Musings on Nigeria’s economic development – Henry Onyidoh


I must first state that this article was borne as a result of the current activities of Senator Abubakar Bukola Saraki-(SABS) towards proposing an all-encompassing environmental bill. It is true that the environment has become a national concern since the UNEP report on the pollution in the Niger-Delta, but what majority of Niger-Deltans and other Nigerians alike are after, are the compensations the multinationals would pay. I however have a divergent view from this, which is about the futuristic consequence of our drive towards development. We are indeed growing both in terms of population and socio-economic strength, the consequences of this growth hasn’t been put forward, talk more of advancing methods to douse its effects. It is therefore of imperative to cleanup some of the economic rubbish associated with the subject.

There are, alas, a few “decrees” that cannot be escaped in the effort to reduce the pollution of our air and water, in disposing of solid waste and the like. The decrees do not necessarily prevent a clean environment, but there is no hope of obtaining one unless there are understood. We have become vaguely aware that there’s a cost associated with development, but have we thought how such development would affect our environment. I doubt if there’s any policy(s) safe guarding the health-of-our-environment, when we eventually strike “gold” as a developed-nation.

This article will attempt to describe one out of the three decrees that matter. There is no point hiding that all three are very depressing. The only purpose in adding more depressing information to a nation already surfeited with it is a small one, if that purpose is to address it. In shorthand, the three decrees are:

1.       The decrees of economic growth

2.       The decree of compound interest.

3.       The decree of the mix between public and private spending

As stated earlier this article will only address one, and by the law of descending other, number one is prime.

Whether we like it or not, and assuming no unusual increase in mass murders or epidemics, the Nigerian labour force for the next 50 years is already born and intends to work. It is hard for any of us, myself inclusive, to imagine a deliberate policy to keep a large portion of it unemployed. But that simple fact has enormous consequences.

The International Labour Organization in 2010 stated that “for more than a century, and all over the world, the average outputs of each worker, for each hour worked has risen between 2% and 3% a year,” thanks mainly to advancement in technology, but also better managerial methods and a more skilled labor force. This increase in what is called productivity is by far the most important cause of our gradually rising standard of living, even though some “negaholics” wouldn’t agree. This rise, putting pollution aside, is what nearly all of us want. In simplest terms, each worker can be paid more because he produces more and he consumes more because he earns more. Inflation only increases the numbers and does not change the facts. Technology may increase the productivity of a doctor more than a cobbler, but both rightly share, through the general rise in income, in the expansion of productivity in the economy as a whole.

It is difficult to conceive of our society or any other wanting to halt the rise in productivity, or efficiency, which has made real incomes higher for us all, bearing in mind accusations of sabotage if you voice the contrary. But even if “we” wanted to, in our kind of society and economy “we” couldn’t. As David Miller notes “that profit drive will always propel most individuals’ daily decisions in the direction of higher productivity.” A business will always buy a new machine if it will cut costs and increase efficiency, and an individual will insist on buying a car based on necessity rather than luxury.

It is not a matter of enjoying it, however. By any fair test, we are not really affluent; over 70% of our population, the World Bank says, feed on less than a dollar per day. Therefore, apart from redistributing income, which has very real limits, the only way the society can improve the well being of those who are not affluent – the majority – is through a continued increase in productivity. We can count on the output of the average worker to continue to rise in the years ahead, judging from the figure Dr. Okonjo-Iweala continues to dazzle us with, and so will the GDP continue to rise. The fact that opposition figures are of the view that our upswing in GDP is not translating to wealth for the lower class, none have however challenged the fact that our GDP is not rising, and nearly all policy makers and economists would agree that our productivity would continue to rise.

[Photo; Nigeria's Finance Minister, Dr. Okonjo-Iweala, courtesy Business Post]

Of productivity and economic advancement