector that was supposed to employ large percentage of the low and rural population of the country is constrained by insecurity and higher cost of transportation.

The issue is now whether one trillion dollar economy can be achieved or just another sloganeering and propaganda.

AVM RTD AKUGBE IYAMU MNSA fsi

PRESIDENT ASSOCIATION OF ENVIRONMENTAL PROTECTION AND CLIMATE CHANGE PRACTITIONERS

CONSULTANT ON CLIMATE CHANGE AND ANALYST ON ENVIRONMENTAL POLICIES AND COMMENTATOR ON NATIONAL ISSUES

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