High on their agenda is the currency war between China and the US as well as the trade imbalances between the member countries. As expected China is the center of discussion over accusations that their currency, Yuan is highly devalued. The Us have put pressure on China to devalue it’s currency and have used all forms of intimidation, coercion and even subtle threat to try to get China to devalue. However, very little has changed.
To get the real gist of the matter, a devalued Chinese currency means their local exports are cheaper when compared to goods from other countries. China’s rise to the second largest economy in the world is no more news. Much of this success is due to the large scale industrial revolution that had begun over 30 years ago. China is able to achieve most of their economic growth via a combination of protectionist and often market oriented economic models. Hight amongst the catalyst of their growth is population and cheap labour. Factors that are supremely similar to ours. China like Nigeria is blessed with a huge population regionally and around the world. They have the population that can satisfy their domestic demand and labour that can fuel growth all over the world. They were able to come of the recession, thankfully to their domestic demand and huge and cheap labour force.
In Nigeria, our population is more than that of any other African Country. If the Federal Government concentrate on a larger plan focussed on helping the manufacturing sector, we stand to benefit from this over the next decade. As the West moved towards the services sector, China took over the manufacturing sector and has not looked back since then. The Manufacturing sector that was the very engine of growth for the West was abandoned for the more “lucrative” service sector. Nigeria off course, does not have the infrastructure to facilitate a thriving manufacturing. To attract world renewed manufacturers, they want to see a stable government, modern infrastructures, lower taxation and cheap labour. Nigeria has none of these except for cheap labour.
Far from all the rhetorics we hear in Abuja, I don’t see any sense of urgency towards ensuring the above ingredients are provided. Amidst the belief within business circles that Nigeria would be the next engine for growth in Africa, we do not see any thing happening to prove that this belief will indeed be turn into reality in the near future. If we get our acts right, Nigeria has the dynamics required to propel its economy to one of the largest in the world in 50 years as we have population and cheap labour that can drive it.I see no reason why we can’t achieve that considering how blessed we are in human and natural resources. All we lack is leadership and a clear policy mechanism that is flexible, unique to our country in terms of dynamics and get stand the test of time (especially during economic cisis).
China began it’s economic revolution about 40 years ago with the help and vision of it’s inspirational leader Mao Zedong. Nigeria began it’s quest for economic revolution during the Babangida Era and has since then either created or implemented all kinds of policy blunders that has taken us if anywhere back to pre colonial era. Nigeria needs a rude awakening, a visionary leader who is not thrown into power by some stroke of luck or misfortune or some even by way of persuasion. We need a leader who has a clear road map and vision of what he wants Nigeria to become. As someone aptly put it a man who builds a house he will not live in builds a shelter for his children and children’s children.
To be like China we need to get our Manufacturing and Agricultural sector back in business. Forget oil, it never brings the kind of growth that population and industrial revolution can bring you. Thats why you rarely find an Opec Nation in the G 20.