Nigeria’s most fundamental problem is that we are not productive enough. Yes, there is corruption, mismanagement, poor leadership, etc, but our most pressing failing is that we simply do not produce enough.

Simply put, US$191 billion is not enough to sustain 140 million people. All these countries have more, or at least just as much corruption as Nigeria, yet they have larger GDPs:

[1] Romania - GDP: US$229.9bn (population: 22.2m)

[2] Algeria - GDP: US$253.4bn (population: 33m)

[3] Vietnam - GDP: US$280bn (population: 85m)

[4] Saudi Arabia - GDP: US$314 (population: 27m)

[5] Egypt - GDP: US$329.791bn (population: 83m)

[6] Bangladesh - GDP: US$330.8bn (population: 147m)

[7] Colombia - GDP: US$337.286bn (population: 46m)

[8] Ukraine - GDP: US$355.8bn (population: 47m)

[9] Philippines - GDP: US$451bn (population: 89m)

[10] Pakistan - GDP: US$475.6bn (population: 168m)

[11] Mexico - GDP: US$1.134trn (population: 109m)

[12] Russia - GDP: US$1.73trn (population: 143m

Most of these countries have not had better governments than Nigeria. Their power supply problems are just as chronic. Corruption is just as rife. Ferdinand Marcos stole as much as IBB. Zia al-Huq murdered more than Abacha. Benezair Bhutto's husband was known as Mr 15%. Most of them have poorer administrators than us. Many of them have fewer natural resources than us. However, they have higher GDPs because the people are more industrious and productive than Nigerians. Basically, in these countries, wealth has been created despite the failings of the government. We cannot continue being intellectually lazy, hiding behind the excuse of poor government. It is like a football player who refused to perform blaming it on a bad coach

Look at us: Nigeria - GDP: US$191bn (population: 140m)  

Until we get states being more productive, we will keep going round in circles. Imagine where Nigeria would be if every state had a GDP of US$20bn, of which US$10bn was export earnings

Our dependence on oil revenue is a matter that needs to be addressed. We need robust action on productivity. Our state governors have got to be given economic performance targets. Maybe, we need a law that allows the federal government to declare a state of emergency in any state that has a GDP of less than US$10bn a year. We should immediately move towards paying 50% of oil proceeds to the oil-producing states, 25% to the federal government and 25% into a central pool that can only be used for long term capital projects. With time, revenue allocation has got to be phased out totally. It is an albatross around our necks.

There should also be a constitutional clause that triggers automatic impeachment proceedings against any governor whose states’ monthly output does not at least match its running costs. States should be forced to publish their monthly earnings. Every state must attract at least one major local or foreign investor a year. After a certain while, any state that cannot meet the set targets, should be scrapped and merged with one of its neighbours

We would need an exports earning regime that looks something like this:  

[1] Oil - US$60bn; [2] Gas - US$20bn; [3] Solid minerals - coal, bauxite, iron ore, limestone, copper, gold, aluminium - US$50bn; [4] Cocoa - US$10bn; [5] Palm oil - US$10bn; [6] Edible nuts - groundnuts, cashew, coconuts, macadamia - US$10bn; [7] Tourism - US$10bn; [8] Manufacturing - US$50bn; [9] Bitumen - US$10bn; [10] Shipbuilding - US$10bn

As controversial as this may sound, the Nigerian people are also liable for our woes as countries with just as much corruption and mismanagement as us like Bangladesh, Pakistan, Ukraine, Russia, etc, are a lot more productive. In many cases, output has risen in these countries despite poor governance

Let us examine the reality of our current situation:

We do not have the expertise to move into value-added food and industrial production yet. If we rush ahead with it, our products will not be competitive because they will almost certainly fail to meet stringent international health and safety standards. Consequently, our best bet is to attract manufacturers and processors.

The first thing any processor or manufacturer will want is a guaranteed supply of raw materials. If we can provide reliable data showing that you manufacture, say, 1 million tonnes of cassava, 500,000 tonnes of cocoa, 200,000 tonnes of coffee, etc, it gives us an advantage when trying to woo investors. Many an investor has turned their back on Nigeria in the past because we could not guarantee supply. If you look at the oil and gas sectors, you will see that despite our troubles, we are attracting investors, because we can guarantee supply.

Do you know that all of Africa's cocoa investors like Cargill and Barrry Callebaut have their facilities in Ivory Coast? Why? Because, with an annual output of 1.3 million tonnes, and being the world's largest producer, the supply of raw material is guaranteed. Upping the output of primary goods is not an end in itself, but a means to an end. If we produce raw materials in substantial quantities at low costs, the manufacturers will be the ones coming to beg us to invest in our economy.

I am optimistic that we will get there in the end.

Robot  # 1 | 01.06.2008 05:07

...Read the full article.

NextLevel  # 2 | 01.06.2008 07:51

Good article. It points in a direction that I like and even though it doesn't look at the underlying factors, it is important we realize that Nigeria is just not great at providing returns to capital investments.

aguabata  # 3 | 01.06.2008 08:46

what i will take from this article is the point that we like refering Nigeria as a very rich country, we are potentially rich if we tap into human capital, natural resources even when harnessed optimally will go a long way but will not make us relatively rich bearing in mind the size of the population. Again I may argue that a leader who stole more money but devoid of ineptitude will cause less harm than say Abacha who is both corrupt and talentless so that could explain why some countries who had corrupt governments still manages to build a fairly strong economic climate.

ELAWALO  # 4 | 01.06.2008 09:51

Nice one It does not take economic science to understand these facts. Whatever underlyimg factors there are, are just a ruse to deflect responsibility ...Collectively as a people we ARE NOT PRODUCTIVE enough ...

Palamedes  # 5 | 01.06.2008 11:41

I have always argued that part of the problem is the number of states we have in Nigeria–created for divide-and-chop; 12 is the ideal but the maximum should not exceed 19 states. Most of our so-called states are smaller than most local governments in London or New York. After paying civil servants' salaries, education, hospitals, road etc., there is little money left for new startup businesses. Looking at these figures, we have to be realistic and accept that Nigeria is NOT a rich country, but a poor one. After all, Bangladesh and Vietnam are better off and no one would describe Bangladesh as a rich country. But as the author says, we cannot blame it all on our governments: Go to Peckham, or Deptford, South London, with large population of Nigerians and other Africans, most of the shops are owned by Asians. I can't imagine Nigerians or Africans doing the same in areas where Asians are many. Starting a business is seem by many as too much of a problem; we prefer the role of consumer; it seems to be our makeup, which needs to be “corrected.” In my republic, I would start the correction process with the young-- to get them to appreciate the supply side of economics and commerce when they become adults. Meanwhile, each state must recruit graduates and non-graduates and put them through military-business-style 16 months workshop and “re-orientation.” It would be a workshop and no paper qualification would be issued; what the graduate gains is a sound knowledge of running business, marketing, finance, presentation, and customer service (We are particularly terrible in presentation and customer service) from experts from commerce and industry (and not academicians). Indeed, the process must be treated as a state of emergency. Mediocrity, persistent indiscipline, people not made for business would be flushed out of the process as the workshop continues. In a poor country like Nigeria, most people don't have the money to start a business; individual are rather reluctant to invest in small businesses (We are willing to spree money in parties but unwilling to invest the money in small businesses), so support from state and local governments would be needed, under very strict conditions between the government agencies or banks and the entrepreneur(s). This is to ensure that any loan granted is used solely for the business and not diverted to purchase luxury items. To return to our makeup, we must be frank about it: We like to spend but shy away from setting up business where we can then spend our money. This outlook of ours seem to be present in the USA, Europe and Africa (We are noted for it and indeed other races make fun of us in this regard. I remember once being in a very long queue, of about 30 people, to get some money from an ATM, a Caucasian chap approached me to try to flog me a mobile phone. I noticed that he didn't approach the other people in the queue, who were all Caucasians). We need a “correction” of this mentality and outlook; and I call for the formulation of policy to start the process, to begin from nursery school to university. If our governments implement such policies, in 50 or more years, the Nigerians of the future would be a very different human beings almost unrecognizable from present Nigerians. They would have been cleansed of all our failings as a people. Maybe some would even start complaining that Nigerians dominate world business. Call it social engineering, we need it now, otherwise we will continue to remain at the bottom of the pile. Ok! that's enough for now.

docokwy  # 6 | 01.06.2008 13:13

Granted that Nigerians are not productive, but if you would, sir, break this GDP into the component states/regions of Nigeria so that a better idea can be obtained on which states/regions are productive at all, and to what extent. The low productivity of Nigeria stems from the trite statement: baboon dey work monkey dey chop.

NWANZA  # 7 | 01.06.2008 15:45

=docokwy;4295048859>Granted that Nigerians are not productive, but if you would, sir, break this GDP into the component states/regions of Nigeria so that a better idea can be obtained on which states/regions are productive at all, and to what extent. The low productivity of Nigeria stems from the trite statement: baboon dey work monkey dey chop. To expand on the above, the Nigerian environment and culture of treasury looting makes it had to be creative. Nigeria do not invest in ideas and visions of the next generation of it's citizen. Also, the North has been stagnant for years due to the oil money which they get and distribute amongst themselves through the creation of local government areas. What we achieved was a welfare system with little or no innovation and creativity. Children are product of their environment, and the evidence of the productivity issue can be traced all the way down to the educational system which have not evolved. The lack of hands on training and laboratory experience make our university graduates unemployable. Even those in the arts do not have the necessary tools to market their trade. Sedimentation to the few left professions leave millions of our adults unemployed because of the tough competition in that field; mainly medicine, law, and sports. Family owned businesses are localized, and do not provide a carrier path for any person that is not family. We need an economic summit to plan an action plan or we will perish. Monkey work and baboon chop cannot be sustained in the near future because of the push to break up the country. Nigeria or more specifically the North need to cease this current opportunity to device a master plan for their citizens. Pointing fingers to the North is not a good thing, but not pointing finger at their mismanagement is also a sin. They choose to lead when they are not supposed to be leading, and the result is what we see today on the ground. Tradition and culture is another issue for another time which impact development. Religion is another factor that seriously retard development which is another subject. Political immaturity is quiet a dangerous issue equivalent to military incursions. We are caught between a rock and a tight space, and escaping Nigeria is the best option.

Alata  # 8 | 01.06.2008 16:07

Nwanza, you can escape Nigeria/AFrica if and when you want. As Palamedes pointed out earlier, though, Nigeria/Africa will not let you escape! Even when you queue up for obodo Yondon to withdraw the results of your gburu from ATM, oyinbo will smell the Nigerian/African in you!! No escape.

Alata  # 9 | 01.06.2008 16:18

Nwanza, you can escape from Nigeria/Africa if and when you want to. But as Palamedes pointed out earlier, Nigeria/Africa will not let go of you. Even when you queue up to collect the rewards of your Gburu, any miscreant oyinbo will scent you out and bring dodgy deals to you alone, talk about racism! At least in Nigeria/Africa, every miscreant will approach everybody with dodgy deal, not just you alone!! All Every problem identified here is a business opportunity awaiting your nurturing and harvesting. The best option is to get stuck in and produce. If you need help, contact me for community development guide and workbook.

Alata  # 10 | 01.06.2008 16:37

Be careful what you wish for. The article indicates that the optimal strategy is to attract (foreign) manufacturers and investors, while buttressing this point with the involvement in Ivory Coast of the likes of Cargill. Cargill is very invested in.... Cargill has been active in Nigeria since 1984 and currently has an office in Lagos. Cargill has activities in the following areas in Nigeria: • cocoa origination • the office also represents other Cargill businesses in Nigeria A 'geography' (as Cargill will describe Nigeria) with estimated 140 million people is too attractive for multi-national companies to miss. They are all hereabouts directly or indirectly. The trouble with Nigeria/Africa seems to be the fascination with producing what we do not consume; and consuming what we do not produce. Why do the cocoa farmers of Ondo and Oyo not team up to produce chocolate for local consumption?

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