Nigeria does not have a development strategy. For a country not to have a development strategy is like the captain of a ship setting off from Apapa to New York without a navigating compass. We have had very good economic development plans in the past, including such tactical schemes as Vision 2020, the National Economic Empowerment and Development Strategy (NEEDS), the Seven-Point Agenda and the Economic Recovery and Growth Plan (ERGP). But they do not constitute a development strategy.
A development strategy is a long-term perspective framework on how to take a national economy from one stage of development to the next. It begins with an economic philosophy, by which we mean a country’s definition of the Good Life and what it regards as the proper balance between the state and market and the institutional set-up required to achieve the greatest good for the greatest number.
There are those who believe in the pure market liberal ideology associated with the Austrian School of Economics, in which even the idea of a central bank is considered a threat to economic freedom. Austrian economists believe that private banks are best placed to issue legal tender currencies and that, through competition the best currency will emerge as the most widely accepted in the country. On the other extreme we have the socialist market system, in which the state controls the means of production and “the commanding heights” of the economy. The market is reduced to the margins of economic activities.
In-between we have mixed-economy models in which states and markets participate in economic activities while the government assumes the role of umpire to ensure a stable eco-system and level-playing field. The United States is closer to the far right of the spectrum while Sweden and the Nordic countries, with their high-tax and high-welfare economies are closer to the left. Germany’s social market model is closer to the centre.
We in Nigeria have long operated in approximation to the “mixed-economy” model. In the sixties and seventies, the state had the upper hand, as public enterprises proliferated in industry, banking, finance and agriculture. With the structural adjustment programmes of the 1980s, the pendulum shifted towards markets. There was a spate of privatisation, commercialisation and liberalisation, with varying degrees of success. There was a determination that the state will be restricted to its area of comparative advantage while the private sector will be the driver and locomotive of economic growth.
Ever since the Great Session of the last decade, there is an international consensus that ideological dogmatism is folly and that both extremes of the pendulum are illusory. Rather, the ideal lies somewhere in the Aristotelian Mean. Emerging and developing countries have a freer policy space to define a system that best works for them, in accordance with the temperament of the people, their historical experience, unique set of conditions and long-term development trajectory.
The 1999 Constitution states that “The security and welfare of the people shall be the primary purpose of government”. Section 16 (1) requires government to: (i) utilize the resources of the country to advance the collective prosperity; (ii) Secure the economy such that the welfare, freedom and happiness of every citizen will be maximized while ensuring social justice and equal opportunities; and (iii) Provide shelter, food and other amenities for all citizens.
Welfarism is clearly at the heart of our constitutional economics. Within this broad framework, a development strategy should define the path by which we can advance the cause of industrialisation, accelerated growth, structural transformation and collective welfare.
In the early decades of independence, import-substitution industrialisation was the chosen path. By the early seventies, significant inroads were made by way of industrialisation. But then things began to fall apart. The discovery of oil brought with it the “Dutch Disease” syndrome, by which the exchange rate was kept artificially high to bring in cheap imports to satisfy the urban elites at the expense of agriculture and the rural poor. Agriculture and industry were undermined, as ours became an import-dependent rentier economy. Failure to diversify the economy also means that there were no jobs to absorb an ever-expanding population. Public finances also come under heavy risk when global oil prices go down and the capacity of the state to generate revenues dwindle.
From the experiences of other emerging economies, a development strategy requires a group of technically trained economists and technocrats working together to evolve a new set of ideas on how the country can make giant leaps forward. We need an intellectual champion such as the statistician P. C. Mahalanobis who became head of the Indian Planning. But Mahalanobis and his team could not have succeeded without the foresight and vision of a great statesman such as Prime Minister Jawaharlal Nehru, a Cambridge-trained scientist and lawyer. The Indians also brought in foreign economists such as Ragnar Frisch, Oskar Lange, Nicholas Kaldor Michael Kalecki, Milton Friedman and Peter Bauer to critique their strategies.
In Singapore, the economist Dr. Goh Keng Swee was a trusted adviser and counsellor to Prime Minister Lee Kuan Yew who was himself a first-rate jurist and visionary. They also enlisted the help of the Dutch economist Albert Winsemius who served as an adviser to Singapore during the years 1961 to 1984. Winsemius had led the first UN mission to Singapore in the early sixties and was soon bowled over. The Singaporeans were humble enough to subject their ideas to severe critiques by Winsemius who made it his life-mission to see the small island nation succeed.
What we in Nigeria today need is a small crop of highly gifted practical economists and technocrats who have a clear vision of where our country should be and how to get it there. They must be patriots not driven by sectional or ethnic sentiments. They should, rather, be believers in the New Nigeria National Project. We need them to work together to build a model of the economy and to address the critical questions of “what, why, and how?” We should address our minds on how to become an industrialised knowledge-based economy in the coming two decades; how we can take millions of our people out of poverty; how we can build a flourishing middle class; and how can we become the financial hub of the continent and make our Naira an international trading currency – how we can hook on to the global economy, with its opportunities and risks. To achieve these goals, we must avoid undue economic nationalism. We should be open to new ideas from whatever quarters, so long as they satisfy the litmus test of the national interest.
I advocate a new Agro-industrial Revolution Strategy for Nigeria covering the next 25 years. It should aim to promote an agrarian rural transformation linked to food security and to manufacturing for domestic and world markets. The strategy should be anchored on a number of locomotives: knowledge capital, reinvention of the state as a developmental vehicle; investment in human capital, research, innovation and investment in the STEM disciplines of science, technology, engineering and mathematics; investment in power and infrastructures; diversification of the economy; iron and steel development; and a broad national consensus and stable polity. Economists are broadly agreed that the minimum pre-condition for a middle-income status is a 70 percent literacy rate. We must therefore invest heavily in education, literacy and skills.
I believe Nigeria can become an advanced knowledge-driven industrial economy within the next two decades if we mobilise the energy of our people while reinventing government as a developmental state. We need a servant state that serves the people, not a rapacious Leviathan that saps their energy. To echo the American statesmen Robert Kennedy: “Some men see things as they are, and ask why. I dream of things that never were, and ask why not.”