Olu Ajakaiye | Nine imperatives for progressive economic transformation in Nigeria

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Professor Olu Ajakaiye (African Centre for Shared Development Capacity Building)

22 September 2016

Nigeria has so far missed the opportunity to embark on progressive economic transformation as characterised by a reallocation of economic activities away from low- towards high-productivity activities. Rather, under the rubrics of laissez-faire policy and its associated aversion to development planning, during the high-growth era of 2000–14 Nigeria experienced a perverse form of economic transformation, whereby economic activities shifted from low-productivity agriculture and high-productivity manufacturing to other low-productivity other industry and services.

It has also been observed that the premature tertiarisation of the economy is unsustainable, given the country’s chronic dependence on imports and its dwindling foreign exchange earnings from faltering oil exports – a situation that may persist for quite some time. So, in reality, the Nigerian economy is essentially dominated by primary agricultural production along with petroleum that is exported in its crude form.

The present administration has indicated its desire to diversify the economy away from oil by promoting agricultural production and solid minerals while investing in infrastructure and human capital to support manufacturing activities. In essence, then, it is apparently committed to correcting the perverse economic transformation witnessed between 2000 and 2014.

Meanwhile, on the basis of the development experiences of the East Asian economies that have been successful in their drive for economic transformation (Das, 1992; Economic Planning Unit of Malaysia, 2004; Ajakaiye, 2007; Natsuka, 2008; Otsubo, 2009; Datuk, 2010; Chow, 2011), the following imperatives suggest themselves:

  • Political commitment of the leadership to maximising the welfare of the people.
  • Creation and maintenance of a competent and highly motivated largely Weberian bureaucracy, with the ability and necessary authority to implement development programmes, including formulating sound development policies and plans as well as vigorously and pragmatically implementing them.
  • Strategic and pragmatic state intervention through effective participatory planning, aimed at:
    • investing in people, science and technology;
    • investing in social, institutional and economic infrastructure; and,
    • efficiently and effectively nurturing, supporting and promoting the development of world-class national private sector operators, organisations and institutions able and ready to partner with the government and their foreign counterparts to their mutual benefit and complementary to the national development agenda.
  • A cooperative, complementary and collaborative public–private interface and avoidance of adversarial relationship among public and private agents based on misconceived realities (see Ajakaiye and Jerome, 2015, for further discussion of the public–private interface for economic development in Africa).
  • Awareness that the pragmatic choice is not between the state and the market but rather between rolling and dynamic combinations of public and private institutions by the state in delivering sustainable and equitable development to all segments of society.
  • Avoidance of capture and rent-seeking behaviour as well as readiness to adjust policies quickly once credible and convincing evidence shows that certain strategies are no longer applicable in light of emerging circumstances.

Accordingly, in order to successfully transform the Nigerian economy, the political leadership at the state and federal levels should be committed to:

  1. building rolling consensus around development objectives at the state and federal levels;
  2. depersonalising the development agenda, thereby ensuring continuity of truly participatory development plans (see Ajakaiye, 2015, for suggestions on articulating a participatory planning process in Nigeria);
  3. rebuilding the capability of the Nigerian state at the federal, state and local levels, which has been degraded under structural adjustment and the dogma of a minimalist (laissez-faire) state;
  4. restoring the Weberian bureaucracy with adequate autonomy and embeddedness to interface with all stakeholders in an atmosphere of mutual trust, respect, sincerity of purpose and zero tolerance for corruption;
  5. avoiding adversarial relationship among agents, be they from the public sector, private business, labour unions, civil society or non-governmental organisations;
  6. avoiding capture and rent-seeking behaviour;
  7. providing leadership and building a rolling consensus around development plans aimed at transforming the economy, thereby advancing the wellbeing of the people without leaving anyone behind;
  8. encouraging all agents to subscribe to the view that society is a corporate entity jointly owned by all members, for which all must work in concert in pursuit of economic transformation through participatory development planning in an environment of mutual trust, respect and sincerity of purpose; and,
  9. encouraging development partners to channel more of their development assistance towards integrated infrastructural and technological development projects to enhance the international competitiveness of the agricultural and manufacturing sectors.

Photo credit: World Bank Group, 2010

 

References

Ajakaiye, Olu (2007) Recent Economic Development Experiences of China, India, Malaysia and South Korea: Some Lessons from Capacity Building in Africa (Commissioned Paper for the 2nd Pan African Capacity Building Forum, Maputo, Mozambique, August 1-3.

Economic Planning Unit (2004) Development Planning in Malaysia, Federal Government Administrative Centre, Putrajaya, Malaysia.

 

 

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