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06 February 2011 By: Salim
Salihu Muhammed The quest for an economic
independence has been the issue of every government in
Nigeria since independence in 1960; however, a lot has
been said to be done in the past 50 years with only a
handful to show. Before independence and the dawn of
oil in the 70s, the
economic interest
of Nigeria lies on its agricultural prospects.
Nigeria's cash crops found safe havens for Europe's
industry, thereby creating a ready market for any
exportable crop from the Nigerian coast, and thus
boosting industrialization and growth of Europe,
particularly,
Britain. The
first such effective economic interest of Britain in
the Nigerian economy was the establishment of English
enterprises to aid the exportation of cash crops and
minerals that assisted in no small measure in building
a
Great Britain. In the nineteenth century,
Britain was interested primarily in opening markets
for its manufactured goods in
West Africa
and expanding commerce in palm produce, cocoa,
groundnut, cotton and other available cash crops and
mineral resources. Securing the cash crops and ivory trade
required that Britain usurp the power of coastal
chiefs in what became Nigeria. Formal "protection"
and – eventually – colonization of Nigeria resulted
not only from the desire to safeguard Britain's
expanding trade interests in the Nigerian hinterland,
but also from an interest in forestalling formal
claims by other colonial powers, such as France and Germany.
At this time, Nigeria never had synergy to define a
common interest that would safe guard her economy left
alone expand it towards plausible growth. The most
promising interest is the regional strives to gain
recognition with the British colonial masters. Since
the formal British administration in Nigeria in 1861,
when Lagos became a crown
colony, through independence till the
return of democracy in 1999, there seem to be a near
absent of people-friendly economic interest other than
those that favoured Nigeria's political masters and
their cronies. A major feature of Nigeria's
economy in the 1980s, as in the 1970s, was its
dependence on petroleum,
which accounted for 87 percent of export receipts and
77 percent of the federal government's recurrent
revenue. Today, the story seems to be the same, with
most of Nigeria's productive sectors left in shambles;
the agricultural gold mine had simply disappeared.
Although Nigeria is a major producer of oil, it
happens to be a major importer of
petroleum products than any other oil
producing nation with a near nil accountability in its
oil production. Today, the Nigeria's apex economic
interest appears to have more complexity in terms of
oil production; the Central Bank of Nigeria (CBN) and
oil extraction companies giving
different figures on
oil exploration
contrary to
Nigeria Extractive
Industries Transparency Initiative's (NEITI's)
figure. Indeed, GNP per capita per year
decreased 4.8 percent in the 1980s; this had led in
1989 to Nigeria's classification by the World
Bank as a low-income country. Little wonder
that the country was declared poor enough by the
World Bank to be eligible for
concessional aid from the International
Development Association (IDA) in late
1980s. There is no doubt saying falling oil output and
prices contributed to another noteworthy aspect of the
economy in the 1980s – the decline in per capita real
Gross National Product (GNP), which persisted until
oil prices began to rise in 1990. Although Nigeria had
in the last ten years generated about $600 billion
from oil, there seems to be no other economic interest
which could generate such revenue in spite of the fact
that there are calls from the analyst and stakeholders
for the country to diversify from oil. Moving further, many developed
nations, especially US, has more interest in the
country's constitution than any revenue earner. The
constitution plays two vital roles; first, the primary
source of revenues to fund the federal government was
requisitions to the state governments asking them to
send to the federal government state-collected tax
revenues; second, each state had a single vote in the
federal Congress. This plainly translate that the
central government lacked the legal power to enforce
uniform commercial or trade regulations - either at
home or abroad - that might have been conducive to the
development of a common economic trading area. Simply
put, a major interest that assisted the US government
in revenue generation is the making of plausible
legislations where every state is involved in key
economic policies. Even though the significance of
legislations cannot be overlooked, the Nigerian
economy had overlooked the relevance of such
legislations in the quest to boost revenue from
non-oil resources. Under the
US Constitution,
the power to tax, along with the authority to settle
past federal debts, was firmly delegated to the
central (national) government, improving the central
government's financial future as well as improving
capital markets (the markets for funds). The
government main economic interest was, and still is,
the harnessing of its tax revenue to fund its annual
expenditure. As best as tax has shown to be the world
most reliable and stable revenue earner, Nigeria is
yet to implement cogent compliance to laid down
legislations on tax and tax generation. It is
important to note with worthy that one of the most
commonly discussed issues in economics is how tax
rates relate to economic growth. The only possibility
of the Nigerian economic interest in tax is the upward
review of tax rate, which of course could lead to a
serious
tax evasion
by tax payers. No doubt, Nigeria received
accolades from the World Bank on its stable economy
over the last fiscal year, and may be seen to be
floating aright in the first quarter of the year,
there could be an "economic blow" if interest
is not shown to the accelerating inflation trends. One
effect of the bank bailout by the CBN is the current
rise in the rate of inflation; in
Scandinavian banking crises (Sweden, Norway, and
Finland) where such bailouts were made,
there was not government purchase of bad assets. Most
of the recapitalization occurred through various
injections of public capital in the banking system.
Purchase of toxic assets instead - in most cases in
which it was used - made the fiscal cost of the crisis
much higher and expensive (as in
Japan and
Mexico) and
increased the volume of circulated money which in turn
led to a serious inflation problem. The modern evidence confirms that
commercial states in the country received more
economic interest than other states, and this could be
as a result of the exacerbated differences of class,
region, and community in Nigeria. Private investors
had followed the government's economic interest in
establishing commercial interest in like manners; in
telecommunications for instance, Lagos, Port-Harcourt,
Kano and the Federal Capital Territory are seen to
enjoy a higher broad band network communication,
presence of state of the art ICT gadgets and
equipments, standard government services, etc. We had
failed to realize that a fully fledged coverage of
spread of commercial interest across the country would
have boosted economic growth as witnessed in the
"turn-around"
economic miracle
in co-developing nations of the early 1980s like
Malaysia,
India and
Indonesia. One would not hesitate to
understand this trend as a continuation of the
complete British control over Nigeria where the
colonial government assumed complete control of the
local economy and would issue trade licenses only to
established firms, a practice that formalized the
competitive advantage of foreign companies over
indigenous firms. Still remember the globacom
licensing saga? Among advance nations of the
world, Labour activities had helped in no small
measure in checking government excesses. The major
objective of labour bodies revolves on the welfare of
tax payers whose labour and commitment in the form of
taxes are used to run the affair of the nation. With
the success of
labour movement
during the war in reaction to the heavy handed
policies of the colonial government, aspiring Nigerian
entrepreneurs, deprived of new economic opportunities,
and union leaders, politicized by the strike's
eventual success, channelled their sense of grievance
into nationalist agitation. Educated persons, whose
economic opportunities were limited largely to private
business and professional activity, began to demand
more participation in the colonial government. Same
scenario still exist in Nigeria's present day labour
movement seeking to participate in government's
activities, safe for demand in
minimum wage increase for workers. The quest for a true economic
independence lays on the identification of strategic
economic interest by governments to aid it implement
its budgets towards a vision of economic growth and
stability. Every Nigerian budget read during its
presentation is tagged by one alias or the other, but
none is dedicated to a particular target or economic
interest that would guide its full implementation
towards actualising the "vision" of making the
economy one of the top 20 by 2020. Salim Salihu Muhammed -salimmed16@yahoo.com |
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