Why Nigeria is yet to be great despite huge potentials

Nobody eats potentials,” Dr Akinwunmi Adesina, the President of the African Development Bank (AfDB), once said at a conference in Lagos. That was some time in 2012 when he was serving as Nigeria’s Minister of Agriculture. How true! Neither has anyone ever consumed a plateful of any form of food called “potential” nor has anyone ever benefited from the potentials of the country. Prospects have to be realised and transformed into reality to impact lives and livelihood.

Perhaps this is why policymakers in fastgrowing and developed countries do not focus too much on production possibility curve, rather they expend energy and resources on how to extract value from the possibilities in improving social and economic welfare; a positive approach towards enhancing human welfare and progressing economic renaissance.

That is part of the tragedy of Nigeria. So, as Adewunmi noted about nine years ago, from his early years he had heard it said repeatedly that Nigeria as a country had great potentials. Yet Nigeria, like some other African nations, with great promises at independence, has remained largely a laggard while others with perhaps much less potentials have marched on to greater heights.

Nigeria’s envisaged greatness was predicated purely on potentials, which unfortunately have failed to translate into economic benefits to the majority of the citizens.

The fault is not in the potentials. The fault and the failure to transform them into benefits is in us. For the most part of our existence as a nation, the focus has been on the items that constitute the basis of the potentials, rather than what they can be made to become on a sustainable basis.

Potentials are conjectures on the future values of today’s portfolio of assets. To that extent therefore, they are mere possibilities, assumptions or valuations, the outcome of which depends on the nature of actions being exerted upon them to create value. But tragedy arises because nationals, in their exaggerated notions of the powers that these assets confer on their nations, fall into the error of equating the potentials with greatness.

True, all nations, big and small have potentials. For some, it could simply be their location close to the oceans, in which case their coastal areas could become a tourist attraction or great hub/passage for international commerce and potentially a gold mine for foreign exchange earnings. But, until that asset is developed, it remains a mere potential. Tourists will bypass it and head to the next destination that provides comfort, safety, and any other benefits they want.

Africa is known to be home to some of the world’s most precious resources. A good example is the Central African Republic (CAR). CAR has one of the world’s largest deposit of diamonds, yet that country remains poor.

In the case of Nigeria, our ever-growing sense of the country’s potentials has been hinged on such material things as natural resources – oil and gas, vast arable land and other agricultural resources, and solid minerals (including gold, bauxite). Of what benefit is the arable land that is either not cultivated or farmed in a primitive manner that yields one of the lowest harvests globally, in virtually all crops, despite having natural competitive advantage in many crops.

The biggest asset in the portfolio of our potentials has always been said to be our human resources: our resilient, hardworking, enthusiastic, creative and intelligent people strewn by the Creator across the length and breadth of the country. We act it; we believe it; we say it. That is the basis of the expression that has become our national mantra: Naija no de carry last!

Nigeria’s diversity, marked by the large assemblage of such diverse peoples and cultures, has also seen as a big asset in our potential that could be transformed into a positive factor in making the country great. However, the diversity is perhaps becoming a source of disparity and disintegration, as it has not been harnessed, just like the “idle hand” which some call “the devil’s workshop”.

Such presumed potentials come from notions that the mere existence of such natural resources automatically confers on a nation greatness arising from the resources in question. That is a fallacy that has diverted attention from the process of building a viable and resilient economy in which these resources can be transformed into goods and services for local consumption and export. Tragically, gloating about the existence of the natural endowments themselves and the possibilities inherent in those materials or assets.

Think of potentials ascribed to these natural resources as being equivalent to the book values of a firm’s assets as reflected on its balance sheet. A company in an industry could be carrying the best property, plant and equipment. That potentially confers on it the possibility of being an industry leader.

Yet, if the management of that firm does not deploy the assets to productive use, its potentials only exist on paper. A company without much equipment, perhaps one that leases most of its equipment, could have better efficiency and profitability ratios, such as return on assets employed, profit margin, etc.

In this regard, think about the fact that Nigeria, Africa’s leading oil producer, has for the most part depended on imported petroleum products to run its economy. Importing refined products means that Nigerians will have to pay higher per litre of petrol, for instance, simply because the local capacity to refine crude oil has been destroyed.

Prof Michael E. Porter has summed up the reality of the points above. In his book, Porter notes that “National Prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labour pool, its interest rates, or its currency’s value, as classical economics insists.”

Porter notes further that, “The principal goal of a nation is to produce a high and rising standard of living for its citizens. The ability to do so depends on the productivity with which a nation’s labour and capital are employed.”

Also, Amartya Sen, the 1998 Nobel Laureate in Economics, has proposed what is known as “Sen’s theory” In brief, it says that what matters is “what one can make out of what he/she has and not really about what you have”

Here then lies the challenge. From all indications, Nigeria as a nation has failed to employ its labour and capital productively to transform its abundant natural resources beyond the realm of potentials. And that is why we cannot produce enough food to feed the population, despite the expanse of arable land available for agriculture.

Again, Adesina provides some facts that should challenge our policymakers. In an address he presented at the graduation ceremony of American University of Nigeria (AUN) last weekend in Yola, Adamawa State, he noted that Nigeria’s future depends on what the country does with its dynamic youth population.

In recent times, Africa’s (and therefore, Nigeria’s) size and scope has been the continent with the youngest population. That is therefore part of our potentials since such a huge size of youthful labour force could be engaged in productive activities. But how real is this? As Adesina noted, “38.5 per cent of Nigeria’s youth are unemployed.”

“Lacking skills, economic opportunities, they are discouraged, angry and restless, as they look at a future that does not give them hope,” he said.

Another area where Nigerians have failed to experience the potentials the nation was said to have is in their income per capita. While at its independence in 1965 Singapore’s per capita income was $517, Nigeria at independence in 1960 had a per capita of $1,400. Today, that has changed: Singapore now has a per capita of $60,000, over 26 times Nigeria’s $2,250.

So, where are the potentials?