If you ask an average Nigerian now what the meaning of recession is, the regular response you get is that it is that they heard it from the news. They hardly understand the meaning of what the global community has used to determine whether an economy is growing or not.

In 2015, when Nigeria’s growth rate was at 2.653 percent, 23 out of 36 state governments owed salaries of civil servants. States like Osun left their civil servants unpaid for as long as 5 months. There were series of strike actions undertaken to seek a solution to this menace, but nothing positive occurred.

So when the World Bank recently announced that Nigeria would escape recession this year, it was evident that only the Nigerian government had taken the news as a sign of relief. They have continuously been criticised by the media and the people for bringing Nigerians into a state of hardship.

Prices of goods had already been increasing before now. It is a norm in Nigeria that whenever prices of items go up, they rarely come down. Even when the prices were increased because of a temporary rise in production cost, Nigerian companies rather see such opportunities as arbitrage platforms to exploit their customers and make more profit.

These companies hardly reduce their prices, not because they do not want to, but because of the uncertainty the economy has posed due to the inconsistent policies placed by the Nigerian government.

Will Nigeria escape recession?

My guess is as good as yours! However, escaping recession has never been Nigeria’s problem. Even at the peak of Nigeria’s economic boom in 2010 when the country was at a 7.8 percent growth rate, about 100 million people were already living below poverty line.

In 2016, over 270 manufacturing firms shut down their operations as a result of harsh business conditions; there was also a mass exodus of airline operators and shipping companies from the country. Some of these companies relocated to neighbouring countries like Ghana and Cote d’Ivoire. Banks were on a retrenchment spree while companies who could still manage to keep their staff had to undertake pay cuts, even when prices of items were being hiked daily.

There was also a pause in capital inflows into the economy. Last year, Nigeria recorded no initial public offering. Fintech giant, Interswitch had proposed to raise $1 billion from the capital market but their hopes were dashed. Why? Investors were not receptive to the Nigerian economy.

The investors had complained that the naira was weak making any potential investments into the economy too risky. Foreign investors also complained that the Central Bank of Nigeria (CBN) has been controlling the exchange rates as the official value of the naira against the dollar does not reflect a true state of the currency. The difference between the interbank rates and the parallel market alludes to their argument.

Egypt, with similar economic conditions, had seven initial public offers last year. The country, which had parallel rates as much as double the official rate undertook a devaluation of their tightly controlled currency in 2016. The floating of their currency made stock prices rise to its highest point in eight years, making their economy more attractive to the international market.

Growth or no growth?

The prospects for 2017 will be high for the Nigerian economy if the government is willing to listen to its advisors and adopt a less stringent approach to running the economy. CBN needs to fully float the exchange rate and allow for a further devaluation of the Naira.

Mr Fisayo Durojaye, an investment banking analyst with Afrinvest West Africa explains that until President Buhari and the Central Bank allow for a complete floating of the exchange rate, we should not be expecting any major foreign investments into Nigeria. Like Interswitch, it is also probable that the proposed MTN initial public offering will not take place.

President Buhari has also taken an unpopular stance saying that he would prevent an increase in petroleum prices. With the rise of crude oil prices, a position like this would only make the government incur more expenses on subsidy payments.

Beyond economic indicators, Nigerians are hungry for a growth in infrastructural development and social inclusiveness. A lot of businesses incur high costs on power generation by having to buy generators, inverters, solar panels and pay electricity bills just to generate enough power to run their businesses. A lot of roads are still in terrible states and it is affecting the cost of transportation and increasing the rate of road robberies.

Nigerians also dream of when they would be able to access good healthcare and not need to run to India or Dubai; they are desirous of the public education system being restored back to its glorious days. They hope for efficient train systems and better air transportation where airlines keep to time. They are expectant of when businesses can be registered within a week; when security and peace would become the norm in the country.

However, in the moment, Nigerians in their usual spirits would still thrive despite the occurrence or non-occurrence of an economic growth. They would continue to live their normal lives, looking for ways to survive and trade. They would keep maintaining the fact that the government has not been of great benefit to them but rather a deficit until their desired “change” is realized.

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