Nigeria takes charge of its own destiny.
In this chart though, the annual percentage change in PPP as seen in contrast to the percentage change in GDP presents a rough idea of the status of the Nigerian consumer. The gap between the two sets of statistics demonstrates that whatever progress the country is making in managing its macroeconomic statistics is not filtering down to the country's consumers to positively affect the quality of life.
Add to this the fact that Nigeria's average rate of inflation for the decade, using International Monetary Fund (IMF) statistics, is 13.5 percent, and the viability of the country's consumer sector becomes starkly questionable.
But all this may be about to change.
And anything notable in the development of the Nigerian economy is significant for the Sub-Saharan region, and the world economy, because of the size of Nigeria's consumer base, at 137.5-million the biggest in all of Africa, and the rank of its economy-number two after South Africa.
On October 17, 2005, the International Monetary Fund (IMF) issued a press release welcoming Nigeria to the IMF's new Policy Support Instrument (PSI) program-basically a formal consulting engagement that could lead to financial support but is not guaranteed to provide financial support.
What is remarkable about this event is that a country has to ask for the IMF's PSI help. The IMF release points to the "homegrown" nature of the public service, business climate, budget, civil service, banking, trade, governance and transparency measures as ambitious, and further cites "broad domestic ownership" of these proposals.
Two programs that may have a relatively quick impact on consumers are: Scheduled upgrades to the country's electric grid, and a substantial extension of Nigeria's road improvement projects.
An August 2005 IMF report titled, "Nigeria: Selected Issues and Statistical Appendix" described the state of the electric grid as "Nigeria's single greatest business problem." Of the businesses surveyed for the report, 97 percent said that they owned their own generators requiring approximately 22 percent of a firm's capital budget. Further, power outages accumulated about 90 lost work days and a sales deficit of 15 percent-not only passed on to consumers in higher prices, but restricting business expansion to the regions.
Some 40 percent of the population is completely cut off from the rest of the country during the rainy season as roads wash out. Paved roads would mean that farmers could expand beyond subsistence growing and supply distant markets. Consumers would benefit from lower prices and greater variety. Marketers would be drawn to these bigger outlets, too, and could rely on the all-weather transport infrastructure to regularly supply them.
Nigeria and IMF PSI consultations have all the earmarks of a successful collaboration. While this is not the end of Nigeria's substantial problems, nor is it the beginning of the end, in Winston Churchill's famous words (from a far different context of course) it may be "the end of the beginning."
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|Publication:||Market Africa Mid-East|
|Date:||Nov 1, 2005|
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