Home Analysis Rebuilding Nigeria economy the starting point

Rebuilding Nigeria economy the starting point

by Business News Report

By Omoh Gabriel
Nigeria is said to be endowed with abundant human and natural resources. This ordinarily should make it a great nation. The land is fertile. There is good geography and water resources to propel development. This has not been the case. Its progress has been hampered by the selfish interest of both the political and business class. This class has used every means available to steal the nation blind. This has made the resources available to cater for the generality of the people grossly insufficient. Today instead of full employment of all resources, only a small proportion of the nation population and land resources are gainfully employed. The rest have been sentenced to perpetual dependency.

Nigeria since the discovery of oil has run a dual economy. An oil economy that is highly capital and technology driven and an agricultural rural economy that is subsistence based with primary tools and technology. The two sectors are not linked through any value chain.

Adams Smith the father of modern economics wrote in his famous book “an inquiry into the nature and causes of the wealth of nations that the annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations. According, therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all necessaries and conveniences for which it has occasion”.

Following his line of argument Nigeria has failed so far because it has not been able to mobilise its entire population for effective production. The economic base is weak because of the low production in the economy. A good number of able bodied persons in Nigeria are not gainfully employed. The youths that are the future of any nation are idling away, but they must be fed, clothed, and treated when sick But the national resources which to do this is simply adequate because only few are making meaniful contribution to the national wealth creation.

The proportion of resources available in every nation is regulated by two different circumstances: first, by the skills, dexterity, and judgement with which its labour is generally applied; and secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. What ever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in particular situation, depend upon those two circumstances.

Nigeria has land, people, natural endowment but its economy has not progressed. Japan has little land, no natural resources but through hard work and technology they have more than enough for themselves and the world at large. It is the same with most of the other developed economy in most recent time China. The main responsibility of the government is to develop strategy to link various value chain in the economy. This will frog leap the entire economy.

If we take Adams Smith words for it “Among the savage nations of hunters and fishers, every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniences of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to go a hunting and fishing. Such nations, however are so miserably poor, that, from mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts”.

Nigeria because of the individual nature and focus of production on oil which technology depend on foreigners, with a very large portion of the population not fully engaged thus creating a dual economy, available resources are not able to cater for all Nigerians with so many feeling neglected, abandoned with a lack of sense of belonging. Among civilised and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently hundred times, more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied; and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniences of life than it is possible for any savage to acquire. Why has the government not be able to pull the economy from subsistence level of production?

Those who are familiar with the workings of the economy, know that it is largely dominated by the informal sector that is unorganised and without records of out put. There are so many faceless and portfolio businesses which makes it so easy for any one to get involved in dubious and illegal activities that detract from national economic growth. This is not the case in most economies. China has become an economic success story. Its success despite its high handedness is as a result of discipline. Last week a death sentence passed by a court in China on a young businesswoman chills entrepreneurs.

According to the Economist magazine on April 7th an appeal court in Zhejiang, a famously entrepreneurial coastal province, conducted a five-hour hearing on a death sentence handed down to Wu Ying, a prominent 29-year-old businesswoman, on fraud charges. The revelation that she faces execution is the latest in a string of dramatic events surrounding her case, including the arrest of several prominent bankers and officials from information she is said to have given, and her own reported suicide attempt.

Within a few years she was reported to have assembled a business empire that spanned spas, hotels and property. Her net worth was then said to exceed 3.8 billion yuan ($576m). This as hard as it may seem, is a consequence of a society that wants to advance. She was found out because every business in China is a registered member of a body. In Netherlands even selling in a kiosk, it has to be registered with the Chamber of Commerce. No business man can operate his or her business in Germany without being a member of the German Chamber of Business.

Here in Nigeria treasuries are looted in active connivance with companies that exist on paper. Individuals get concession and waivers for their financial benefit instead of sectoral benefit. Government deals with business men on account of their persons who proffer self centred solutions, not on basis of being a member of a group that represent group interest. This is the basis of the chaos in the private sector.

It is about time the federal, state and local governments across the country, begin a mass mobilisation of Nigerians. Every business man or woman must belong to identifiable group, or association. The informal sector must be assisted to come into the formal sector. Emphasis should be on small and medium scale enterprises which in every economy generates jobs more than the large companies. The federal government in the nest four years should focus on creating and sustaining small and medium scale businesses in both the agricultural and industrial sector along value chain. In pursuit of this the business umbrella bodies must set up code of conduct and business ethics for all members. This will be the starting point of re-building the Nigerian economy.

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