Renowned economist and technology entrepreneur, Prof. Ndubuisi Ekekwe, has raised concerns about Nigeria’s worsening economic situation, citing significant declines in the country’s Gross Domestic Product (GDP) and unsustainable borrowing practices. Speaking on the current state of Nigeria’s economy, Ekekwe highlighted alarming statistics that reveal a substantial contraction in GDP over the past eight years, and more than $100 billion lost in GDP in just the past year alone.
“You cannot crash from $569 billion to $375 billion in eight years and still claim you are making progress,” Ekekwe said, calling attention to the nation’s shrinking economic output. According to Ekekwe, the challenges cannot be solely attributed to fluctuations in oil prices, as the government has also turned to heavy borrowing to cover revenue shortfalls, accumulating over $100 billion in debt.
The Malthusian Warning for Nigeria
Ekekwe drew a parallel between Nigeria’s current economic predicament and the Malthusian theory of population growth outstripping resources. Citing Reverend Thomas Malthus’ 18th-century postulation, he noted that while Nigeria’s population continues to grow rapidly, the country has failed to generate enough resources to sustain its people. Malthus predicted a catastrophe when population growth overtakes available resources, leading to social and economic instability.
“In typical cases, nations unlock innovation to create more resources to support growing populations,” Ekekwe explained. He pointed to the examples of the United States and China, which have successfully expanded their GDP to match population increases, thereby avoiding the so-called Malthusian catastrophe. However, he warned that Nigeria, like many African nations, remains stuck in the “invention era,” unable to transition into the “innovation era” where economies grow exponentially due to technological advancements and better resource management.
“Nigeria has failed to shift the equilibrium and continues to rely on loans to fill the gap,” Ekekwe stated, suggesting that borrowing has become a temporary solution to address fundamental economic challenges rather than creating sustainable growth.
Borrowing to Fund the Economy: A Growing Concern
Ekekwe criticised Nigeria’s continued reliance on loans to stabilise its economy. While borrowing can provide short-term relief, he argued that the long-term effects of excessive loans are dragging down the country’s GDP and negatively impacting the standard of living. “The challenge, unfortunately, is that the loan impacts are triggering a drop in GDP, which reduces the per capita income for the citizens,” he said.
As the debt piles up, the nation’s economy becomes more strained, with fewer resources available to invest in critical areas like infrastructure, education, and healthcare. This, Ekekwe warned, will only deepen the cycle of borrowing and economic decline unless Nigeria finds innovative ways to generate revenue and expand its economic base.
The Need for Innovation
Prof. Ekekwe emphasised that innovation is the key to reversing Nigeria’s economic stagnation. He stressed the importance of moving beyond the “invention era,” which is characterised by rudimentary growth and limited economic expansion and transitioning into the “innovation era,” where economies are driven by technological advancements and creative industries that can propel sustained growth.
“Nigeria needs to expand opportunities by moving into the innovation era,” he said. By leveraging technology, entrepreneurship, and industrial advancements, Nigeria can break free from its cycle of borrowing and underperformance, creating a future where economic growth matches population expansion.
A Call for Action
Ekekwe’s comments serve as a stark reminder of Nigeria’s urgent need for economic reform. With a rapidly growing population and diminishing resources, the country faces the risk of falling into deeper economic distress if it continues its current trajectory. He called on Nigerian policymakers to rethink their approach to economic development, emphasising the need to invest in innovation, education, and infrastructure that can foster long-term growth and reduce the nation’s reliance on foreign loans.
In conclusion, Ekekwe’s warning underscores the importance of addressing Nigeria’s structural economic issues before they become insurmountable. “The resources are there,” Ekekwe noted, “whether from oil revenue or loans, but without a strategic plan for innovation and growth, we risk hitting the Malthusian catastrophe.”
As Nigeria grapples with these economic challenges, the path forward must focus on innovation, fiscal responsibility, and sustainable development to avoid a further downward spiral in its economic fortunes.