The Struggles of Nigeria's Economic Policies

Take your pick of topics. Subsidies? When a government tries to help people facing rising prices, it often ends up hurting its budget. This is just the first layer of the problem. Usually, when governments step in, they create winners and losers, which leads to more issues. In the discussion about subsidies, the unavoidable problem is how they distort the economy's ability to allocate resources effectively.

What about taxes? Governments get excited about the extra money that higher taxes can bring. But this increase in public spending usually has its downsides. When taxes go up, consumer spending goes down and business investments drop. Except in emergencies, when more government spending can help struggling economies, increasing spending at the cost of businesses and consumers is rarely the best option. It often leads to higher prices at home.

And minimum wages? At this point, we can stop pretending. From the current government to the opposition, Nigeria’s leaders struggle to grasp basic economics. And “no be today”! General Yakubu Gowon (Rtd.) explained that price increases during his time were not just because of wage increases but also due to foreign companies raising their prices.

Did consumers having more money after the Gowon wage increase mean too much cash was chasing too few goods? Yes. Since the Gowon era, Nigerian governments have had a money problem. Sadly, they have spent it just like his government did. Despite tight budgets, our leaders have spent money printed straight from the central bank without care.

If it is no secret that Nigerian politicians don’t understand economics, we should not be surprised by their outcomes. The better question is “Why is that?” A lot of the thinking about economics and the ideas coming from it stem from our social and cultural backgrounds. Before fancy economic theories, there were views on wealth and how it should be shared. Much of Marxism came from people’s anger at the stark contrast between poverty and wealth in the same areas. While the Right claims that the Left’s support for the people weakens economies, history shows us that even the Right has borrowed ideas from the Left to ease social issues.

Is there a middle ground? John Maynard Keynes made strong points about when governments should step into the economy, sometimes going against market trends for the greater good. This journey through economic history shows how the paths we have not taken are significant. The lack of serious thinking on these issues in Nigeria is a clear weakness in our approach to development.

Thinking does not seem to be a skill many Nigerian politicians have. You don’t need much brainpower if your main job is to enrich yourself. When put this way, it can seem like a stretch to say that politicians cannot think. But there are plenty of examples to back this up. Nigerian politicians, mostly male, are among the most conservative in the world. What do they conserve? Cultural and traditional practices that limit our choices today. That is still an overly simplistic view. As shown elsewhere, culture and traditions can have both beautiful and practical aspects.

As a reminder of who we are and our history, many beautiful parts of our culture should be in museums and tourist spots. What about the practical parts? Ideally, these should provide the tools needed to make significant changes, as Archimedes said.

At this point, one wonders how our leaders have become such sad copies of the American slaveholders who refused to give black people what makes us human, self-awareness. You could argue, as Frederick Douglass did, that black people “learn from the past, improve upon the past, look back upon the past, and pass down their knowledge to future generations.” But no group can tell the difference between the beautiful and useful parts of their heritage if their leaders lack the ability to think.

Unless, of course, our aim is not to “move the world.”