Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

NIGERIA: Africa’s Biggest Economy is Big for nothing for the Poor and Working People

NIGERIA: Africa’s Biggest Economy is Big for nothing for the Poor and Working People

By Peluola Adewale

No doubt this is not the best of time for President Goodluck Jonathan. His government has been exposed as peddling meaningless phrases while wholesale looting continues and the country shows growing signs of disintegration. The Boko Haram’s abduction of over 200 Chibok school girls has brought on it contempt and opprobrium locally and internationally. But apparently to gild the rotten image of his government, President Jonathan reminded us of what he considers the monumental economic achievements of the government in his May 29 speech to mark 15 years of the return to civil rule in Nigeria. According to him the country under his watch has gained “recognition as the largest economy in Africa, the most preferred investment destination in the continent and in terms of returns on investment, the fourth in the world.” Good enough the working people cannot be taken in by this. The crushing realities of their daily existence have made them to clearly see the so-called achievements as a façade.

It should be recalled that in April the government announced the result of the rebasing of the country’s GDP that has made it Africa’s largest economy overtaking South Africa. The base year for the calculation of the GDP was brought forward from 1990 to 2010. As a result the GDP of Nigeria is currently put at $509bn, rising by 89 percent from the value previously stated. The South Africa’s GDP stands at $372bn.

It would not be correct to dismiss the new official status as the biggest economy as a mere publicity stunt. There are evidences on ground to justify this. For instances, services such as banking, telecommunications and consumer goods stores have seen qualitative transformation from what obtained as of 1990’s. But as a commentator described it this development is a vanity. Nigeria is big for nothing. There is nothing to show for the size of the economy in term of quality of life for the vast majority of the population. Nigeria is as the biggest economy in Africa as the fattest person in the continent who is full of fat. Obesity is not a sign of healthy living.


Besides, it is not the wizardry or policy of the economic management team of the government that has made Nigeria to be the biggest economy in Africa but the rapidly growing population of Nigeria which is the biggest in the continent and seventh in the world. It is the same reason why Nigeria is the “most preferred investment destination in the continent”.

The official poverty rate is put at about 60%. This means there are about 40 percent or about 70 million people, well over the entire population of South Africa who can buy some consumer goods or pay for some services. This explains why the MTN has 55 million subscribers as of 2013 more than the population of South Africa and Shoprite sold more champagne at its 6 outlets in Nigeria than in its entire 600 outlets in South Africa. Even those at the bottom of the socio-economic pyramid, i.e. among the 60 percent living on a less than $1.25 a day must necessarily buy groceries and basic items like soaps even if they cannot afford to send their children to schools or access health care. This explains it is services and consumer demand and not agriculture or industry that constitutes the lion share of the new GDP. The proportion of service is more than the agriculture and industry combined. It is not difficult to see why Nigeria’s economy is an archetypal jobless growth.

Indeed, the Wall Street Journal in the US aptly captures the situation in an article. According to it, “Nigeria’s rise is primarily a triumph of demographics. Its population will be seven times as large as South Africa’s by 2050, the U.N. projects. That trajectory is drawing investment and emboldening businesses willing to wrestle with Nigeria’s myriad woes.” (Wall Street Journal, April 7, 2014).

The “Nigeria’s myriad woes” in question include virtual absence of rail and water transportation and the primitive state of the infrastructure like roads and power whose provision can, even on the basis of capitalism, create opportunities for mass jobs and lift a good number of people out of poverty. Incidentally it is neo-liberal version of capitalism, especially in a colonial economy like Nigeria that produces parasitic ruling elite who are not interested in production but in governance in order to loot the collective resources of the society, that has made almost impossible development of these basic infrastructures.

The May 28 2011 Editorial by the Economist weekly in London paints the ugly but correct picture of governance in Nigeria. It states “the economy may be growing by 7% a year, but this feeds mostly the greedy mouths closest to government troughs.” It observes aptly that the problem of Nigeria is not “simply one of embezzlement and bribery. The entire state machinery exists to siphon off cash.” It quotes a consultant saying that “Nigerian politics is one big bun-fight over oil money”. It mentions how “the three-quarters of the government budget goes toward recurrent expenditure” and “very little is invested in infrastructure.” It reveals that the grid power of Nigeria the “seventh-most-populous country in the world, and its seventh-biggest oil exporter” put at about 4000MW is as much as that of “Bradford, a post-industrial town in the north of England.”

It is not difficult to see why Nigeria is one of the five countries where the two-thirds of extreme poor people live. Incidentally the World Bank President gave this shocking revelation the same week Nigerian ruling elite threw up a party to celebrate its status as the biggest economy in Africa. The Jonathan government would no doubt consider the timing of this revelation as uncharitable. But the World Bank just like a father who is determined to keep a devil-may-care child within his senses so as not to set the house on fire does not want the realities to be lost on the exultant Nigerian government. The Chief Economist of the World Bank for Africa said, “I don’t want to rain on Nigeria’s parade …. but what matters are living standard for everyone”.


This is not for President Jonathan. What matters to him is the number of billionaires and private jet owners the country has produced. He declared at this year May Day rally, “Nigeria is not a poor country”. What are his evidences?

“Aliko Dangote was recently classified among the 25 richest people in the World,” said the President. He added, “If you talk about ownership of private jets, Nigeria will be among the first 10 countries, yet they are saying that Nigeria is among the five poorest countries”. This is reminiscent of Fela Kuti’s “Ikoyi blindness”. Ikoyi is an opulent area in Lagos resident by the rich. Though this neighborhood has lost some his luster as many of the streets are in state of disrepair it still retains its status as exclusive to the rich. The late Afrobeat legend sang on how the residents of the area are blind to the suffering of the poor.

However it is not only President Jonathan and his ruling PDP that are suffering from this incurable blindness. The current Lagos state government, the model of the opposition APC, is perhaps the worst anti-poor in the country and in history of Nigeria. For instance, it imposes the fees in the state university which is not only outrageously high but it is also the highest by any public university in Nigeria. It is simply impossible for any student from the poor and working class backgrounds to pay the fees.

With its enormous riches it is true that Nigeria is not a poor country. But it has the largest concentration of the extreme poor people in Africa. This is called a paradox of extreme poverty in the midst of huge human and material resources. But to President Jonathan” Our problem is not poverty, our problem is redistribution of wealth.” Isn’t this fallacious?

Poverty is a product of the inequitable distribution of the collective income and wealth of society. Resolving the problem of poverty requires the collective ownership of the nation’s wealth so that it can be put to work, in a planned way, to increase the income of the majority. However, this is not possible on the basis of capitalism, an inherently iniquitous socio-economic system based on private ownership of wealth and production for the profit of the wealthy. In other words, redistribution of wealth is an intractable problem for any capitalist government, worse still if it is a neo-colonial country like Nigeria. Therefore, for Nigeria the problem is both of poverty and breaking the grip of the ruling class over the country’s wealth.


Incidentally, what the GDP rebasing has revealed more clearly is the fact that the inequality is much sharper and deeper than earlier thought. While over 60 percent of the population live on less than $365 a year the per capital income has been increased from $1,555 to $2,688. This is why perhaps instead of joining Nigeria to celebrate its headline growth, some far-sighted strategists of capitalism want the government to be sober and spare thought for the high possibility of social unrest that could be triggered by the inequality. For instance, Razia Khan the Head of Africa Research at Standard Chartered Bank warns in an article that the GDP rebasing “in highlighting even greater inequality it may reveal why so many Nigerians feel poor, and the attendant risk to political stability.” (The World Today, February 2014) In other words these strategists fear that propaganda over the doubling of Nigeria’s GDP will simply push more Nigerians to draw the conclusion that the present order must change.

The inequality is so stark that the Minister of Finance Ngozi Okonjo Iweala, who is a former Managing Director of World Bank and therefore a perceptive strategist of capitalism, has to admit it. She said at the official presentation of the rebasing statistics, “inequality has been rising so we need to build social safety nets meant to take care of those at the bottom of the ladder” (Vanguard, April 7, 2014).

The problem of inequality is not the lack of safety nets. Even at that on the basis of neo-liberal capitalist progam, which is the economic thrust of the government, provision of safety nets as the SURE P program has shown can only be tokenist and unsustainable if it is not another big racket of corruption. The problem is structural; it is fundamental and systemic. In other words, inequality is a fundamental crisis of capitalism. Therefore, Okonjo admitting the reality of inequality cannot change the situation. The brutal fact is that there is no solution within the confines of capitalism.


For the working people the best way to start the fight back and change their situation is through struggle and building a political force, their own party, that has a policy, a socialist program, that can truly transform our lives. This is what was lacking in January 2012 when millions hit the streets during the biggest general strike and mass protest in the history of Nigeria against fuel price hike. The misfortune of labour and working people today is that such party is still missing. The working people have shown capacity and resolve to fight back the neo-liberal capitalist attacks. Some of such struggles have won concession like the last ASUU strike which attracted more funds to universities. But as the introduction of new fees at Obafemi Awolowo University has shown the ASUU strike like any other similar action cannot fundamentally resolve the education crisis which is a crisis of capitalism.

This means that we need to strive to bring to power a government of the working people that would commit the resources of the society to the provision of functional education, health care, decent housing, decent jobs, infrastructure, etc. In order to mobilize adequate resources to achieve this, the commanding heights of the economy must be put under public ownership with democratic management and control of the working people, while the public officers who are subject to recall must receive the average salary of civil servants.