Abstract
There is a renewed interest in the idea of the developmental state in Africa. This is partly a reaction to the failure of the pro-market reforms under the Washington Consensus to deliver socio-economic progress. Nonetheless, the Nigerian There is a renewed interest in the idea of the developmental state in Africa. This is partly a reaction to the failure of the pro-market reforms under the Washington Consensus to deliver socio-economic progress. Nonetheless, the Nigerian economy, after fifty years of political independence and economic governance and management, has suffered from fundamental structural defects and has remained in persistent stagnation. Many features in Nigeria’s economy combined with other non-economic factors have produced a weak private sector that is largely oriented towards distributive activities. The productive and technological base is weak, outdated, narrow, inflexible and externally dependent. Furthermore, infrastructure is poor, inadequate and lacks maintenance. Thus, the effectiveness of incentives has been generally low, giving rise to inadequate utilization of the factors of production. The paper blames the country’s overdependence on single product export-crude oil-without profound efforts to diversify the economy as a key weakness. Questions that the paper tries to address are; is Nigeria at present, making enough efforts to move towards the identified features of a developmental state? Does it require a sound re-thinking into the development agenda with regards to the various key issues relevant to developing countries? How can we break out of this vicious cycle? Correcting this scenario forms the crux of this paper. The paper suggests different solution scenarios to many of the problems on the platform of the developmental state paradigm. As such, the country should develop a class of entrepreneurs that possess the tacit knowledge required for rapid industrialization and development of the manufacturing sector. This proactive stance with capable institutions would move Nigerian economy to the desired direction.
Highlights
The financialisation of the Nigerian economy resulted in distorted concentration of investment on short term liquid assets to the detriment of investment in the real economy, is a major challenge to the country
African countries including Nigeria have passed through series of policy regimes - import substitution strategy, export-oriented policies, structural adjustment programmes, privatization and commercialization, and most recently, liberalization policy among others
This paper is, intended to among other things provide an answer to a fundamental question: does Nigeria have the features of a developmental state? What are the options?
Summary
The financialisation of the Nigerian economy resulted in distorted concentration of investment on short term liquid assets to the detriment of investment in the real economy, is a major challenge to the country. The country does not have a class of entrepreneurs that possess the tacit knowledge required for rapid industrialization. In this regard, the current inflation targeting framework is not enough and further unguided liberalization could stifle the efforts to develop the real economy (Note 1). African countries including Nigeria have passed through series of policy regimes - import substitution strategy, export-oriented policies, structural adjustment programmes, privatization and commercialization, and most recently, liberalization policy among others. These policies have not augured so well. This paper is, intended to among other things provide an answer to a fundamental question: does Nigeria have the features of a developmental state? What are the options?
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