I once had dinner at the home of Professor Joseph Stiglitz, Nobel Economics Prize Winner. I had gone to New York with Journalists from Asia, South America and Africa to the Campus of Columbia University where the Initiative for Policy Dialogue (IPDD), which he founded, showed us a few ways to report on development. Even though I had previously met with the Prof four years earlier in Nigeria, it was on this occasion that I managed to have a one-on- one with him that resulted in a front page story in BusinessDay sometime in October 2008.
So I guess it would be easy to understand my interest in the thoughts of this one time World Bank senior vice-president and chief economist, and author of thirteen books including the bestseller, Globalisation and its Discontents. Predictably, my interest was drawn to his remarks during a presentation in Cape Town, South Africa, on 15 November 2017, to the effect that the services sector holds the key to Africa’s future economic growth rather than manufacturing as widely postulated.
Stiglitz had challenged the notion that Africa’s development can follow Asia’s growth model of manufacturing export-led growth. He had said that “services will be the growth sector in the future”.
At the event organised jointly by, the South Africa Bureau for Economic Research, Economic Research Southern Africa and REDI 3.3, he said whether agriculture can play a major role in transformation is controversial. ‘Nevertheless, he quoted a report titled, Agriculture Powering Africa’s Economic Transformation, which said that agriculture presents the easiest path to industrialization and economic transformation for African countries.
‘By improving all the upstream and downstream linkages, agriculture can be a particularly successful part of the strategy for Africa’, Stiglitz was quoted as saying. While I am not competent to challenge Stglitz’s view, I do have a view all the same, which is slightly different from his. Well, Sort of.
I have argued here about Nigeria’s burgeoning services sector and how it puts us in the race for outpacing the rest of Africa as I have encouraged both primary agriculture and value added agriculture but more in favour of the latter. The latter being an exploitation of the whole agric value chain suggests investments in manufacturing. Suffice this to mean that I am in favour of a mix or the triune of services, agriculture and services, albeit at varying degrees.
In a piece titled, why are we so rich yet so poor, I had said that ‘It is to be noted too that in terms of services, Nigeria leads the rest of Africa while ranking 27th in the world. The adventurous disposition of the financial sector ensured that it grew in leaps and bounds’. If anything, it suggests that the country can leverage on this advantage and emerge.
My argument around agriculture is couched on the fact that it is an instrument for mass job creation; and it is jobs that will eventually lead to economic growth or lack thereof. After I established that agriculture is a strictly rural phenomenon, I had called on government to re-think agriculture towards modernising it and empowering rural folks so they can be lifted off poverty. This is as I also noted that it is instructive to carry rural folks along as the economy is being diversified by creating opportunities for them and training them to fit into the new economy. This empowerment should be especially targeted at women who suffer the most from poverty induced deprivations.
With other articles, especially the one on encouraging Innoson Motors, the indigenous car maker, I expressed that “Value added export is the soul of economic development when pursued in the right policy environment.” With a replication of Innoson all over the country, I submitted that it could be the beginning of industrial revolution in Nigeria. I drew inspiration from how a city like Detroit owes its development to the auto industry.
I pursed this thought when I lamented the state of the country’s palm oil industry relative to Malaysia’s. I chided government for not seeing it as a low hanging fruit in its diversification plan. “Indeed, when one considers the range of products that have palm oil input ( soaps and detergents, cosmetics, pharmaceuticals, biscuits, biodiesel among others), it is a wonder that the manufacturing sector is still in recession when it should be leading the return to growth”, I had queried as a five –quarter long recession raged on. I did because, not only would local consumption of the locally produced goods by our 180 million strong population ensure that needed growth, the export of surpluses to neighbouring countries would have guaranteed it, what with the extra forex earnings that it would have occasioned.
The summary of the argument put forward is that our economy can potentially benefit from any of the drivers of services, manufacturing or agriculture but a multifaceted approach integrating these three may yield better results.
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