Ngozi Okonjo-Iweala has foresworn her economics

In the wake of this sad news, our know-it-all minister of finance has stepped in to explain to Nigerians why that is: We have too many people, she said.“Indian is a middle-income country, one of the largest economies in the world like Nigeria, is a big economy, but the largest number of poor people in […]

In the wake of this sad news, our know-it-all minister of finance has stepped in to explain to Nigerians why that is: We have too many people, she said.
“Indian is a middle-income country, one of the largest economies in the world like Nigeria, is a big economy, but the largest number of poor people in the world reside in Indian, China and other places.”  Leadership newspaper reported her as saying.
And in her desperation to put Nigeria in “good company”, she lied.
“Most middle-income countries, including Brazil have large number of poor people that is the reality of today and Nigeria is no exception.  And when the World Bank president was talking he also talked about those countries. He mentioned that India is doing well and it has a large number of poor people,’’ she said.
Actually, that’s not what WB president said i.e. he didn’t include Brazil in the same class with Nigeria.  He said 2/3 of the world’s poorest are in 5 countries, Nigeria being one of them; and 80% are in 10 countries; there’s no Brazil on the list.
Kim said “the fact is that two-thirds of the world’s extreme poor are concentrated in just five countries: India, China, Nigeria, Bangladesh and the Democratic Republic of Congo.
“If you add another five countries, Indonesia, Pakistan, Tanzania, Ethiopia and Kenya, the total grows to 80 per cent of the extreme poor,” he said.
If large population is our excuse, Brazil has more people than Nigeria.  Why is it not on the top 5 or top 10 poorest countries lists?
Whenever we are in unfavourable categories such as this, we blame our large population.  But when we’re in positive groups such as one of the growing economies such as MINT, we don’t  credit our population (which we should do, if we’re honest), rather, the top government functionaries do some back slapping and attribute it to their efforts.  NO!
There are two main reasons why we had 6.6% (some people say 6.8%) economic growth last year.  One reason is because we’re a developing economy.  Historically, developing economies have higher growth rate than the developed ones.  Last year, the United States’ economic growth was 2.4% in the last quarter.  In the UK, it was 1.7% and in the third largest economy in the world, Japan, it’s 2.6%.  Compare that with tiny Djibouti, whose growth rate was 6% last year – not very far from Nigeria.  This is chiefly because Djibouti is a developing economy and they’re currently building a new large port.
The second reason is our population.  Nigeria is a huge market.  This market stems from our population.  A larger workforce increases how much a country can produce – and consume.  It’s the reason why ECOWAS countries are eager to have Nigeria as a trading partner – Nigeria can consume its own goods, others can’t.
However, if we’re to have real growth, we must improve on productivity.  Because although population contributes to growth, it’s only up to a point without productivity.  In Nigeria, our productivity is shit!  We have lots of bodies, but they’re useless bodies.  Greg Ip of The Economist explains this quite lucidly:  “A country is not rich, though, just because it has a lot of people—just look at Nigeria, which has 32 times as many people as Ireland but an economy of roughly equal size.
“The reason for this population/economic size disparity is that the average Nigerian is much less productive than the average Irishman. For a country to be rich—that is, for its average citizen to enjoy a high standard of living—it must depend on productivity, which is the ability to make more, better stuff out of the capital, labor, and land it already has.”
To improve our productivity and become rich, we need two things: capital (investment) and ideas.  Therefore, these three variables (population, capital and ideas) are needed for real economic growth.  Actually they’re two.  That is, growth rests on population and productivity.  But you can’t have productivity without capital and ideas.
Further, you can have capital but without viable ideas, you wouldn’t go far.  This is the reason why economic power shifted from Japan to United States in the 90s.  Japan had exhausted its ideas.  However, America created new ones, using the Internet as its launch pad.
Ngozi Okonjo Iweala seemed to have forgotten these basic economic principles.  She would have done better elsewhere as she actually did in a more intelligent OBJ’s government.  But serving in GEJ’s government seems to have dulled her sharp mind.  It’s the reason she would call a budget in which they plan to spend more than 70% of the total on recurrent expenditure, as the budget of job creation.  Job creation with less than 30% capital expenditure?
Right now, the lady strikes one as a student taking O’Level course in Economics.