Onuoha Frank: Perspectives On The Nigerian Economy and Economic Freedom

There are fences in virtually every strata of the Nigerian economy. Fences in this context, suggest physical or manmade barriers that impede the movement of goods and services from one point to another. It also portrays a situation where government meddles in every aspect of production in the economic chain of a country.

In pre-colonial Nigeria, the Trans Saharan trade routes give a glimpse of the level of openness that characterized the pre-colonial economy in Nigeria. Although majority of the states actively controlled the volume of goods and services, however by ensuring the free movement of goods, people and services through their borders states in the Hausaland, Oyo Empire, Egbadoland etc benefitted immensely. Traders from different states merged in popular markets in some states like Kano, Gobir Kanem. This open market system brought other forms of development to the states involved. In some cases some of the regional markets grew into large towns. Kano, for instance, was a regional market, which served the long-distance caravan trade over the Sahara and the long distance trade from the coastal areas. George B. Ayittey in his essay “Indigenous African Free-Market Liberalism” noted that in traditional pre-colonial African economic system, “free trade routes crisscrossed the continent. Goods and people moved freely along with them.” There were crucial diplomatic relationships that were established as a result and development projects in other states were imitated by some host communities. Arguably, the existence of this free movement led to the coming of the Europeans to Nigeria and West Africa around 15th century.

The era of physical barriers started in an official capacity as a state policy with the entrenchment of colonialism. The colonial powers sought for monopoly of goods and services from the hinterland. The British officials in Nigeria ensured that all factors of production were directly or indirectly in the control of the government, its agents and British companies that set up shop in the country. With time it became illegal for even Nigerians to own certain businesses that the colonial masters viewed will compete with their interest. The mounting of fences in various aspects of production was replicated in social relations. Government Reserved Areas, GRAs, privileged schools for government officials and their friends etc. Ultimately government bureaucracy multiplied. The ease of doing business for local people during the period all but disappeared.

The post-colonial era did not change much. The physical barriers were not dismantled. In any case, the new Lords (Nigerian leaders) added more blocks on top of the fences and barricaded with barbwires. At Independence, the Nigerian government held a monopoly of almost all the sector of the economy and it was reluctant to release it. Moving forward, the barriers started disappearing gradually. Today the legacy of the barriers is such that our economy is still tottering and needing urgent attention.

According to the World Bank Group, out of 189 economies reviewed in the Ease of Doing Business Index 2015, Nigeria ranked 170. It ranked 129 out of 189 countries in the Ease of Starting a Business category. It will take 8 procedures in 28 days to start a business in Lagos state. In the African continent, it is easier to do business in South Africa, Tunisia, Ghana and Morocco. Countries like Burkina Faso, Niger and Guinea trump Nigeria on the index.

The pervasive spread of state sponsored fences contributes largely to the situation. Within Nigeria these barriers come in form of interstate poor road networks and infrastructure, border and trade conflicts, which impede the movement of goods, people and services from one state to another. The harrowing experiences most transporters, commuters, business owners and commuters relate very well known. A trader from Port Harcourt will take close to two hours to get to Aba for a journey that should only take 45 minutes if the roads were good. Some states discourage traders and businesses by imposing unreasonable and ridiculous demands on non-state indigenes and businesses. There is the multiplicity of charges demanded by most states and local governments on trucks and businesses to pass through their areas. Most states have stringent limitations on property acquisition by non-indigenes. The cases of some states embroiled in borderland disputes also place a grave limitation on the economic dividends. Free inter-penetration and inter-state access is a key economic policy statement the Nigeria government should pursue as a matter of urgency. Inter-state market access will ensure the barter of developmental ideas, food sustainability, raw materials development and manpower provision. Free movement within the states and communities will encourage local and foreign investors to participate.

A non-unified tax regime may also impose an impediment to free movement of goods and services. In this area, there have been noticeable reforms from the government at the federal level. Notwithstanding, some challenges still persist at the state level. One of the issues is as Asuquo Richard George pointed out in an article published in the Vanguard in 2014, “the appropriate tax authority to administer several taxes.” The situation is highly volatile as many of the businesses are exposed to double taxation and even multiple ones in certain cases. This fence can be dismantled through “mutual cooperation among different government agencies and parastatals.”

Government has a huge role to play in facilitating the free movement of goods and people and eliminating the barriers that stunt the growth and development of the economy. One of the things it can do is, leave business for the private sector. Focus on the development of policies that encourage businesses to thrive, open up the state borders by encouraging the state governments to work together, provision of social amenities and improve infrastructure. The notion that government has the capacity to do business in Nigeria has been tested over time and has failed with clear evidences in every sector of the economy.

The Nigerian economy has immense potential. Its growth however, depends largely on letting people explore the opportunities anywhere they are. The people must take ownership of the factors of economy and government should divest to creating the enabling environment for the economic activities to grow.