Big Brother Africa: China or Nigeria?
Big Brother Africa: China or Nigeria?
Democracy or Meritocracy? The Nigerian Economic Society Weighs in
China just summoned Nigeria and other 53 African countries to the 9th Forum on China-Africa Cooperation (FOCAC) in Beijing, China, between September 4 to 6, 2024.
The forum provides multi-lateral coordination between China and all African countries (except Eswatini).
Historical antecedents show Nigeria could have been the one convening the other African brothers if it had lived up to its early economic prospects and lead over China.
As of 1960, the average output of each Nigerian, Nigeria’s gross domestic product (GDP) per capita, exceeded that of the average Chinese, indicating Nigeria’s lead in unit productivity and prosperity.
Nigeria maintained this lead for 3 decades, but by 1999, the momentum had dissipated. From 2000 onwards, China’s average productivity and prosperity outpaced Nigeria’s with increasing margins.
The trend is similar when the purchasing power of the average earnings in each country is compared instead of just the dollar values (since a dollar does not have the same value in different countries).
China’s GDP per capita in terms of its purchasing power parity (PPP) surpassed Nigeria’s and the rest of Sub-Saharan Africa from 1999 onward.
At $24,558, China’s GDP per capita (PPP) is now four times that of Nigeria at $6,318.
GDP per capita is the Gross Domestic Product (GDP) of a country divided by its population, representing the average economic output or income per person in that country. GDP per capita Purchasing Power Parity (PPP) measures the average economic output per person, adjusted for differences in price levels between countries to more accurately compare the economic well-being and living standards of different countries.
China’s Development Model
China’s rise in terms of increased productivity and prosperity is not mere coincidence. It resulted from certain economic reforms that were undertaken by the Chinese government, beginning in 1978.
Although accounts of China's economic reform strategies differ, a common thread in all narratives is the deliberate effort by Chinese leaders to propel the country from stagnation to prosperity.
A report by the International Monetary Fund recorded that to revive its dormant economic potential, China promoted the development of rural enterprises and private businesses, liberalised foreign trade and investment, eased state control over certain prices, and invested in industrial production and workforce education.
Another account by the World Bank reported that China prioritised higher savings rates and capital accumulation during the first three decades of central planning. China achieved this by maintaining terms of trade that favoured the industrial sector and restricting wage growth for industrial workers.
The Chinese government prioritised innovation in its economic strategy through several prominent initiatives, including an export-led growth strategy where a country seeks economic development by opening itself up to international trade.
In 2015, China announced its "Made in China 2025" initiative to advance and modernise its manufacturing across 10 critical sectors with significant government support, positioning the country as a leading global player in these industries.
There was also a significant reduction in population growth rates in China. This is based on the assumptions of a growth model - that rising savings rates and falling population growth rates motivate higher capital-labour ratios and rising living standards.
Total fertility rates dropped from 7.5 births per woman in 1963 to 1.18 in 2022. While the fertility rate in Nigeria and Sub-Saharan Africa has also declined in the same period, births per woman in both regions are three to five times higher than that of China.
Consequently, these major economic reforms resulted in China’s critical human capital developments and corresponding economic productivity.
Over the past 20 years, China has made significant progress in key aspects of human development, improving education, health, and living standards for its citizens.
According to the 2022 Human Development Index, China is classified as having "high" human development, with a score of 0.78 ((where 0.90 = Very High; 0.76 = High; 0.64 = Medium; 0.517 = Low).
In contrast, Nigeria's progress in critical aspects of human development has remained "low" at 0.55 as of 2022.
The careful cultivation of controlled population growth and targeted human development resulted in a more moderate standard of living for China, serving as a key catalyst in the country's fight against extreme poverty.
The latest accessed record on the poverty rate in China shows that the share of China's population living in extreme poverty or $2.15 per day is almost non-existent at 0.1 per cent in 2020 while those living below $3.65 per day reduced to 2.0 per cent. However, those living below $6.85 in poverty remain a bit high at 24.7%.
The poverty trend is a bit different for Nigeria. While Nigerians living on less than $2.15 per day has slightly decreased over the last three decades, those living below the two other poverty lines remain high. As of 2018, 30.9% of the Nigerian population still live in extreme poverty.
Meritocracy: China’s Form of Democracy
Another aspect that sets China's development apart is its unique political system model. Many in the West believe China lacks democracy due to its governance by a single party, the Communist Party of China (CPC). However, China describes itself as a socialist democratic government.
China's political system has a strong meritocratic element, which means that the Chinese government, in principle, is run by well-educated and experienced officials who were carefully selected and promoted by merit.
Both past and present Chinese presidents possess significant intellectual capabilities with strong educational backgrounds, given the crucial role of statecraft. Since 1954, all Chinese presidents have had a university education, with many attaining a doctorate.
Conversely, only 42.9% of Nigerian presidents have completed a university education since 1960. The minimum educational requirement for the presidency in Nigeria is merely a School Certificate or its equivalent, making a university education a voluntary will, not a mandatory qualification, for ascending to the highest office.
With its development models, China emerged a formidable global power. Nigeria and countries in Sub-Saharan Africa that were at par with China's economic growth in 1960 are now being invited by China to "Join Hands to Advance Modernization and Build a High-Level China-Africa Community with a Shared Future" at the 9th FOCAC meeting.
While the level of economic growth and development between China and Nigeria seem to correlate with the level of academic achievement of its political leaders, a paper recently presented at the 65th NES summit cautioned that a leader’s level of academic achievement is not a determinant of the country’s level of economic growth.
The President and Chairman of the Governing Council of the Nigeria Economic Society (NES), Professor Adeola Adenikinju, in his paper, “University Education and Economic Growth: Where does Nigeria Stand?” struck the balance:
“First, a country cannot outperform the level of its intellectualism … Second evidence suggests that while the quality of university education is crucial for economic growth, the educational background of political leaders and policymakers may not be as determinative as often presumed.”
NES: From FOCAC to FONAC
While the Nigerian President was away at the FOCAC meeting in Beijing, at home in Abuja, the Nigerian Economic Society (NES) convened an economic dialogue focused on how Nigeria can restore its former economic prominence both within Africa and globally.
The greatest consequence of the 65th NES conference, with the theme “Socio-Economic Development in Nigeria: Imperatives, Implications, and Impacts” could be the transitioning of Nigeria from a participant at the Forum on China-Africa Cooperation(FOCAC) to the Convener of a Forum on Nigeria-Africa Cooperation (FONAC). Better still, Nigeria convening a Forum of Nigeria-Asia Cooperation (FONASC).
The NES President, Professor Adeola Adenikinju, in his paper, “Nigeria’s Socio-Economic Challenges: Lessons From The Implementations And Outcomes Of Structural Adjustment Programmes” outlined the socio-economic challenges confronting Nigeria, the government's policy responses, and the broader implications of these reforms.
He pointed out that the economy's persistent dependence on oil has led to a financial strain, marked by a high debt service-to-revenue ratio, and ongoing structural weaknesses that hamper sustainable development.
The report examined the significant economic reforms undertaken by the current administration to rejuvenate the economy, noting their similarities to Nigeria's Structural Adjustment Program (SAP) of 1986. Both the former and ongoing policies aimed at diversifying the economy away from petroleum and counteract deindustrialisation, but neither has produced significant positive results.
The report further analysed how the SAP program and other similar economic reforms in Nigeria, which yielded limited results, led to economic stabilisation, enhanced fiscal discipline, and reduced inflation in Indonesia.
They must have done something differently!
For instance, Indonesia focused on the manufacturing sector by implementing policies that encouraged investment in this area. As the largest sector in the Indonesian economy, manufacturing contributed 18.67% to the GDP in 2023.
The report further noted that huge investments in the transportation and storage sector, effective implementation and monitoring teams (manned by seasoned economists and professionals transparency in privatisation, and a social safety net are some of the secrets behind the successful economic reforms in Indonesia.
The growth trajectories of both China and Indonesia reflect robust economic governance structures that are rigorously implemented. In contrast, such structures in Nigeria are either absent or only partially developed.
The actions that make a nation thrive are those that are strategically planned and monitored with precision.
Without this level of strategic oversight and commitment, economic progress can face severe constraints.