If the recovery of the badly battered American economy is based on over 2.3 million new jobs generated annually since 2010; if the result of Chinese economy cruising averagely at above 7.5 per cent yearly is because it adds as high as 6.5 million new jobs annually; how come our Gross Domestic Product said to be growing as high as seven per cent, is hardly creating up to a million jobs annually?
Unlike other countries where job creation is evidence-based with economic growth indicators indisputable, in Nigeria’s case, it’s based, according to Okonjo-Iweala, on “Job creation surveys of the National Bureau of Statistics conducted in collaboration with the Office of the Economic Adviser to the President, National Planning Commission, and Federal Ministry of Labour,’’ without any involvement of non-governmental stakeholders such as labour unions, chambers of commerce and industry, the country’s civil societies that should have given the survey credibility.
The question this raises is: Shouldn’t economic growth (increase in GDP) be synonymous with growth in employment, which has historically remained the most credible measurement of economic growth? If it is not human labour behind the so-called economic growth, should it be robots growing the economy? Given neither traces of human labour nor robot labour driving the so-called economic growth, shouldn’t our high oil sales be the plausible generator of the revenues responsible for the ongoing growth?
The fact that ours is wholly dependent on externally-generated revenue stream makes our dependence on external economic growth factors translate only to vertical economic growth effects, which unlike horizontal economic growth effects, lacks trickle-down and multiplier effects. That is why ours is growth without development, real sector or jobs.
What we are suffering today is not only the high human cost of being trapped in a high-tech oil curse; but more is the fact that unlike most oil rich nations who control their oil, as mere rent-seeker, who bequeathed their oil to foreign oil companies, in controlling production, they prefer importing fellow compatriots than employing Nigerian workers.
Compounding our situation is the fact that we spend the entire oil largesse purely on consumption of foreign-made goods. And without investing substantial part of our petrodollar revenues on physical infrastructure that attracts real sector investments, we are stuck in an economic mud.
Not helping matters is the kind of monetary policy we have chosen to pursue. Neoliberal monetarist policy regime, being a tight monetary policy stance that is based on blind fighting of inflation, has had huge cost on the entire economy of the country, especially with high interest rate regimes—one of the highest in the world.
Keeping naira excessively valued has also resulted in dumpers helping themselves in what could be called a no-man’s economy. This incontestable advantage over local manufacturers has rather than growing manufacturing activities in the country, led to real sector bankruptcy and layoff of workers in the productive sector. Little wonder, no amount of propaganda by those running the economy has been able to wish away the indisputable economic reality.
But like every other country that has become an industrial economy through economic diversification, transforming Nigeria’s economy should begin with diversifying it away from oil. This will require unprecedented investment in infrastructure development, needed in an effort to reduce the embarrassing high cost of doing business in Nigeria, recently ranked number 131 out of 183.
Also reversing the current trend of dumping foreign-made goods, we need to raise high tariff walls, which posing high import costs on these foreign dumpers, should force them to begin relocating their factories to Nigeria, or else they lose the 170 million consumer market.
But for those against our imposing high tariffs as they did during their catch-up period of industrial takeoff, we should remind of Abraham Lincoln’s advice to Americans during his inaugural speech in 1861, “If we buy foreign-made goods, we get the goods, lose the money and the jobs; but when we buy American-made goods, not only should we get the goods, we should also get the money and the jobs.’’
From this, there is no need for more evidence, why Nigeria has exported millions of jobs it ought to have been creating domestically, particularly for its teeming youth, whose unemployment is the result of our running an import-dependent economy.
That is why everything needs to be done, done urgently to drastically lower Nigeria’s excessive high cost of doing business, which has continued to favour imports at the expense of local real sector firms. Such a drastic reduction in the cost of doing business will require an aggressive investment in two critical infrastructure sectors — power and transportation. Being ultimate game-changers means that no amount of borrowing spree should be seen to be reckless.
We should borrow wherever we can find the money, in full appreciation that all of today’s great industrial economies, in their desire to join the exclusive club, engaged in unprecedented borrowing, a risk that eventually paid off. That is why allergy to borrowing is stifling our industrialisation, which can only take place with our infrastructure deficit addressed head-on. With such absence of savings culture, modern taxation policy, how else should we generate about $300bn needed to put our infrastructure at par with developed economies of today?
But how should we justify our allergy to borrowing when it was Alexander Hamilton, America’s first Secretary of Treasury who speaking before the US Congress in 1792, said, “A good national debt…will be to us a national blessing. It will be powerful cement to our nation. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will spur to industry.’’
If every US Treasury Secretary after him has followed his advice without having cause for regrets, why has Dr. Okonjo-Iweala been insisting that we should not borrow as Hamilton advised? Without borrowing, what alternative financing sources has she for fixing the country’s decadent infrastructure, which is the only way to spur industrialisation and economic growth?
That brings us to what has become synonymous with Okonjo-Iweala, her kind of George W. Bush belief system, which is, “You are either with us or against us.’’ Developing such extremist position, personalising government as if it belongs them, has been our great obstacle to move this economy forward. In other words, it only points out high cost of intolerance.
It is high time Dr. Okonjo-Iweala listened beyond the neoliberal. She should do so in appreciation of Deng Xiaoping’s advice to Chinese public policy entrepreneurs, when he said, “It doesn’t matter whether the cat is black or white, so long as it catches mice.’’
Okonjo-Iweala should have known that if China is today the world’s most solvent economy by adopting an anti-neoliberal economic development model. Rather than following China’s highly successful pro-jobs model she is firmly forcing the country to the same US, which is today the world’s most indebted economy. Isn’t it logical that we should emulate the Chinese model while distancing ourselves from obsolete neoliberal model, that only reinforces our underdevelopment?
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