6 days Ago By Oluwole Crowther
On numerous occasions, Nigerians—including some politicians—have drawn comparisons between the cost of living in Nigeria and that in developed economies such as the United Kingdom and the United States. They often argue that Nigeria’s cost of living is comparatively lower. Yet, these same individuals are quick to reject comparisons between Nigeria’s economic indicators, such as exports or GDP, and those of developed nations, claiming, “You cannot compare Nigeria with China.
” This raises an important question: Is it truly appropriate to compare Nigeria with developed economies? To answer this question objectively, we must delve into the historical evolution of societies and the factors that shaped their trajectories. Historical analogies from the books, “Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson, and How Europe Underdeveloped Africa” by Walter Rodney provide critical insights.
Both books explore how institutions, events, and choices have defined societal progress and disparities. Understanding the evolution of societies At its inception, every society operated under extractive institutions, where the elite amassed wealth at the expense of the majority. Over time, some societies gradually transitioned to inclusive systems, providing equal access to political and economic opportunities.
This shift has been pivotal in determining the developmental trajectories of nations. Acemoglu and Robinson emphasise the role of “critical junctures,” transformative events that disrupt the existing balance of power and set societies on new paths. These junctures can lead to either progress or regression.
For instance, the Black Death of 1346 decimated Europe’s population, creating a labour scarcity that disrupted the feudal order. In response, Western Europe evolved towards inclusive institutions, laying the foundation for sustained development. Conversely, Eastern Europe became more extractive, perpetuating inequality.
The feudal system, which dominated Europe in the Middle Ages, exemplifies the extractive nature of early institutions. In this hierarchical system, kings owned all land, distributing it to lords in exchange for military services. Lords, in turn, granted land to peasants, or serfs, who were bound to the land and required to provide unpaid labour and pay taxes.
This system concentrated wealth and power among the elite, maintaining rigid social inequalities. Africa in historical context Walter Rodney’s How Europe Underdeveloped Africa challenges the notion that Africa was inherently underdeveloped. He argues that, as of the fifteenth century, African societies were on par with European institutions in terms of development.
Historical accounts of the Kingdom of Benin, for example, describe a highly organised and sophisticated society. Rodney draws attention to the Kingdom of Benin as a testament to Africa’s pre-colonial advancement. Dutch explorers who visited the kingdom in the fifteenth century described its grandeur in terms that rivalled the most developed cities of Europe at the time.
They remarked: “The town seems to be very great. When you enter it, you go into a great broad street, not paved, which seems to be seven or eight times broader than the Warmoes street in Amsterdam..
. The king’s palace is a collection of buildings that occupy as much space as the town of Harlem and that are enclosed with walls. There are numerous apartments for the Prince’s ministers and fine galleries, most of which are as big as those on the Exchange at Amsterdam.
They are supported by wooden pillars encased with copper, where their victories are depicted, and which are carefully kept very clean.” The Dutch also admired the cleanliness of the streets and homes, noting: “The town is composed of thirty main streets, very straight and 120 feet wide, apart from an infinity of small intersecting streets. The houses are close to one another and arranged in good order.
These people are in no way inferior to the Dutch as regards cleanliness; they wash and scrub their houses so well that they are polished and shining like a looking glass.” Despite these similarities, the trajectories of Europe and Africa diverged drastically over the centuries. While European societies transitioned to inclusive institutions, African societies became increasingly extractive, influenced in part by the transatlantic slave trade and colonialism.
Acemoglu and Robinson highlight how African leaders, rather than resisting these influences, often colluded with colonial powers, prioritising short-term gains over long-term development. This extractive legacy persisted even after independence, as post-colonial African leaders perpetuated systems that enriched the elite at the expense of the majority. Missed opportunities by the Kingdom of Kongo: A reflection of many African nations The experience of the Kingdom of Kongo provides a stark illustration of missed opportunities.
When Portuguese explorers introduced technologies such as the wheel and the plough in the late fifteenth century for farming, Kongolese leaders largely ignored these innovations. Instead, they embraced firearms (guns), using them to capture and export slaves in response to market incentives. This choice underscores how extractive institutions prioritise immediate benefits over investments in transformative technologies.
Acemoglu and Robinson argue that such decisions reflect the broader dynamics of extractive systems. Inclusive institutions, by contrast, encourage technological adoption and innovation, fostering sustained economic growth. This divergence helps explain why societies that started at similar levels of development have followed vastly different paths.
Read also: Businesses, innovations and a dwindling economy The Nigerian experience Nigeria’s history mirrors many of these themes. During the colonial era, extractive institutions prioritised resource exploitation over human development. Independence did not bring the significant change that many had envisaged; instead, successive Nigerian leaders continued the extractive practices of their colonial predecessors.
Corruption, nepotism, and the concentration of power among a small elite have stifled Nigeria’s potential. Despite its abundant natural resources and a population brimming with entrepreneurial energy, Nigeria’s economic performance has lagged behind. Comparisons with countries like China, which faced similar challenges but embraced inclusive institutions and strategic investments, highlight the consequences of Nigeria’s choices.
China’s post-1978 reforms prioritised education, infrastructure, and industrialisation, creating a foundation for sustained growth. In contrast, Nigeria’s overreliance on oil for its major foreign earnings and slowing rate of diversification of its economy have left it susceptible to global shocks and entrenched inequality. Should Nigeria be compared with developed economies? Returning to the initial question, comparisons between Nigeria and developed economies can be both illuminating and misleading.
On the one hand, such comparisons highlight Nigeria’s potential and the opportunities it has squandered. For instance, in 1960, an average Nigerian was 1.04 times richer than an average Chinese, and 63 years later, the fortune has been reversed, and a Chinese man is now 8 times richer than a Nigerian despite a lower population.
The same goes for the Singaporean; an average man there was 4.58 times richer than a Nigerian in 1960, and in 2023, he is now 52.27 times richer than an average Nigerian.
This analysis underscores the importance of inclusive institutions in driving development. On the other hand, these comparisons can obscure the structural challenges Nigeria faces, rooted in its historical and institutional context. A more productive approach is to focus on lessons that Nigeria can learn from the experiences of developed economies.
For instance, the United Kingdom’s transition from feudalism to inclusive institutions was driven by grassroots movements, institutional reforms, and investments in public goods. Similarly, the United States’ post-independence economic policies prioritised education and infrastructure, laying the groundwork for innovation that produced inventors like Thomas Edison and Henry Ford. These examples demonstrate that transformative change is possible when leaders prioritise the collective good over personal enrichment.
Moving forward To chart a new course, Nigeria must address the root causes of its slow development. This requires dismantling extractive institutions and building inclusive systems that empower all citizens. Key priorities include: Investing in education and healthcare : Human capital is the foundation of economic growth.
By prioritising education and healthcare, Nigeria can unlock the potential of its population and reduce inequality. Diversifying the economy : Slow diversification from oil has made Nigeria vulnerable to price fluctuations. Rapid diversification into agriculture, manufacturing, and technology can create jobs and drive sustainable growth.
Strengthening governance : Transparent and accountable institutions are essential for fostering trust and encouraging investment. Anti-corruption measures and judicial reforms must be central to Nigeria’s development strategy. Encouraging innovation : Policies that support entrepreneurship and technological adoption can spur economic transformation.
Nigeria’s burgeoning tech sector is a promising example of what is possible with the right support. Comparing Nigeria with developed economies is not inherently right or wrong; it depends on the context and purpose of the comparison. Such analyses can reveal both Nigeria’s potential and its shortcomings, providing valuable insights into the factors that drive development.
Ultimately, the goal should not be to mimic other countries but to learn from their experiences and adapt those lessons to Nigeria’s unique context. By embracing inclusive institutions and prioritising long-term investments in its people and infrastructure, Nigeria can break free from its extractive past and chart a path towards prosperity. The question is not whether comparisons are appropriate but whether Nigeria is willing to make the hard choices necessary to realise its potential.
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