I have posited that Africa cannot effectively copy China’s industrialization policy for many reasons. You can read that piece in Harvard here. Many things happen in China and one of those things is how China subsidizes production elements for its companies.
If you live in New York, you can buy an iPhone cover for $4 from Chinese firms and their secondary affiliates. That $4 includes shipping and handling. How can someone make an iPhone cover in China and ship it to you in New York for $4 and still remain in business?
Yes, China has subsidized logistics, and it is the world’s best in doing that.
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It is on this thesis that I note that Nigeria has to pick one element in our production system to subsidize. Energy is always a suspect. Note: India is big on energy subsidy; according to the Brookings Institution, “The Government of Delhi’s household electricity subsidy is amongst the most generous in India.” which means that India subsidizes energy.
In this piece, I explain why Nigeria must bring fuel subsidy back, with the corruption removed, if we want to re-ignite our economy.
Why I like Strategic Subsidies And Why Nigeria Must Reform and Return Them
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