As Nigerians, we are not making economic progress, looking at data from our GDP. You cannot crash from $569B to $375B in eight years, and still claim you are making progress. And within a year, from 2023, we have also dropped more than $100B off the GDP. Sure, we can claim that oil prices could be blamed. But it is important to note that what oil revenue did not provide, loans did. In other words, as Nigerians, we have had resources since Naira is Naira and USD is USD, whether from oil revenue or loans. We have ramped up the loans with excess of $100B.
Let me add one more thing, drawing from my junior secondary school lecture in agricultural science on Rev Malthus postulation. Malthus noted that resources (say food production) were growing in arithmetic progression and the population was on a geometric progression (more rapid and faster in multiples). He came up with an inflection point – called the Malthusian catastrophe – and that happens when the population has overtaken the resources required to support the people.
Typically, every nation unlocks innovation to “create” more resources so that you will keep having more resources to support the growing population. At the basic state, all nations begin in the invention society era. This plot shows how the US and China expanded the resources (here GDP) to support the rising populations. In other words, they shifted the equilibrium and avoided the Malthusian catastrophe via the parabolic growth which reversed centuries of economic stagnation.
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Unfortunately, for Nigeria, that transition has not happened. Consequently, it has to borrow hoping to “create” more resources to support the population. This is typical in most African economies as they remain stuck in the invention era and are unable to expand opportunities by moving into the innovation era. Loan provides that operational support and that is why Nigeria will keep taking loans. The challenge, unfortunately, is that the loan impacts are triggering a drop in GDP which reduces the per capita for the citizens.
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