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A time to learn and deliver the economy 

It’s been argued for a very long time that some knowledge of history is useful to the scientist, the economist or the student of literature or philosophy on the grounds that no science or art is static. This argument by strategic thinkers has its background on the premise that historical science begins with reaction to the imagined happenings of the past. History, however, is the reconstruction of the past; by and for those who are living of the life of those who are dead.  It is a tool of all discipline and the key to wisdom. People who ignore the lessons of history wonder in dilemma. The usefulness of the above words of wisdom played out on August 1995, during an address by Harvard Political Professor, Samuel Huntington, at Taipei.

He was asked of his impression about Prime Minister Lee Kuan Yew’s effort to develop Singapore, and he scantly summed it up this way; the honesty and efficiency Senior Minister Lee has brought to Singapore are likely to follow him to his grave. However, like faith which is a belief in things not seen, coupled with the fact that ordinary calculation can be upturned by extra-ordinary personalities, not only did Lee’s efficiency survive him, but, history has since assisted in providing answers to the correctness or otherwise of Professor, Samuel Huntington declaration.  Accordingly, its now on public domain that two years after the asymmetrical observation, Singapore- a country with a GDP of $3billion in 1965 grew to $46billion in 1997, making it the 8th highest per capital GNP in the world according to the World Bank ranking.

Clearly, a bracing account and unprecedented result. What is however left for those who are living is to learn the lessons from such history and gain wisdom, or ignore it, and wonder in dilemma. Essentially, the crux of this piece is to use Singapore’s experience under Prime Minister Lee Quen Yew to analyze and understand the essential ingredients of foresight in leadership and draw a lesson on how leadership decision making process involves judgment about uncertain elements, and differs from the pure mathematical probability process. From accounts, aside from the fact that the story of Singapore’s progress is a reflection of the advances of the industrial countries-their inventions, technology, enterprise and drive, a united and a determined group of leaders, backed by practical and hard-working people who trust them made it possible, It is part of the story of a leader’s search for new fields to increase the wealth and well being of his people. The second and most profound lesson was Lee’s explanation that; after grappling with the problems of unemployment in the country, he came to the recognition that the only way to survive was to industrialize. Add just immediately, he concentrated on getting factories started. ‘Despite their small domestic market of 2 million, he protected locally assembled cars, refrigerator, air conditioners, radios, television sets, and tape-recorder, in the hope that they would later be partly manufactured locally.

There is certainly an ingrain lesson for the nation Nigeria to draw from this second position. Considering the slow growing economy but scary unemployment levels in the country, the current administration in my opinion will continue to find itself faced with difficulty accelerating the economic life cycle of the nation until they contemplate industrialization, or productive collaboration with private organizations that has surplus capital to create employment. Another alternative recourse will probably be to move part of the job creation functions and infrastructural provision/development to the state and local government authorities via restructuring/structural interventions. While the first option (industrialization) may offer considerable solution, the second and third options (restructuring/productive collaboration with private organizations) has more potential reward in political and socioeconomic terms as well as come with a reduced risk. To achieve such feat, power (electricity) and other infrastructure-roads need to be addressed. Notably, not doing any of this, or continuing on the low growth of the economy will amplify the painful consequence of strategic mistakes made by previous administrations that failed to invest during the period of rapid economic growth.

In my views, the nation has to do this because history teaches that democracy needs economic development, literacy, a growing middle class, and political institution that support citizens with favourable economic environment to survive. This leads to another set of sad narrative. Presently, Nigeria is a country that services its debt with 50% of its annual revenue; we don’t need to be economists to know that we have become a high risk borrower. The country, going by reports, would be facing another round of fiscal headwinds this year with the mix of $83 billion debt; rising recurrent expenditure; increased cost of debt servicing; sustained fall in revenue; and about $22 billion debt plan waiting for legislative approval. It may be worse if the anticipated shocks from the global economy, like the Brexit, the United States-China trade war and interest rate policy of the Federal Reserve Bank go awry. The nation’s debt stock, currently at $83billion, comes with huge debt service provision in excess of N2.1 trillion in 2019, but set to rise in 2020. This challenge stems from the country’s revenue crisis, which has remained unabating in the last five years, while the borrowings have persisted, an indication that the economy has been primed for recurring tough outcomes, the report concluded. Indeed, the question may be asked why the country’s revenue crisis remained unabated in the last five years.

Within the context, the answer lies in the fundamental recognition that here is a country reputed for crude oil dependence and laced with management system devoid of accountability, transparency and accuracy. And before a real solution can be proffered, we need as a nation to find and understand the sources of the national problems without losing sight of the real and lasting meaning wrapped in the lesson. As an illustration, the Nigeria Extractive Industries Transparency Initiative (NEITI), few days ago told Nigerians that the nation loses about $4.1 or N123billion annually due to poor crude oil production metering, stating that unless government takes appropriate measures, limitations in the metering of crude oil production will continue to pose serious threat to the nation’s revenue target. 

Regrettably, Nigeria is the only oil-producing country without adequate metering to ascertain the accurate quantity of crude oil produced at any given time, the report concluded. What the above tells us as a country is that there is more work to be done, more reforms to be made; that as a nation, we are poor not because of our geographical location or due to absence of mineral/natural resources but because our leaders fail to take decisions that engineer prosperity. And we cannot solve our socio-economic challenges with the same thinking we used when we created it’

And this piece may not unfold completely the answers to these challenges, but there are a few sectors that a nation desirous of development can start from. And the first that comes to mind is the urgent need for diversification of the nation’s revenue sources. Revenue diversification from what developments experts are saying will provides options for the nation reduce financial risks and increase national economic stability: As a decline in particular revenue source might be offset by increase in other revenue sources.
Jerome-Mario wrote from Lagos. 

In this article:
economyJerome-Mario Utomi
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