Question: I enjoyed your lectures at Tekedia Institute. But Sir, could you explain why Nigeria keeps borrowing money? Is this ever going to stop in this decade?
My Response: I will respond as a teacher; you can of course reach out to your senator for a political response. I understand there is a new $2 billion oil-backed loan that the nation will be picking. Please read the lecture notes on how I have classified the invention society, innovation society and accelerated society eras.
Let me add one more thing, drawing from my junior secondary school lecture in agricultural science on Rev Malthus postulation. Malthus noted that resources (say food production) were growing in arithmetic progression and the population was on a geometric progression (more rapid and faster in multiples). He came up with an inflection point – called the Malthusian catastrophe – and that happens when the population has overtaken the resources required to support the people.
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Typically, every great nation unlocks innovation to “create” more resources so that you will keep having more resources to support the growing population. At the basic state, all nations begin in the invention society era. The plot below shows how the US and China expanded the resources (here GDP) to support the rising populations. In other words, they shifted the equilibrium and avoided the Malthusian catastrophe via the parabolic growth which reversed centuries of economic stagnation.
For Nigeria, our unlocked resources via GDP, aggregate of all economic activities, have shrunk over the last few years due to many factors, including energy price, currency loss, etc. As that was happening, the population continued to grow, creating a double whammy where more people have to share lesser resources, seeding an imbalance where policies have moved from tactical to operational (Nigeria abandoned strategic policymaking many years ago), as every week is a crisis!
In my thesis as noted in the lecture material, Nigeria is still at the invention society era. So, to overcome this paralysis, it needs to move to the innovation society era. In the lecture note, we explained the pillars and enablers for innovation. Unfortunately, for Nigeria, that transition has not happened.
Consequently, it has to borrow hoping to “create” more resources to support the population. This is typical in most African economies as they remain stuck in the invention era and are unable to expand opportunities by moving into the innovation era. Loan provides that operational support and that is why Nigeria will keep taking loans.
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The easy part is for all Nigerians to agree that Nigeria has a problem, the hard part? To agree on how to solve it and who should lead the process. It is in the latter you will learn how emotionally unstable and illogical Nigerians are. It is not by yammering all the time, the character strength required to do the right thing isn’t just there. The political managers will keep borrowing, because that is the only thing they are capable of, every other option is beyond them.
Nothing has a single universal meaning in Nigeria, not even corruption, same applies to honesty, integrity and competence, the meanings are dependent on who’s in power and the tribe you ask. The true Nigerians are too insignificant to influence anything, the ones with huge influence represent other interests.
If you put yourself forward that you want to fix Nigeria for free, without asking for anything in return, you will still be rejected. There are special interests that outweigh good intentions, that is how to make sense of the sorry state of Nigeria. Those who cannot do anything will be supported, while those who can do something significant will be derided and rejected. The road is still very far, no solution will work, for now.