By Abdulhaleem Ishaq Ringim
Economic Diversification in Nigeria by Zainab Usman is an in-depth analysis of Nigeria’s political economy that presents an apt delineation of the interplay of politics, institutions and policymaking in the process of economic development. Zainab’s is an attempt at instituting a diagnostic exercise to identify(beyond prevailing conventional narratives) major impediments to sustained development.
By repudiating ‘resource course’ and ‘backward neopatrimonilaism’ as the causal roots of Nigeria’s economic underperformance, the book presents a thesis that centres on challenges to economic diversification in resource-rich countries as the major impediment to economic transformation and development.
The author did a great job at identifying pathways to achieving economic transformation and establishing the state’s role in guiding the process but argued that the efficacy of the state’s guiding interventions remains a function of its institutional capacity which in turn depends on its political character.
Hence, to deconstruct Nigeria’s peculiar political character and its implications for economic transformation, the book deployed carefully designed frameworks for the analyses. Central among these analytical templates is the political settlement framework, which defines the influence of the distribution of political power on policymaking for development.
Per Zainab’s model, economic transformation, especially in resource-rich countries like Nigeria, depends on a kind of political settlement that distributes power among elite formations to ensure the emergence of a stable political coalition. This is why even while Nigeria has witnessed periods of semi-steady economic growth in her national life, such has never been adequate enough to usher in sustained development.
As an “Intermediate” State, Nigeria’s breed of political settlement is characterized by the formation of unstable political coalitions and cyclical political crises (especially in political transition periods). This has ensured that the country is always in crisis management. And the resulting policy and reform orientation has always assumed a manner that prioritizes short-term macroeconomic stabilization over long-term structural economic transformation.
The author, however, believes that such a political configuration is not immune to change. She explained that certain “critical junctures” determine whether a prevailing political configuration will change or persist. At these junctures, elites are constrained to take certain policy actions. And the economic outcomes of such policy actions depend on whether the assumed policy direction takes a stabilization or transformational orientation.
Using this framework, the author analyzed two subnationals, Lagos and Kano, to demonstrate the complex interplay of politics and policymaking and its influence on economic outcomes. The analyses mainly focused on critical junctures for both states and the resulting policy orientation and outcomes in relation to their contrasting political settlements. Lagos presented itself as a model for economic transformation while Kano a microcosm of Nigeria as it is.
The book concluded with recommendations on how Nigeria’s political settlement can be balanced by institutionalizing “zoning” as a power-sharing agreement, adopting a shared vision for transformation, and addressing market failures while emphasizing the imperative of building a post-oil economy. I find the book very interesting. It presents thought-provoking arguments and indeed updates our mental models on the challenges of economic diversification in Nigeria’s context.
Not that I agree with every postulation. In fact, I can’t entirely agree with the relegation of culture as an outcome of economic development rather than a determinant. Culture precedes economic activities(not to talk of development) in global historical trends, so I believe it cannot be an outcome of what it fundamentally precedes as far as existence is concerned.
As I posited some weeks back (linked), I belong to the school of thought that considers culture as a significant determinant of economic development alongside geography and climate. However, I believe culture itself is a product of nature, geography, climate and the environment.
I believe that at every point in human history, the culture of any people is determined and constituted by a combination of the powerful and inter-generationally persistent ‘cultural legacies’ the people have inherited over time (mostly developed in response to geographical and climatic determinants) and the cultural aspects developed as a result of the influence of [mostly unpleasant] environmental changes and the need to adapt to them.
Hence, I believe nature, geography, climate, and environmental changes determine the cultural compatibility and disposition(positive or negative) of any people towards development. Therefore, I have not seen enough reason to forgo Varoufakis, Gladwell and others on geographical and cultural determinism regarding economic development.
Nonetheless, the book is a masterpiece!