Digging Africa out of economic depression
Economists are likely to dust up their archaic textbooks – and of course the recent but deceptive ones too – to prove me wrong that Nigerian economy is in a Depression. Oh, ‘A depression is when you have a 10% fall in GDP’… ‘No, it is when your GDP declines for a long period of […]
Economists are likely to dust up their archaic textbooks – and of course the recent but deceptive ones too – to prove me wrong that Nigerian economy is in a Depression. Oh, ‘A depression is when you have a 10% fall in GDP’… ‘No, it is when your GDP declines for a long period of time… it is an extended Recession’, they would scream. I am not concerned about what textbooks written by white men say depression is, but I am looking at the substances of Economic Depression, which are high unemployment and poverty rates.
Nigeria certainly has a serious problem with unemployment. Many graduates are searching endlessly for work. And when they do, they often land jobs that cannot sustain them. I mentioned that issue last week. Regardless of the inadequacy of the World Bank’s use of $2.00 a day as a benchmark to measure poverty – to the effect that $2.00 is a lot of money in Nigeria, as President Obasanjo (and my humble self) had argued in the past – the fact is still that there is excruciating poverty in Nigeria. Millions have no access to a mere N50 per day. An unemployed person earns no money, and there is a limit to the amount that relatives will give him or her. Many people remain unemployed because they have run out of money to even get them around, or to even buy 30 minutes in a cybercafé in the hope of sending their tired CVs to company websites! For those people, N50 is a lot of money. And Nigeria has millions of them. Yet Nigeria churns few new out billionaires everyday (especially oil profiteers)!
I say therefore, that Nigeria is in a period of economic depression. It has been for as long as I can remember. Last week, I mentioned the fact that Nigeria bought cars for fresh graduates decades ago without caring if it could sustain the practice. The fact is that since the British departed, granting us a mirage called ‘independence’, Nigeria has been in economic depression. This is because, as against the economic and social system the existed pre- and during colonialism, the moment the British left, every Nigerian had their eyes – and minds – trained on the city centres. Everyone wanted a taste of Lagos, Ibadan, Kaduna, Enugu, Port Harcourt, Onitsha and so on. Automatically therefore, Nigeria went into the beginnings of an economic depression which would creep in on us in a devastating fashion, and remain with us. We do not need another white man to come and tell us this before we believe it. But that is what one sees in Nigeria. Successive governments believe in what a Mr Smith will say, and dismiss a Mr Tope’s belaboured thinking as ‘the ranting of an ant’. But here we are!
Since we are not very good at keeping records, it was difficult for us to see any problems, until our population exploded – from about 30million in 1960 to 100million in 1980 and 160million today, while our social structure changed, with more Nigerians becoming city rats rather than subsistence farmers. Real poverty – otherwise nicknamed HUNGER – therefore increased in the land.
Yet the situation in Nigeria can be empirically pigeon-holed. Let us look at the American example. The New York Stock Market Crash of 1929 was similar to our Stock Market Crash of 2007. In 1929, many middle class people who wanted to live large like the bankers and stockbrokers, lost everything they had when the likes of JP Morgan II and Prescott Bush (Grandpa of George W) among a few others, conned them out of their money by selling pumped up useless stock to them. The USA plunged into a very difficult period of high unemployment, high hunger and despondency. Now how did the USA get out of that problem, which lasted fifteen years? This kind of example is what African economists should be looking at. For it seems certain that the current strategies being adopted to revive the economies of African countries (chiefly Nigeria), have not been working. Will we ever get out of poverty – of mind and body? Will our people be less hungry someday? Will unemployment ever reduce in the land?
The current approach is to keep selling crude oil and sharing monies to states. Some get large chunks others complain. The crude oil has become a weapon to pass insults to those who don’t have some in their backyards. But even the areas where the crude oil exists, poverty and unemployment still exist aplenty! The current approach is to celebrate Nigeria’s GDP – Gross Domestic Product (however measured), which has been growing in leaps and bounds, year-in-year-out, minute by minute. That is what our white advisers and textbooks told us to focus on, but it is left for us to tell ourselves the truth about our situations, because the roof is on fire. Our dalliance with decades of economic depression is what turned us into a proper terrorist state. Before it was Niger Delta protesting poverty, disease, lack of infrastructure and unemployment in their region. Now it is Boko Haram casuing mayhem… and Niger Delta still! I say, we are living with symptoms of a Great Depression. No questions about it!
Now for the American antidote. We need to look at this so that we can tell if we can EVER get out of the morass with the way we are doing things and the mindsets we have. Many things were tried by the Americans to get out of the Great Depression. First they abolished alcohol. Yes, the same USA that is preaching freedom for all today, abolished alcohol! It brings to mind that once South Sudan was given their ‘independence’ from the North, a celebrated article and feature on many major news agencies, focused on their ‘BOOMING’ beer industry! Welldone Brother Barack!
The Americans also tried a coup! A military coup d’etat! In 1934, Major General Smedley Butler of the US Army went to Congress and confessed that some businessmen – notably JP Morgan II (again), Prescott Bush (grand-dad), the chairmen of Goodyear Tyres, Standard Oil and so on, came to tempt him into planning a coup to remove President FD Roosevelt and installing a Fascist government. The coup attempt became known as ‘The Business Plot’, and was later replicated ALL OVER AFRICA. General Butler was offered $10million, 500,000 troops and the support of the mainstream press, by these businessmen. See this; http://en.wikipedia.org/wiki/Smedley_Butler. The Americans tried Keynesianism, spending government money to employ people for the heck of it. All of these approaches did not work.
What did the trick was President Roosevelt’s banning of every American from purchasing any new car between April 1942 and December 1944. He actually commandeered the car manufacturers in Detroit, to retool and work with fighter-jet manufacturers so that the USA can produce 100,000 fighter jets in a year to supply European countries who were then at war. So it took total sacrifice by all Americans, dictatorship from Roosevelt, and of course a World War, for the USA to dig itself out of its own Depression. Will Nigeria ever get this convergence of opportunities. Or at least the WILL to make such sacrifices?