Effective and Functional Governance in Practice: Take-Away for Nigeria
Governance in a lay man’s definition presupposes ‘the process of decision making and the process by which decisions are implemented (or not implemented)’ (UNESCAP 2009). It exists both as an informal and formal structure in a social system from simple family structure to complex political governance (government). Essentially, governance operates through laid down structure such as practice of laws and norms, a select medium of communicative language and accumulation of power. For instance, in an informal family structure, the head of family (usually a father) acquires certain rights and privileges over other members in guiding and directing their affairs. Similarly, in a formal democratic governance setting, the head of central government (usually a president) acquires through constitutional law certain authorities and responsibilities for provision of public good. On the other hand, effective and functional governance is synonymous for good governance. By the standards of International Development, good governance is a measure of how public institutions conduct public affairs and manage public resources ‘in a preferred way’. It further adds that good governance emerges as ‘a model’ to compare and contrast functional and non-functional economies in terms of responsibility of government to meet basic needs of people of the society (masses). Above all, there are universally accepted principles of measure of good governance which include participation, rule of law, consensus building, equity and inclusiveness, effectiveness and efficiency, accountability, transparency and responsiveness.
A key and pivotal principle of good governance is effectiveness and efficiency. This principle is directly relevant and connected to workings of an economy which deals with the interrelationship of production, consumption and exchange activities of a society. In the practical sense, any public-sector governance exists mainly within a peculiar economic system. Broadly speaking, economic systems are divided into three groups, market-based economy, centrally-planned economy and mixed economy. A market-based economy allows free-flow of exchange of goods and services in accordance with law of demand and supply (laissez faire). This economic doctrine presumes a full market economy whereby there is no form of governmental economic intervention. However, in reality, most economies introduce a subtle measure of regulation through income redistribution; pricing control; administrative subsidy and social security benefits. A situation considered distortionary to free market-economy. It is generally believed that no known economy in modern history practices pure market economy. A centrally-planned economy (also known as a command economy) is an economic system in which a central authority (government) makes key economic decisions of production and distribution of goods and services. A fundamental feature of central economic planning is economic activity of states, undertaken by ‘own enterprises or agencies’ known as public enterprises. These operate through a system known as bureaucracy by which economic pricing and quotas are determined by state enterprises on behalf of government. To this end, a major advocacy for central economic planning is its public good (utility) initiative such as egalitarianism and environmentalism. In the same vein, a common critique against central economic planning is its ‘red tape’ attitude as fore-runner to inefficient management of economic surpluses and shortages. A mixed economy, on the other hand, is a system that presents aspects of both pure and central economy. In practical terms, a mixed economy protects private property ownership and allows freedom in use of economic capital; however, subject to governmental interference in anticipation of social objectives. It is common belief that most modern economies ‘feature a system of two or more economic systems’ merging at some point along ‘a continuum’. A classic example is Chinese economy described as a ‘mixed socialist market economy’. This is because, in mixed economies, both the public-sector and private-sector compete for the same limited resources in the society. More importantly, government interventionism in mixed economy is ubiquitous where it deliberately distorts free market (target industry) through reforms which may be either nationalization or agglomeration. The former aims to achieve state ownership, especially in an industry that provides a public good or service such as provision of domestic energy and utility (water and electricity). The latter aims to further promote free market through trade protectionism to achieve comparative advantages. For instance, the East Asian Export Led Growth development strategy of the 20th century was a deliberate government interventionism which has transformed a host of countries into international economic hub.
Broadly speaking, economies are traditionally categorized as either real economy or financial economy. More recently, there is a new derivation of economy known as creative economy. Real economy is measured by outputs (visible or invisible) of a country. Financial economy is measured by market in terms of depth and sophistication. Creative economy focuses on leisure and entertainment. In modern times, countries are interdependent in their economic dealings which give rise to global economy. However, in this interdependence, there the big economic players, average players and small players. For instance, it is common knowledge that the 20th largest economies (G 20) account for 80 percent of the world’s economic output. And more so, the five biggest of them ‘are big enough to impact the world with their developments’. According to the Investopedia, the current five strongest economies are, in descending order, United States of America, China, Japan, Germany and India.
The United States of America, according to the Wikipedia, is a developed country with a mixed economy. Similarly, it is the largest economy by ‘nominal GDP and net wealth’ and second-largest by ‘purchasing power parity’. According to the International Monetary Fund (IMF), the United States of America nominal GDP in 2020 is $22. 2 trillion with 1.9 % growth. Similarly, in the same year (2020), it has the world ‘fifth highest per capita GDP ($66, 900 nominal) and seventh-highest per capita GDP (PPP). Similarly, it is the most ‘technologically advanced economy’ especially in computers, pharmaceuticals, medical, aerospace, military equipment. Its currency, US. Dollars is the most frequently used in international transactions and world’s foremost ‘reserve currency’. In the same vein, it is the world’s ‘largest importer’ and ‘second largest exporter’. Its economy is mainly fuelled by both the real and financial economy. To this extent, it is classified as having abundant natural resources, with well-developed infrastructure and high productivity. Specifically, it has abundant reserves of petroleum and natural gas making the second largest manufacturer in the world. Its real economy comprises trade in both goods and services which was ‘$4.2 trillion in 2018’. The United States of America has not less than one hundred and twenty-one (121) of the world’s largest companies (500 in total) as headquarters. Its financial institutions, as represented by commercial banks, had ‘$20 trillion in assets’ as at August 2020. Similarly, the New York Stock Exchange and Nasdaq are the world’s largest stock exchanges by market capitalization and trade volume. Foreign investments in the US total ‘almost $4 trillion’ while American investments in foreign countries total ‘over $5.6 trillion. Not surprisingly, as at 2018, consumer spending in the US topped ’68 % of US economy’ (free-market); with labour income share of ‘43% as at 2017’.
In practical terms, the United States economy grew dramatically since the 20th century innovations and ‘improvements in innovations’ which opened vistas of growth for firms and typically transferred gains of growth to shareholders. This era typically saw American firms sharply cutting costs to the extent of lowering prices and further increasing outputs. This trend made America to assume the world’s largest economy since in the 1920s. However, this national market-based prosperity was cut short by Great Depression of the 1930s to which the government then swiftly responded through increasing government spending in the economy and reducing taxation costs. The governmental interventionism approach, as propounded by British-born economist John Maynard Keynes, gives elected officials a lead role in the economy during swing periods, through a mechanism known as fiscal policy. Thus, a sitting US President and a delegated Congress official both have discretionary powers to intervene in the economy and alter it toward a desired path. The US economy has been on steady growth from 1946 to 1973 with average growth of ‘3.8%’. This peaked in the period (1960-69) with total expansion growth of ‘53%’, averaging ‘5.1% yearly’. Notwithstanding, there were of periods of negative economic triggers in the US economy such as the 1973 oil crisis. The economy later re-emerged stronger. This was mostly plausible because, in 1970s and 1980s, all indications pointed to fact that emerging economies such as Japan would overtake the economy of the US due to ‘close in the economic gap’. But this has not happened to date.
The 21st century US economy began with a recession in 2001 ‘with unusually slow jobs recovery’. This subsisted till 2006 housing bubble, another major financial economic distress in the history of United States. The housing bubble catapulted into 2007-08 subprime mortgage crisis which saw the near-collapse of the non-depository banking system and major multi-national banking institutions in the US. This was only salvaged by governmental interventionism through bail out programs and other economic stimulus running into hundreds of billions of dollars. The economy was thus gradually recovering until 2011 when ‘real GDP regained its pre-crisis rate, coupled with household net worth by Q2 of 2012’. The United States of America nominal GDP peaked the $20 trillion benchmark, first-time ever, in Q1 of 2018 under the incumbent president Donald Trump. This was broken down into ‘private consumption (70%), business investment (18%), government spending, excluding transfer payments (17%), and net exports negative 3%’. The best real GDP yearly performance under the current administration of Donald Trump was put at ‘2.9 in 2018’ and was the described as best performance of US economy ‘in a decade’. However, the current rampaging novel corona virus has badly and greatly hit the US economy with quarterly annual growth of GDP for Q1 2020 put at ‘negative 5%’ and for Q2 2020 put at ‘negative 32.9’. Consequently, the real GDP per capita of the US, evaluated as $52, 444 in 2017 was categorized as ‘the 20th out of 220 countries’. The current nominal GDP per capita (2020) of US economy is $ 63, 051 and ranks number five (5th) in the world. However, it has been debated by economists that the real GDP of the US has been on the decline since 2000 with probable reasons adduced for decline such as ‘slower population and growth and growth in labour force, slower productivity growth, reduced corporate investment, greater income inequality reducing demand, reduced labour power, lack of major innovations’.
Select Economic Variables Outlook in the US
Employment
The United States of America approximately was 160.4 million strong in labour force, (2017) and described as ‘fourth largest in the world behind China, India and European Union’. This has increased to ‘160.9 million (2020) accounting for 57.4 % employment rate’. Usually, the private-sector is the largest employer of workforce in the US (85 %) ‘and over 99 % of all private employing organizations in the US are small businesses’. There are about 30 million small businesses in the US which account for ’64 % newly created jobs’. Government job complements the rest. The largest company in the world and largest private-sector employer, an American company, Walmart, ‘employs 2.1 million people worldwide and 1.4 million people in the US alone’. Most of these businesses are owned by minorities such as African Americans, Asian Americans and Hispanics and ‘generate almost $700 billion in revenue and employ almost 5 million workers in the US’. This economic outlook had made the average median household in the US as of 2008 to be $52,029.
Unemployment
The US unemployment rate (2017) was 4.1 representing ‘6.6 million’. The broader U 6 unemployment rate which includes the under-employed was 8.1 %. This rose to 9.9 % in 2010 with U 6 equivalent being 17.1%. However, this reached an all-time high 14.7 % (April 2020) due to COVID-19 virus crisis which posed a great challenge to the government of United States. The current unemployment composite rate in the US (as at October 2020) is 6.9 %. Similarly, the current youth unemployment rate (16-19 years) in the US IS 13.9 % which translates to ‘11.1 million people’.
Income and Wealth Distribution
The median household income in the US was $59,039 (2016). The US economy has been consistently amongst the lead, of OECD nations, in terms of median household income – ‘fourth highest 2010; 2nd highest 2007. However, there is a growing income inequality in the United States of America. As adduced by analysts, ‘the top 1 percent of income earners accounted for 52 percent of income gains from 2009 to 2015’. Similarly, according to a 2014 OECD report, ’80 percent of total pre-tax market income growth went to the top 10 from 1975 to 2007’. Thus, analysts such as Robert Shiller (Professor) had declared that there is ‘rising inequality in the United States and elsewhere in the world’.
Household Net worth and Wealth Inequality
The total household net worth in the US was a ‘record high of $99 trillion (2017). This represented an average of ‘$782, 000 per household, with about 126.2 million households’. However, there is a flip-side. The ‘top 1 % households owning approximately 42 % of net worth in 2012’; ‘top 1 % controlled 38.6 % of country’s wealth in 2016. Similarly, according to the Bolton Consulting Group (2017 report), ‘1 % of Americans will control 70 % of country’s wealth by 2021’. Thus, it is posited that wealth inequality in America ‘is greater than most developed countries other than Switzerland and Denmark’. According to the Economist Intelligence Unit, (2008) ‘there are 16,600,000 millionaires in the US’ which translates to ‘about 30 % of entire world’s millionaire population’. Similarly, the US has ‘about 34 % of the world’s billionaires’ as of 2011.
Home Ownership
The US home ownership rate as of 2018 was 64.2 %. This figure was ‘considerably down’; relative to all-time peak of 69.2 % due to the great recession of 2007-2009. Home ownership rate in the US is largely influenced by demographic characteristics such as race, age, level of income and location. For instance, it is revealed white folks have the highest home ownership rate, whilst African Americans have the lowest home ownership rate. According to the Financial Post (2016), the cost of average US house was £187,000. Consequently, studies such as Pew Research Centre’s (2016) had revealed that Americans ‘aged 18 -34 years are more likely to live with their parents’ rather than own their own homes.
Profits and Wages
It would appear profits and wages as household compensatory economic indicators in the US have been on an inverse relationship – profits improving and doubling over the years; wages stagnating and receding in terms of real wages over the years. For instance, American minimum wage rate of $7.25 per hour (2009 - 2017) which translates to’$15,080 for 2080 hours in a typical work year’ is just a little above ‘poverty level for a single person and 50 % poverty level for a family of four’. Thus, according to a survey by the Federal Consumer Financial Protection Bureau (on the financial well-being of US citizens) which reveals that ‘roughly half have trouble paying bills and more than one-third have faced hardships such as not being able to afford a place to live, running out of food, or not having enough money to pay for medical care’. Specifically, journalist cum author Alissa Quart states ‘the cost of living is rapidly outpacing the growth of salaries and wages, including those for traditionally secure professions such as teaching’.
Poverty
The United States of America reached an all-time high poverty rate of 20 % (1959-1962). This was tackled confrontationally during reign of President Lyndon Johnson through proclamation of War on Poverty. Poverty subsequently declined to all time low of 11.1% in 1973. Extreme poverty in the US (which translates to living on less than $2 per day before government benefits) ‘doubled from 1996 levels to 1.5 million households in 2011, including 2.8 million children. Significantly, in 2013, child poverty reached record high levels ‘with 16.7 million children living in food insecure households’. Similarly, as of 2015, 44 % of children in the United States live with low-income families’. Low-income families could be described as those suffering from ‘inadequate access to quality education, limited access to credit and wealth accumulation, constrained access to job opportunities’. Or those ‘living in an emergency housing shelter or transitional housing programs’. Furthermore, the United States has been described as having ‘one of the least extensive social safety nets in the developed world’ reducing absolute and relative poverty by ‘considerably less than the mean for wealthy nations’. Hence, the declaration by the United Nation’s Special Rapporteur (2018) on extreme poverty and human rights that ‘five million people in the United States live in third world conditions’.
Chinese economy is essentially a socialist economy with peculiar domestic characteristics. It is regarded as the world’s largest emerging market economy (high-income developing economy). As a result, the economy is described as mixed socialist market economy. It comprises state-owned enterprises and domestic and foreign private businesses. As at 2019, according to Wikipedia, state-owned enterprises in China accounted for ’40 % of China’s GDP of USD 14.4 trillion’. The remaining share was contributed by the domestic and foreign private businesses and investments. China has one of the world’s most developed state-owned enterprises, which have total assets of $78.08 trillion and more than 90 % of these belong to the ‘2020 Fortune Global 500 companies’. Similarly, direct foreign in Chinese economy contributed ‘about one third of China’s GDP and a quarter of jobs’. Total foreign assets owned by the Chinese economy reached $7.8 trillion (June 2020) against foreign financial liabilities $ 5.7 trillion ‘making China the second largest creditor nation after Japan in the world’. Accordingly, China is reputed to have at least ‘four of the top ten most competitive financial centres’ which are Shanghai, Hong Kong, Beijing and Shenzhen. In the same vein, according to the Global Wealth Report (2019), China surpassed the US in the wealth of top 10% of the world population. However, China’s household wealth stood only behind that of the United States of America in 2019 at $63.8 trillion to $105.6 trillion. Consequently, China’s economy ranks as the second largest in the world ($15.2 trillion by nominal GDP) and the largest by purchasing power parity. Additionally, China is the world’s ‘fastest growing major economy with growth rates ‘averaging 10 % over 30 years’. As a result of China being a socialist market economy, it has a large public employment rate at 63% (2019). On the flip side, it has a lower nominal per capita income ($10,839) ‘ranked 59th in the world’. Probably as a consequence of its explosive population which is above one billion (1,394, 015, 977) citizens.
Exceedingly, the Chinese economy has done remarkably well in the industry and service sector. Specifically, China has revolutionized in the manufacturing sector to the extent that it is referred to as ‘the largest manufacturing and trading nation in the world’. It manufactures an array of diverse products ranging from light and heavy goods such as toys, aluminium, textiles, chemicals, electronics, ship, aircrafts etc. It is reported China manufactures as much as ‘45 times personal computers per person more than the rest of the world’. The same scenario occurs for solar cells and cell phones. The Chinese manufacturing sector is reputable for ‘churning out products for government use or are immediately put into boats and shipped to foreign consumers’. However, there seems on the flip side that Chinese products may not ‘receive same kind of credit as Sweden, Germany, Japan and the US’. This may be due to indigenous technological means of production of Chinese products or its low-cost production lines. But there is no doubt that China is an emerging manufacturing global giant in today’s world. In the Chinese service sector, it is reported as of 2013, ‘only the United States and Japan boasted a higher service output than China’. By 2015, the Chinese service sector had been described as the key to growth. Specifically, in the year (2015), it was reported that ‘property sales and building construction are slowing, but people in China are availing themselves of healthcare, tutoring and movie tickets’. Thus, financial and ‘other’ services such as banking, healthcare and education were the main drivers of the economy in China as of 2015; accounting for ‘51 % of GDP, up from 44% in 2011’. However, there was unclarity, from the view point of analysists of Chinese service economy, as which of the services, financial or ‘other’ was the main driver of growth; owing to what they described as ‘gaps in available data’. According to them, greater indications in the economy pointed to the fact that the ‘other’ services including tourism, education and health care were the engine room of growth in that year (2015).
The revolutionized feat in the Chinese service sector was the outcome of its deliberate economic policy in accelerated opening of its services sector; since joining the World Trade Organization in 2001. This later led to formulation of a strategic five-year action plan (2011-2015) in terms of national policy on Trade in Services. This policy aimed to show more proactive commitments in key service sub-sectors such as education, healthcare, transport, tourism, finance and logistics. In specific terms, the policy blue print sought ‘a collaborative development for Trade in Services and Trade in Goods using the scale advantage of trade in goods to trigger the trade in service development and increase its share in total foreign trade’. By so doing, the Chinese government not only formulated a policy blue print but came up concrete implementation plan such as ‘increasing its technological and knowledge intensity to enhance international competitiveness’. In clear-cut terms, the Chinese government undertook a holistic policy implementation reforms which cut across ‘formulation of new regulations on promoting trade in services, improvement of legal and fiscal system to create an enabling environment and to re-direct foreign investment for the service sectors’.
The major highlights of the trade in service plan were innovative financial services industry to include micro enterprise boom (involving cross-border operations); facilitation of logistics to ensue data-based modern logistics systems (ensuring proper coordination and linkage among related services or infrastructures); infusion of high-tech services (information processing) such as development of digital content soft wares and management of information security services; accessible opening of business services such accounting, auditing, engineering, management consultancy, market research, brokerage and other professional services; and lastly tourism for domestic and out-bound (export) development of tourism resources.
Since the 1978 economic reforms of china, it had introduced market-based economic approaches which has continued to date. Recently (in the year 2001), it signed up to membership of private organizations and trade treaties such as the World Trade Centre (WTO), ASEAN etc. Expectedly from this initiative, China has been in the fore front of dramatically opening up its once ‘closed economy’ to foreign investors (both the public and private sectors). These include countries like the US, EU, Japan, Hong Kong, Brazil, India and Malaysia. More importantly, the government of China has excelled at the public-sector employment rate (67.4 %) of its large population force which has a record-high number of 778, 700, 553 million workers. Consequently, Chinese labour force is currently the world’s largest. Currently, China ranks 14th on the Global Innovation Index and ‘the only emerging nation in the top 30’. Ultimately, all these economic giant strides portrayed by the Chinese economy might not be unconnected with the politico-economic philosophy envisioned in the Chinese Dream (2013). This describes a sterling and grand vision incorporating national ethos such as patriotism and industry for a vibrant China. It represents a specific dual mission of ‘a moderately prosperous society by 2021’ and ‘a fully developed nation by 2049’. As part- measure of attainment of the Chinese Dream, the Republic of China had recently undertaken major economic initiatives which range from domestic to regional and international outlook such as the founding of Asian Infrastructure Development Bank in 2015 and Silk Road Fund in 2014.
Select Variables of Chinese Economic Outlook
Employment
Employment in China is basically public-sector led and is anchored on a socialist policy of iron rice bowl (job for life). This policy guarantees employment for ‘all willing and able to work’. In 2005, the estimated employed labour force in China was ‘791 million persons’. 49 % of these worked in agriculture, forestry and fishing; 22 % in mining, manufacturing and energy; 29 % in the services and other categories. By 2016, the average monthly wage rate for manufacturing workers (for export) was $424. A decent wage rate, with cost-significance such that, when other associated costs of doing business in China are factored, has ‘equalized any Chinese cost advantage with respect to developed economies’. Similarly, in 2004, about 743,000 private enterprises employed ’25 million persons’.
Unemployment
China has consistently remarkably maintained a low unemployment rate since 2008 to date (averaging whooping 4 %). For instance, the pre COVID-19 pandemic unemployment rate (2019) was 3.6 % and according to IMF projections, it is likely to increase to 3.8 % in the outgoing year (2020). Similarly, according to an unemployment forecasts (Statista 2020), the projected unemployment rate in China in 2025 is 3.53 %. This feat is attributed majorly to China’s socialist heritage of full employment policy. According to Textor (2020), the main concern of China’s current state of employment is in respect of ‘regional differences’. He noted that ‘the unemployment rate in north-eastern regions of China was notably higher than the southern parts’. According to him, the unemployment rate in Beijing was 1.4% (2018).
Income and Wealth Distribution
According to statistics made available by an online publication (On the Economy 2018), the average real per capita income in China in 2014 was $12, 472.5; whilst average world per capita income for the year was $ 20, 055 and world median per capita was $12,981.4. Similarly, the average real per capita disposable income in China (in Yuan, 2015) was 21, 586.9; whilst the median was 18,371. However, income distribution showed ‘significant skew toward a few provinces. For instance, the provinces of Zhejiang, Beijing and Shanghai showed per capita average disposable income ‘about three to four times the level of lowest regions’. In the same vein, real cost of living in China, measured by average city price index (CPI) at median price 7000 yuan per square metre; showed that ‘housing prices in Beijing and Shanghai were nearly five times the median and over eight times the lowest housing price regions’. The consequential effect of this is fall in the living standards in Beijing and Shanghai, in terms of fixed purchasing power of Yuan, relative to poorer regions such as Shaanxi and Hunan.
The wealth distribution of an average Chinese household is significantly held in real estates (62%), other durable assets (28%) and negligible amount of gold (0.4%). The economic significance of this is that non-financial assets make a bulk Of Chinese house-hold balance sheet put at 91%, according to an Online source (financialexpress.com). This is further proven in the high-level of mortgage holdings in China (close to 60% of total debt exposure) as a measure of dominance of real estate as the dominant component of wealth.
Household Net worth and Wealth Inequality
According to the Global Wealth Data Book (2012), ‘the wealth per adult aged 20 and above in China was at $20,452 or 128, 848 Yuan, and the total nationwide assets amounted to $20.2 trillion or 127.3 trillion Yuan. Relying on China Family Panel Studies data collated by Institute of Social Science Survey, Peking University (2010); Xie and Jin (2012) reported that the average household net worth in China (2012) was 422,000 Yuan with total net worth of 181.3 trillion Yuan. This has reached 2.9 million Yuan ($408,000) by 2020. Similarly, they revealed that ‘wealth Gini Coefficient in China was 0.7 in 2012’. Consequently, the richest 1 % of house-holds in China ‘owned more than one-third of total house-hold wealth’. However, the study found that ‘wealth was more equally distributed in China for the remaining 99% of households’. For instance, the poorest 40 % in China ‘owned less than 4% of the total house-hold wealth’. Compared with the United States of America, where the poorest 40% ‘owned less than 1% of the wealth’. Similarly, the study found housing assets as a major contributor to household net worth in China accounting for an average of 74% (2012). So were financial assets which had average contribution of 11% to total household wealth. It as well noted ‘housing assets inequality’ significantly contributed to wealth inequality (73%) in China. Similarly, structural factors such as socio-economic characteristics (education, profession), rural-urban divide and regional disparities were as well contributing factors to wealth inequality in China.
Home Ownership
According to the Peking University Institute of Social Sciences (2018), ‘home ownership rate in China decreased from 90 % (2014) to 89.6 % (2018). The average housing cost in China as of 2018 was 117,923 Yuan; whilst housing was priced 103,479 Yuan as of 2014. China had a real estate bubble (in housing for residence and commerce) which tripled housing prices from 2005 to 2009. As of 2010, Chinese real estate was declared as the ‘largest in the world comprising 20% of the economy’. Manifestations of the housing bubble was evident in ‘high price-to-income and price-to-rent ratios for property and the high number of unoccupied residential and commercial units’. According to 2011 estimates by property analysts, there were ’64 million empty property and apartments in China and that housing development in China is massively oversupplied and overvalued’. An insider critique of survival of the property bubble theory in China pointed to the conservative mortgage lending standards, rising incomes and rising urbanization as ‘proof that property prices can remain supported’. However, there was property bubble burst by late 2011 as a forerunner of deflated housing pricing which was described as ‘one of the primary causes of China’s declining economic growth in 2012’.
Profits & Wages
According to National Bureau of Statistics of China, wages (government agencies and institutions) in China ‘increased to 93, 383 Yuan per annum in 2019 from 84,744 Yuan per annum in 2018’. Manufacturing wages increased from 72,088 Yuan (2018) to 78,147 Yuan (2019). Wage rate in China almost tripled in a ten (10) year period from 37,147 Yuan (2010) to 93,383 Yuan (2020). The current minimum wage rate in China is 2,480 Yuan per month. As of 2012, private-sector wage growth in China was 14 %; GDP growth was on slow-down to around 7.5 % (per annum). This literally translates that wages are growing faster than overall economic growth. The consequential effect of this would likely be exertion of pressure on profit margins of firms. This was manifest in the weakness of Chinese equity markets (as of then) as outcome of investors’ concerns in the market. Furthermore, due to China’s Yuan peg to the US Dollar and given the United States Dollar appreciation; this would necessarily mean further increase in associated costs of Chinese exports vis a vis other currency. For instance, the free-floating Japanese Yen may continue to depreciate against the US Dollar ‘providing pricing support to Japanese manufacturers relative to Chinese manufacturers’.
Poverty
According to a World Bank hypothetical schedule (graph) on rates of extreme poverty (1981-2010), China had the most significant extreme poverty reduction from more than 80% (1981) to less than 20% (2010). This could be translated literally that by 2013, China had effectively cut its extreme poverty rate by half. According to the Wikipedia, this percent has continued to fall, down to 4.1 % in 2014. Precisely, in 2018, there were around 30 million ‘living below national poverty line’ making an insignificant proportion (2%) of total population.
The economy of India is described as a middle-income developing market economy. India occupies world’s fifth largest economy by nominal GDP ($2.6 trillion) and third largest by purchasing power parity ($8.7 trillion). However, on a per capita income basis ranking $1,670 (2016), India ranks low at 112th position (nominal GDP). Understandably by reason of its high population growth (1, 380, 004,385). According to the Wikipedia, India had earlier on from independence (1947) ‘promoted protectionist economic policies with extensive state intervention and regulation’. However, as a result of ‘balance of payments crisis in 1991’; India adopted a broad program of economic liberalization. Thus, from 2014 -2018, India was the world’s ‘fastest growing economy’. The real economy of India is built around services, manufacturing and agriculture; with both services and agriculture taking a strong lead and contributing 55% and 50% of GDP respectively. Next is the manufacturing sector which employs ‘over 57 million’ workforce and contributes ‘3% of global manufacturing output’. It is reported that the construction and real estate sector ‘is the second largest employer after agriculture’ in India. Two notable industries in India are the textiles industry ‘employing over 45 million people directly; and the Information and Communication Technology (ICT) industry which employs ‘over 4 million people directly’. Indian economy is favourable to ‘long -term growth perspective’ due to its viable and sustainable structure built on young population, ‘healthy’ savings and investment rates and re-integration into the global economy. Consequently, India thrives on a vast informal economy and is the world’s second largest by labour force (520 million workers). Formal sector employment rate in India accounts for almost half of workforce (45.4 %). Similarly, domestic private consumption is the mainstay of India’s GDP (60%) and India is ‘world’s sixth largest consumer market. Overall, India was ‘tenth largest importer’ and ‘nineteenth largest exporter’ in 2018. In spite of this, India is notable for extreme income inequality and financial non-inclusion. The foreign direct investment flow in India was $64.4biliion (2018-19) ‘with service sector and telecommunication industry leading inflows’. Indian financial economy, on the other hand, the Bombay Stock Exchange and the National Stock Exchange ‘are one of the world’s largest stock exchanges by market capitalization’.
Select Variables for Indian Economic Outlook
Employment
According to the Wikipedia, as of 2012, ‘there were around 487 million workers in India, second largest after China’. However, about 94 % of Indian workforce ‘work in unincorporated enterprises ranging from push cart vendors to home-based diamond and gem polishing operations’. India’s unincorporated sector has low productivity and offers low wages. In empirical terms, the 94 % unincorporated sector of India produced ‘just 57% of India’s national domestic product in 2006’. It was reported that India had ‘about 58 million unincorporated non-agricultural enterprises in 2010’. The formal incorporated sector in India such as factories, shopping malls, corporations represent about 7 % of workforce (2012). In concrete terms, this represented more than 40 million registered employees as of 2010, divided into 17.5 (public sector) and 11.4 (private sector). In the account of Statista Research Department (2020), the number of factory workers in India (2018), was over 12 million. A common critique of Indian labour market is its restrictive labour laws which have led to labour-market rigidity. Hence, most (87%) Indian incorporated firms are small (with fewer than 10 employees) ‘and so suffer from lower productivity than if they scaled up, employed more people and were much bigger companies’.
Unemployment
According to the National Sample Survey Office report, unemployment in India (2017-18) was 6.1%. The report stated that male youth unemployment rate (2017-18) was 17.4% (rural areas) and 18.7% (urban areas). Similarly, female youth unemployment rate (2017-18) was 13.6% (rural) and 27.2% (urban). In the report of International Labour Organization (2018-2019), it concluded unemployment was rising in India at rate of 3.5%. A common reason associated with unemployment in India was its restrictive labour laws and dearth of infrastructure which prevent ‘a pro-employment economic environment and smooth industrial relations’.
Income and Wealth Distribution
According to The Economist, India’s average GDP per capita (PPP basis 2009) was $5,138. It however disclosed it had significant variations along geographic location lines. Generally, it is believed that the residents of towns and cities have a higher per income and living standard than their counterparts in rural settlements. Therefore, cities such as Goa have GDP per capita as high as $14,903; whilst their rural counterparts in Bihar had the lowest GDP per capita at $682. Similarly, considering the World Bank’s classification of middle-income families to be those with ‘per capita income of $10 and $50 per day; the National Council of Applied Economic Research of India concluded that ‘there were 153 million people who belonged to middle income group in 2006. Consequently, as per World Bank report projections (2011), ‘if India continues to grow per projection, India’s middle-income group would double by 2015 over 2010’.
According to an Online source (Indian express.com), ‘the average wealth of Indians in mid – 2019 has more than doubled, $14, 569, from last year to $7,020’. The breakdown of this, as of 2017, could be divided into real estate (77%) and other physical goods (7%), financial assets (5%) and gold (11%). However, it has been disclosed that, in India, ‘despite the prominent role of non-financial assets in the household balance sheet, mortgage loans account for only a small part of liabilities (23%)’. This is partly explained to be due to the ‘high average level of home equity level held by Indian households which suggests a strong investment motivation for real estate purchases’.
Household Net worth and Wealth Inequality
According to an Online source (indianexpress.com), India ranks fifth globally in terms of ultra-rich population (those with wealth in excess of $50 million). In concrete terms, only a small fraction of the population 1.8 % of adults (15.6 million people) ‘enjoy net worth of $1,00,000 and continue to own a lion’s share of India’s total wealth’. As such, Oxfam reported that India’s ‘top 1% of the population now hold 73% of the wealth’. On the flip side however, ‘78% of adult population have personal wealth less than $10,000 or (Rs 7,30,000). In concrete terms, India’s rich are presumably getting richer, according to a Credit Suisse Report, adding ’10.8 million people’ to its list of de la crème (those who possessed between $10,000 and $100,000 – 20% and those who possessed between $100,000 and $1,000,000 – 2%). For the ultra-rich in India, 4,460 adults have wealth over $50 million; whilst 1,790 adults have wealth over $100 million.
Home Ownership
As of 2011, the home ownership rate in India was higher than most developed economies at 86.6 %, according to the Wikipedia. For instance, the United States had home ownership rate of 65.3 (2019); the United Kingdom had home ownership rate of 65.2% (2018) and France had home ownership rate of 65.1% (2018). This is divided into low-income housing in rural areas and cities to modern apartment buildings in only big cities. According to the Times of India, a majority of Indians have ‘per capita space equivalent to or less than 10 feet by 10 feet for their living, sleeping, cooking, washing and toilet needs’. The average low-cost housing ‘is 103 sq. feet per person in rural areas and 117 sq. feet per person in urban areas’. Similarly, in the big cities such as Mumbai, urbanization challenges such as housing still occur ‘between the affluent, middle-income and low-income segments of the population’. As of 2007, desirable neighbourhoods in Mumbai such as Colaba, Marine Drive and Bandra were described as ‘the priciest in developing worlds going for around $9,000 to $10,200 per square metre’. Mumbai alone is reported to have more than 1500 high rise buildings. Yet, over 42% of populace live in slums despite the huge economic potentials of Mumbai. Financial Times reports that ‘Dharavi is the grand panjandrum of the Mumbai slums’. Conversely, in Bangalore, ‘roughly 10% of Bangalore’s population live in slums’. The demographics of the city has changed since the 1990s when new sprawling high rise buildings were built and vast shopping centres started to thrive.
Profits and Wages
According to an Online source (salaryexplorer.com), a typical average Indian worker, as of 2020 earns R31, 900. The lowest average is R8,080; the highest average is R143, 000. In empirical terms, 75% of employees earn R79,100 or less; 50% earn R29,400 or less; 25% earn less than R16,900. However, the median salary is R29, 400. In India like in most countries, there is a continuous review of workers’ salaries with respect to years of experience and educational qualification. Precisely and uniquely in India, there is almost a standard benchmarked rate attached to salary earnings from educational qualifications. For instance, on the average across job careers, ‘a diploma certificate worker earns 17% more than their peers with only high school certificate’; a Bachelor’s Degree holder earns 24% more than a diploma certificate counterpart; a Master’s Degree holder earns 29% more a Bachelor’s Degree holder; Ph.D. holder earns 23% more than Master’s Degree’.
On the investment profits side, in India, among the available investments’ returns options, two stand out notably in terms of welfarism and returns. These are Senior Citizens Savings Scheme and Public Provident Fund. According to an Online source (bajajfinserv.in), the former is a government-sponsored scheme ‘for individuals above 60 years of age’ and is accruable to a steady and secure stream of income (7.1%) periodically. The latter is a public (masses) investment outlet which pays an annual interest returns (7.4%) with minimum investment of R500 per annum. It has ‘a life of 15 years with partial withdrawals allowed of the corpus at various points’. On the firm profits side, in India, small scale corporate businesses are the order of the day and make gross profits ranging from 10% to 50%. A notable venture in this regard is the property management where ‘with R 3,00,000 minimum start-up capital’ a gross-profit of 50% can be attained (according to an Online source businessalligators.com).
Poverty
According to the World Poverty Clock, ’18 Indians escape poverty every minute’. According to Achim Steiner (a UNDP Administrator), ‘India lifted 271 million people out of poverty in a 10-year period starting from 2005/06 – 2015/16’. As of 2020, in India, multi-dimensional poverty has significantly reduced from ’54.7% at the time of independence to 6% in 2020’. According to the latest report of World Poverty Clock, ‘India is well on its way of ending extreme poverty by meeting its sustainable development goals by 2030’. As of 2012, by numerical strength, the World Bank considered India to be the world’s largest number of poor people; owing to its sheer massive population. However, by empirical standards, the World Poverty Clock (2018) reported that ‘a minimal 5.3% or 70.6 million Indians lived in extreme poverty compared to 44% or 87 million Nigerians’. According to the Wikipedia, ‘Nigeria and Congo surpassed India in terms of total population earning below $1.9 a day’. However, it is reported a very large number of Indians (60%) still live on less than $3.2 a day; thereby ‘safely putting India’s economy into the category of lower middle-income economies’. On the whole, in curbing absolute poverty in India, the Indian government and non-governmental organizations have initiated several poverties - alleviation programs such as ‘subsidizing food and other necessities, increased access to loans, improving agricultural techniques and price supports, family planning’. In furtherance to these, in India, there is a growing de-emphasizing on key economic indicators such as gross domestic products (GDP) ‘where unhealthy infatuation with GDP growth matters less and holistic development or inclusive-growth matters more’. In particular, strategic social welfare schemes such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). In a study authored by Klonner and Oldiges (2012), it concluded that MGNREGA ‘helps reduce poverty gaps (intensity of rural poverty) and seasonal poverty but not overall poverty’.
The Nigerian economy is described, according to the Wikipedia, as ‘a middle -income, mixed economy and emerging market’. Its current GNI was $241.3 billion as of 2012 with consequent ranking of 40th out of 176 countries in the world. This rose to $515 billion (nominal 2019) with consequent ranking of 27th in the world. Its GDP (PPP) $1.215 trillion was ranked 24th in 2020. The per capita GDP was $2,222, as of 2019, was ranked 138th in the world. Historically, Nigerian GDP almost tripled in a twelve-year period (2000-2012) from $170 billion to $451 billion. Particularly, it was revealed that factoring the contribution of the informal sector of the economy (who are not officially included in computation) could boost actual GDP figures. Consequently, a cursory look at Nigerian economy would reveal the informal sector as the backbone of the economy albeit it is not a significant government revenue base. Agriculture is the mainstay of the economy and accounted for 25% of GDP in 2017. It was followed by trade at 17% of GDP and manufacturing at 9% GDP. Petroleum and natural gas (which is a major government revenue earner) accounted for 8.6% GDP in 2017. Other components of the GDP (2017) were telecommunications and information services (8.6%) and real estate (6.8%). In a bid to further bolster the economy, anchored on liberalization and privatization, the Nigerian government introduced an economic reform program typified as National Economic Empowerment Development Strategy (NEEDS) between 2003 to 2007. The primary objective of NEEDS was to raise the country’s standard of living through a variety of macro-economic initiatives especially social amenities such as provision of water for ‘house-hold consumption and irrigation’; energy supplies (uninterrupted power), resuscitation of antiquated infrastructure and removal of bottle-necks to private enterprise. A parallel economic reform initiative at state level is the State Economic Empowerment Development Strategy (SEEDS). A similar economic reform development program, on the longer term, is the United Nations sponsored National Millennium goals, to which Nigeria is a pilot nation. The program spans 2000-2015 and entails the nation’s voluntary commitment to ‘a wide range of ambitious objectives’ which include poverty reduction, accessible health services, qualitative education, sustainable environment and international development cooperation. A progress report released in 2004, on the account of the United Nations, it was stated that ‘Nigeria was making progress toward achieving several goals but was falling short on others’. Unequivocally, the implementation of NEEDS has been severely and widely criticized by locals in Nigeria in failing woefully to meet its fundamental objective of raising the standard of living in Nigeria. In precise terms, they argued that NEEDS was a politicized socio-economic policy reform crafted by neo-colonial hegemonic class (ruling elites) who were hell-bent in ‘perpetuating dominance and subjugation against the masses of the Nigerian state’. This same scenario was discernible in the lack of success of participating countries (especially Nigeria) in the defunct United Nations National Millennium Goals. A potent harbinger for a change in vision and mission by the United Nations to Sustainable Development Goals (2015-2030) which integrate all countries toward realizing that ‘action in area will affect outcomes in other’.
Select Variables for Nigerian Economic Outlook
Employment
According to an Online source (nationmaster.com), the total labour force of Nigeria was 52.6 million in 2012 (rated 13th out of 182 countries). This rose to 90.4 million in 2020. The employment rate of adults was quoted 51.8% in 2008 (rated 120th out of 165 countries). As of 2012, the salaries and wages benefits (hourly minimum wage) were $0. 77 and was rated 112th out 148 countries. Similarly, the minimum wage #18,000 per month ($115) as of 2014. This was recently raised to #30,000 per month in 2019. The standard workweek (2014) was 40 hours and was rated 149th out of 183 countries. As of 1999, the labour force by occupation was categorized into agriculture (70%), industry (10%) and services (20%). As of 2020, the labour force by occupation is agriculture (30.5%), services (45%) and industry (23.5%).
Unemployment
According to an Online source (nationmaster.com), the unemployment rate in Nigeria in 2007 was 4.9% and ranked 62nd out of 96 countries. This consequently rose to 23.1% in 2019 (infoguidenigeria.com). However, taking a holistic look, according to the data from National Bureau of Statistics, ‘about 40% of Nigerian population who fall within employable age are not employed’. The contemporary unemployment phenomenon in Nigeria is a recurrent and pandemic situation which has largely contributed to the worsening social ills of the day and the rationale behind the current advocacy for self-employment (micro, small and medium-scale enterprises).
Income and Wealth Distribution
According to an Online source (naijnaira.com), ‘workers in Nigeria are paid between #63,054 and 2,062, 823 as salary every month’. The average monthly income of Nigerian workers is #465,843 ($1,312); whilst its annual equivalent is 5, 590,111 ($15,756) and its median is #465, 843. According to the Credit Suisse Global Wealth Data Book (2019), the average mean and median wealth per adult for Africa was $6,488 and $1,219 respectively. Precisely for Nigeria, the mean and median wealth distribution per adult was $4,881 to $1,249 respectively.
Household Net worth and Wealth Inequality
According to the Knight Frank Wealth Report (2020), ‘more than 40,000 Nigerians are millionaires’. Of these, an infinitesimal few are high net worth individuals (billionaires, according to Forbes Magazine2020) such as Aliko Dangote ($8.3b), Agbadu Abdul Azeez ($5.7b), Abdul Samad Rabiu ($3.1b), Femi Otedola ($2.5b) and Folorunsho Alakija ($1b). This represents just a small segment of Nigerian households put at almost 20 million (average number of houses). According to an Online source (ajazeera.com), there is a rapidly growing number of Nigerians opting for ‘foreign citizenships by investments’ (golden visas) in non - Europe oversea countries (especially the Caribbean). This is like a ‘win -win’ arrangement in which foreigners apply for residency or citizenship permits in other countries in return for a fee (equity investments) in the country of choice. This consequently grants residency or citizenship rights to the applicant with accompanying benefits of ‘visa-free access to Europe’. Nigerian wealthy families have been reputed to ‘rush’ for acquisition of golden visas as a means of escape from the country’s myriad of socio-economic challenges and currently the globally ravaging COVID 19 pandemics. According to the London-based Henley and Partners ‘applications by Nigerians increased by 185% during the eight months to September 2020, making them the second largest nationality to apply for such schemes after India’.
Home Ownership
The home ownership rate in Nigeria is estimated at 25% of the population, according to the Centre for Affordable Housing Finance in Nigeria. Access to affordable housing in Nigeria has been described nightmarish with a greater proportion of the populace, especially the middle and low-income class, are without adequate shelters. According to an Online source (cbn.gov.ng), the housing situation in Nigeria ‘put existing housing stock at 23 per 1000 inhabitants’. The total national housing deficit in the country is put at staggering ‘20 million units’ with an estimated ‘#21 trillion to finance the deficit’. Recently, the Central Bank of Nigeria approved a mortgage finance of #200 billion ($520 million) ‘to fast-track the construction of 3 00,000 social housing units low-income households and to create new jobs for the unemployed’. The two popular locations (cities) in the country with the highest housing deficits are Abuja (1.7 million units) and Lagos (187, 500 units). Similarly, prized property locations in the country range from medium-brow such as Ikoyi (Lagos) where average annual rent for a four- bedroom apartment goes for #14 million ($36,745), Victoria Island (Lagos) where annual rent for four -bedroom apartment goes for #4.5 million ($11,811) to high-brow apartments at Banana Island (Lagos) where a three - bedroom apartment sells for $625, 000, five - bedroom apartment goes for $2.8; Maitama (Abuja) which houses Nigerian diplomats with average property worth selling at $2.7 million and above; Asokoro (Abuja) with average property worth at $2.7 million and above; Jabi (Abuja) with average property worth at $2.5 million; Lekki (Lagos) with average property worth at $2 million; Ikeja GRA (Lagos) with average property worth at $1.5 million. Currently, the most ambitious real estate development in the country is the Eko Atlantic City (Lagos) ‘a mega city that will provide new homes for 250,000 people and office space for another 150,000 people’.
Profits and Wages
The official minimum wage in Nigeria is #30,000 per month ($83) and was recently signed into law in April 2019. However, according to an Online source (salaryexplorer.com), corporate organizations salary package in Nigeria range from median average monthly wage (#339,000), lowest average rate (#85,700) and the highest average (#1,510,000). It is a trite in Nigeria that discussions and negotiations about workers’ salaries and wages centre around economic consideration (government purse) rather than fundamental rights issue. Whereas, the standard global practice and recognized by international bodies such as the International Labour Organization (ILO) and the International Convention on Economic, Social and Cultural Rights (ICESCR) is to factor living cost and other incidental costs into determination of official wages and salaries of workers. According to an Online source (legalnaija.com), the average monthly living cost in Nigeria’s commercial capital (Lagos) for an average family is between #161,000 ($475) to #622,000. Surprisingly, the monthly stipend for the commonality of Nigerians is between #57,200 ($209, skilled labour) and #25,200 for non-skilled labour. Thus, the ICESCR articulates that ‘the average salary which is less than a third of the living costs of a single individual is grossly insufficient for the maintenance of a decent standard of living’.
The socio-economic environment in Nigeria is endemically hostile to business and investment profits. Consequently, profitability analysis in Nigeria is not only subject to volatile markets but is also intrinsically tied to sector-specific analysis. However, there is dearth of reliable business sector profitability rates in Nigeria due to the local tradition of business performance secrecy in Nigeria (for government taxation evasion) and incoherent (unstandardized) business practice documentations. In spite of this, some sectors still present reliable profitability data such as the agricultural production industry which shows results for sector low and high profits as 1.67%, (2016) and 25.43% (2019) respectively (csimarket.com).
Poverty
According to an Online source (bloomberg.com), poverty in Nigeria may be taking a worsening turn and reaching an all-time high (100 million people) or ‘about half the population’ by 2022. In order to forestall this doom, the country has been currently advised by international bodies such as the International Monetary Fund (IMF) and the World Bank to adopt ‘a unified and flexible exchange rates’ in order to ease ‘external imbalances and bolster activity in the OPEC nation’. Poverty in Nigeria has been both endemic and pandemic and is devoid of necessary political attention. According to the World Poverty Clock, six Nigerians fall into extreme poverty every minute’. As of 2017 up to date, Nigeria has been topping list of countries with ‘extreme poverty population’ (mostly African countries) with number of poverty-stricken citizens put at 86.9 million ahead of India with 71.5 million citizens. Thus, Nigeria is currently and infamously ‘poverty capital of the world’.
Way Forward
From the view-point of this write-up, the only way forward for our dear country, Nigeria, to get out of her current socio-economic cum political imbroglio is to adopt and follow unique leadership styles (dictated by good governance) as exemplified by some countries. From all intents and purposes of this writing, the foremost of the pace-setting countries (from which Nigeria can borrow a leaf) are China and India. Both these countries, from the fore-going revelations of this write-up, rose from similar nationhood challenges like Nigeria’s, daring all odds to become global exemplifying brands and ambassadors of today. Therefore, Nigeria too can, all things being equal, rise from her today’s myriad nationhood challenges to become a global toast. However, it is instructive to point out that, that China and India are today global giants was not by sheer accident or incident; but conscious and cautious strive toward realization and attainment of a well thought-out and lucidly outlined national ethos. A classic example here is the Chinese Dream philosophy which has been modelled as replica of the American Dream and described as ‘collectivist dream for which everybody with hard-work, determination, and bravery, cooperate to make China (not the individual) a great nation, improving its standard of living and economic affluence’. Ditto for Nigerian State (via the central government) which is currently in slumber, self-oblivion and utter retrogression, to formulate and invent a Nigerian Dream with shared characteristics with the former. In contrast with the alluded Nigerian Dream, this writing would criticize the current Nigerian socio-economic policy driver anchored on medium-term economic recovery and growth plan (ERGP). The latter is a sheer economic blue-print policy with so much ‘economic emphasis’ at the expense of fundamental socio- political undertones. This then leaves the implementation and attainment of policy objectives of ERGP at the whims and caprices of some specific governmental institutions, agencies and units (Delivery Unit of the Presidency). This is, ab initio, policy objective attainment failure because of lack of clear-cut socio – political indicators (strategic policy factors) as harbinger for policy objective attainment. A classic case in point here is the co-opt of general citizenry (collectivism) in terms of ethos orientation toward their duties and responsibilities with concomitant rights and privileges from national policies. Unequivocally, if contemporary Nigerian government officials could reform their governance methodology (in terms of national socio-economic policy formulation and implementation) to entail full citizenry participation and benefits derivation; this would go a long way to drastically reduce policy somersaults and failures. Therefore, resurgence of a reinvigorated national policy formulation and implementation would ultimately obviate the propensity to be going cap in hands to China and India via international borrowing for projects financing. Rather, Nigeria would only strictly maintain diplomatic dealings with both countries, based on deserved mutual respect. Therefore, Nigeria requires the necessity and urgency to politically imitate and mutate to adopting in practice politico-economic model of either China or India (if not in principle).
On a final note, for Nigeria to practically and successfully replicate the success stories of both China and India, she must undergo two (2) major and key reforms which are:
- Change in her socio-economy philosophic outlook to reflect domineering socialism. Emphatically and logically, it would not be fool-hardy to state that Nigeria currently lacks a clear economy - philosophic outlook and approach. The phrase ‘mixed economy and emerging market’ in description of the socio-economy of Nigeria is both vague and misleading. Currently, Nigeria manifestly inclines toward a capitalist state. This is arguable because, in Nigeria as of today, only infinitesimally few industrialists dominate her landscape and cornering almost all her wealth. These have no masses appeal at heart because, with their humongous wealth, they have not used it to create economic survival for Nigerians through massive job creation and employment. At most, they cater to an infinitesimally few associates and kindreds in terms of economic survival. For instance, it is common knowledge that Africa’s foremost billionaire (in dollars) who is a Nigerian and who resides in Nigeria, could only employ few thousands of employees (less than 100,000) in his network of industry conglomerates. Rather, Nigerian government should adopt and portray a socialistic economic policy (as applicable and practicable in Nigeria), foremost of which must be full employment of able and eligible Nigerians to bolster economic growth. And further equitable distribution of gains of growth, especially toward provision of both social and physical infrastructure such as improved qualitative education and health service as well as mechanized agriculture. Similarly, government should encourage the domestic organized private -sector to follow suit, especially the high net-worth private citizens.
- Adoption of well-thought strategic policy formulation and implementation ethos. Lucidly and vividly, contemporary Nigeria lacks well-thought strategic national policies in terms of national value and utility. Thus, policies in Nigeria are usually formulated in vacuum without specific, clear-cut guidelines for realization of objectives of such policies. In this regard, Nigeria needs to critically under-study the ‘trade in goods and services’ policy of China which serves as a bedrock for the revolutionization of the economy of China as an Asian and global giant. A key component of the policy (for future frontier exploration) was the establishment in 2015 Asian Infrastructure Development Bank and Silk Road Fund in 2014. At this juncture, it is aptly instructive and constructive to question the regional functionality of numerous Funds and Development Banks in Africa, especially the African Development Bank!
Sherif Jimoh wrote from Kwara State