Despite the barrage of economic policies by successive governments on the need to diversify Nigeria’s GDP, there still persists, a continued and large dependence on oil revenue with a corresponding less dependence on fiscal policy and other contributors to the Nigeria’s GDP. However, going by the economic theory of being an intermediate state, in which Nigeria has inadvertently align itself with, the outcomes of economic reforms under these states, are capable of episodic reform but incapable of driving industrial transformation.
Economic reform and socio-economic cum transformation agenda are two underpinning factors that serve as the barometers to measuring the success or otherwise of every government in terms of its mandate to transform its society. That perhaps, accounts for the reason why it is inherently a trans-governmental agenda that every successive government adopts and modifies, so as to suit its government and serve as a road map to its manifestoes.
To every political and economic savvy in Nigeria, and Africa at large, the year 2020 has always been a terminal point or determinant year which posits Nigeria; and indeed other developing countries, as nation to be found among the altruistic comity of nations, parading, at least, as top 20 countries with the largest and most vibrant economies in the world. Unarguably, however, and also asinine to crying over a spilt milk is the reality, when making reference and giving Nigeria a pass mark in an attempt to assess its performance in line with the United Nations Millennium Development Goals MDGs (2015). In terms of poverty baseline, Nigeria overtook India in 2018 to ingloriously occupy the first position in the world as a nation whose over 90 million of its citizens wallow in abject poverty. According to the World Data Lab’s Poverty Clock, if poor Nigerians were a country, it would be more populous than Germany and to a more exacerbated trajectory, almost 6 people in every minute fall into this debasing class in Nigeria!
Analyzing Nigeria’s compliance with the MDGs 2015, it would be admitted without any shade of doubt that Nigeria is abysmally lagging behind and thus one of the unlucky nations whose resources have been mismanaged by political marauders. It is no longer a news that Nigeria is at the vanguard of the countries with the most populous out-of-school children with over 13.2 million in number as estimated by the United Nations Children’s Fund (UNICEF). On gender equality, is on record that, women make 49% of the population but less than 5 % in the legislative arm of government; more so, more than 60% of the out-of-school children are females.
Right from the period of attainment of self-government to the intermittent military interregnums, Nigeria has been grappling with different economic agenda with a view to better the lives of its citizens. With a chequered history of botched economic reforms, which over the years, have come in either structural, institutional, micro or micro reforms, governments have made some vainglorious attempts to cause economic resuscitations in areas like privatization, banking, civil service, trade policy, holistic review of capital adequacy, deregulation of capital market among others.
Economics pundits would agree with me that the contemporary understanding and explanatory power of political economy of African states have staunchly been rooted around some theories among which areresource-curse, ethnic pluralism, neopratrimonialism, prebendalism and of course, more recently, developmental state theories. However, these underpinnings may not be a close-ended approach towards analyzing economic development of developing states in the world; Nigeria inclusive. As the hitherto Africa’s “giant” and indeed largest economy, Nigeria has always been preoccupied with the focus of how to diversify its economy and maximize its natural resources, and thus, has had its recent growth driven by non-oil sectors to wit: telecommunication, finance, service delivery and so on.
Scholastically, permit me to analyze, briefly, four sets of economic theorythat have been used to analyze the institutional foundation of the failure of economic transitions in African countries. The first is the resource-course theory which posits that countries that are naturally endowed have in the course of their attempt to bring development, rather suffer slow growth and political instability. Jeffery D. Sachs & Andrew M. Warmer in their masterpiece titled “The Economist; the Dutch Disease”,posit that, through the Dutch disease and rent-seeking, these resources are the major impediments to growth, good governance, political stability, and successive democratic governments. This resource abundance theory has, however, been proved wrong by the rapid growth of some resource-rich countries during the commodities super cycle of the 2000s questions these deterministic assumption about unintended effects of resource abundance.
Secondly, ethnic plurality theory is another postulation which has been used to analyze socio-economic development. It simply states that a society that is inherently characterized by ethnic plurality are susceptible to dismal economic outcomes, because ethnic fragmentation undermines consensus for growth-promoting public policies. Nigeria as a developing nation, which is characterized by ethnic plurality makes sub-optimal policy choices, which are consumption orientated, foster rent-seeking, and engender conflict. It can therefore be identified that correlations and social coexistence are characterized by endogeneity and inverse causality, rather than causations between diversity and economic performance (Z. Usman; successes and failure of economic reform in Nigeria’s post military political settlement,2019). Conversely, with the meteoric renaissance in Malaysia and Brazil, it have been proved, though, that multi ethnic and multi-racial countries have successfully transmogrified to upper-middle income status.
The third theory is Neopatrimonialism; which has been identified as the genetic causation of Africa’s retrogression rather than development. This points to the particularism in African societies especially the prevalence of informal institutions as the main obstacle to economic transformation. As a system of social hierarchy where patrons use state resources in order to secure the loyalty of clients in the general population, therefore, only those with connections have the real power, not those who hold higher positions. Neopratrimonialism, thus, no doubt sabotages political institution and undermines the rule of law.
Developmental state theory, which is the fourth, positions the state as a key player having a significant role in the transformation of every developing society. The political characters, in addition to the nature of business-state relationship and the strategies for political survival employed by the ruling elites shape policy choices and determine economic outcomes. These is a socio-economic state’s policy where the state presides over industrial transformation due to its corporate coherence, institutionalized ties to society and pursuit of collective goals. Using Peter Evans’ postulation of state capacity, Nigeria can be described as state that has episodic coherence capacity to facilitate economic growth through haphazard reforms, and does not thereby preside over industrial upgrading from low to high value economic activity.
By the ushering in of democratic government in 1999 after a distorted and chequered political interregnum summingup to 2 decades of economic reformless, the new government was caught up with the reality of looming economic crisis, a seeming trepidation necessitated by the decline of oil price in the global market which glaringly exposed Nigeria to unprecedented economic volatility. Amidst the economic apprehension, the ruling elite in 1999 dispensation, felt the need to set in motion an economic reform agenda, thus, causing a cabalistic consent and adopt an informal elite consensus on power rotation between the regions of the country.
Balogun writes from lagos.