A Response to “End of Oil is the Beginning of Prosperity in Nigeria”

Posted: October 8, 2014 in Government, Markets
Tags: , , , , , , , ,

Nigeria’s problem is sincerely not policies and national planning solutions for the economy whether it witnesses endless oil production or the ‘end of oil’; that is far too easy. One can make a list of credible sounding policies or actually good solutions for the Nigerian economy depending on whether the problem solver, perhaps an economist, is a die-hard free-market advocate, a supporter of strong government intervention or is two-handed. Who will implement them? From my thorough academic research Nigeria scores 9/10 for resistance to policy introductions.

The most important lesson I got from studying development economics come from an observation made by economist Peter Thomas Bauer on West African economies. He clearly stated that economies do not attain prosperity because they have “natural resources” mineral, agricultural; prosperity is a “function of the attitudes, behaviours, habits, dispositions and thinking” of the citizens. He did not see West Africa prospering for this reason i.e. since the 1950s. When he moved shortly after to study South East Asian economies he could see the possibilities of economic miracles long before other economists could for the inverted reasons West African could not be hoped to achieve such. Japan has virtually no natural resources yet because of their formal and informal culture of collective and individual efficiency and dedication they are one of the world’s dominant economic powers.

What are the attitudes, behaviours, habits and thinking of the Nigerian ruling elite? What are the attitudes, behaviours, habits and thinking of the Nigerian citizen? It looks like six decades later that Lord Bauer was and is still right.

Another issue is the history of prosperity itself. Rome of today is nothing like the Rome at the time of Jesus Christ’s life. The same goes for Egypt, Turkey (the Ottomans), Spain, Portugal, Greece, Mongolia etc. they were once highly prosperous economic and military powers that cannot match or resemble their past power and prosperity. When the sources of a nation’s prosperity collapse recovery, if at all possible, it is always a very uphill task; infrastructure decays, migration and brain drain become necessary, postponed wars become fightable, ‘bottom pot’ kleptocracy gets very desperate. As economies collapse nations collapse. Even the economies of nations that never truly prospered collapse. If the end of oil does happen I do not foresee any (easy or smooth) recovery for the Nigerian economy especially not with the kind of elite and workers the nation has. Furthermore, economic prosperity in other nations rises from time to time making it hard for ‘spent nations’ to reassert themselves. What are the solutions to these problems?

The USA’s Midwest is producing “ghosts towns” because one-time prosperous cities no longer have the good paying manufacturing jobs, which have been shipped overseas as much cheaper labour. Warri is potentially a future ghost town with its loss of ‘oil city’ status. What policies or solutions will make such towns prosperous again?

Let us hope all will be well for Nigeria and its economy in the near and distant future.

Grimot Nane

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