Ezike: We are only doing it out of desperation, it will not benefit Nigeria
Professor John Emeka Ezike is of the Department of Business Administration and Finance, University of Lagos. He spoke to IJEOMA OPARA on the Nigeria-China deal.
Can we look at some benefits of the deal?
All it does is to make it easy for Nigeria to buy and pay for Chinese products, and so, it works well for China. The Chinese currency is not yet universally acceptable; it can only be accepted in that country unlike the Dollar, which can be used anywhere. So, it benefits China more than Nigeria. For example, given a yearly trade volume of 14b, 12b of that trade or 87 per cent is China’s export to Nigeria, only two billion or 14 per cent is Nigeria’s, so, you can see that, that balance of the trade is in favour of China. Nigeria is only accepting this relationship out of desperation; it does not benefit Nigeria as such.
If Nigeria is well organised and had a strong bargaining power, what should have been done is to demand from China to buy more Nigerian oil, so that the trade balance will improve. For instance, if they were to buy as much oil as the United States used to, then the balance of trade between the two countries will be a little bit better.
The problem is that what we are doing is a fire brigade approach. We are solving the immediate problem and not the long-term problem. In the long term, this will materialise if we plan well in order to bring more of western type of economic management than running to China for short-term palliative that will not have any effect in the long run.
What can Nigeria do to manage her political independence, while remaining economically friendly with others?
What happens in international trade and investment is that you use what you have to get what you want, that is what is called theory of comparative advantage, which we have in many respect. Nigeria has a large deposit of mineral resources; has a large land mass and a huge population. What is important for me is that every country has what is called National Economic Objectives, and there are four: fast rapid economic growth, price stability, full employment and balance of payment equilibrium. It is my submission that what Nigeria needs as a national objective is full employment of resources, and that means, full employment of our landmass.
If we can subject a greater proportion of Nigeria’s landmass to arable agriculture, then it will be better. We find out that in Europe, no land is left fallow, unless it’s kept for grazing of animals; otherwise, all land is cultivated. We have a thriving active population of between 18 to 45 years of age, if we can engage this population in useful employment, Nigeria will achieve the objective of rapid economic growth. Nigeria has a large capital, but we don’t invest in it adequately, if we can invest in it fully, instead of gigantic projects and corruption, Nigeria will be well off. Also, entrepreneurship, the Nigerian young people are very entrepreneurial, but what we see are young people hawking sweets and carrots along the streets, if we divert the energy of the young to useful engagement, Nigeria will be better off in terms of economic growth, price stability and balance equilibrium.
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