According to Michael Sarel in the piece he wrote for the International Monetary Fund titled ‘Growth in East Asia: What We Can and What We Cannot Infer, the now industrialised countries of Asia achieved rapid growth in large part through an astonishing mobilisation of resources. In his words, Asian growth, like that of the Soviet Union in its high-growth era, seems to be driven by extraordinary growth in inputs like labour and capital rather than by gains in efficiency. In the piece, Sarel wrote that “among the many reasons suggested to account for the East Asian success, the investment rate and the export orientation of these economies enjoy enthusiastic support. These are often called “engines of growth” because their strength seems to be pulling the whole economy forward. Moreover, they appear to generate beneficial spillover effects for the rest of the economy. The policy implication of this view is obvious. If the hypothesis is valid, the government should jump start the engines of growth, and if certain sectors continue to contribute to economic progress, while others do not, then the government should assist the economy’s forward motion by promoting the “good” sectors. Therefore, it should encourage investments and exports, using such policy instruments as direct subsidies or preferential allocation of credit to promote these activities.”
The growth of an economy is a product of labour, capital and technology. Labour engenders productivity. But Nigeria discarded this wisdom more than four decades ago to embrace indolence and rentiers with high tastes and insatiable appetites for foreign products. The industries died and we rely on imports for basic goods and services. No country develops by absolutely relying on importation of everything. Such a country becomes a dumping site, a satellite of the producer-countries at best. Nigeria finds herself in this situation because the over 200 million population would not want to go through the pains associated with local production of needed goods and services.
But we must deliberately penalise the penchant for foreign consumption of finished products if Nigeria is to ever become a developed economy. According to Jong Woo Kang, “penalising imports creates inefficiency and adds costs to domestic producers who rely on imported goods for their businesses”. What J W Kang meant by ‘imported goods’ here are tools and materials needed for local productions. So, we cannot altogether close our eyes to importations. However, it means what should be imported are things required for local production of finished products for consumption, but not the finished products themselves flooding the country, as we currently witnessed. Nigeria is blessed with massive labour strength and we are not too behind nor are we totally helpless when it comes to mobilising capital for productive means. Where we are lacking is in technology, the development of which was practically nonexistent as a result of several decades of indolence occasioned by easy and soft lifestyles as well as reliance on rentiers from oil exploration. But we will get out of inefficiency through capacity building; and we won’t build or develop our own home grown technology if we don’t start and effectively protect what we are building from foreign competition.
According to report credited to UNESCO, Nigeria has about 71,753 students (as at last count) studying abroad. In the United Kingdom alone where it is estimated that an average of 18,000 pounds is spent by each Nigerian student annually, Nigerian households are taking resources from an economy that is so deplorable to transfer over two billion pounds to the United Kingdom’s economy in their search for good education. It is a common joke on Nigerian streets that some UK schools are like satellite campuses of Nigerian universities as a result of deluge of Nigerian students population in the schools. But as at 2022, the most preferred destination for Nigerian students are Canada, Germany and the United States of America. These countries have the most Nigerian students. How sustainable is the funding of these foreign spending by an economy that is hardly working? If we can borrow a leaf from the Singapore’s experience, it can be gleaned from the book, ‘From Third World To First’, where we read about how Lee Kuan Yew, the pioneer prime minister of the country, laid the foundations for the creation of a first-world education system. Instead of the massive emigration of Nigerians to the foreign lands in pursuit of education, and with no plan to return to use the knowledge and possible technical know-how in Nigeria, Singapore’s approach and ideas for education, through her leaders starting with Lee, is about helping to create a better life for all Singaporeans. Lee’s educational policies resulted in a system that attracts the right and best candidates to become teachers; that forms them into effective teachers, specialists and leaders; that ensures they and the education system are able to deliver the best possible learning; and establishing a legacy that allows the education system to continue to move forward while tackling the challenges of its success. But what we have in Nigeria is direct opposite. If you want high quality education for yourself or for your children, you have to locate where to get it by yourself and find the money anyhow to spend in acquiring the education in a foreign land. This has become a very significant outlet for the spending of third world resources in the first worlds.
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The unification of the foreign exchange market has worsened the plights of the Nigerian students whose tuition are paid from Nigeria. From exchange rate of average N460 to a dollar in June 2023 to a 80-90% jump thirty days after, funding foreign education sustainably by ordinary Nigerians has become a luxury too phoney to near. Those that are in already are crying foul and wailing seriously because an 18k per annum bill suddenly requires a 34k worth of local currency to take care of.
We need home grown solutions, and urgently too. As a matter of emergency, we must tackle the menace of absolute dependence on foreign finished products and services, capital flights, storage of stolen funds in developed economies, and frivolous and unproductive tourisms that are gulping and/or draining resources of third world economies.
Ola Emmanuel is a business planning consultant