A look at Nigeria's economy

by

Oladele Olashore

A look at the present desperate situation of Nigeria is enough to force one into the usual conclusion of a bleak and unenviable economic future-a future of permanent or structural emergencies. This condition has in part been aggravated by inadequate shelter, low health standard, lack of gainful employment, low wages and inadequate income for subsistence and self-sustenance. Above  all, there is also the problem of poverty. By the mid  20th century, it had become a very profound problem associated with, and threatening the development aspirations of the country. The growth oriented development theories and strategies employed by the country, at the prodding of Western capitals countries resulted in little or no growth; but they occasioned serious inequalities in income distribution and development in the country. 

The benefits of economic growth and development did not “trickle-down” as predicted by the neo-classical development theorists (Wilber, 1979). Instead, they became concentrated at the top: the rich got richer, and the poor got poorer. This situation led to a paradigm shift in development theory in the late 1960s and early 1970s with focus of development shifting from growth, to growth-with-equity (James and Weaver, 1981).

Development strategy came to favour meeting basic needs of citizens, rather than an exclusive concern with rate of economic growth, measured in terms of GNP per capital (Chenery et at, 1974). Consequently, concern with the problem of income inequalities, poverty, and with the need to meet basic needs of people in the developing countries led the World Bank to declare “The Assault on World Poverty” in the decade of the 1970s, thereby elevating the issue to a global political context. But efforts by the World Bank failed to resolve the problem. If anything the recovery and adjustment programs initiated by the Bank in the 1980s aggravated the problem. For example, the Sub-Saharan African region that, statistically, has one of the highest incidence of poverty in the world remained severely afflicted despite the adjustment programs introduced in virtually every country. Between 1970 and 1985, the number of those categorized under absolute poverty in sub-Saharan Africa, i.e. those whose income could not meet their basic needs, increased by two-thirds compared to an increase of one-fifth for the entire Third World (UNDP, 1981).

The opinion that surrounded Nigeria’s economic prospects in the 60s - the first decade of independence - was soon replaced in the 70s by increasingly poor performance in many facets of the economy as substantial gaps began to appear between hopes and achievements, between promises and performance and between expectations and realities. But unfortunately for the nation, the international economic system on which the country is so much dependent became increasingly hostile.

At the root of economic backwardness, stagnation and decline in Nigeria is the poor performance of the agriculture sector, which ideally, should have been the predominant sector. And of course, the root cause of the rapid decline in food production are well known. Domestic policies with regard to agriculture had often constituted a disincentive for farmers, while the high rate of rural-urban migration has further aggravated the situation. This has resulted in shortage of rural labour force, while at the same time increasing rapidly the population of urban dwellers who have to be fed by the rural people. Consequently, by the decade of the 1980s, instead of getting their basic needs satisfied, a majority of Nigerians found themselves edged down, below poverty level; that is, being able to only earn and live on an income which is less than what  is considered essential to cover basic needs. (Bradford & Kucinski, 1988:30). Indeed, many could not even earn enough to satisfy their basic needs, thus characterized by absolute poverty. That there is poverty in Nigeria and that it has progressively worsened is therefore an established fact. The World Bank itself has summarized the Nigerian situation as follows:

The rise in oil prices and in Nigerian oil production increased per capita consumption and income thought most of the 1970s, but the economic reversal of early 1980s has had a severe effect on the country’s poor. Consumption has plummeted by 7% a year, and standard of living was lower in the mid-1980s than in the 1950s. Analysis of caloric intake shows no improvement between 1952 and 1985. The economic crisis of the 1980s was so severe that it more than cancelled out the progress of the previous twenty years (World Bank, 1990:42).

The 20th century was such an inter-dependent world (even though there were a lot of inequities and inequalities) that any attempt by Nigeria to have tried to go it alone would have worsened the already bad case. Forty-one years after independence, the envisaged economic emancipation remains elusive and at best, a hope. The economy is still basically underdeveloped, with low income per head, low  level of productivity, a circumscribed and fractured industrial base, and a high dependence on primary export commodities, high degree of illiteracy and low level of life expectancy. The resultant effect is an economy that is characterised by high level of openness and domination by foreign products. But before any serious consideration for the 21st century could be tabled, it is pertinent that we first appraise the country in the 20th century.

2.  Nigeria’s Economy in the 20th Century: A Rear Mirror View

The structural problem that hindered growth for the nation was the subsisting mono-cultural dependent on a single export commodity. If it were not agricultural cash crop, it would be crude oil. This made the economy to be vulnerable to fluctuation in world prices of such commodities. The resultant effect was that whenever global prices fell, the economy was thrown out of gear. It became more and more difficult for the government to meet its obligations.

The Government could no longer pay for imports ; especially industrial raw materials and worse still, revenue severely started dwindling. And since the internal economy was basically underdeveloped with a sharp bifurcation between the traditional and modern sectors this resulted into weak linkages between the traditional and modern sectors. This of course made growth virtually impossible.

By about 1982, a serious socio-economic crisis began to rear its ugly head in Nigeria. The crisis resulted from a combination of factors, such as global recession, declining oil revenues, increased debt burden and heightened primitive accumulation by a profligate, corrupt and prebendal neo-colonial dominant class. For these classes, vituperation and ill-conceived policies and programs intended to address the crisis, became political techniques and avenues for accumulation at the expense of the objective interest of increasingly popularized Nigerians. 

As a result of this crisis, the economy developed more or less in reverse gear, as indicated by the average annual rate of growth of GDP of 1.1%, between 1980 and 1988. This sharply contrasts with the rate of growth of 6.9% between 1965 and 1980. (Attahiru M. Jega, Crisis, Adjustment And Poverty In Nigeria: A Critical Assessment, 1993. Paper delivered at the National Conference on Economic and Social Policy Options For The Third Republic, Organized by Friedrich Ebert Foundation, in collaboration with the African Centre for Development and Strategic Studies).

Additionally, wages stagnated and purchasing power declined. For example, earnings per employee in the manufacturing sector averaged  -9.6 growth rate between 1980 and 1987 (taking 1980  as a base year), while average annual rate of inflation was 11.6%. Private consumption grew at an annual rate of -0.1% between 1980 and 1988, in contrast to 5% between 1965 and 1987 Daily calorie supply per capita also declined to 2,146 in 1986, compared to 2,185 in  1965 (World Bank, 1990:232). The crisis of the 1980 manifested itself not only as a crisis of production, given capacity  under-utilization, or as a crisis of under-consumption, given declining incomes and purchasing power; but also, and significantly, as a crisis of legitimation. This is in the sense that pauperization bred discontent and social upheavals, questioning the legitimacy of the State, at the same time that intra-dominant classes conflicts and struggles in the sphere of accumulation gave justification for military coup d’etats and counter - coup d’etats which ended democratic civilian governance of the Second Republic ( Attahiru Jega, op. cit.)

Between 1986 and 1987, the regime of General Babangida introduced the twin programs of economic adjustment and political transition. The economic adjustment program itself was a strategy recommended by the World Bank for attacking poverty (namely: Labour -intensive employment generation programs and provision of social services). As is well known, the critical elements of S.A.P. were as follows:

   Introduction of price reforms, by removing existing control mechanisms and structures;

   Introduction of trade liberalization, by removing barriers, giving export incentives, and deregulating exchange rates of currency;

   Reduction of public sector involvement in the economy, divestiture through commercialization and / or privatization; and

  Attempts to “roll-back the state,” by  cutting public expenditure on social services and  so on.

But as it were, the inherent contradictions associated with the critical elements of SAP simply compounded the problem of poverty in Nigeria. A critical assessment of the period 1985 and 1990s reveals that SAP had been anything but effective, insofar as reduction of poverty was concerned. Therefore, it can be argued that the politics of Structural Adjustment had only increased, rather than alleviated the problems of poverty in the country, both in absolute and relative terms.

(A) Dependent Economy: Throughout the last century, the nation operated a dependent economy. The Nigerian flair for conspicuous consumption of non-essential goods is a veritable source of its inordinate demand for imports, thereby rendering her a fertile dumping ground for all sorts of consumer goods. Basically, the economy imports what it does not produce and consumes what others produce. Since she is not self reliant, the nation depends wholly on the economies of Western Europe, North America and Japan. This dependency further reduced its capacity for development. Rather than develop a strong industrial base, our economy has remained predominantly an import-dependent economy with the resultant effect of generating employment opportunities abroad, to the detriment of our own economy.

(B) Oil Economy: The advent of petrol-dollars has brought about a huge windfall that unfortunately, was not channelled to build a productive base. A lot went on expensive infrastructure, white elephant projects, and importation of luxury goods and huge appetite for consumer produce. This ultimately fuelled corruption in the bureaucracy, creating a subculture that emphasized connection to State office and with access to oil money, people looked upon wealth as ‘manna’ from heaven. In this culture, the whole essence of governance lost its focus as the elites struggle to grab as much of oil wealth as they could. In no small way, this equally contributed to military rule, political instability and the eventual collapse of the Second Republic with severe implication to the health of the economy. This oil economy worsened the economic structure in several ways:

a.     It deepened the problem of dependency in that agriculture was neglected and virtually destroyed. Therefore, by the late 1970s, we became a net importer of food, meat, rice, etc. and our agriculture sub-sector lost its focus. It is generally forgotten that 30 years ago Nigeria was the world’s most important producer of palm kernel and palm oil, the second most important producer of cocoa, the  fifth rubber exporter and a major exporter of cotton, hides and skins, timber, tin and columbite;

b.     When Nigeria’s export rose phenomenally, there was no corresponding diversification. Therefore, when the oil market collapsed, the Nigerian economy collapsed with it. The depletion of the foreign exchange was so  massive that we could not enter into any credit or contractual obligation beyond 30 days.  Problems started, and for the first time, the nation had to go to the IMF  for support to sustain the economy. The misadventure of the 70s brought in the Breton Wood institutions, and hence, the debt trap that has hung on our neck ever since;

c.      Part of what contributed to the collapse of oil was the discovery of oil in Alaska and the North Sea. The drop in revenue occurred at a time when the nation’s taste for imported food and other finished goods had been well nurtured to maturity. The 1981 glut in the international oil market was devastating to Nigeria. Despite this glaring but dwindling oil revenue, the government failed to reduce the nation’s import bill. By the beginning of 1983, the nation’s foreign exchange reserve had crashed from 5.1 billion USD in 1981 to 1.1 billion USD. And more gruesome still, the foreign  debt stood at 10.0 billion USD. Today, there is confusion between the CBN and the Federal Ministry of Finance as to what our external debt figure stands. It is however believed to be between 28 and 32 billion USD.

d.   Uncontrolled government expenditure. The reconstruction and development of socio infrastructure gave the post war government a cast iron excuse to spend uncontrollably. The attitude of the government bordered on profligacy, as Nigerians were encouraged to cultivate an appetite for foreign goods. The budgets subsequently attuned to this propensity. The nation went on safari, on a honeymoon that was bankrolled from petrol-dollars by a government that managed a treasury it never dreamt possible. 

A particular top government functionary was actually quoted to have said that money was not Nigeria’s problems, but how to spend it. Accordingly, using the premise of the National Development Plans, government became a heavy spender. The ensuing fiscal indiscipline created room for massive official corruption, leakages and a general tendency by Nigerians to look up to the government to do everything for them. This of course worsened the distortion as the entrepreneurial spirit was killed and replaced with expediency and connection to power. The disbanded National Economic Intelligence Committee (NEIC) reported that in 1995 alone, a total of 6. 24 billion USD, representing 73.66% of total foreign exchange earnings was utilized by the public sector at the official exchange rate of N22 to $1. Of this amount USD 880.62 million was spent on public sector estacodes and BTA (Oba Oladele Olashore, Joy Of Service, An Autobiography. 1998, p.140).

with such a statistics, it is easier to discern the reasons for the low level of capacity utilization and why the economy was driven to the jungle. A corollary to this was the Casino Mentality that was foisted on us. Rather than having an innovative and productive class, people were more interested in government contracts and import licenses to import goods that were sometimes sold to the highest bidder.

e.     Absence of linkage of the oil sector. Nigeria exported most of the oil she produced; yet there are very little linkages with the rest of the economy. The danger of this manifested and became very bad in the 90s when we started exporting crude oil and importing refined oil. But since the oil industry lacked the necessary linkages, with other sector, the oil sector failed to act as the engine of growth. If anything at all, what it did was to fetch money into private pockets. It is not surprising therefore that our oil fostered the phenomenon of growth without development.


3. Nigeria’s Economy And Global Market -Arrays of Distortions

Nigeria, having been consigned to the position of exporter of raw materials, a culture of importation of finished goods was forced down our throat by the capitalist Western nations. Within this context, it meant our capacity for economic growth was directly related to the capacity to earn foreign exchange to pay for its huge import. With this scenario, there could never be enough to service the people or enough for growth and development. Unfortunately for Nigeria, her dependence on oil made the economy vulnerable to fluctuation and external shocks as we did not have control of our oil output, and could certainly not fix or unilaterally determine its price. Following the collapse of world oil prices, Nigeria’s economy began to overheat and we were eventually unable to meet our import bills for raw materials, spare parts and even essential food imports. We were accordingly forced to accept the IMF sponsored Structural Adjustment Programme in 1986.

By the end of the 20th Century, and in spite of economic deregulation, the economy was yet to address its structural distortions, one of which was the industrial sector. The industrial and the manufacturing sectors had largely remained undeveloped under the yoke of multinational corporations. The manufacturing sub sector had largely operated below its installed capacity. Specifically capacity utilization declined from 70% in 1986 to 28% in 1996 and has not improved ever since (Central Bank Of Nigeria: Annual Report and Statement of Account - for the year ended 31st December 1997).

The slight recovery in manufacturing production in 1996 and 1997 was reversed in 1998. The aggregate index which was used for the measurement of manufacturing output, estimated at 133.1 (1985 = 100) fell by 3.9% in contrast to growth rates of 0.4 and 1.3 percent recorded in 1997 and 1996 respectively (Central Bank Of Nigeria: Annual Report and Statement of Account - for the year ended 31st December 1998). The drop in manufacturing output was traced largely to declines in the productive activities of nine out of the thirteen manufacturing sub-groups: Synthetic fabrics (12.9%) radio and television (11.1%) Cotton textiles (10.9%), Soap and detergents (10.4%), Footwar (8.6%), refined petroleum (5.1%), Vehicle assembly (1.5%), cement (1.1%) and paints (1.1%). The remaining four Sub-groups however, recorded increase in production as follows: Soft drinks (3.2%), beer and stout (2.2%) roofing sheets (1.8%) and Sugar confectionery (0.7%) { Source: CBN Annual report, op. cit.} The modest growth of the industrial sector, which began in 1996, cold not be sustained by the end of the last century. The aggregate index that was used in measuring industrial production, estimated at 133.9 (1985 = 100), declined by 4.7% in contrast to 6.2 and 2.8 percent increases in 1997 and 1996 respectively. The contraction in aggregate industrial output reflected developments in all the major components of the industrial sector: mining, manufacturing and electricity consumption, which recorded output declines of 5.2, 3.9 and 3.6 percent respectively (Source: CBN Annual report, op.cit.).

Specially, the persistent shortage of fuel and other petroleum products had a negative impact on manufacturing operations. The scarcity of fuel hindered the movement of industrial inputs; goods and personnel; while shortage of diesel also reduced the capacity to use generators to provide power for running industrial machinery and equipment in the face of epileptic electricity supply from the National Electric Power Authority.

Given the above scenario and score sheet of failure in the domestic economy, it therefore became an uphill task for the stretched economy to compete favourably in the global market. Nigeria’s balance of payments weakened from a surplus of N1,077.7 million (USD 15.0 million) in 1997 to a deficit of N220,667.6 million (USD 2,873.0 million).  [See CBN annual report, 1998, p. 137]. This was of course a reflection of the poor performance of the current account. The current account balance deteriorate form surpluses of N240,180.3 million (USD 3,438.7 million) or 8.5% of GDP and N36,033.7 million (USD 502.2 million or 1.2% of GDP in 1996 and 1997 to a deficit of N330,109.0 million (USD 4,297.8 million) representing 3.5% of GDP in 1998. And till the close of the 20th Century, the government’s policy of external reserve build-up suffered a series of reversals. At this level, the official reserves could accommodate 9.2 months of current import commitments as against 9.6 months in the preceding year (See op. cit.)

Movements in macroeconomic indicators revealed a mixed performance of the Nigerian economy in fiscal 2000. Contrary to expectations, the economy was stagnant for the better part of the year. This was attributable to the delay in the approval of the year 2000 Federal budget. The expansionary fiscal operations of the government in the second half of the year induced rapid monetary growth that was out of line with the projected targets. This put pressure on the domestic prices and further precipitated the depreciation of the naira. Structural bottlenecks in the economy persisted and continued to constrain output and employment growth. But owing to a favourable development in the international petroleum market, the pressure on the balance of payment relaxed, thereby resulting in a building up of gross external reserve. This notwithstanding, growth in the real GDP was estimated at 2.8%, compared with 3.0% anticipated, and the 2.7% achieved in fiscal 1999 (CBN: Monetary, Credit, Foreign Trade and Exchange Policy Guidelines For Year 2001).

Industrial production in fiscal 2000 fell by 0.8% from the level in the first half of 1999, reflecting declining activities in the mining sub-sector and electricity consumption. Aggregate capacity utilization was estimated at 34.8%, compared with 34.6% at the end of December 1999. Inflation rate, which fell to 6.6% in 1999, remained at a single digit and decelerated further to as low as 0.9% in June 2000. This  however proved to be a fluke as inflation rose drastically to 5.4% by November (op. cit).

The pressure on the naira intensified as the naira exchange rate in the IFEM, on the average depreciated by 7.0% from N94.83 = 1 USD between January and November 1999, to N102.02 = 1 USD in the first eleven months of year 2000 (Source: Op. cit. See The Guardian, Wednesday, January 3. 2001). Similarly, the average rates in the bureau de change and the parallel market depreciated 10.1 and 10.2 per cent respectively, during the period. consequently, the parallel market premium over the IFEM rate average 8.8% in the fiscal 2000 compared with 7.8% in the corresponding period of 1999.

4. Challenges of Economic Transformation in Nigeria In the 21st Century

 Before Nigeria can aspire to any enviable position, she must first tackle a series of questions:

(a) Energy crisis. At 89.5 (1985 = 100), the aggregate index of energy consumption declined by 7.6% in 1997, in contrast to an increase of  31.3% in 1996. A total of 28.6 million tonnes of coal equivalent (tce) of energy were consumed, representing a decrease of 4.7%, as against a rise of 23.1% in 1996. The fall was accounted for by reduced consumption of petroleum products, natural gas and hydropower by 6.8, 3.1 and 2.9 per cent respectively. This development followed largely the prolonged nationwide shortages of petroleum products; low level of activity in key gas consuming industries and persistent disruption in electric power supply (See CBN annual reports, 31st December, 1997). Aggregate energy consumed in 1998 was 28.2 million tonnes of coal equivalent (tce). This level of consumption represented an increase of 2.1% in contrast to a decline of 8.1% observed in the previous year.  The consumption of petroleum products and hydropower energy however decreased by 11.9 and 6.7 percent respectively, below the levels in the preceding year (See CBN annual report, 31st December, 1997). The decline reflected the unprecedented energy crisis in the country as the nation-wide shortage of petroleum products and power outages persisted even to year 2001. No meaningful development can take place in the absence of regular supply of petroleum products as well as regular and uninterrupted supply of electricity. Already, Lagos State Government has initiated an independent power generation agreement with Enron. But until the desired expectation is achieved, the real sector will continue to operate below average.

[b] Weak industrial base: The Industrial Core Projects (ICOs) are  basic industries established mainly by the government to catalyse industrial growth and development through the production of basic inputs for downstream industries. ICPs comprise oil refineries and petrochemical plants, liquefied natural gas projects, fertilizer, steel paper and sugar plants, an integrated aluminium smelter, machine tools, marble and cement industries. The collective performance of these projects remains poor. Many of them have stopped operating, owing partly to inadequate funding, which hinders the procurement of raw materials and replacement of ageing machinery and equipment. Lack of funds also constrains the completion of some on-going projects, while the poor state of essential infrastructural facilities, which necessitated their private provisioning, further exerts undue financial burden on the ICPs. With reduced activities, the prospects for the ICPs appear bleak.

[c] Economic Diversification: Another bane of strong industrial base is our mono-cultural economic base. The economy must of necessity be diversified and transformed to meet up with the challenges of the 21st century. Nigeria must build an economy that is self-sufficient at home and economically competitive internationally. The country has to go back to agriculture as the source of raw materials for our industries, for food for our teeming population and as a source of employment. The country’s massive investment in agriculture will additionally boost her foreign exchange deposit, which will be saved if we stopped importing what could be produced at home. Related to this is the question of establishing strong linkages between oil and other sectors, particularly manufacturing, agriculture and capital goods sub-sectors.

The nation must also explore and exploit the West African market through cooperation, integration and regional security. It is only through transformation that the problem of debt overhang can be resolved. The strategy to be utilized include: continuous calls for debt forgiveness through our strategic allies and secondly, Nigeria must start pursuing with all urgency the strategy of export led growth.

[d] The National Question: Equally important to the ability of the Nigeria’s economy in the new millennium is the resolution of the Niger-Delta crisis. There is no doubt that this crisis has some significance for resolving the National Question as well. The government must facilitate accountability, equity and justice in revenue mobilisation and allocation. The responsibilities of the multi-national Corporations to the local communities must also be recognised and addressed. The activities of these companies should service the local needs and welfare of the communities where they operate.

But on the global dimension, it does appear that like other part of Africa, Nigeria is being marginalized by the advanced nations. Competition in atomized and global economies is neither equitable nor just. Africa accounts for just about 3% of world trade; while our traditional export fetches less and even the manufactured products from Africa are either blocked by tariff walls or they can just not compete in quality and price with similar products from other regions.

So in a way, the challenges of the 21st Century are the challenges of globalization. And as it were, globalization is leaving us behind in terms of communications and transportation. And in such a dynamic global market you cannot compete if you cannot communicate (electronically). The issue has really gone beyond catching up with the West, What is pertinent now is to reduce  the gap. Nigeria must therefore join the information super highways. At the same time, we need to evolve a workforce to compete internationally and be able to transfer their acquired skills back home to Nigeria.

5. Nigeria’s Business Class

For Nigeria to meet up with the challenges of globalization, we need the business class to work much harder and take advantage of the new era economic deregulation and political liberalization and contribute meaningfully to a diversified and competitive Nigeria’s economy. But in the strict sense of the word, we do not have the economic class that will take up the challenge and transform the economy. What we have in the country is the semblance of the economic class; they in fact belong to the leisure class, the club of the “Nouveaux Riche”. A critical analysis of the membership of this club would reveal their emergence through oil lifting or through government monopoly patronage, through Government appointments [civil or military] or through contracts awards. Some of them are drug kingpins or fraudsters/tricksters (419) Due to their peculiar antecedents, they are not productive and have certainly not cultivated the gestation period. This club is consumption oriented and not innovative at all. That is why you only find them investing in the service industry - courier, hotels, banking and airline operations. With such a shaky background how can this class take us to the 21st century of economic development? In India and several South East Asian nations, the homegrown producers and exporters own the companies that are notably the major players in the international market. The economic development of Indonesia, like the rest of the Asian Tigers did not take more than 30 years. Thirty years after the war the economy of Nigeria is still at its infancy just because the engine of growth is non-existent.

Globalization dictates privatization - unlike what we have in the 70s (i.e. indigenization). Once you privatize, you invariably open up for the private sector to become the engine of growth, but to what extent can our private sector act as the engine of growth? The government too could not be said to be assisting this sector. In fact, it does appear as if government is a strong believer and devotee of the demode Keynesian school of government’s economic activism. In what appeared as a double talk, the government economic blueprint and policy thrust chant the mantra of private sector led-growth and development of the economy. But the actions, conveyed in resource allocation via the yearly budgets, still ensure that the government continues to have a strong hold on the economy. Unless the Private Sectors are transformed, they cannot be trusted with the economy and neither could they be productive. The Nigerian Economic Summit Group, an offshoot of the Vision 2010 has apparently realized this, hence, their decision to embark on leadership recruitment drive and training abroad, though seminars and other programs to cultivate a productive class that will take over as the engine of growth and be able to compete in the unfriendly global market. I quite agree with the Policy Magazine in its opinion that the government can mobilize financial resource to pump into industrial projects owned and operated by the Private Sector. Such fund injection can be in the form of minority equity stakes or long-term loans at low digit interest rate. For as long as government itself undertakes all infrastructural projects, funding them from its consolidated revenue account and foreign exchange resources without corresponding investment inflow from abroad, there will be further pressure on the Naira, and by extension, the economy. China was able to develop by establishing small villages iron and steel industries not like our imposing Ajaokuta Steel Complex that has refused to come on stream. What is required of the government is to play the catalyst or the facilitator role. The history of economic development in South East Asia could serve as a good example for Nigeria. In South Korea and Japan especially, government invested heavily in infrastructure, factories and in developing human capital. These were subsequently ceded to the private sector to manage.

Essential as globalization is, we must however be wary in joining the bandwagon. It must be noted that these advocates of liberalization have been double-dealing. Their economic policy is a combination of restrictions at home and advocacy of free trade abroad. How many of the products coming from the developing countries can successfully and effectively compete within the North American market? Even competitive products from Japan and China are regularly and frequently discriminated upon. If the West says globalization is suitable and working effectively well, why can’t they support and encourage the globalization of labour? How many people can freely go to Europe or North America to work? Nigeria must therefore wake up to the realities of the new dawn and stop wasting time and resources. The economic selfishness of the capitalist West must necessarily be held in check. As much as we require Direct Foreign investments, and as desirable and essential to development as they are, these must not be restricted to the lucrative oil and gas sector alone.  

The writer was a one time Minister of Finance