“Nigeria’s problem is not money, but how money is spent.” – This famous statement was made by General Yakubu Gowon, Nigeria’s military head of state from 1966 to 1975. This statement captures an important truth about Nigeria’s economic trajectory. Abundance without direction is lost. chance.
A March 16, 1975 New York Times article, “Nigeria Struggles to Control Wealth,” argues that Nigeria’s working and professional classes are entitled to a larger share of the country’s burgeoning prosperity. It became clear that he felt that there was. However, federal authorities were ill-prepared for the dissatisfaction caused by these rising expectations and the inflationary pressures plaguing the population. Trade unions were fragmented, with no effective mechanisms in place to mediate negotiations or maintain order.
“As a result, countries that once lagged behind Nigeria in terms of economic growth and per capita income have grown rapidly, leaving countries and their people in the dust.”
The situation was emblematic of a broader problem. In other words, the managers of Nigeria’s economy, neither military leaders nor civil servants, were adequately equipped to handle the extraordinary wealth that flowed from the oil boom of the early 1970s. Even though the country had completed the Second National Development Plan (1970-1974) and was preparing to launch the next five-year plan (1975-1980), the focus remained domestic. , self-interest overshadowed long-term strategy.
The International Bank for Reconstruction and Development (IBRD) optimistically predicted in 1962 that Nigeria’s 1962-1968 development plan would bring Nigeria self-sustaining growth and economic independence.
“The current NDP emphasizes the importance of diversifying away from oil and focusing on areas such as agriculture, the digital economy and manufacturing. But efforts to diversify have been slow and inconsistent. ”
However, this promising trajectory was derailed by poor management and lack of discipline in adhering to the principles of economic planning.
As a result, countries that once lagged behind Nigeria in terms of economic growth and per capita income have grown rapidly, leaving countries and their people in the dust.
Divergence: A tale of two economies
In 1981, Nigeria’s GDP per capita was higher than countries such as India, Morocco, and even China, but only 15 percent lower than that of the Seychelles. Forty-two years on, some of these countries have emerged as industrial hubs while Nigeria has stumbled. China in particular is a striking example of how disciplined planning can transform a nation.
From 1981 to 2023, China’s per capita GDP soared, far exceeding Nigeria’s. It is not just economic growth that has enabled China to lift 800 million people out of extreme poverty by 2022, but also the country’s commitment to national development planning, which began with the First Five-Year Plan (1953-1957). This is thanks to their unwavering efforts. China is currently implementing its 14th Five-Year Plan (2021-2025), and has consistently adhered to its development plan for more than 70 years.
Nigeria’s approach, on the other hand, is fragmented and inconsistent. Despite a number of ambitious plans, including the latest 2021-2025 National Development Plan (NDP), a lack of policy continuity and failure to implement long-term strategies are hampering the country’s progress.
Inconsistent implementation and goal deviations
The 2021-2025 NDP is the latest in a series of development frameworks aimed at addressing Nigeria’s structural challenges. Similar to Vision 2020 and its predecessor, the Economic Recovery and Growth Plan (ERGP), the NDP aims to unlock Nigeria’s economic potential by focusing on critical sectors such as infrastructure, agriculture and manufacturing. However, history shows that these plans often fail due to ineffective implementation.
For example, Vision 2020 aimed to position Nigeria among the top 20 economies in the world by 2020. Instead, the country improved only marginally, moving from 30th to 27th place in the world GDP rankings.
In stark contrast, China’s five-year plans have been consistently successful. Since its first plan in 1953, China has not only formulated a clear development strategy but also implemented it precisely. The country’s transition from an agrarian economy to an industrial powerhouse is a testament to the careful implementation of a plan that enabled far-reaching economic transformation.
In contrast, Nigeria’s grand ambitions have been repeatedly frustrated by external shocks (most notably oil price fluctuations) and poor governance.
Also read: Nigeria’s economy under the watchful eye of President Tinubu’s government
Failure to diversify the economy
Both Nigeria and China were once largely agricultural economies. But while China has rapidly diversified into manufacturing and technology, Nigeria remains stuck in a single economy and heavily dependent on oil.
The current NDP emphasizes the importance of diversifying away from oil and focusing on areas such as agriculture, the digital economy, and manufacturing. But diversification efforts have been slow and inconsistent.
Investments in education, research and development, and technology have helped China become a world leader in industries such as telecommunications, renewable energy, and consumer goods. Despite its potential, Nigeria continues to fall back on oil revenues as its main economic driver.
Job creation and poverty alleviation: China’s success vs. Nigeria’s struggle
Nigeria’s NDP has set an ambitious goal of creating 21 million jobs and lifting 35 million people out of poverty by 2025. However, these targets reflected similar goals to previous plans, most of which were not achieved due to inconsistent economic growth.
In contrast, China’s poverty alleviation story has been a global success. Over 40 years, China has lifted 800 million people out of poverty and contributed to three-quarters of the world’s “extreme poverty reduction,” according to Yu Weiping, vice minister of China’s Ministry of Finance.
This was achieved through deliberate alignment of social policies and economic growth strategies, with investments in education, health and infrastructure creating opportunities for inclusive growth.
China’s rural revitalization strategy is an important part of efforts to sustain poverty reduction and promote long-term development of rural areas.
After successfully lifting millions of people out of poverty, the focus shifted to ensuring rural areas continued to grow and develop and prevent a return to extreme poverty.
The strategy revolves around revitalizing rural economies by developing local industries such as agriculture, while improving access to education and health care.
Essentially, rural revitalization is about modernizing rural areas and creating better living conditions in order to maintain the progress China has made in poverty alleviation.
Governance and institutional weaknesses
One of the most important factors separating Nigeria from China is the strength of its institutions. Nigeria’s NDP acknowledges the need for institutional reforms to improve implementation, but weak governance, corruption and political instability continue to undermine these efforts.
China’s centralized governance system has enabled it to efficiently implement development policies and achieve its goals. Thanks to strong institutions, China has been able to manage large-scale projects, stimulate industrial growth, and reduce large-scale poverty.
By comparison, Nigeria struggles with even basic infrastructure projects due to weak institutions, delays, and frequent cost overruns.
Monitoring and evaluation: the missing link
A critical flaw in Nigeria’s development plans is the lack of an effective monitoring and evaluation (M&E) system. Although the current NDP promises a more rigorous approach to tracking progress, Nigeria’s history of M&E weakness has often invalidated plans. Vision 2020 and the ERGP set ambitious goals, but a lack of accountability and real-time coordination prevented them from achieving their goals.
In contrast, China’s five-year plan is supported by a robust M&E framework. The Chinese government is continuously measuring progress and making necessary adjustments to ensure the goals are achieved. This commitment to tracking and implementation is key to China’s unprecedented success in economic development and poverty reduction.
Without strong political will to implement M&E, Nigeria’s NDP risks falling into the same pattern as its predecessor: ambitious on paper but underwhelming in its delivery.
Nigeria’s progress will depend on its ability to learn from the lessons of successful economies like China. Development isn’t just about making ambitious plans, it’s about executing them with precision. Without consistency, strong governance and effective oversight, Nigeria risks being permanently neglected by the countries that once looked up to her.
