Quite frankly, it is worth asking: Why
are prices of products in Nigeria always increasing (inflation)? Why are there
no jobs to do (unemployment) or no jobs that commensurate with one’s qualification
(underemployment)? Why do we always experience job loss to company liquidation,
macroeconomic instability? Why are businesses always crashing? The overall
feeling is that, to earn a decent living, live a decent life, in Nigeria, just
as other poor countries, is an “opportunity” of few. Nigerians living below the
poverty threshold of $1 per day are more than 70%. Why Nigeria economy is in a
sorry state, why are we poor, and what can be done about it? These are
questions investigated by one of the leading developmental economists; Paul
Collier.
Paul Collier’s “The Bottom Billion”, published in 2007 by Oxford University Press,
has become a seminal book for students of public policy and developmental
studies; a resource book for African economists and policy makers; and a
good-to-have literature for any curious mind interested in a deep perspective
and diagnostic discourse on why some countries are poor, and the remedies for the
ravaging and monstrous symptoms of poverty. This essay attempts to present a
review of the book, and use it to diagnose Nigeria economy –the proverbial
stone that kills two birds.
“The
Bottom Billion” is a
5-part book, with eleven (11) chapters in totality. Part one, with a chapter
content, gives an overview of what is “falling behind and falling apart” for
the poor countries –mostly Africa and Central Asia. “This book is about four traps that have
received less attention: the conflict
trap, the natural resource trap, the trap of being landlocked, and the trap of
bad governance…,” Collier writes. Each of these traps, as constructed as
the poverty traps, is discussed in part two of the book, on a
chapter-by-chapter basis. The part three, with one chapter, inquires what
globalization can do for the countries of the bottom billion. Collier opines
that the poor countries are marginalized from the growing world economy. Part
four presents –with a chapter each –the four poverty-ameliorating instruments:
Aid, Military intervention, Laws and Charters, and Trade policy for reversing
marginalization. The fifth part, as the concluding part, presents an action
plan for action. It is a thorough book, a final product of 8-year research;
with not-less-than 22 peer-reviewed journal publications. It undoubtedly
extensively pushed the boundaries of knowledge, with clear-cut empirical data,
and statistically-fortified findings.
On conflict as one of the causes of
economic retrogression and impediments to growth, “seventy-three percent of people in the societies of the bottom billion
have recently been through a civil war, or are still in one,” Collier
posits. What causes civil war ranges from social, political, geographic,
economic factors, and every country that has undergone one has the high
tendency of re-experiencing same. In Nigeria, this story is familiar. Nigeria
went through civil war in 1967 – 70, and the wound is not healed until this
moment. This is the sentiment being currently exploited by the Independent
People of Biafra (IPOB) movement, and because we have experienced it before, and
for other reasons, we can still experience it, if ethnic agitations are not
well managed –politically and socioeconomically. Apart from this full-blown
civil war, Nigeria has been witnessing devastating interethnic conflicts:
Ijaw-Itshekiri, Berom-Fulani settlers of Plateau state, Ife-Modakeke, Nupe-Yoruba,
and the Eggon-Fulani of Nassarawa state. The human and material cost of the currently-battled
Boko Haram insurgency cannot be overemphasized. People have lost jobs, economy
has been grounded, and property has been shattered. The cost of prosecuting war
against the Islamist militancy, of feeding displaced persons, of providing health
care services for victims, and necessary state intervention for reconstruction
of physical structures –schools, hospitals, police stations, markets, houses –incurred
(and being incurred) would stimulate economic growth, if it is so directed.
Conflict is one of the factors impending Nigeria economic growth.
Natural resource trap, resource curse,
is also a factor affecting economic retrogression of “The Bottom Billion”, according
to Paul Collier, and Nigeria perfectly fits into this narrative. This is very interesting.
How will abundant natural resources, from gold to bauxite, crude oil to aluminium,
to tin ore, be responsible for stifling economic growth? It is a paradox, but
that is the reality. Considering Nigeria as a case study, our politicians have
no regard to usually-repeated boom-and-burst’s cycles of oil market. Collier
explained that the boom of the 1970s made Nigeria politicians to abandon other
commodities such as peanut and cocoa. The Dutch disease –defined as “the
negative impact on an economy of anything that gives rise to a sharp inflow of
foreign currency, such as the discovery of large oil reserves. The currency
inflows lead to currency appreciation, making the country's other products less
price competitive on the export market” –induces rent-seeking style of governance, encourages lavish
spending, stifles fiscal economy, and kills creative economy. Nigeria has its
fair share. During the oil boom, politicians were embarking in white elephants
projects of no or little economic prospects, equally using such as conduits of
siphoning fund. As we are experiencing presently, only few states are viable,
many cannot pay workers’ salary. Things have gone from bad to worse, to worst,
and there is no hope in sight. There you have it: Natural resource is a poverty
trap, and this is why the recent news of possible exploration of oil from the
Lake Chad basin in the North-Eastern part of Nigeria is not a good one. We
should rather farm and process our produces to finished goods for both internal
consumption and export.
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