Complacency is a huge hindrance to innovation, one needs not to fear venturing into the unknown. This can be done by using a different approach and not accepting what you hear as articles of faith but trying new ways and bouncing off ideas. Deploying Creative Problem Solving (CPS) will ensure innovative solutions are provided for difficult problems.
CPS is a collaborative and engaging way of arriving at effective solutions to problems and entails breaking down a problem to understand its nuances, coming up with ideas to solve the problem, and ensuring these solutions are effective by evaluating them. The root causes of a problem must be identified first, CPS guarantees solutions as it focuses on new perspectives.
The application of CPS to the Nigerian economy
Nigeria needs to really understand its problems first. After it has fully comprehended the problem, then it would be easier for it to get solutions. But, when you do not have a firm grasp of the challenges, then you would likely be just groping and very unlikely to solve the problem.
Taking, for example, Nigerians’ obsession with export and demonisation of import. While it is good to boost export as that strengthens your currency and affords you the luxury to import whatever you are lacking. It might seem contradictory that you export to be able to import.
But, that is the reality, you need to export as much as you need to import. The biggest and best economies in the world do not just export alone but import too in equal measure. That is why, one major objective of macroeconomics is balance of payment equilibrium and not surplus.
This is the diametric opposite of what Nigeria preaches and Nigerians have come to consider as gospel. As wealth is not static, you do not have to export alone and demonise imports to be a powerful nation as the principle of mercantilism propounds.
Mercantilism is an old idea that ruled supreme in the 1500s to the 1700s amongst the most advanced economies in the world because they believed wealth was finite and fixed. Modern economics; however; was only birthed because mercantilism was overthrown and seen as bad economics. Free trade instead of protectionism was seen as the way to go.
According to Trading Economics data, Nigeria’s economy in 2021 was bigger than South Africa’s with $441 Billion and $419 Billion respectively (https://tradingeconomics.com/country-list/gdp?continent=africa). Yet, South Africa exported $143Billion almost three times Nigeria’s at $57.7 Billion.
Consider Nigeria’s obsession with exports. Nigerians would definitely be green with envy when they look at South Africa’s exemplary export earnings which are $46 Billion more than its imports. However, in Nigeria’s case, import is $4 Billion more than its export earnings at $61.6 Billion.
Furthermore, South Africa’s exports are more than a third of its GDP, and imports at almost a quarter of the GDP. Compare this with Nigeria, which has export at just over one-tenth of its GDP and import just slightly higher.
Observatory for Economic Complexity (OEC) 2021 data
Looking at this, Nigeria’s problems are the inability to export and not too much import per se. So, the fixation of the authorities on stopping imports might be a misplaced one.
According to worlddata.info (https://www.worlddata.info/largest-economies.php) Nigeria is the 31st largest economy in the world. However, it is one of the least complex countries in the world (https://en.wikipedia.org/wiki/Economic_Complexity_Index) .Consequently, Nigeria should be positioned within the same region.
Read also: How Nigeria can move from net food importer to exporter
Nonetheless, it is lagging as it is 52nd in exports and 50th in imports. Meaning, it has to aggressively export more and yes, import more. Because Nigeria as a nation is punching below its weight in terms of both import and export earnings. Nigeria needs to up its game.
One way this can be done is through exporting services instead of goods. As exporting commodities has become impossible to expand at the rate we need to, this is because we do not seem to have a competitive edge when it comes to visible trade. But, Nigerians are known for rare and in-demand skills. This could logically mean one thing: Export services. This would not only expand exports and imports but also improve Nigeria’s economic complexity.
Conclusion
The facts clearly have shown that Nigeria’s problem is inability to export and not too much import. Hence, export earnings should be boosted to enable Nigerians import all that they need.
Dr Simon is head, Research and Hubs Coordination at Opolo Global Innovation
