BY OIKONOMIA WITH LEKAN SOTE
In his poem, “The Road Not Taken,” American poet, Robert Frost, probably sighed in regret as he concluded, “I took the one less travelled by/ And that has made all the difference.”
The same applies to Nigeria, whose wealth has not been managed according to principles of best practices.
To borrow a phrase credited to Ambassador Fanny Amun, former coach to Nigeria’s Under-20 Flying Eagles Football Team and Secretary to Nigeria Football Association, Nigeria has continued to “wobble and fumble.” He has since denied ever saying so.
At Independence in 1960, Nigeria’s economy started out as one based on exportation of cash crops–cocoa, groundnuts, palm oil, hides and skin and other commodities– but was eager to become industrialised.
Nigeria adopted the model of import-substitution, suggested by Western and indigenous economic experts who are literally and metaphorically trained in the traditions and diet of the London School of Economics.
The model has turned out to be disastrous, because their assumptions are alien to the realities of Nigeria. The machineries they recommend for industrial production are unsuitable to the tropics and most of the raw materials of production have to be imported.
These significantly impair the capacity of the economy to be productive, and to even produce goods close to the taste of less sophisticated Nigerians who, admittedly, have not been completely Westernised. Thus effective demand, meaning ability to pay for what is demanded, has no fit to what the taste of the people require.
What that means is that Nigeria has what economists describe as a disarticulated economy whereby the productive capacity produces goods for other economies, whilst the consumers have to buy produce and manufactures of other economies.
There is little wonder that most consumer goods consumed in Nigeria are imported: Vegetable oil is imported from Indonesia, rice from India, and fish from Thailand. Of course, you know that Peugeot, Mercedes Benz, Volkswagen and Leyland automobiles, hitherto assembled in Nigeria, are once again being imported once again.
No one should wonder why the two sea ports in Lagos are congested to the brim, and nearly all governments, beginning from that of General Yakubu Gowon, completely failed to reverse the trend.
Rather, they continued to accumulate foreign reserves, ready to finance imports of everything from cornflakes to Cadillac. And when that is getting depleted faster than it is replenished, Nigeria panics and begins to accumulate debt.
By 31st December 2020, Nigeria’s debt profile –owed by Federal, States and Federal Capital Territory governments— was N32.915 trillion. The situation is getting more dire when the government is in the vicious cycle of taking debts to fund budgets and service debts.
If debt is taken to service debts, or finance government overheads, there will be little or no economic progress. Former Minister of Finance, Kemi Adeosun, once disclosed that the Federal Government borrowed N165 billion to pay salaries of government workers.
Yet the current Minister for Finance, Budget and National Planning, Zainab Ahmed, who appears to be totally out of touch with the realities, says that Nigeria has not yet reached its debt-to-Gross Domestic Product threshold.
Nobody in government seems to understand the linkage between Nigeria’s imports oriented economy and its debt profile. God rest the spirit of economist Henry Boyo. The offshore oil sector accrues cash flow from oil sales only to squander it to import consumer goods, like petroleum products.
There is an ominous prospect these days that the Chinese will enact the feat of bringing coal to Newcastle by exporting cassava to Nigeria, regarded as the greatest producer of cassava crop in the world.
China has manufactured cassava peelers ready for export to Nigeria, the land of people and government with misplaced priorities. How do you explain the world’s Number One cassava producer looking forward to importing cassava from an erstwhile importer?
“The best road to travel is to use human capital to grow Nigeria’s economy in the interest of all citizens
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Anyway, Nigeria already imports vegetable oil (which is bleached palm oil that grows even in the wild across the country), from Indonesia that came to learn the trick of propagation of the oil palm at the Nigeria Institute for Oil Palm Research, Benin, though some revisionists (in NIFOR), say that is not the true account of the history.
To such an insincere, cynical, interpretation of history, the Yoruba would say it is left to a chicken that toilets without also urinating. Those who would rather deny their shame should be left to stew in its consequences.
Under the government of President Muhammadu Buhari the Central Bank of Nigeria, with raison d’etre to control inflation, exchange and interest rates, has assumed the centre stage of dabbling into the macroeconomic schedule.
Macroeconomics, of course, is traditionally the responsibility of the Ministries of Finance, Budget, and Economic Planning, joined by those of Electricity, Trade, Industry, Agriculture (and maybe Petroleum, because of its strategic position as cash cow to the Nigerian economy).
Whoever is going to run Nigeria’s economy should understand economics, be able to tinker with all forms of taxation like a master puppeteer, and have a good handle on how industry works. He must also be a master of the arcane world of high finance.
This individual must at least have a working, if not exactly a professional, knowledge of these aspects of economic planning. This lack of the right personnel has dogged the economy of Nigeria for too long.
Unfortunately, the only Nigerians that seem to have demonstrated this capacity are Obafemi Awolowo, Vice Chairman of General Yakubu Gowon’s Federal Executive Council, Dr. Ngozi Okonjo-Iweala, Coordinating Minister of the Economy for President Goodluck Jonathan’s government, and (to a lesser extent), Prof Charles Soludo, CBN Governor to Presidents Olusegun Obasanjo and Umaru Yar’Adua.
Unfortunately, they didn’t stay long enough to lay solid macroeconomic foundations before they left or were eased out of office and replaced with the less endowed, by shortsighted stratagems of the rapaciously ignorant.
The choice before Nigeria is really not a choice; what some would describe as an option of no-option. A good life is no more than access to food, clothing, shelter, education, healthcare, entertainment, and every form of luxury peculiar to the individual citizens.
And the realistic thing to do is to diligently create an enabling environment for these existential needs to be met, using science and technology that is available and appropriate to the Nigerian environment.
And for the umpteenth time, let the formulators of Nigeria’s macroeconomic policies start from the most obvious elephant in the room, and be intentional in revving up the activities of the agricultural and agro-allied industry of Nigeria, because the former provides food and cash crops, while the latter is the engine that will convert farm produce to industrial manufactures.
One more extremely important thing that needs to be done is to embark on an accelerated development of human capital, which Wikipedia defines as, “the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.”
Awolowo once said that Man is at the same the beneficiary and agent to achieve his own social gains. The best road to travel is to use human capital to grow Nigeria’s economy in the interest of all citizens.
That is the irreducible minimum that must be guaranteed to every citizen, whom Louis Brandeis, Associate Justice of America’s Supreme Court, says occupies the highest position in any country.
