A former Deputy Governor of the Central Bank of Nigeria (CBN), Professor Kingsley Chiedu Moghalu has warned that if Nigeria and other developing countries fail to achieve inclusive economic growth, they would have missed the path to true development and run the risk of increased instability.
Moghalu, who is a Professor of Practice in International Business and Public Policy at The Fletcher School of Law and Diplomacy at Tufts University in Boston, USA, laid out a road map for achieving inclusive growth at the 2016 Global Empowerment Meeting (GEM) convened by the Centre for International Development at Harvard University in Boston recently.
“In order to achieve inclusive growth, we should be clear about what it means and what it doesn’t,” Moghalu told the GEM, a high-level international conference at which senior policymakers and global thought leaders tackle problems of poverty and economic development.
“Inclusive growth is about bringing all sectors of the economy and different strata of the society into a process of broad-based economic growth. This raises incomes and creates wealth across the board through increased labour productivity. It is not the same thing as inequality.
“That is a wider problem created by the unequal distribution of capitalist wealth and is being addressed in some industrially advanced countries with income and wealth redistribution through taxation adjustments and other means,” the former CBN chief was quoted to have said in a report.
Moghalu also noted that “inclusive growth also is not quite the same thing as social protection, although there is some relationship between the two. Inclusive growth focuses on the productivity of labour across a balanced set of sectors, and on ensuring employment, while social protection and welfare may include exhaustive fiscal transfers that do not necessarily create any goods and services.”
He suggested that “achieving inclusive growth in Nigeria and other developing countries required an approach focused on conceptual clarity, which is necessary because a proper understanding of what inclusive growth is and what it is not will help policymakers avoid the wrong kinds of “solutions” that will in reality not solve the problem; rural based economic growth as opposed to “urban bias” in development thinking; the fundamental role of business in promoting inclusive growth; infrastructure, which promotes equality of opportunity to access the marketplace of labour and goods; the creation of an effective social contract between the state and its citizens, which is presently absent; financial inclusion; and effective political leadership that can translate political power, authority and responsibility into inclusive growth-related public policy, with concrete outcomes that bridge the gap between expectations and performance.”
The former central banker noted that the failure to consciously pursue inclusive growth in Nigeria has created structural distortions in the country’s economy that have resulted in the economic crisis in the country.
Also, a former President of the African Development Bank and former Minister of Finance of Rwanda, Dr. Donald Kaberuka, who was also a panelist at the conference with Moghalu, emphasised that inclusion of every citizen and every group in the political process and the exercise of political power is essential to attaining inclusive economic growth