Nigeria's Coming Economic Collapse, by 'Tope Fasua

We are potentially sitting on the edge of the precipice. This time it's potentially real and all we need is one reckless, poorly thought out trigger or action, and boom! We could see the naira devalue to 1,000 naira to the dollar or less. We could also see inflation soar to over triple digits. We may not feel much of an impact apart from a moderate increase in inflation if, for example, interest rate levels rise to 20 or 30 percentage points. Our biggest challenge could be soaring inflation due to price adjustments, price gouging, loss of trust in government…

God knows I tried. For years I wrote and worked, even went into politics to see how I could help directly, as joining the two major political parties was an impossible or untenable option. I laid out all my ideas about our economic situation, from how I think we could achieve growth, to how to manage inflation, and how to urgently manage the value of the naira. I'm afraid the situation is no longer redeemable. And Nigeria is on the brink of a fiscal cliff, which could likely lead to massive economic decline: a meltdown.

I worry that no rigorous economic discussion has taken place in this country for the past 13 years, with the last seven years being the worst. What we have passed off as economic talk is riddled with lies. The so-called "respected economists" and the imposters who often held their positions, came to the table with biases and an agenda. Some came to work for the banks, and others for even bigger and more sinister managers.

Now we are faced with the probability of a collapse. Inflation promises to flee. I don't see what anyone is doing to prevent this, or any discussion of what people should do if this happens. Should we just go through this, as our people go hungry by the millions? Is there anyone thinking about food sufficiency if the whole world goes into crisis, and everyone shuts up and fends for their own people? I was in favor of double-digit growth. I'm always. But we didn't take our chances when we could. Today is about survival. Why do we ride in eternal regret?

Tax cliff

This means that the Nigerian government will soon be unable to meet its obligations. I fear for those who attempt to enter government today, whether in elective or appointed positions. Statistical figures from Nigeria recently showed that we now spend more than 100% of our income on servicing debt. So where will we find the money to fulfill other obligations? And crude oil has fully become a liability, as our crude revenues are offset by our oil imports, while the federal government struggles with ways to finance itself. The national oil company, NNPC, recently obtained limited liability status, saying it will no longer contribute to federal benefits on a monthly basis. The point really is that there is nothing to contribute. But will the business be run like a true limited liability organization, or will it continue on its wasteful ways? Where is the necessary staff rationalization and pay cuts that will be the next line of action for a limited liability company? Are States and other stakeholders still under the spell? Or will they wake up in the near future and find they've been wronged?

The federal government under Buhari has also shown no capability, and t...