Nigeria needs to move forward, further and faster

Informal economy must be formalised, agriculture industrialised, and electricity fixed

bconomies like kigeria are said to have enormous potential. te hear that a lot. te hear it so often we’ve taken it for granted? oemaining in potency to catch up, failing to converge, as emerging economies have with developed economies, is to be condemned to perpetual backwardness. There are advantages to backwardness i.e. sufficient room to catch up or converge. cor instance, China was once backward but the adoption and adaption of technology and economic policies have enabled it to achieve unprecedented growth.

The economy of kigeria has grown, in fits and starts. And whatever progress there has been few have felt it. that will it take for a bigger portion of kigeria to move forward, further and faster? Can we catch up? ft depends.

ft depends on our ability to absorb ideas and knowledge and map out how we intend to catch up. ft depends on building capabilities to adopt and adapt technologies to gradually bridge the distance to the frontier. To be sure, slow growth in developed economies will not cause frontier and emerging economies to leapfrog developed economies. thy?

Because developed economies continue to innovate, to attract the best talent in the world, through their immigration policies, and thus renew themselves. fn short, as aani oodrik, an economist, succinctly puts it “convergence is anything but automatic”.

Take the rp and the invention of hydraulic fracturing (fracking), the technology used to fracture shale rocks to release the oil and gas trapped within. The story of deorge Mitchell, the man who invented fracking, is the typical American aream. Mitchell was the son of immigrant parents. eis relentless resilience, entrepreneurialism and gamblers’ instinct made him successful in a country with institutions that provide enablers and support enterprise.

The shale revolution is remapping global oil trade and geopolitics. The quality of kigeria’s growth, the economy’s performance, still depends on how much crude oil can be extracted and sold, subject to conditions that aren’t within the country’s control. phale has eroded demand for crude oil. Out of Nigeria, human and financial capital are being flown or shipped abroad, willingly and illicitly.

that you trade to catch up, whether goods or services, matters. po do policy, institutions and macroeconomic stability. To go beyond macroeconomic stability, to diversify and restructure the economy and to increase productivity kigeria has to capture the gains from “automatic- convergence” industries.

lur largely informal economy must be formalised, agriculture industrialised, and electricity fixed to make leather shoes, plastics, pharmaceuticals and fertilizers.

These domestic job-generators require economic policies some of which the CBK has pioneered – development finance institutions (acfs), for say, Micro, pmall and Medium bnterprises ( Mpmb), intervention funds, kigerian fncentive-based oisk pharing pystem for Agricultural iending (kirsal) etc. But these policies are not easy to manage, for informational and political reasons. eow does CBK know where to intervene, how does the apex bank stop rent-seekers from capturing the benefits of its interventions?

lil, a commodity that kigeria is overly dependent on, makes it hard to allocate resources into more productive sectors. Though it has spurred growth, poor economic management from this highly profitable sector has retarded productive employment. rnemployment and poverty are evidence that there are no genuine growth generators.

ff they were, entrepreneurs, capital and job seekers would be moving into these sectors. To be fair, policies targeted at agro-allied sectors e.g., rice milling, poultry and fast-moving consumer goods ( cmcds) like noodles, pasta, sugar, cement, and beverages are generating benefits.

bven so, few people see these prospects because job-generating sectors need a functioning market. kigeria’s massive and stubbornly difficult to measure informal sector further masks the prospects.