By Taiwo Adebowale
In a shocking revelation, renowned economist Bismarck Rewane, Managing Director and CEO of Financial Derivatives Company Limited, has declared that Ghana is now wealthier than Nigeria. Rewane made these statements during an economic scorecard presentation on Channels Television, marking the first anniversary of President Bola Tinubu’s administration.
This news comes as Nigeria’s economic ranking has seen a dramatic decline. Once the 32nd largest economy globally, Nigeria has now fallen to the 42nd position. More strikingly, in terms of wealth management and accumulation in Africa, Nigeria has dropped from being the continent’s leader to fourth place.
Ghana Surpasses Nigeria in Wealth
“In the past, we were always richer than Ghana. Now, external reserves and GDP figures speak for themselves,” Rewane stated. This shift signifies a monumental change in the economic landscape of West Africa, with Ghana emerging as a significant economic player.
Rewane, who is also a member of President Tinubu’s Economic Management Team Emergency Taskforce (EET), emphasized the gravity of Nigeria’s economic decline. The EET was established to develop and implement a consolidated emergency economic plan to address Nigeria’s financial challenges.
Economic Performance: The Good, the Bad, and the Ugly
Rewane categorized Nigeria’s economic performance into three sections: the good, the bad, and the ugly. This triage reflects a nuanced view of the country’s current financial health and future prospects.
- The Good: Despite the challenges, there are areas with potential for improvement and growth. The Nigerian economy still holds promise if key reforms and policies are effectively implemented.
- The Bad: Rewane highlighted the declining GDP growth rate, which was 2.98% last year. This pales in comparison to South Africa’s 1.93%, Kenya’s 4%, and Ghana’s 3.8%.
- The Ugly: Nigeria’s inflation rate stands at a staggering 33%, while South Africa and Kenya both maintain a 5% rate, and Ghana sits at 25%. Furthermore, Nigeria’s GDP per capita is a mere $1,111, significantly lower than South Africa’s $6,700, Kenya’s $2,000, and Ghana’s $2,200.
Structural and Exogenous Economic Challenges
Rewane dissected Nigeria’s economic weaknesses into structural and exogenous factors. Structural issues include rent-seeking behaviors, inefficient market structures, an energy crunch with a mere 4,000 MW of power generation, regulatory bottlenecks, declining labor productivity, and demographic pressures.
Exogenous shocks, on the other hand, encompass global disruptions such as the COVID-19 pandemic, subsequent global supply chain issues, political tensions, high global interest rates, and social unrest driven by the cost of living crisis and wage agitation.
Policy Missteps and Social Unrest
One critical issue Rewane pointed out is the lag between policy announcements and their actual impacts. This delay has often led to unintended consequences and social unrest. For instance, major policy changes announced in 2023, including the ambitious goal of achieving a $1 trillion GDP, have yet to yield the desired outcomes.
“The wrong sequencing of reforms is taking its toll on output,” Rewane said. The removal of petroleum subsidies, the unification of exchange rates, and promises to overhaul security infrastructure and double power generation have not been executed in a manner that prevents economic disruptions.
Looking Forward: Hope Amidst Challenges
Despite the bleak current situation, Rewane sees a path to recovery. He emphasized the need for new borrowing to refinance existing obligations and called for robust policy changes and institutional reforms. According to Rewane, these steps are expected to lead to positive and faster growth from 2025 to 2026.
Rewane also reviewed President Tinubu’s promises from the onset of his administration. These included increasing GDP to $1 trillion within eight years, removing petroleum subsidies, unifying exchange rates, doubling power generation, and controlling inflation. While these promises are ambitious, the reality has been a mixed bag, with significant room for improvement.
President Tinubu’s First Year: Promises and Performance
President Tinubu’s first year in office has been marked by significant economic turbulence and bold policy moves. The formation of the Presidential Economic Coordination Council (PECC), which includes distinguished leaders and key government officials with Tinubu as Chairman, underscores the administration’s commitment to addressing these challenges head-on.
The PECC has a formidable task ahead: to steer Nigeria back on course to economic stability and growth. The council’s role will be crucial in ensuring that the ambitious policies and reforms announced by Tinubu are implemented effectively and yield the desired results.
Conclusion: A Call for Urgent Action
Nigeria’s fall from economic grace is a wake-up call for urgent and decisive action. The contrast between the country’s current economic status and its past dominance in Africa is stark. However, with the right policies, leadership, and commitment, Nigeria can reclaim its position as an economic powerhouse on the continent.
Rewane’s analysis serves as both a critique and a roadmap. The challenges are significant, but they are not insurmountable. With strategic reforms, effective implementation, and a focus on both structural and exogenous factors, Nigeria can navigate its way out of the current economic quagmire.
As Nigeria marks the first anniversary of President Tinubu’s administration, the nation’s leaders and policymakers must reflect on these insights and take bold steps to reverse the economic downturn. The future of Nigeria’s economy depends on their ability to learn from past mistakes and implement sustainable solutions that will benefit all Nigerians.
Taiwo Adebowale is Atlantic Post Senior Business Correspondent
