Like many developing countries, Nigeria faces several challenges at multiple levels in its attempt to address the poverty that plagues its society. There is no simple solution. Alleviating poverty will involve all Nigerians and most Nigerian social, political, and religious institutions.
These remarks paint with a broad brush, but are intended to begin a conversation about some of challenges of overcoming poverty and bringing Nigeria to the point where it can develop a vibrant economy, a middle class, a vast democracy and freedom for its 130 million citizens. As an American, I can only hint at both the problems and solutions. The specifics must come from the leaders of the Nigerian religious, business, academic, and political realms.
There are two major myths we must dispel. The first is that developing countries lack resources. Of all countries on earth, Nigeria is actually one of the most resource rich. In addition to vast amounts of oil, the nation has significant reserves of minerals -- worth billions on the world market. Much the land is capable of producing more than enough food to not only feed all Nigerians but also provide significant exports to the world. Resources are not the problem.
The second major myth pertains to Nigerian people. As Christians, we proclaim that all human beings are endowed by their Creator with His own image. This implies both status and abilities. All groups of human beings, no matter their location or nation-state, are deserving of dignity and respect. All groups of human beings have reason. We can plan, think, address our needs, and respond to our circumstances.
We can take the resources found in the earth and put them to use for the mutual benefit of our fellow human beings. Nigerians are no different than any other people on this planet. They are bright, articulate, care about their families, and are entrepreneurial. If the problem is not a lack of resources, neither is it a lack of human capital or the presence of some deficiency in Nigerians themselves.
Feeding the monster?
Among the many challenges you face, the most acute may be those we can call personal. Given the pervasiveness of corruption, individual Nigerians must daily make choices as to whether or not they will participate. Attempting to open a business, get a permit, apply for a travel visa or even travel by car from city to city will likely bring you fact to face with someone who wants a bribe. How should these situations be handled? This is no easy decision. Those who refuse will be at a significant economic and personal disadvantage. Those who participate might gain a temporary advantage but in doing so are feeding a monster that will only hurt them in the future.
The challenges, of course, also rise up at the national level. Given the plethora of natural resources, simply increasing international aid will not bring about the changes needed to grow Nigeria’s economic base. Charity, while alleviating some of the symptoms of poverty, will not end poverty. Economic growth is the only viable way to build a middle class, expand freedom, and enable Nigerians to provide for their own health care, education, and mediating institutions.
What is needed? Most of all, the rule of law, specifically property rights. If property cannot be owned, sold, borrowed against, and protected in a court of law, Nigeria will remain in poverty. But rule of law, by itself, is not enough. You also need access to capital. For economic growth to occur, people in business must be able to assume the risk of borrowing for a reasonable amount of time and rate of interest. At present, a long term loan is defined as one which is extended over 12 months. The rate of interest hovers around 25-30 percent. This combination is lethal to business growth.
No matter what amount of aid is received by the Nigerian government from the outside world or how deep are its natural resources, Nigeria will remain in poverty if it cannot solve this credit problem. Of course, the high interest rate and the lack of rule of law must be addressed together. Lately, we’ve seen an example of how this problem can undermine the nation’s economic structure. Kenya has recently completed a law reform study that revealed more than 20,000 parcels of land involving bank loses of more than $4.5 billion.
The presence of pervasive corruption, the lack of rule of law, and soft or nonexistent property rights are barriers to Nigerian people of business. They are also significant barriers to non-Nigerians interested in investing in this nation. Witness the recent pullout of Vodafone from the country and the discussions currently taking place at Shell about withdrawing from Nigeria in 2007. If these two global corporations withdraw their investments, how many less experienced or smaller companies will never even consider investing in Nigeria because of current conditions?
Open and Transparent
On the international front, there are many issues at play. Among the most important is the influence of international funding agencies on the economy of Nigeria. While the privatization of government-owned means of production is desirable, both the process and the speed of privatization will greatly influence the success of the program.
If privatization is not done with transparency, the corruption will be merely transferred from politicians who control public works to politicians who control private industry.
Nigerians would do well to publicly insist that as the negotiations involved in privatization are conducted, their government be completely open about who is bidding and their sources of funding. The temptation of politicians to sell to their friends and, simultaneously provide funding has overturned the good intentions of those who promote privatization as the best means of growing an economy. Zambia’s privatization and its results should be carefully considered.
You are all very familiar with the agricultural subsidies issue. Given the billions of dollars provided to farmers in both the United States and the European Union, it is not likely that developing world farmers will be able to compete on a level playing field with their U.S. and E.U. counterparts. This issue needs to be addressed from an economic and an ethical perspective by those who live in developing countries. Perhaps the establishment of the G20 nations at the WTO meeting in Cancun in 2003 is a beginning that will eventually lead to the reduction of subsidies that are economically devastating to developing world nations.
The challenges you face are significant. But working for the cause of economical viability is even more significant, given the inherent dignity of each Nigerian. The battle will not be lost because the cause is wrong. The more likely possibility is that the battle along personal, national, and international fronts for the economic viability of Nigeria will never occur.
The consequences are too important to merely be left in the hands of political leaders. As religious leaders and Christian business people, the responsibility falls squarely on your shoulders to address the corruption, poverty, dependency, and bad policy that have brought about instability and destruction in Nigeria. May God bless you in this struggle.
Rev. Gerald Zandstra, is a fellow of Institute of Public Policy Analysis who recently visited Nigeria and is the Director of Acton’s Center for Entrepreneurial Stewardship, Grand Rapids, Michigan USA.