Made in Nigeria: Four Lesson From China @9jaclicktivist

Nigeria can improve its performance in its new found love in Made in Nigeria products through transformational change in its educational system, channelising small savings, and a  incentive getting  labour forces to transfer to emerging production sectors

 Nigeria and China are  populous countries, Nigeria is the most populous here in Africa. Nigeria and China had very high initial poverty levels. But today, if we look at the development indicators of these two nations, we find a lot of difference between them. The development initiatives of China could be more relevant for Nigeria rather than policies undertaken by developed European and North American countries, as China is a latest success example of a large, over-populated, largely illiterate and economically backward  country, which achieved success in a very well-planned manner within a very short period of time. We must not forget that the European and North American countries achieved the same feat of development over a longer period, spanning centuries, involving colonisation and exploitation of other parts of the world. Their growth model cannot be emulated by us.

The Comparative performance

China has shown better performance in almost all development indicators during the last 40 years. Chinese economy is growing at a rate that completely Dwarfs Nigeria's GDP.

The World Bank $2 per day criterion of head count ratio indicates the poverty level to have been 97.8 per cent in 1981 in China and it has gone down to the level of 36.3 per cent in 2005.  The same poverty head count ratio in Nigeria have been growing since then, much lower than China, and it has gone down to a level of mere 65.6 per cent of the population in 2005. The minimum $1 dollar PPP criterion shows that the population under severe poverty in 2013 was approximately 6 per cent in China, while the same figure for Nigeria was approximately 48 per cent. During this period, Nigerian planners were busy in manipulating definition of poverty in order to reduce poverty statistics, while the Chinese were really focusing on employment and poverty reduction.

Political will

China’s economic progress can be attributed mainly to its political system as well as planned and foresighted economic policies. The political system in China is characterised by quick decision making. China’s ability to implement dictatorial decisions on certain issues, which can never have a democratic consensus, has been instrumental in forcing its people to work in the direction according to the need of the State rather than respecting the vox populi. Militarily China doesn’t have any threat from its neighbours and has political will to handle terrorism. 

Nigeria, precisely because it is a democracy, and giant of Africa, fails in all these aspects. Due to its policy making system, which has its own virtues, Nigeria cannot take decisions as quick as the Chinese government can; Nigeria cannot provide and sensitize its labour to work in a particular sector the way China can; in a similar way terrorism cannot be handled in a swift manner due to appeasement and votebank policies and even the strict population control policies cannot be initiated. Democracy comes with a price tag, and we must be ready to pay that price without complaining. We do not need to learn from China’s brutally dictatorial ways. But, that does not mean that we can learn nothing from China. One core area is vocational training, where China can be our teacher, and this can be our first lesson from China.

Vocational training

China is reaping the benefits of vocational training in school that was introduced in the late 1980s. China provides vocational training after years of schooling and approximately 50 per cent of the eligible students are enrolled in such courses. Nigeria without doubt have special school for this, we have alot of technical schools and graduate but they are not able to perform because they laccapital to start the carrier

Out of remaining 99.9 per cent of students, less than 20 per cent study science, without any practical skill development and rest study Socail Science and commerce courses without any vocational training. The separation of vocational training from the general schools has resulted in making Technical schools/ institutions inferior, less sought after, and completely out of mainstream education, and ultimately out of sync with the aspirations of emerging job markets. Lack of respect for such institutions in the society further aggravated the overall condition of these institutions.

Labour force 

Labour power in the warranted and crucial sector and areas of strategic importance is another advantage that the Chinese system possesses. Again, this very possible to achieve in Nigeria. Nigeria can actuallyshift its labour forces to agriculture , industry or compel the workforce to attend certain training programmes,a means to provide Job and enhance Productivity, production must be an integral part of Nigeria . Government provide incentives in order to facilitate such labour production. This is the second lesson that we should learn from China.

Control over economic variables

China has strong control over its price mechanism. It has allowed the prices to increase faster/slower in the strategic sectors according to the need of the country. At the same time there are indicators of price indices which are good not to increase much, and China had been successful in controlling them. For instance, the price of consumption, price of Government expenditure, price of investment and price of imports should not increase at a very high rate as they adversely affect the consumption capacity of the poor, increase the cost of Government expenditure meant for developmental activities, slow down economic activities and growth contribution by private players and discourage import of technology, increase burden of foreign debt respectively.

In China, the price of consumption, price of Government expenditure, price of investment and price of imports increase is very low. The price indices have grown faster in Nigeria for all those sectors where they were not beneficial for the country and the price indices have grown slower in the sectors which precisely were supposed to have grown faster for the benefit of the country. This is the third lesson that we should imbibe from China.

High saving rate

China had been successful in raising its saving rate and utilising it for capital formation. Even the corporate and government saving rates have been very high in China. Nigeria can also increase its saving as well as capital formation rate through channelising small savings of the rural poor people. This will not only give security to the poor but also generate fund for the capital formation. This should be, we suggest, our fourth lesson from China.

The least that Nigeria can do: Focusing on the four lessons

Though Nigeria cannot have the strong political will or dictatorial decision making of China due to its democratic political system, it can improve its performance through some transformational change in its educational system, channelising small savings, incentivising labour forces to transfer from the existing sector to importantly emerging sectors, and by having larger control over the prices for the benefit of the country.

The structure of Nigeria's economy is such that the biggest setback for the Nigeria’s economic growth comes from the fact that for most kinds of manufacturing work, workers do occur here, we import a lot at high rate. Government too have not really helped Matter as Loan have not been release to small scale Business people, for instance, our masons, barbers, electricians, cleaners, sweepers, health workers, auto mechanics, etc.  

Nigeria could at least introduce an advance Vocational subject/ training This will help a lot of students and the economy would achieve a maximum productive fit. 

An increase in the savings rate is essential to finance the domestic projects. Further, domestic savings provide stability to the economy. This can be done through channelising small savings of the rural poor and of the urban poor, which otherwise are not kept in the banking system. Government have tried to make some efforts to channelise small savings via ADBanks. But the scheme should reach the remotest villages and all sections of society.

Foreign investment of savings could also play an important role in generating employment in the economy by boosting growth. Buhari Government is digging pitch for “Made in Nigeria”, but this can be possible only when we remove bureaucratic/Oligarchy hurdles from the economy. Most economic decisions are taken by the Political class, oil magnets and Finance Minister in Nigeria, instead of experts or officers of Ministry of Trade and Production. Foreign and domestic investors are more afraid of Nigeria's bureaucracy and police rather than being afraid of Nigeria’s outlaws.  This would be a big challenge for the Government to tackle the deep-rooted inertia of bureaucracy.

One even bigger challenge would be to transfer the labour force from existing sectors to the desired sectors for efficient utilisation of our labour power. This can be done by incentivising the labour force to shift. The incentives could be in the form of free training, better living conditions and job security.

Nigeria'’s economy will get a tremendous boost if we can learn these four lessons from China.

Micheal Adebola Adeniyi

@9jaclicktivist