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Nigeria: Embrace modern economics and innovation

By Patrick Dele Cole
11 December 2019   |   3:12 am
By Every time that I open a newspaper, or browse the internet and engage with the debate that constantly rages about the state of our economy

By Every time that I open a newspaper, or browse the internet and engage with the debate that constantly rages about the state of our economy, it is increasingly evident to me why our economy is stagnating and our people are becoming poorer. I often feel like I am in a time warp. I’ve witnessed decades of Nigerian economic policy and the solutions that many advocates today are those that were being called for in the 1970s.

Infrastructure investment. Protectionist policy and import ban to support domestic manufacturing. Currency controls and restrictions. All of these have been constant and yet the challenges that they are focused on overcoming continue to frustrate us. We continue to have an embarrassing and shamefully inadequate power sector. Our roads continue to hinder the movement of goods. Our airlines remain inefficient and based on recent allegations, it would seem might be primarily designed for money laundering, as opposed to service delivery. Our ports remain congested. Our railways are limited. Our domestic food production continues to fall well below domestic consumption and to be hugely constricted by the wider power and transportation challenges. Our fuel supply remains our biggest foreign currency drain and means we are reliant on foreign suppliers. Our oil industry continues to dominate our foreign currency earnings, and so has the ability to hold our country hostage.

Failing to solve these problems over nearly half a century, means that our people have become progressively poorer. Our population has increased exponentially and will continue to do so, but our resources to support them, and our ability to deliver services to them have not. This is the inevitable result of solutions that are not designed to address the fact that economies are dynamic and more often than not, innovation outstrips policy.

If I look back 30 years, I remember the days when Nigeria was the number 3 producer of rubber, the number 3 or 4 producer of textiles, one of the largest producers of palm oil. We produced tin, columbite, magnesium, cotton, sorghum, sugar cane and cocoa (number 3 in the world). These were what made Nigeria strong and viable. Not oil. It was oil that diverted energy from these things. These are essential minerals that the world still uses, in fact, they are in high demand. We ought to have been able to find a balance. We should not be where we are today.

Unfortunately, to continue the rather pessimistic tone that I have adopted to introduce this article, we have also failed in another, a more administrative task which makes our ability to achieve an economic revolution considerably more difficult. We simply do not know how many Nigerians there are, where they are, who they are and what they do. Our last census continued the political tradition of prioritising political interests of hard data. I don’t trust it for a second. Due to update it years ago, we have continued to procrastinate and allow those political considerations to continue. When our ability to achieve power is fundamentally dependent on demographics that process is inevitably vulnerable to manipulation.

For the same reasons and some commercial influence, we have also managed to create a completely decentralised system of sector or service-specific databases that do not talk to each other and so offer no opportunity to provide wider value. BVN, telecoms registration, passports, national identity numbers, voting cards and numbers, tax registration numbers. I lose track of the different ways in which agencies seek to capture my data. In its entirety, we probably do have much of what we need. But can we integrate? Is there the will, or the ability? Or do too many benefits from the confusion it creates?

Continuing the same theme. Our government data and interactions remain largely paper-based and our records are physical, often suffering decay, destruction or are simply mislaid. Perhaps this partially explains our ability to make the same mistakes over a 50 year period. Our institutional memory is simply inadequate. Lessons are not learned. If we were producing all that rubber, palm oil, textiles, and cocoa, then we must have a huge wealth of information somewhere. We must know where the soil quality information is. The seed types that are best. The quality of the minerals that we have.
But do we have the records? Or have they been lost forever?

What I don’t think any of our policymakers anticipated, is the hugely detrimental effect that this lack of centralised, well structured and so usable data and records have on our ability to compete effectively as the world enters the 4th industrial revolution. To counter this clear failing, I have recently been hearing the suggestion that because the rest of the world is moving towards digitisation, and data-driven digital economies, Africa has an opportunity to finally become relevant from a manufacturing perspective. The suggestion seems to be that despite 50 years of failure to achieve proper industrialisation, Nigeria and the wider continent will now achieve it because the rest of the world is moving on but still needs goods. This type of thinking is indicative of a mindset that follows but does not know how to lead.

Modern innovation in service delivery, underpinned by data and digital infrastructure (the one areas where we have largely succeeded) have the potential to be the catalyst that drags us out of our economic malaise and power a new social renaissance. It can help us deliver services to the poorest, allowing people to drag themselves out of poverty, rather than being forced into it, while acting as a platform for wider growth, better decision making, and greater equality. It can also dramatically enhance accountability in our political leaders. Imagine if the scorecards that are used to judge our ministers were backed by credible data and we could see how things are evolving? Deception would be so much harder.

To leverage this, we need leadership that recognises the traditional obstacles to data collection, use, and storage in Nigeria must be overcome. We must have one centralised and well-managed ID system, that integrates across sectors. If we do that and create a proper enabling environment for innovation over the top of it, then our natural entrepreneurial mindset, our tenacity, and our potential will finally be directed towards a solution, rather than being used to staunch the bleeding of a fatal wound.

Nigeria continues to have the potential to be great, but we are in an economic emergency. We have been so since But I do believe there is a solution. The question is whether we have the will to grab hold of it and do what is necessary.