Wage increment essential to Nigeria’s economic growth – Prof. Daron Acemoglu

Turkish-born American Economist, Daron Acemoglu, has argued that in order for the Nigerian economy to grow faster, there’s a need for the Government to prioritise wage increment and the creation of employment for its citizens.

Acemoglu stated this while giving a lecture to mark First Bank’s 125th anniversary celebration event, which was held at Eko Hotels & Suites, Victoria Island, Lagos.

The notable Economist was speaking on the theme: ‘Institutional Impact on Economic growth and Improved Living Standards.”

He emphasized that job creation and other elements such as good health and education, are needed to achieve high-quality economic growth in Nigeria. According to him, if these issues can be addressed properly for the benefit of the country, it will have a ripple effect on the economy.

Daron Acemoglu addresses barriers that prevent growth

Three barriers that prevent growth: For Acemoglu, improving the living standard of Nigerians encourages better productivity which positively rubs off the Nigerian economy. He, however, stated that there are three barriers to high-quality growth around the world – Automation, institutional slide, and international linkages.

The impact of technology is determined by the users: Acemoglu said the use and shortage of automatic equipment in manufacturing threatens employment rate especially in the developing countries. Though it has not yet been fully incorporated into businesses in Africa, it still poses a threat.

The Author of ‘Why Nations Fail’ urged Nigerian businesses to embrace technology fully into its operating system if the country’s other key sectors are to develop and reduce the dependency on the oil sector.

Acemoglu said the fear of technology cutting employment rate among developing countries has contributed to the slow growth of sub-Saharan Africa. Contrary to popular opinion in Africa, He said technology does more good than bad to the economy.

According to Acemoglu, the impact of technology on a country depends on how it is utilised by the country itself. He said technology doesn’t control people, rather people control technology, and the benefit is enormous if properly utilised by the country.

Though, he acknowledged that technology is taking over manufacturing and production work, but it increases the availability of labour for other sectors, adding that technology is not meant for the developed world alone.

“We need to be completely open in embracing and BEING enthusiastic about technology.”

While on the impact of institutional slide on the economy, Acemoglu said the constant changes in the system of government in Africa has hindered the growth of the continent. Advising that the State and the society have to be on a common ground to achieve high-quality growth for their economy.

In his remark, Acemoglu said there’s a need for African leaders to know how to handle international pressure and how to utilise international opportunities for the growth of their economy.

Daron Acemoglu’s profile

Daron Acemoglu is Elizabeth and James Killian Professor of Economics in the Department of Economics at the Massachusetts Institute of Technology. He has received a BA in economics at the University of York, 1989, M.Sc. in mathematical economics and econometrics at the London School of Economics, 1990, and Ph.D. in economics at the London School of Economics in 1992.

He is famous for his book, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (co-authored with James A. Robinson).