Last week, we observed that, like the proverbial tortoise, the Nigerian economy has been growing at a painfully slow pace. Today, we conclude our tortuous saga of the tortoise.
Economic growth has nothing to do with the so-called “mystery of capital”.
Achieving accelerated growth requires what Harvard economist, Dani Rodrik, terms “first order principles” — protection of property rights, contract enforcement, a fair, predictable and transparent judicial process, national competitiveness, appropriate incentives, sound money, debt sustainability and effective public institutions. Igniting growth is not the same as sustaining it.
The current APC-led administration claimed to have inherited a virtually empty treasury in May 2015, at a time when global oil prices had collapsed. But the recession was not entirely inevitable. The administration wasted considerable time in getting itself off the ground. These delays generated uncertainties. The economy was plunged into recession between 2015 and 2017. During 2016, overall economic output regressed by a factor of -1.8%, the worst since the height of our tragic civil war.
Much of the current crisis is only partly the fault of a grossly incompetent administration. It derives from decades of poor policy choices, irresponsible leadership traditions and an unsustainable political economy anchored on collecting petro-dollar rents from treacherous multinational oil companies. Added to it is the grim reality of grand corruption. According to the London-based Chatham House, the national treasury was losing US$1bn monthly from oil theft during the Goodluck Jonathan years.
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Source: Daily Trust - 🏆 13. / 51 Read more »