Reassessing economic development strategy means government must re-think policies and charts deliberate pathway for long time development. It is very likely that economic scholars will be intrigued by the diverging performances by various countries in the Southeast region of Asia.
Before the outbreak of COVID-19 pandemic, the trade wars between the United States and China had already changed the trajectory of International trade in favour of countries that have strong internal structures to sustain economic growth. Indeed, economic sustainability is going to be one of the most important issues of the coming decades for Nigeria’s economic development. In reality, the capacity to manage resources efficiently must be achieved and sustained to support economic transformation.
Nigeria is in need of political and economic cohesion to set up efficient economic systems in order to achieve sustainable development. If we examine the effects of COVID-19 pandemic vis-a-vis the state of Nigerian economy, then we will realise the reasons for inaugurating economic sustainability committee by the Vice President few days ago to think of how to build resilient and vibrant economy,
Saddled with the responsibility of how to re-configure the national economy, the committee will have to first accept that population is a key factor that drives the economy, because, in real fact, “trained and healthy” population bring fresh talents and innovation into the economy.
With COVID-19 pandemic around, we observed the impact is broad and global, as matter of fact; these are challenging times for businesses with serious financial impact in various sectors of the economy. Concerning Nigerian economy, the absence of closed circuit economy mechanism to support national economic development process even in time of challenges is a major constraint. Example, Nigeria is practically in need of foreign technical support in every sectors: Engineering and technical schools have not impacted the industrial sector, lack of basic amenities is greatly affecting most sectors to perform optimally; health sector services are poor due to inadequate infrastructure. Besides, we need foreign partners in construction sector to provide necessary road networks infrastructure; electricity the heart beat of any nation’s economy, has to come from Germany, China, America, Malaysia, etc.
The COVID-19 pandemic exposes the deprivation of a safety net and protection for Nigeria’s economy. Nigeria, like many other oil exporters in Africa and Latin America, has watched the price of Brent crude move down wards from $70 a barrel in January 2020 to less than $30 in the third week of March 2020. Low price of oil further aggravate rising inequality, especially for those working in the fabric of economy’s “informal sectors” with no social protection. Once again, Nigeria is caught in the net of international economic conjecture, confronted with the constraint of dwindling oil revenues for financing sustainable economic development.
As Covid-19 pandemic continues to dominate the news cycle globally, we have another opportunity to use this crisis as a way to understand how to develop our economy differently. This requires a rethink of what governance is all about. Rather than politicising economic fundamentals, government should move towards actively putting in place power for SMEs to create vibrant internal markets to deliver sustainable and inclusive growth.
Government should also ensure that partnerships with business involving government funds are driven by public interest and consider the followings:
First, governments must invest in structures, and in people through institutions because it is the people that add values to economy. But this will involve long-term investment to strengthen the nation’s economic systems, reversing the trends of recent years of high rate of underemployment.
Second, governments need to identify sectors that have quick and direct impact on the economy with practical approach to develop into local market growth. And it is equally important to focus on how to better coordinate research and development activities, steering them towards national economic goals.
Third, governments need to support SMEs to become economic apparatus to create more opportunities for youths through innovative projects. These are in addition to defined economic sectors objectives and priorities to make sure both citizens and the economy benefit. Precisely, power (electricity) is a sector that receives billions from the public purse. The large public funding going into power sector, that means governments still have to play a major role in the process to ensure adequate provisions, supply is safeguarded and profits are reinvested back into innovation, rather than siphoned out to shareholders.
Long-term sustainable and inclusive growth is the driving force for poverty reduction in developing countries. We are amazed by the rapid growth path followed by some countries such as Chile, India, Malaysia, Thailand, and more recently Vietnam, where the industrialisation process quickly transformed their subsistence, agrarian economies lifted several hundred million people out of poverty in the space of one generation.
The current COVID-19 pandemic, the most serious one since the Great Depression, calls for a rethink of economic policies in the health sector. It is therefore, a good time for political leaders of our country and economists to reexamine economic development strategies as well.
Michael Aderohunmu
Dr. Aderohunmu, development economist is also president, Nigeria-Malasia Business Council.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
