2017 offered a ray of hope for Nigeria as the country exited a recession. However, the feeling remains that Nigeria failed to make good use of the opportunity presented by the economic recession. Our economy remains non-diversified and heavily reliant on oil To all intents, Nigeria has wasted the crisis.
In 2017, the Buhari administration had a chance, with its second full year budget, to effect a change the budgeting process, and break a cycle which has kept the economy in the doldrums for a very long time. This did not happen, and with 2018, politicking is certain to take centre stage.
Security challenges continued, with a new upswing in Boko Haram attacks and the Pastoral Conflict entering a new phase where communities have taken up arms to defend themselves, and in an increasing number of cases, attack Fulani communities. The question of property rights, central to the resolution of this slow burning conflict, is yet to be answered. The much vaunted constitutional amendment that is meant to deal with many of these issues has progressed at snail’s pace.
As we enter the election campaign season, questions remain about the fundamental structure of Nigeria’s economy, and the Nigerian state itself. Increasingly, the Nigerian state no longer participates in the life of the Nigerian, except in the collection of taxes, levies and charges for certain required government services. Things will come to a head at some point, and we fear that the window for a genuine change is closing.
For most people in Nigeria, 2018 will present a mixed outlook. The government’s hope for the effects of rising oil prices to trickle down to various segments of the national economy, and by extension, down to the average Nigerian will be hinged more on hope than actual substance. For Nigerians to feel the real effects of a slowly recovering economy, more clarity on fiscal and monetary policy will be needed. However, with the general elections on the horizon, save for a few big ticket projects, this is unlikely to happen as we will be more likely to see direct cash transfers rather than policy actions that will be more long than short term.
For the average Nigerian, in 2018 he will have to continue now familiar cost cutting measures that have characterised much of the last two years. Household spending will remain depressed as budgets remain squeezed and brand loyalty will continue to wane. The rising popularity of alternative financial investments, cryptocurrencies, crowdfunding and non-financial lending lends credence to our 2017 observation that more Nigerians will seek to create, and grow additional streams of income as depressed wages, deferred spending and job losses mount.
Security will remain a concern for most Nigerians all through the year with crimes such as kidnapping and armed robbery set for their customary pre-election spike. More Nigerians will flee the economic deprivation and insecurity of the rural areas for the relative safety of the country’s urban centres, a trend which paradoxically, will have a negative impact on essential services and security in receiver cities, and have an impact on the crime rates there.
2018 will present the Nigerian with a range of opportunities on a host of fronts. Which opportunities get maximised will depend on her location, the prevailing economic climate and level of risk appetite.
Download SBM’s analysis of what Nigeria should expect next year.