Lessons of non-resource driven economic growth

In the October 2013 regional economic outlook on Sub-Saharan Africa, produced by the International Monetary Fund a team of economists from the IMF’s African Department did show that Africa’s economic growth can be traced beyond commodities or natural resource endowments.

The report revealed that a few economies in the region have actually joined the league of high performers through sound policy making, and not relying on natural resources.

The report highlighted how six countries- Burkina Faso, Ethiopia, Mozambique, Rwanda, Tanzania and Uganda during the period 1995-2010 laid the foundation for sustained  economic growth and turnaround by creating strategic policy frameworks bordering on structural reforms, the institutional reforms, creating enabling environment for the thriving of agriculture, exports, tourism and foreign capital inflow and higher investments in human capital.

Indeed these policy measures really paid off as these low income countries in the period of study experienced a GDP growth of at least 5% a year on average and a growth in GDP per head of at least 3% a year. The implemented macro-economic measures created an environment for controlled inflation, better management of public finances and higher tax revenues.

It is also remarkable that these countries experience less corruption, record better political stability and governance than their peers in the region.

That these countries achieved a significant and visible turnaround through the pursuit of constructive and encompassing policy environments without the back up of any windfall from commodity or oil sales is instructive to Nigeria and other resource endowed nations that find it difficult to envision economic growth beyond natural resources.

The long standing desire for the diversification of Nigeria’s economy away from the heavy reliance on crude oil sales would continue to be viewed as idle talk or jerrymandering without a deliberate, consistent and robust medium and long term policy framework to achieve such. It is important to note that the experiences of these African countries reveal that it is not enough to pander  myriad of economic policies that are meant to engender growth without a corresponding improvement in the management of public finances, (by reducing corruption across all tiers of government), and the building of effective and efficient institutions for governance.

We have used this forum severally in recent times to remark emphatically that the quality of governance in Nigeria is much below average.

Indeed, we doubt if those who are in the position to provide good governance across the country give any meaningful thought to their task. Because, if countries that hardly have one-tenth of the huge financial resources we control go a long way in achieving inclusive economic growth then such speaks volume on the gross mismanagement of resources that is the bane of Nigeria.

There seems to be a plethora of economic and financial policies emanating from the desks of Okonjo-Iweala, the minister of finance and co-ordinating minister for the economy and the governor of Central Bank, Sanusi Lamido Sanusi. But these efforts at policy generation are not enough.

We believe that in a polity where policies abound, there should be strong institutions to ensure the effective and efficient implementation of these policies, and a regime of prudence, and zero tolerance to corruption that will guarantee good governance. Without these, Nigeria may remain like a wretched basket that holds no content.