Nigeria and politics of building a post-oil economy

Economic Diversification in Nigeria by Zainab Usman is an in-depth analysis of Nigeria’s political economy that presents an apt delineation of the interplay of politics, institutions and policymaking in the process of economic development. Zainab’s is an attempt at instituting a diagnostic exercise to identify(beyond prevailing conventional narratives) major impediments to sustained development.

By repudiating ‘resource course’ and ‘backward neopatrimonilaism’ as the causal roots of Nigeria’s economic underperformance, the book presents a thesis that center challenges to economic diversification in resource-rich countries as the major impediment to economic transformation and development.

The author did a great job at identifying pathways to achieving economic transformation and establishing the role of the state in guiding the process but argued that the efficacy of the state’s guiding interventions remains a function of it’s institutional capacity which in turn depends on its political character.

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Hence, to deconstruct Nigeria’s peculiar political character and its implications to economic transformation, the book deployed carefully designed frameworks for the analyses. Central among these analytical templates is the political settlement framework which defines the influence of distribution of political power on policymaking for development.

Per Zainab’s model, economic transformation especially in resource-rich countries like Nigeria is dependent on a kind of political settlement that distributes power among elite formations in a manner that assures the emergence of a stable political coalition. This is the reason why even while Nigeria has witnessed periods of semi-steady economic growth in her national life, such has never been adequate enough to usher in sustained development.

As an “Intermediate” State, Nigeria’s breed of political settlement is characterized by the formation of unstable political coalitions and cyclical political crises(especially in political transition periods). This has ensured that the country is always in a state of crisis management. And the resulting policy and reform orientation has always assumed a manner that prioritize short-term macroeconomic stabilization over long-term structural economic transformation.

The author however, believes that such a political configuration is not immune to change. She explained that there are certain “critical junctures” that determine whether a prevailing political configuration will change or persist. At these junctures, elites are constrained to take certain policy actions. And the economic outcomes of such policy actions depends on whether the assumed policy direction takes a stabilization or transformational orientation.

Using this framework, the author analyzed two subnationals, Lagos and Kano to demonstrate the complex interplay of politics and policymaking and its influence on economic outcomes. The analyses particularly focused on critical junctures for both states and the resulting policy orientation and outcomes in relation to their contrasting political settlements. Lagos presented itself as a model for economic transformation while Kano a microcosm of Nigeria as it is.

The book concluded with recommendations as to how Nigeria’s political settlement can be balanced by institutionalizing “zoning” as a power sharing agreement; adopting a shared vision for transformation; and addressing market failures while emphasizing the imperative of building a post-oil economy. I find the book very interesting, it presents thought-provoking arguments and indeed updates our mental models on the challenges of economic diversification in Nigeria’s context.

Not that I agree with every postulation. In fact, I fundamentally disagree with the relegation of culture to being an outcome of economic development rather than a determinant. Culture precedes economic activities(not to talk of development) in global historical trends, so I believe it cannot be an outcome of what it fundamentally precedes for as far as existence is concerned.

As I posited some weeks back, I belong to the school of thought that greatly considers culture as a major determinant of economic development alongside geography and climate. However, I believe culture itself is a product of nature, geography, climate and the environment.

I believe that at every point in human history, the culture of any people is determined and constituted by a combination of the powerful and inter-generationally persistent ‘cultural legacies’ the people have inherited over time(mostly developed in response to geographical and climatic determinants) and the cultural aspects developed as a result of the influence of [mostly unpleasant] environmental changes and the need to adapt to them.

Hence, I believe nature, geography, climate, environmental changes determines the cultural compatibility and disposition(positive or negative) of any people towards development. I’ve not seen enough reason to forgo Varoufakis, Gladwell and others on the subject of geographical and cultural determinism as it regards economic development.

Nonetheless, the book is a masterpiece!

Abdulhaleem Ishaq Ringim

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