Nigeria is on the path to economic recovery after a biting recession occasioned by the recent fall in global oil prices. However, the approaching 2019 general elections seem to pose as a threat to this recovery.

The second quarter of 2017 witnessed Nigeria’s emergence from its worst recession in 25 years. This was after the first positive growth in the nation’s Gross Domestic Product (GDP) following 5 quarters of contraction. Figures from the Nigerian Bureau of Statistics (NBS) show that the country’s economic growth has remained positive since then. For instance, the country’s economy grew by 0.72% in Q2 2017, 1.17% in Q3 2017, 2.11% in Q4 2017 and 1.95% in Q1 2018.

The discovery of the “Black Gold” in Nigeria influenced the abandonment of other profitable sectors of the economy for years. For example, the agricultural industry that used to drive economic development became moribund. The oil boom, especially between 2011 and 2015 was, therefore, a two-sided coin.

The failure to save from the oil windfall for the rainy days like the recent recession ignited calls for diversification. Economic policy analysts in Nigeria are now able to assess the drawbacks of the mono-economy. Like the African Business magazine points out, recession has awakened Nigeria’s consciousness of broadening and strengthening its economic infrastructure.

Nigeria’s economic recovery efforts

The increasing calls and actions geared towards a shift from an oil-dependent to a diversified economy, are products of the recession. Nigeria’s 2018 budget stands at $29.8 billion, which the President calls, ‘the budget of consolidation.’

Economic diversification is aptly reflected in the budget but paradoxically, the budget is financed largely by crude oil. According to Nigeria’s Minister of Industry, Trade and Investment; “you need oil to get out of oil. If we combine reforms in the structural economy with rising oil prices, growth will come back.”

The Economic Recovery & Growth Plan (ERGP) is the blue-print that has been guiding the Federal Government’s economic recovery agenda. Agriculture, transportation, power and gas, manufacturing and processing are priority areas in the recovery plan.

So far, President Muhammadu Buhari has been consolidating on the agricultural reforms of his predecessor. There have been reforms through the Ministry of Finance, to broaden the tax base of the economy. Major infrastructure projects are ongoing in the area of rail and road transportation.

The Minister of Power, Works and Housing, has also announced the exploitation of multiple sources of energy. This is to improve Nigeria’s power generation capacity which according to him, has moved from a steady 5000MW to 7000MW.

The 2019 general elections as a threat to sustainable economic recovery

Despite changes made so far, it’s evident the overhaul is still below expectation. Nigeria must remain consistent on the path of diversification, irrespective of global oil prices at any point in time. According to the NBS, the economy is in its second and last stages of recovery, heading towards sustainable growth.

However, the present build-up to the 2019 general elections in the country, is proving to be counterproductive to economic growth. The quest by the Buhari Administration to secure a second term in office is already in full gear.

This is happening amidst stiff opposition from his rivals and the Nigerian Youth who appear unsatisfied with his first term. Many of the President’s political associates have joined the opposition, prominent among them is Senate President, Senator Bukola Saraki. Saraki, apart from defecting to the opposition, has also declared his intention to run for President.

His decision to rival Buhari in the 2019 election among many other political alignments and realignments are already causing political ripples within the nation’s political space. The polity is therefore already very tense at the expense of continuing sustainable economic recovery measures. It’s very clear that major spending will soon tilt towards the electioneering process rather than economic recovery projects.

In an audience with British Prime Minister Theresa May, in April 2018, President Buhari already expressed concerns about this fact. According to him, the increasing focus of politicians on the approaching elections is slowing down the economy. He, however, noted that he is not bothered, as he is focused on providing security and revamping the economy.

In response, Theresa May said the Buhari administration has “been making good progress on the economy,” there’s need to maintain the focus, despite approaching elections, and increase in political activities.

Rising crude oil price & the hidden truth behind Nigeria’s recovery?

While the price of crude oil is rising, Buhari’s critics have been quick to attribute the present recovery to this rising price. To them, the Buhari administration has done little or nothing in terms of diversification to achieve the present economic recovery. This explains the increasing calls from Nigerian youths on the need to “change the change.”

The future may still be economically disastrous for the country if the above claims are true. This is coupled with the ongoing 2019 electioneering frenzy at the expense of economic recovery activities. With the rising oil prices and a seemingly slow diversification process, the nation must be wary of resting on its laurels now that the oil windfall has returned.

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