Reviewing Nigeria’s Economic Interest and Development

The quest for an economic independence has been the issue of every government in Nigeria since independence in 1960; however, a lot has been said to be done in the past 50 years with only a handful to show. Before independence and the dawn of oil in the 70s, the economic interest of Nigeria lies on its agricultural prospects.

Nigeria’s cash crops found safe havens for Europe’s industry, thereby creating a ready market for any exportable crop from the Nigerian coast, and thus boosting industrialization and growth of Europe, particularly, Britain. The first such effective economic interest of Britain in the Nigerian economy was the establishment of English enterprises to aid the exportation of cash crops and minerals that assisted in no small measure in building a Great Britain.
 
In the nineteenth century, Britain was interested primarily in opening markets for its manufactured goods in West Africa and expanding commerce in palm produce, cocoa, groundnut, cotton and other available cash crops and mineral resources. Securing the cash crops and ivory trade required that Britain usurp the power of coastal chiefs in what became Nigeria. Formal “protection” and – eventually – colonization of Nigeria resulted not only from the desire to safeguard Britain’s expanding trade interests in the Nigerian hinterland, but also from an interest in forestalling formal claims by other colonial powers, such as France and Germany. At this time, Nigeria never had synergy to define a common interest that would safe guard her economy left alone expand it towards plausible growth. The most promising interest is the regional strives to gain recognition with the British colonial masters. Since the formal British administration in Nigeria in 1861, when Lagos became a crown colony, through independence till the return of democracy in 1999, there seem to be a near absent of people-friendly economic interest other than those that favoured Nigeria’s political masters and their cronies.
 
A major feature of Nigeria’s economy in the 1980s, as in the 1970s, was its dependence on petroleum, which accounted for 87 percent of export receipts and 77 percent of the federal government’s recurrent revenue. Today, the story seems to be the same, with most of Nigeria’s productive sectors left in shambles; the agricultural gold mine had simply disappeared. Although Nigeria is a major producer of oil, it happens to be a major importer of petroleum products than any other oil producing nation with a near nil accountability in its oil production. Today, the Nigeria’s apex economic interest appears to have more complexity in terms of oil production; the Central Bank of Nigeria (CBN) and oil extraction companies giving different figures on oil exploration contrary to Nigeria Extractive Industries Transparency Initiative’s (NEITI’s) figure.
 
Indeed, GNP per capita per year decreased 4.8 percent in the 1980s; this had led in 1989 to Nigeria’s classification by the World Bank as a low-income country. Little wonder that the country was declared poor enough by the World Bank to be eligible for concessional aid from the International Development Association (IDA) in late 1980s. There is no doubt saying falling oil output and prices contributed to another noteworthy aspect of the economy in the 1980s – the decline in per capita real Gross National Product (GNP), which persisted until oil prices began to rise in 1990. Although Nigeria had in the last ten years generated about $600 billion from oil, there seems to be no other economic interest which could generate such revenue in spite of the fact that there are calls from the analyst and stakeholders for the country to diversify from oil.
 
Moving further, many developed nations, especially US, has more interest in the country’s constitution than any revenue earner. The constitution plays two vital roles; first, the primary source of revenues to fund the federal government was requisitions to the state governments asking them to send to the federal government state-collected tax revenues; second, each state had a single vote in the federal Congress. This plainly translate that the central government lacked the legal power to enforce uniform commercial or trade regulations – either at home or abroad – that might have been conducive to the development of a common economic trading area. Simply put, a major interest that assisted the US government in revenue generation is the making of plausible legislations where every state is involved in key economic policies.
 
Even though the significance of legislations cannot be overlooked, the Nigerian economy had overlooked the relevance of such legislations in the quest to boost revenue from non-oil resources. Under the US Constitution, the power to tax, along with the authority to settle past federal debts, was firmly delegated to the central (national) government, improving the central government’s financial future as well as improving capital markets (the markets for funds). The government main economic interest was, and still is, the harnessing of its tax revenue to fund its annual expenditure. As best as tax has shown to be the world most reliable and stable revenue earner, Nigeria is yet to implement cogent compliance to laid down legislations on tax and tax generation. It is important to note with worthy that one of the most commonly discussed issues in economics is how tax rates relate to economic growth. The only possibility of the Nigerian economic interest in tax is the upward review of tax rate, which of course could lead to a serious tax evasion by tax payers.
 
No doubt, Nigeria received accolades from the World Bank on its stable economy over the last fiscal year, and may be seen to be floating aright in the first quarter of the year, there could be an “economic blow” if interest is not shown to the accelerating inflation trends. One effect of the bank bailout by the CBN is the current rise in the rate of inflation; in Scandinavian banking crises (Sweden, Norway, and Finland) where such bailouts were made, there was not government purchase of bad assets. Most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead – in most cases in which it was used – made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico) and increased the volume of circulated money which in turn led to a serious inflation problem.
 
The modern evidence confirms that commercial states in the country received more economic interest than other states, and this could be as a result of the exacerbated differences of class, region, and community in Nigeria. Private investors had followed the government’s economic interest in establishing commercial interest in like manners; in telecommunications for instance, Lagos, Port-Harcourt, Kano and the Federal Capital Territory are seen to enjoy a higher broad band network communication, presence of state of the art ICT gadgets and equipments, standard government services, etc. We had failed to realize that a fully fledged coverage of spread of commercial interest across the country would have boosted economic growth as witnessed in the “turn-around” economic miracle in co-developing nations of the early 1980s like Malaysia, India and Indonesia. One would not hesitate to understand this trend as a continuation of the complete British control over Nigeria where the colonial government assumed complete control of the local economy and would issue trade licenses only to established firms, a practice that formalized the competitive advantage of foreign companies over indigenous firms. Still remember the globacom licensing saga?
 
Among advance nations of the world, Labour activities had helped in no small measure in checking government excesses. The major objective of labour bodies revolves on the welfare of tax payers whose labour and commitment in the form of taxes are used to run the affair of the nation. Wit
h the success of labour movement during the war in reaction to the heavy handed policies of the colonial government, aspiring Nigerian entrepreneurs, deprived of new economic opportunities, and union leaders, politicized by the strike’s eventual success, channelled their sense of grievance into nationalist agitation. Educated persons, whose economic opportunities were limited largely to private business and professional activity, began to demand more participation in the colonial government. Same scenario still exist in Nigeria’s present day labour movement seeking to participate in government’s activities, safe for demand in minimum wage increase for workers.
 
The quest for a true economic independence lays on the identification of strategic economic interest by governments to aid it implement its budgets towards a vision of economic growth and stability. Every Nigerian budget read during its presentation is tagged by one alias or the other, but none is dedicated to a particular target or economic interest that would guide its full implementation towards actualising the “vision” of making the economy one of the top 20 by 2020.
 
Salim Salihu Muhammed
[email protected]

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