I lived and worked in Nigeria for many years as a British diplomat, and one of the issues that most disturbed me was the sustenance of the fuel subsidy regime.
Why would a country with a severe infrastructural deficit invest more money on a wasteful expenditure such as cheap petrol, instead of building schools, hospitals, dams and a national railway system? It is evident that it had to go.
We joined the World Bank and the International Monetary Fund in saying as much to the Nigerian government. And at long last, it is gone.
And everything we said that would happen after it goes is happening. Nigeria’s GDP is growing at 3.46 per cent, while Europe is on the edge of recession.
Her stock market just crossed 100,000 basis points, overtaking Argentina’s as the world’s most profitable stock market. And capital importation is up by 66 per cent.
But that is not the best story. The cherry on the cake is that fuel importation into Nigeria is down 50 per cent. This means that Nigeria’s much-depleted federation account will rapidly be resuscitated.
More funds will trickle down to the federating states from the Federal Government, and if well utilised, Nigeria could attain her pre-2015 growth levels.
The future looks bright for Nigeria if her government can stay the course and resist the pressure to reverse the fuel subsidy removal and the flotation of the Naira.
Nigeria’s economy is not a mess. There is nothing messy about 3.46 per cent growth. If attaining such growth was easy, then we would have that level of GDP development in Europe. But we don’t.
The only thing I would say is that Nigeria must improve its regulatory institutions, including measures to counter corruption.
If I were an investor and observed that the former head of the Nigerian Communications Commission is now the Chairman of the board of MTN, and sitting with him on that board was the former head of Nigeria’s Federal Inland Revenue Service and the former Minister of Communication Technology, along with a host of former top regulatory quango bosses, I would have concerns.
If Nigeria can fix this, I do not see how the country will not benefit from a high influx of foreign capital.
Money is attracted to domiciles with good policies and sound regulations.
Right now, Nigeria has the policy. All it needs is to take steps to build confidence in its capacity to regulate and renew efforts to identify and stamp out corrupt practices.
-David Roberts, a former British Diplomat worked with the British Council in Nigeria
