HS in Nigeria | Africa’s economy is growing rapidly, and a decisive turning point can take place in the giant country of Nigeria

Lagos, Nigeria

But it’s not crowded here!

After getting to know Africa’s largest city, Lagos, the traffic jams and the cramped conditions of its slums, the south shore of Lagos’ most expensive island, Victoria Island, offers a surprise.

The Eko Atlantic area has been reclaimed from the sea. Three million cubic meters of sand and thousands of tons of aggregate have been used as tools. Luxury hotels and, for example, an amusement park have already been built in the area, but much is still deserted.

The ten square kilometer area was started 20 years ago, when the Nigerian president who will come to power on Monday Bola Tinubu was still the governor of Lagos State.

“I Tamed the Atlantic Ocean”, Tinubu said in the election campaign, referring to Eko Atlantic.

Eko Atlantic Opponents have considered the ownership of such a large area to the rich and the business community to be a straightforward “as climate apartheid“.

The accusations are that erosion has accelerated along the shores of poorer areas now that Lagos’ most expensive area has been widened and protected.

Interestingly, the poorest conquered a place of residence from the sea much earlier, but by completely different means.

The fishing community of Makoko, the most famous slum in Lagos, did it by erecting their humble dwellings on the water as a “floating slum”.

Eko Atlantic runs largely on private money. The key drivers of the project are the brothers who became Nigerian billionaires from a Lebanese family Gilbert and Ronald Chagoury. They have promised that the area will serve middle-income people in addition to the rich.

We will see. So far, apartments and services have been built mainly for very wealthy parties.

For example, the United States decided to acquire a plot for a large new consulate in this very area. Chagoury’s family has been a member of the United States Democratic Party and Bill Clinton’s major supporters of the foundation. Clinton herself visited Eko Atlantic ten years ago.

However, in general, construction in the area has been slow, and the pandemic slowed it down even more.

Eko Atlantic seems to be stuck in relation to its potential.

Just like Nigeria, the largest African country in terms of population and economy.

Wider a picture of the region’s economy is given by the head of the West African economic community Ecowas Omar Touraywho had time to visit Helsinki this spring as well.

“The visit to Finland was very emotional, because at one time I was an exchange student at the University of Helsinki,” he says.

Touray reminds that many African economies grew at an annual rate of over ten percent until the pandemic.

“Due to the pandemic, the international economy has suffered, inflation has risen and food production and distribution have become more difficult, which affects us as well.”

International Monetary Fund IMF forecast an average economic growth of 2.8 percent for the world this year and three percent next year.

Sub-Saharan Africa’s growth is slightly better, averaging 3.6 percent this year and 4.2 percent next year, IMF estimates.

“So it’s not explosive here either,” says Touray.

In Nigeria, the failed banknote reform left growth in the first quarter of this year at 2.3 percent.

On the other hand, the worst is probably over, because after the deep drop in the pandemic year 2020, the rise has already continued for ten quarters, or 2.5 years.

of Africa among the largest economies, Nigeria and Egypt do not shine when looking at gross domestic product (GDP) per capita. Only South Africa is in the top ten on this list as well. However, South Africa’s growth is currently clearly more modest than Nigeria’s.

But there are also bright spots. According to the African Development Bank, many countries, from Rwanda to Senegal, are reaching or exceeding ten percent growth again.

“Of course, the starting level has an effect,” Touray reminds.

“In itself, the healthier the global economy, the stronger we are. There has always been an interest in Africa, and with the EU and China, for example, it has been understood that trade relations should benefit all parties.”

Touray is the former foreign minister of The Gambia. He reminds that Africa’s economic development has been great since the colonial period, although there have also been enough internal problems.

His birth country Gambia transitioned to democracy in 2016 with a dictatorial president Yahya Jammeh at the end of a long reign.

Nigeria, on the other hand, transitioned to democracy in 1999, when the dictator Sani Abacha had died the previous year in the company of two Indian prostitutes from either a heart attack or poisoning.

Nigeria still has terrorism, organized crime and insecurity, Touray admits.

“But democracy and freedom of speech are in good shape.”

It is different in Burkina Faso, Mali and Guinea, which are members of the West African Economic Community, where military coups have been experienced.

“Ecowas does not accept that, and these countries have promised to return to democracy in 24 months.”

The economic community has developed from a free trade area into a customs union that also cooperates in peacekeeping. Even dictators have to take that into account.

“Thanks to visa freedom, the West African workforce can move in our economic community just as freely as the EU workforce in their own region. Countries lose this advantage if they abandon democracy.”

Unlikely the goal is to have a common West African currency as early as 2027.

“It requires all member states to stay within the agreed debt and inflation limits, which is very difficult due to the pandemic and conflicts. But maybe in the next few years we will reach the target career again.”

There is not enough interregional trade in the economic area.

“If you want to transport goods from Lagos to Abuja, the capital of Nigeria, it can be more expensive than transporting goods from Japan to Abuja.”

It sounds unbelievable, but Touray explains it.

“On the route from Abuja to Lagos, there can be a hundred unofficial roadblocks where bribes are demanded to allow the loads to move forward.”

“And the exact same thing can happen if you transport goods from Abuja, Nigeria to Dakar, Senegal.”

Nigeria is becoming the third largest country in the world in terms of population.

“We can turn population growth to our advantage if we improve the administration, increase investments in infrastructure and improve the labor market. The young population is also an asset,” says Touray.

In Europe, there is a fear of a flood of refugees and migrants resulting from the population explosion. Touray reminds us that 90-95 percent of African migration and refugees take place within regions and do not go outside of Africa.

“Displacement within regions is often caused by insecurity and poverty, and these root causes should be focused on.”

Climate change should also be dealt with somehow.

As drought and desertification increase, pastoralists in Nigeria and Niger have moved further south and clashed violently with farmers.

“The environmental crisis is also a security threat. The international community makes promises to solve the environmental crisis, but implementation has fallen short.”

Potential is still huge.

Nigeria has the largest oil reserves in Africa, though oil theft too are in the billions annually. The oil thieves are suspected of delivering a slice of the profits to those in power so as not to disturb them.

Nigeria favors simple crude oil exports. Our own oil refining has been on the back burner, allegedly because it is easier for the central government to transfer the revenues from crude oil exports to the pockets of those in power.

Change may be at hand. The richest man in Africa Aliko Dangote this week held the inauguration of an oil refinery costing more than €20 billion in Lagos.

However, the action will only start clearly later. It has been alleged that the inauguration of what will be Africa’s largest oil refinery was already organized so that the outgoing president Muhammad Bukhari would get a polished public image.

Following Buhari, unemployment in Nigeria is feared to rise to 37 percent this year and inflation to accelerate to over 20 percent.

Is it is typical that the biggest investments in Nigeria so far are made by private parties, such as the Aliko Dangote oil refinery and the Chagoury brothers in the Eko Atlantic area.

However, Bola Tinubu, who will become president of Nigeria on Monday, is more international and market-oriented than his predecessor Buhari. As governor of Lagos, he also earned a reputation as a financial expert.

Even in its current state, the Nigerian economy should not be underestimated. Lagos State alone is larger in terms of economy than the economies of Niger, Benin, Togo, Chad, Sierra Leone, Liberia and Gambia combined.

Even in the slums of Lagos, the overriding impression is one of busy enterprise.

The sellers at Kalatori say that the lack of freezers only prevents the business from growing. Tailors call themselves fashion designers and hairdressers call themselves hair artists.

Next Nigeria would need the stabilization of the security situation, the organization of normal tax collection and, through that, investments in infrastructure and especially in the education of children and young people.

Over ten million Nigerian children can’t go to school. Only 61 percent of 6-11-year-olds receive regular education.

Last year The Economist believes that African economic giants such as Nigeria and South Africa should learn from the smaller countries in the region, which do not rely only on the profits of their oil reserves or mining industry, but also know how to invest in the basic needs of their citizens.

“There are enough natural resources and other resources in our region, but due to bad administration, they don’t always benefit the population,” says Omar Touray.

“When we get this thing fixed, Africa’s economic outlook will change decisively.”