Decisive elections in Nigeria

The elections on February 25 in Nigeria may be the most important since its independence in 1960. After eight years of instability under outgoing President Muhammadu Buhari, the next government has a chance to carry out much-overdue needed reforms before and which, if implemented correctly, could usher in an era of explosive – and hopefully inclusive – economic growth.

The elections come at a difficult time for Africa’s most populous country, which is also its largest economy. Nigeria is in the midst of a growing debt crisis: the 100% of the country’s income is used to pay the national debt, almost 200 billion dollarswhich it involves additional borrowing to finance current spending. Inflation is twenty-one %partly due to a chronic shortage of dollars, exacerbated by the heist on a large scale of crude oil that represents more than 90% of their income in foreign currency. The unemployment rate is 33% and more than half of young Nigerians are currently unemployed.

This bleak economic reality, coupled with the constant threat of terrorism and separatist violence, led to a sharp drop of productivity, which intensified the already serious poverty crisis nigerian. The country has 20 million school-age children who do not attend classes and of its 219 million inhabitants, 133 live in multidimensional poverty; but the waste in subsidies the importation of refined oil prevents the government from carrying out the investments in education and health necessary to achieve sustainable economic growth.

At the root of Nigeria’s current economic woes is a decades-long crisis of leadership. The country is a clear example of the call resource cursewhich was established in the 1970s when the oil boom made it a rentier state in which rival ethnic and religious groups fought for control of the distribution of oil rents. The transition to democracy after almost four decades of military dictatorship led to further fragmentation, as the corrupt Nigerian political elite exploited growing poverty to buy the people’s votes through various clientelist schemes.

Whoever takes office after this month’s elections will inherit that time bomb. To succeed, the next president must focus on transforming the Nigerian political economy. Constitutional reform is especially needed to address immediate challenges such as the debt crisis and rampant oil theft, as well as long-term structural problems.

When Nigeria gained independence from the UK in 1960 it was a decentralized federation. That allowed the country’s leaders to focus on economic governance and be more attentive to the needs of the people, but a number of military coups Beginning in 1966, they made the military culture of centralized command the defining characteristic of the Nigerian political system. As the federal government increased its power, state governments became increasingly content with monthly allocations from oil revenues (which were reduced in recent decades) and little else.

“The next president must focus on transforming the Nigerian political economy. (…) And attend to immediate challenges such as the debt crisis and rampant oil theft»

The next Nigerian president must restore the balance of power between the central government and the states, giving regional bodies and state governments more economic and security powers in their jurisdictions. It will not be easy, because vested interests thanks to the concentration of power will undoubtedly work against changes that threaten the control of resource rents.

What Nigeria needs is a visionary leader. The country has a private sector thriving, but the absence of a systematic philosophy of governance prevented the Nigerian economy from realizing its potential, because the balance between the market and the state changes from one government to another.

But Nigeria needs more than a figurehead. In recent decades, political dysfunctions weakened intensely to the country’s institutions, undermining economic growth and national security. The absence of strong institutional capacity undermined both the current government’s statist approach and previous governments’ increased emphasis on the private sector, leading to regulatory capture, crony capitalism, and inequality. None of those approaches succeeded in creating prosperity. Without strong and independent institutions to ensure transparency and fair competition, the next Nigerian leaders have no chance.

Finally, the next Nigerian government must address the poverty crisis by combining effective social protection with market initiatives that create opportunities to break out of poverty traps. In addition, the country must deal with rapid population growth, one of the main factors affecting the increase of extreme poverty.

that the main candidates Presidential leaders have touched on some of these issues during their campaigns is encouraging, but the question is whether the next Nigerian leader will have the political vision, courage and perseverance to reinvigorate the institutions needed to attack the widespread corruption that has limited the economic potential of the country and impoverished its population. We will find out soon.

Copyright: Project Syndicate, 2023.www.project-syndicate.org