Is comparing Nigeria to developed economies justified?

On numerous occasions, Nigerians—including some politicians—have drawn comparisons between the cost of living in Nigeria and that in developed economies such as the United Kingdom and the United States. They often argue that Nigeria’s cost of living is comparatively lower. Yet, these same individuals are quick to reject comparisons between Nigeria’s economic indicators, such as exports or GDP, and those of developed nations, claiming, “You cannot compare Nigeria with China.” This raises an important question: Is it truly appropriate to compare Nigeria with developed economies?

“Corruption, nepotism, and the concentration of power among a small elite have stifled Nigeria’s potential.”

To answer this question objectively, we must delve into the historical evolution of societies and the factors that shaped their trajectories. Historical analogies from the books, “Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson, and How Europe Underdeveloped Africa” by Walter Rodney provide critical insights. Both books explore how institutions, events, and choices have defined societal progress and disparities.

Understanding the evolution of societies

At its inception, every society operated under extractive institutions, where the elite amassed wealth at the expense of the majority. Over time, some societies gradually transitioned to inclusive systems, providing equal access to political and economic opportunities. This shift has been pivotal in determining the developmental trajectories of nations.
Acemoglu and Robinson emphasise the role of “critical junctures,” transformative events that disrupt the existing balance of power and set societies on new paths. These junctures can lead to either progress or regression.

For instance, the Black Death of 1346 decimated Europe’s population, creating a labour scarcity that disrupted the feudal order. In response, Western Europe evolved towards inclusive institutions, laying the foundation for sustained development. Conversely, Eastern Europe became more extractive, perpetuating inequality.

The feudal system, which dominated Europe in the Middle Ages, exemplifies the extractive nature of early institutions. In this hierarchical system, kings owned all land, distributing it to lords in exchange for military services. Lords, in turn, granted land to peasants, or serfs, who were bound to the land and required to provide unpaid labour and pay taxes. This system concentrated wealth and power among the elite, maintaining rigid social inequalities.

Africa in historical context

Walter Rodney’s How Europe Underdeveloped Africa challenges the notion that Africa was inherently underdeveloped. He argues that, as of the fifteenth century, African societies were on par with European institutions in terms of development. Historical accounts of the Kingdom of Benin, for example, describe a highly organised and sophisticated society.

Rodney draws attention to the Kingdom of Benin as a testament to Africa’s pre-colonial advancement. Dutch explorers who visited the kingdom in the fifteenth century described its grandeur in terms that rivalled the most developed cities of Europe at the time. They remarked:

“The town seems to be very great. When you enter it, you go into a great broad street, not paved, which seems to be seven or eight times broader than the Warmoes street in Amsterdam… The king’s palace is a collection of buildings that occupy as much space as the town of Harlem and that are enclosed with walls. There are numerous apartments for the Prince’s ministers and fine galleries, most of which are as big as those on the Exchange at Amsterdam. They are supported by wooden pillars encased with copper, where their victories are depicted, and which are carefully kept very clean.”

The Dutch also admired the cleanliness of the streets and homes, noting:

“The town is composed of thirty main streets, very straight and 120 feet wide, apart from an infinity of small intersecting streets. The houses are close to one another and arranged in good order. These people are in no way inferior to the Dutch as regards cleanliness; they wash and scrub their houses so well that they are polished and shining like a looking glass.”

Despite these similarities, the trajectories of Europe and Africa diverged drastically over the centuries. While European societies transitioned to inclusive institutions, African societies became increasingly extractive, influenced in part by the transatlantic slave trade and colonialism.

Acemoglu and Robinson highlight how African leaders, rather than resisting these influences, often colluded with colonial powers, prioritising short-term gains over long-term development. This extractive legacy persisted even after independence, as post-colonial African leaders perpetuated systems that enriched the elite at the expense of the majority.

Missed opportunities by the Kingdom of Kongo: A reflection of many African nations
The experience of the Kingdom of Kongo provides a stark illustration of missed opportunities. When Portuguese explorers introduced technologies such as the wheel and the plough in the late fifteenth century for farming, Kongolese leaders largely ignored these innovations. Instead, they embraced firearms (guns), using them to capture and export slaves in response to market incentives. This choice underscores how extractive institutions prioritise immediate benefits over investments in transformative technologies.

Acemoglu and Robinson argue that such decisions reflect the broader dynamics of extractive systems. Inclusive institutions, by contrast, encourage technological adoption and innovation, fostering sustained economic growth. This divergence helps explain why societies that started at similar levels of development have followed vastly different paths.

The Nigerian experience