By Dike Onwuamaeze
The Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has stated that only nine states in the country could be classified as fairly prosperous. These states, according to him, are Kwara, Oyo, Osun, Ekiti, Ogun, Ondo, Ed, Lagos and Anambra
Rewane made this statement in a paper titled “NIGERIA: Resource Rich & Cash Poor; Plenty Potential …Little Actual,” which he presented to mark the 60th Independence Anniversary of Nigeria.
He also said 12 states fell within the category of highly miserable in the country. These states are Yobe, Borno, Jigawa, Kano, Bauchi, Gombe, Plateau, Adamawa, Taraba, Sokoto, Zamfara and Niger.
The remaining 15 states, namely Katsina, Kebbi, Kaduna, FCT, Nasarawa, Kogi, Benue, Enugu, Delta, Imo, Akwa Ibom, Bayelsa, Rivers and Ebonyi, were classified as fairly miserable.
Anambra State, according to him, has the least incidence of poverty in the country with 14.2 per cent while Taraba State scored the highest on the misery index with 39.1 per cent.
The prosperity/misery index, as presented by Rewane, showed the level of prosperity or poverty in the country. Hundred per cent on the index represented perfect or total miseries while zero per cent represents perfect prosperity. Above 40 per cent stand for acute misery or poverty while Nigeria’s average scores of 26.3 per cent fell within the fairly miserable category.
Rewane recommended the emergence of dynamic leadership and strong institutions in order for the country to achieve positive economic outcomes, adding that “Nigeria needs a big-push that could awaken the sleeping giant “to break out of the vicious cycle of poverty.”
The CEO said the big push would provide economic stimulus, eliminate constraint and structural bottlenecks and build robust fiscal and external buffers through fiscal discipline, prudency and diversification of the country’s revenue base
Rewane, however, said that the country is currently faced with a binary choice, which is either to “do nothing” or pursue “revolutionary change” in the management of the economy.
He said the choice to, “do nothing” would mean a guaranteed failure or that the country would remain in the same state while a choice for revolutionary change have 45 per cent probability to succeed.”
Rewane pointed out further that the choice to do nothing would mean that the power sector reform would be partly implemented with modest new investments in power sector while some rail projects with limited linkages would be commissioned .It would also mean “partial exchange rate convergence, continued rationing of foreign exchange while intending international investors to remain tentative.”
He stated that the possible outcome of the choice would be to stymie the country’s opportunity to launch its economic take-off.
On the other hand, Rewane argued that a pitch for the revolutionary change in the management of the Nigeria’s economy would deliver the needful big-push for sustained economic take-off, increase total factor productivity by 2,5 per cent and encourage massive investments that could enhance gross fixed capital formation to 35 per cent of the GDP.
He noted that this would entail the passage of the Petroleum Industry Bill, the sale of failed refineries as scrap, the commercialisation of NNPC and the launching of the reform of the oil and gas sector. This would also, according to him, imply the removal of subsidies, the deregulation of petroleum products’ prices and the unification of the foreign exchange market by the CBN under flexible exchange rate regime.
He also postulated that the revolutionary change might encourage the International Monetary Fund, the World Bank and the African Development Bank to, “provide additional support of $3billion to $5billion” and the restructuring of the Eurobond while the foreign direct investment into the country might surge to $5billion and $7billion in 2021/2022.”
He identified the transformational steps to the country’s economic “take-off” as the removal of constraints, exchange rate unification, power reforms, the elimination of petrol subsidies, etc.