Nigeria, the largest economy in Africa, has had chequered growth driven by a high dependence on oil revenue. Its overall growth experience has proven non-inclusive, with a significant proportion of the population (67 per cent) living below the poverty line, while many more fall into poverty daily. Several deliberate attempts have been made by successive governments to stimulate economic growth.
Indeed, Nigeria has a long history of economic development planning; this includes the various national development and rolling plans, as well as programmes such as the Structural Adjustment Programme (SAP), National Economic Empowerment and Development Strategy (NEEDS), Transformation Agenda, Vision 20:2020, and of late, the Economic Recovery and Growth Plan 2017-2020. Nevertheless, poor policy implementation and policy failure remain the bane of the Nigerian economy.
The observed policy failure is related largely to the wholesale adoption of policies from other country contexts, a distinct lack of policy coherence, as well as poor coordination between the different levels of government (i.e. federal, state and local governments) and the various Ministries, Departments and Agencies (MDAs). Furthermore, previous policies have been overly ambitious with the government employing strategies, which have proven quite successful in other climes, to achieve large scale industrialisation, whilst much attention has not been given to providing the necessary framework conditions to support the growth of the nascent local industries.
Misappropriation of public funds is another major problem plaguing the Nigerian economy. Corruption often leads to inefficient use of resources as policy decisions are largely influenced by the private gains to the decision-makers and their cronies, rather than the economic and social benefits of such decisions. Thus, project costs are often inflated, while programmes and projects which can potentially deliver the best value for money are frequently abandoned in favour of projects which do not offer maximum economic and social value. Following the oil boom in the 1970s and adoption of the import substitution industrialisation strategy, oil revenue was invested in heavy industries like iron and steel, sugar and vehicle assembly plants. Due to economic downturns and policy inconsistencies, these ventures turned out to be loss-making entities. Some of these projects, such as the Ajaokuta steel rolling mill, were never operational, becoming conduits for siphoning public funds. Similarly, oil revenue earned during the gulf war in 1991 and from the boom in oil prices – which peaked at $115 per barrel in June 2014 – was squandered on programmes and projects that generally encourage corruption and rent-seeking.
A recurrent trend in the Nigerian political landscape is that each successive government, both at the national and state level, jettisons policies and programmes developed by their predecessors, preferring a fresh start rather than building on the foundation laid by previous governments. With the resultant duplication of efforts and waste of resources, it is no wonder that more than five decades after gaining its independence, Nigeria remains an under-developed economy.
As the economy rebounds from the recent recession and with the imminent elections in 2019, a drastic policy shift is pertinent. This requires adopting a systemic approach to economic development planning which emphasises policy continuity and promotes engagement with all stakeholders including the government, industry and universities/research institutes in contrast to the piecemeal approach awwlied hitherto.
Such holistic approach to policymaking requires the alignment of several policy strands. Larger investments in education and training are needed to build capacity in the workforce. An overhaul of the country’s educational system is needed to make it more rigorous and responsive to the needs of employers. This also entails encouraging creative and innovative thinking among students and revamping the vocational and technical education sector.
Strong institutions and a favourable business environment are other essential elements necessary for achieving sustainable growth. Although the country has enjoyed some measure of policy stability since returning to democratic rule in 1999, it has become imperative to create new institutions (e.g. a market-based credit system as opposed to a bank-based credit system) in response to its evolving economic, social and political needs, whilst strengthening existing institutions, for instance, simplifying the business registration system to provide an enabling environment for investment and growth. The judicial and legal system needs to be overhauled to ensure investors and entrepreneurs enjoy secure property rights. Corruption should be reduced to the barest minimum to reduce the costs of governance and of doing business. Massive investments in infrastructure such as power, good road networks, security are also essential to create a conducive environment for investment.
Nigeria is endowed with a large expanse of arable land, a favourable climate and a large pool of unskilled labour. An industrial strategy which explores these advantages to develop the agricultural sector is apposite for diversifying the revenue base away from oil exports. Employing this excess supply of rural labour will not only generate direct farming jobs in the agricultural sector, it also creates indirect jobs in sectors such as the marketing of agricultural supplies, processing and transportation of agricultural produce.
Increasing concern about the long-term effects of global warming has spurred a growing demand for alternative sources of energy. Ethanol, which can be extracted from a variety of plant sources such as corn, sugar cane or cassava, is widely perceived as a ‘clean’ renewable energy source which can reduce greenhouse gas emissions. The above-mentioned crops are currently cultivated by Nigerian farmers, albeit on a small-scale and at a subsistence level. The introduction of policies such as micro credit schemes, which offer financial support, and agricultural extension services, which facilitate the procurement and distribution of early maturing and disease-resistant crop varieties and dissemination of subsidised cost- and time-saving technologies, will encourage large-scale production of these crops. In so doing, Nigerian farmers can tap into the rising global demand for alternative energy sources.
Small firms play a vital role in the Nigerian economy, accounting for 99 per cent of the total number of active firms and 84 per cent of total employment. Nonetheless, this group of firms are largely informal and financially constrained. To encourage the growth of small scale businesses, it is important to restructure the financial system to improve access to finance for small firms. Additionally, there is a need to establish business support centres, where the government can make new technology and knowledge available to small firms at subsidised rates, so that they are not constrained to making individual investments. The support centres can also provide shared services (such as joint marketing and advisory services) to the firms. This will promote co-operation and collaboration among the firms to stimulate growth.
The successful use of economic development strategies to engender economic growth in countries such as Taiwan and Ireland provide support for the effectiveness of such policies. It is important, however, to take cognisance of the local institutional and economic contexts underlying the design and execution of development strategies that have aided growth in these countries prior to transferring such policies to other country contexts. Hence, to engender sustainable economic growth, Nigeria needs to adopt a systemic approach to economic development planning which encourages engagement with all relevant stakeholders, strengthens the institutional environment, whilst developing a framework for fixing its infrastructure deficit. Going forward, it is crucial to maintain policy consistency and coherence for improved effectiveness in the implementation of economic development strategies in the Nigerian economy.
–Ipinnaiye is of the University College Cork, Irelandw
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: firstname.lastname@example.org
- NEWS22 hours ago
Gov. Tambuwal Warns PDP Supporters Against Idle Talks
- OPINION18 hours ago
Untold Secrets Behind State Of Governance In Gombe
- COVER STORIES10 hours ago
APC, PDP Test Might In Katsina, Kwara, C’River, Bauchi By-elections
- COVER STORIES10 hours ago
Ohaneze’s Endorsement Of Atiku Inconsequential – PMB
- NEWS9 hours ago
Sokoto Will Benefit More If Tambuwal Is Returned – Group
- NEWS18 hours ago
Osinbajo Raises Concern Over Threat Of Robots, AI
- NEWS8 hours ago
NAF Jet Destroys Boko Haram Tactical H/Qs In Sabon Tumbun, Borno
- BUSINESS8 hours ago
Minimum Wage In Common Man’s Shadow