Towards a modern Nigeria
With Africa’s impressive growth rates in the past decades many got thinking that the continent will catch up, or converge, with Asia and Latin America.
Two economists, Stephen Broadberry and Leigh Gradner, in a paper: Africa’s Growth Prospects in a European Mirror: A Historical Perspective, say “history suggests that such optimism could be misplaced.”
Why? Africa’s growth in the past has the habit of growing and falling rapidly. With each decline wiping out the gains made during the growth period.
They argue that pre-industrial Europe’s economic history followed this pattern. In other words, Africa’s economic behaviour is not the exception. Hence what Africa needs to break this boom-and-bust cycle, to sustain its recent economic growth and ensure the future prosperity are institutions and a vibrant civil society.
The authors note that the Industrial Revolution in Great Britain ushered Europe into a modern economic era. Specifically, it was the Glorious Revolution in 1688, the first among many institutional changes, which played an important role in the gradual transformation of the political economy of Great Britain. The revolution brought about a balance of power between the parliament and the monarchy.
The political and economic history of Nigeria, a country richly endowed with human and natural resources, has been journey of ups and downs. As far back as 1958, Nigeria’s economic potential, based on its exports of agricultural produce such as palm oil, cocoa, groundnuts, cotton and rubber, looked promising. This promise, however, depended on dampening tribal and ethnic tensions as well sound public administration. The civil war reversed those previous gains. And since our discovery of oil, Nigeria has been through several booms and busts.
The institutions, to protect Nigeria from internal and external shocks, are gradually been put in place. For example the Excess Crude Account and the Sovereign Wealth Fund to shield the economy from declining oil prices. An active central bank, the development of a bond market, and a stock exchange that is on the rebound are other areas where Nigeria has recorded significant improvement.
The economic boom in Nigeria this time has gone beyond oil and gas. The growth of Nigeria’s non-oil sector has been impressive with agriculture, building and construction, wholesale and retail trade and services in the lead.
However the pace is slow compared to the frequent jousts between the presidency and state governors over federal allocation of funds. A fight often dressed in the costume of true fiscal federalism. Though both the state and federal government have tax-raising powers neither exercise it. A few states like Lagos, can say they are fiscally independent of the centre. Thankfully the economy has been able to absorb these political shocks, so far.
What Nigeria sorely needs are institutions that ensure security of lives – hospitals, police and judiciary. The growing carnage in the north and unprecedented oil theft in the south present an environment of limitless violence perpetuated by non-state actors who have wrested the monopoly of violence from the state. Especially when, in a country where the family serves as safety net and social security, the death of a family member traps a family in poverty.
The authors of the aforementioned paper note that in spite of Nigeria’s macroeconomic performance “the state remains vulnerable to factional disputes. Repeated outbreaks of violence show that mature limited access orders remain vulnerable to instability arising from shifts in the dominant coalition.”
Nigeria’s social order is vulnerable. It is constantly at risk to the power scramble antics of rent-seeking political elites. A counterpoint to this would be a strong and united civil society to check and balance the excesses of government.