Just as we bask in the afterglow of a judicial decision, we must not forget that in the 18th century, the British commonwealth was once known as the Empire in which the sun never sets. It stretched from Canada and the United States all the way across Africa to Australia and New Zealand.
The Pound Sterling (currency) was measured in weights of gold like Pounds, Shillings, and Pence. The Bank of England promised to pay the bearer of the note the equivalent in gold when presented. That was about two centuries ago. An Empire was only as great as the sprawling influence of its slave trade, raw material sources, and the staking of its flag in faraway lands. It was not only the British that participated in these savage acts of brutality, the French, Portuguese, and Spanish were also actively involved in the exploitation of the Wretched of the Earth (Frantz Fanon).
The 21st Century Repartitioning of Africa
In 1884, at the Conference of Berlin, the whole of Africa was partitioned by the Seven European nations. Only Ethiopia and Liberia were spared. Today as we look at the geopolitical map of Sub-Saharan Africa, we see that about 50% of the nations in Francophone West Africa are under the renewed military rule and the contagion is spreading fast. The cost of living crisis, spiraling inflation, and more than anything else bad governance are driving citizens to the brink. In the words of Kofi Annan,
“A coup is not just a consequence of failed governance; it is a stark reminder of the urgent need for accountable and inclusive leadership.”
Africans are apprehensive about the contagion of political instability. The bigger fear is that all the countries that have since caught the coup bug are unitary governments and not federations. The risk of Nigeria falling prey (God forbid) to this trend is that federal states normally fragment and fall into disorganized chaos. Please see Yugoslavia, Serbia, Croatia, etc
Growing level of macroeconomic misery amongst the working class in Nigeria
But behind this whole phase of political uncertainty is the growing level of macroeconomic misery amongst the working class in Nigeria. The false hopes of palliative magic and the monetary illusion of a wage review are not believed and will soon lead to a crisis of false expectations.
All the macroeconomic indicators, leading, coincidental, and lagging point towards a tough Q4 2023 and improving but difficult days in early 2024. The naira is likely to trade close to N980/$ in October, the stock market sizzle may fizzle and inflation will get to 27% in Q4. The mirage of 4.1% unemployment is as illusionary as a pie in the sky. But there is a glimmer of hope as Nigerian policymakers have no choice but to stop making irrational decisions.
In this edition of the LBS Breakfast session, Bismarck Rewane and The FDC Think Tank use historical antecedents and data points to draw the nexus between economic mismanagement and political instability and further attempt to forecast and project the trajectory of economic recovery and the return to normal times, highlighting the effects of these on your strategy, budget, and business.
Do enjoy your read!!!