Dons Recommend Proactive, Homegrown Measures To Stabilise The Economy

TWO academics, Professor Olufemi Taiwo and Associate Prof. Ademu Wada, told The Guardian that the country’s present economic challenges require proactive measures to stabilize. They contend that Nigeria has been bogged by the absence of listening presidents that could adopt practical ideas and research results to strengthen the various aspects of the nation’s economic policies. Prof. Taiwo is of the Economics Department of University of Ilorin, while Wada is a Senior lecturer in the Department of Economics, University of Jos.

Taiwo lamented that the country had not been lucky with a listening leaders despite surrounding themselves with seasoned technocrats who daily provide workable economic blue prints. He expressed the hope incumbent President Muhammadu Buhari would make an exception stressing that, “as a proactive leader he would listen to advice on how to turn the nation’s economy into a more viable one.” The don said indigenous technological development serves as “the pivot on which the economy of any developing country” like Nigeria could thrive.
“The persistence of backward social and political institutions, which prop up the ever-widening gap between the rich and the poor and consequent aggravation of poverty among the majority of Nigerian people,” he argued, “could form part of the reasons why one could conclude that the nation’s economy is at a low ebb.” Speaking further on the present status of the nation’s economy, Prof. Taiwo noted that; “the Nigerian economy has not experienced any appreciable development. This he said follows the large-scale and the rising unemployment, the hyper-inflationary trend, the increasing foreign dependence and domination.

He noted that; “Measured in terms of whether or not there has been a process of sustained and sustainable increases in the real per capita income of the people, the conclusion is likely to be that the Nigerian economy has not experienced growth. Whatever increase that may have been recorded in the per capita income was made possible only by the massive output of petroleum oil, an exhaustive natural resource.”

He maintained that the glut in the world market from about the mid-1970s, clearly demonstrated the vulnerability of foreign trade oriented mono-cultural economy, and the inability of such to ensure sustainable increases in the per-capita income of its people. “Besides, it has not insured an optimal internalisation of the benefits of economic progress in the form of better nourishment, clothing, housing, education, health care and better economic well-being for its citizens in general,” he added.

On what economic policies he would like President Buhari to adopt, Prof. Taiwo declared: “I must say that most of the many benefits Nigeria would derive from developing its own capacity for technological innovation would include development of appropriate technologies, foreign exchange savings, efficient utilization and adaptation of imported technologies and foreign exchange earnings.

The desirable course of action is therefore clear: The development of technologies that will be appropriate to the relative factor endowment of specific countries requires the development of indigenous capacity for creating technologies in the countries concerned. This indigenous Less Developed Countries (LDC’s) development of low-cost, efficient, labour-intensive (capital saving) techniques of production is one of the most essential ingredients in any long-run employment oriented development strategy.”
“This argument assumes a greater relevance in the case of Nigeria, with its total population of about 180 million and its aggregate unemployment rate of over 40 per cent. It is futile for Buhari and his economic team to expect that any foreign investor and/or manufacturer of capital equipment will be concerned with these peculiar realities of the Nigerian economy. By contrast, a truly Nigerian technological invention, no matter how crude at first, will of necessity, reflect the peculiarity of the Nigerian economy, since technological inventions tend to reflect the socio-economic environment from which they evolve.”
Continuing the Economics teacher said; “we need a blue print for indigenous technological development.”

Professor Taiwo said; “Nigeria is still on stage one of the world development chart because of issues relating to these challenges. Two per cent of our Gross Domestic Products (GDP) should be used to develop standard laboratories and conduct researches…The economic growth will begin to manifest internally. We don’t need to import television sets or refrigerators if we have the indigenous technologies that can develop them. Our concentration on oil proceeds will reduce. People will do other things than relying on oil money.”

Comparing Nigeria to US for instance, he noted that throughout the period 1970-1980, United States did not spend up to 30 per cent of its total import bills on imported machinery and transport equipment, adding that the percentage has generally been declining. He added: “Similarly, over the same period, the British and the Germans did not spend more than between 27 per cent and 21 per cent of their total import bills respectively on the importation of machinery and transport equipment, manufactured by other people. The argument here is not that any country can be totally self-sufficient in the area of technological needs. The point is that imports constitute leakages out of the system in terms of the associated lost multiplier effects, and this is a strong argument in favour of restricted imports over and above the question of balance of payments.”

The development of indigenous technology, he says, will enable Nigeria to save foreign exchange, to reduce leakages associated with imports, and to internalize a larger proportion of its benefits of economic development. “Moreover, the consequent minimisation of the dependence on foreign technology will enable Nigerians to strike better bargains on the machinery that they have to import. Nigerians’ self-esteem will be boosted, thereby making Nigeria’s political independence more meaningful.”

He expressed the fear that when oil, the current foreign exchange earner for Nigeria ultimately exhaust, coupled to the nation’s teeming population, “the agricultural sector would not likely regain its historical foreign exchange earning power until there occurs a major technological development within the domestic economy.”

Wada, on his part argues against whatever economic model that seeks to remove oil subsidy. He maintained that despite the fall in international price, “the oil sector is critical to the economy of this country,” adding that fuel subsidy is a way of reducing the cost of transport, inflation and difficulties people will go through when the subsidy is removed.  “If you take it from the point of view of our local market, you will understand that the moment there is increase in petrol price, it translates immediately into increase in prices of food items. It then means that the quantity of food that a consumer can buy in the face of the removal of oil subsidy will be smaller; that is to say, suffering increases. So, you cannot be arguing for an economy that is already infested with poverty to begin to remove subsidy.”
Making a case for the retention of oil subsidy, the Associate Professor of Economics said the major problem has been managing the subsidy.