There are factors that drive economic growth. You have to think about capital gathering, increase in labour inputs and technological advancement. According to YiLi Chien, an economist and research officer at the Federal Reserve Bank of St. Louis, a country’s economic growth can be dissected by “accounting for what percentage of economic growth comes from capital, labour and technology”; and that technological advancement will become the main driver of sustainable growth of an economy.
There is a difference between economic growth and economic development. The issue before Nigeria at the moment is not about economic growth, per se. While growth is about improvement on what is already established; i.e. efficient deployment of all factors, economic development on its own is about moving a people, the entire population of a country out of poverty and out of misery, unto a better standards of living. David Diaz, in a piece published by the University of Sunderland, captures economic development as moving a people “from low standard of living, including supporting them to gain employment and appropriate shelter”. Therefore, before we talk about economic growth in Nigeria, we have to first focus attention on where the country is and what the country needs at this moment. Nigeria needs economic development.
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As a country, the onerous task before Nigeria is economic development because, for years, and to be candid, the country’s economy has retrogressed terribly as a result of total neglect of the real sector productive activities – no thanks to the unitary system of governance that supports and upholds indolence and lethargy by taking available financial resource to the centre and thereafter finger-nipping, and denying the constituents that are in charge of production while messing up the chunk of the resource through bogus awards of remunerations, exorbitant contracts award and bills payment, and other frivolous inanities. An Anathema!
It is clear to many watchers of the Nigeria’s economy that the country is in a dire situation. According to USAID, Nigeria’s economy and its prospect is “constrained by many structural issues, including inadequate infrastructure, tariff and non-tariff barriers to trade, obstacles to investment, lack of confidence in currency, and limited foreign exchange capacity”. This being the case, the immediate task before President Bola Tinubu’s government is about how to tackle the glaring challenges that are preventing the development of the country’s economy and to relaunch and reinvigorate the production sectors, if ever this government is to be seen as successful.
So far six months in the life of the Bola Tinubu administration, the Central Bank of Nigeria has been looking at the financial and monetary policy side of the economy. But to achieve its set goals sustainably, there is need for holistic approach to the policy formulation. There are factors that drive development and growth as earlier mentioned. They include human and physical capital, natural resources and technology. For Nigeria’s economic development to be possible, there is urgent need for highly skilled, educated and well-trained workforces. It means the education sector should no longer be treated with levity or approached lackadaisically the way being witnessed for decades. Efficiency, high level of productivity and quality outputs need to become the new mantra. In the same vein, the backbone of the real sector, provision of infrastructure and emergence of manufacturing factories should become a revolution for government to initiate and rally all Nigerians to pursue with renewed vigour. For this economic development drive, Nigeria needs surplus and affordable production infrastructure such as energy, power and good transportation: surplus and affordable machinery and retooling (assembly plants for completely knocked down (CKD) parts and deliberate support for local fabrication of machine tools, conducive environment for technological advancement for increasing productivity, and decreasing costs of production. The costs of funds is at present cut-throat. No serious businesses, real sector production companies, can survive current interest rates charged by the money deposit banks. The current lending rate is unfavourable to local production and competitiveness with foreign goods. To bridge the productivity gap and correct the international trade imbalance, it must be clear to all that to produce locally is more cost effective and more consumer-friendly. This government and the MDAs need to show they really mean business by working on the undue advantages the imported finished products are holding over local production. President Bola Tinubu would show concrete sign of seriousness and penchant for success if his government can immediately make moves that are capable of improving employment generation, labour productivity and increasing economic outputs. This is the way to tackle social insecurity and gangsterism. It must be clear to the handlers of the economy that to effectively discourage vices, there must be virtuous endeavours to which the energies can be channelled. It is time this government show performance, not waiting for the last year of the present four-year term.
Ola Emmanuel is a business planning consultant
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