“Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty, lies opportunity.” – Albert Einstein.
On Friday, September 23, on the morning programme of one of the independent television stations, “Recession: Economy faces stagflation”, was the topic of discussion with an economic expert. I tried to define that uncommon economic jargon. Stagflation, in a layman’s view, is a combination of two words, namely, stagnant and inflation. I think, in the light of Nigeria’s prevailing dire economic situation, stagflation will be construed to be an economic situation whereby inflation is blended with stagnant or falling output and employment.
If you are at a loss what exactly is happening in Nigeria, especially in our economic sector, reading the above definition will be both enlightening and insightful. But interestingly, an expert recently questioned if, in the true sense of the word, inflation, that truly is what the country is presently undergoing, when we are rather operating an import-based economy and, thus, a consumption prone nation.
It is more appropriate and apt for a production run economy to suffer or be blamed for inflation than consumption based one. But just as the topic of this discussion says, I am not going to be so much concerned and focused on the details of what the economic challenge we are currently confronted with is.
The most successful and economically independent and highly industrialised nations in the world are not found among those who can boast of the endowment of natural resources, especially, crude oil identified under the umbrella name, Organisation of Petroleum Exporting Countries. Nigeria is a member of OPEC.
The fascinating thing is that this seemingly economic sleeping giant has every potential and quality requisite to belong if not surpass the privileged few, successful and economically independent nations. The pertinent question becomes, why are we so jinxed to the point that we are used to being likened to the proverbial “eagle with clipped wings that possibly won’t fly?”
I hate to resort to the consolatory corner that this economic stagnancy or developmental retrogression is not peculiar to us as a country, and that our fellow natural resources blessed countries, too, suffer same. Balderdash! Who is holding us down from rising out of our self-inflicted complacency?
I foresaw that the economic emancipation that will, by implication, extend to other sectors of the nation’s life, shall be predicated on whatever side the previous election pendulum will swing. I foresaw this prevailing and inexorable economic tribulation fast approaching – so unavoidable a circumstance that I reluctantly agreed in a submissive manner that this can only be a disguised blessing for the entire nation. If we fail again this time and this rare opportunity to rise above board proves elusive for us, it is hard for me to say, but we may never recover from the devastating trauma or pick up the residue this recession will ultimately leave behind.
A veteran journalist, Thomas Friedman, in his book, “The world is flat”, convincingly explains why the countries devoid of natural resources tend to prosper, thus, “the ideal country in a flat world is the one with no natural resources, because countries with no natural resources tend to dig inside themselves. They try to tap the energy, entrepreneurship, creativity, and intelligence of their own people – men and women – rather than drill on oil well. Taiwan is a barren rock in a typhoon–laden sea, with virtually no natural resources – nothing but the energy, ambition, and talent of its people – and today it has the third largest financial reserves in the world. ‘’The success of Hong Kong, Japan, South Korea, and Coastal China can all be traced to a similar flatness.”
A major developmental restraint Nigeria suffers is what the ace economist, Adam Smith, called Creative Destruction in his classical treatise, The Wealth of Nations. This oxymoron cum economic phrase simply means a society’s ability and willingness to pull together and sacrifice for the sake of economic development and the presence in a society of leaders with the vision to see what needs to be done in terms of development and the willingness to use power to push for change rather than to enrich themselves and preserve the status quo.
It is a synergy of conspiracy and confederation by an old and outdated order militating against a modern, advanced and encompassing idea that intends to replace the former for an accelerated development. But there are standing cabals that have sworn and mortgaged their lives that things won’t work. To achieve or run an economically progressive nation, certain indices and investor friendly policies have to be in place and operational.
An economic policy that rather creates or encourages sluggish bureaucratic bottlenecks hampering development in a country is obviously a disincentive to aspiring foreign investors. To set up an industry, or establish a company in Nigeria, what does it cost in terms of time, operational demands by the government in comparison with other countries such as China, UAE, etc?
Few have argued that the recent unfriendly and stringent forex policy that sent the formerly existing investors in Nigeria parking was targeted at some unscrupulous Nigerians whose stock in trade was fund repatriation, money laundering, etc. But must we throw away the baby with the bathwater? Then it becomes anti-climax, and we are not ready for the repercussions and consequences.
We now have the ample opportunity to make the best out of the current dire economic situation in the country. This country went from brain gain to brain drain around the civil war period. If we can downplay nepotism and tribalism, create enabling environment for our “Millennium” entrepreneurs now living in the advanced and developed economies for them to return and unleash their wealth of knowledge and exposure on their father land Nigeria, there would be a widespread, instantaneous yet unprecedented turnaround in this country.
Enough of recycling of leaders, it has gotten to our neck, we can’t take it anymore. No country has achieved lasting development by operating unfavourable economic policy and at the same time anticipating foreign investors to come in. It is my unpopular (if not weird) wish that the crude oil found in Nigerians dries up to the last drop. Only then can one witness the explosion of the hidden and latent potentials, creativity, ingenuity, resoluteness and resilience deeply abiding in an average Nigerian.
But if I were the government, we can choose to create artificial scarcity, deliberately become oblivion of the crude oil, make budgets not factoring the proceeds of oil revenue in it, invest in and explore other sectors in human resources, particularly. How I wish our government will recognise the huge and enormous capabilities which Nigerians possess.
We do not require the financial aid from IMF, World Bank, or the Paris Club, etc. We are well able. Confidence, faith and duty – all join their voices with sincerity of purpose and patriotism calling us to turn our adversity to advantage, recession to resources, economic depression to economic development, and find in the middle of the current difficulty the rare opportunity to rise to the top. So help us God.
–– Orajiaku writes from Lagos. He can be reached at: email@example.com