Nigeria's Economy Is On Track
By Mike Arnold
I have been to Nigeria. Multiple times. This is a nation that is going places. And it will get there even faster when it begins implementing policies that make her more self-sufficient and less dependent on others, thereby unleashing her pent-up entrepreneurial potential.
There used to be a tendency among Nigerians to think that foreign is better. Now, that fallacious mindset is gradually dying out. Nigerians are beginning to understand and accept that they can achieve greatness, too – without foreign inspiration, leadership or funds. Which is why Nigerian music and movies are rising in prominence globally.
It’s not just entertainment. Nigeria’s entrepreneurs are catching on, and the biggest of all Black nations is wanting to move beyond song and dance to real industry. The new administration's decision to end fuel subsidies and float the Naira is a step in the right direction towards unleashing their potential. Here in the U.S., now Fitch and Standard & Poors have upgraded Nigeria’s economy. Things are taking shape.
I understand as Nigeria becomes less dependent on Europe and its former colonial powers, these powers will fight back. It is natural. Nigeria is a resource-rich country of very intelligent people. It is a large population – the sixth largest in the world – that can be a ready-made market for goods produced in Europe. As a result, there is great incentive on the part of state broadcasters there to spin a good message as a bad mess.
So, when the British Broadcasting Corporation understandably presents the reforms that are severing the strings attaching Nigeria to Europe negatively, people in Nigeria ought not be surprised.
Even a mother is somewhat sad when her children leave home. The empty nest can be scary. As Nigeria goes from importing 2.5 billion litres of gasoline from Europe every month to importing less than half of that number, of course the BBC will panic.
But with all due respect, whose economy is a mess? Is it Nigeria, which grew by 3.46% in the last quarter of 2023, or the United Kingdom, which has now slipped into recession?
Nigeria was borrowing money from European and Chinese institutions to artificially inflate the value of its currency. Now, it is doing the commonsensical thing by floating its currency. While this may bring some short-run instability, offers enormous, long-term rewards and economic freedom for the nation. People in Nigeria would be naive to think those they took loans from will be happy with them.
No doubt Nigeria has to work on its internal governance issues. Its regulatory systems are weak, especially in the telecoms sector. And the telecoms sector is where you have the largest corporations in Nigeria by market capitalisation.
Strengthening regulatory institutions would lead to an infusion of fresh foreign direct investment into the country, especially as the Nigerian Stock Exchange just registered a stunning 100,000 basis point growth in its all-share index, placing it ahead of Argentina.
The universal “factors or production” taught in every business school – the elements that, when brought together, form the driving engine of an economy – are land, labor, capital and entrepreneurship. Nigeria is rich in the first three, and has enormous potential with the final, key factor: Entrepreneurship.
With the new market freedom of the Naira, more incentive to produce goods and services locally, and the end of paternalistic fuel subsidies, I am confident Nigeria’s multitude of brilliant entrepreneurs will rise to capitalize on these opportunity and drive the nation’s economy – and international reputation – to new heights.
I believe Nigeria’s future has never looked brighter. It’s time for Nigerians to rise and shine.
Mike Arnold is founder of Africa Arise USA, Arise Academy IDP Camp Schools, the #IDPjustice campaign, and currently serves as Mayor of the City of Blanco, Texas, USA.
