Nigeria’s backwardness in terms of development has left many in amazement. Nigeria has oil wealth, yet it has remained undeveloped. The major problem seems to be the negative influence of the Bretton wood institution on its economic reforms. The unconducive policies and disruptive internal sociopolitical dynamics from these institutions are the major reason behind Nigeria’s foot-dragging in terms of development.
Effects of War
After the first world war fought between 1914 to 1918, the world’s economy was marred along with its political landscape. The negative effect of this war lingered into the great depression seen in 1930s.No one was able to quench the worldwide depression, neither the United States nor Great Britain due to lack of resources.
The quest to rebuild what was destroyed in the war gave birth to that Bretton Woods Conference held in New Hampshire in July 1944. From this conference, some multilateral organizations evolved such as the IMF, the IBRD later known as the World Bank or the International Trade Organization named after the Britton Wood city. The issue concerning the International Trade Organization was not concluded right at the conference. Thus, a further agency the GATT was kept in charge of international trade. The conclusion of the GATT agreement gave birth to the World Trade Organization for proper regulation of the international market in 1995.
The IMF was assigned to give temporal financial assistance to the needy, while the World Banks takes care of development assistance in the form of loans. Nigeria despite being naturally endowed, has depended on these organizations for financial assistance. In turn, the unfavorable conditions from these organizations have a tremendous impact on the country because it relies on them for financial support. Nigeria, for instance, was faced with rising inflation and unemployment after world war 1 due to some harsh measures imposed on them by the IMF in the 1980s.
As a result of the extreme condition, Nigeria was faced with class conflict in terms of capital flight resulting in a total shuffling of the countries economy. However, Nigeria is not the only country involved. The former Soviet block, Eastern Europe, Yugoslavia, and the Soviet Union were all affected by the IMF-World Bank harsh policies. The Soviet block lost its economy to these, organizations through their economic help in the form of developmental loans. Its State enterprise was brought down; says Chossudovsky on the 9th of April 2000. The effect of these extreme policies has been devastating to the countries involved.
Mismanagement of Countries Economy
Nigerian economy is affected by the mismanagement of the abundant resources in the country. Is there any prospect in sight? Considering the continues dependent on the IMF- World Bank, the chances of economic recovery is far from sight. When a country is leaning on a shoulder, it will definitely cooperate if not absolutely to him whom the shoulder belongs to. Nigeria has gone beyond cooperation, it has gone beyond the borders of comprising it’s sovereignty and dignity; according to Grill (1985). The IMF has an operating office in the countries capital named the Financial Ministry through which it controls the activities of the Central Bank says a current newspaper report.No matter the dose of economic medicine Nigeria revive from the IMF- World Bank, the citizens will still remain poor because the economy itself has refused to be stable.
During the era of Chief Olusegun Obasanjo, from 1999, people thought in the direction of change considering him as savior. However, his era has come and gone and his name is now included in the list of controversial leaders the country ever had. The hallmark of his regime which was a hike in fuel price as suggested by the Bretton Wood institution has caused more harm than good. The poor masses in the system became poorer and the middle class was brought lower. The citizens work harder just to put food on the table and to at least move around using the transportation system. By the day, the country’s economy keeps sinking with no hope of the promised miracle through the so-called economic reform at sight. The situation keeps depreciating to the extent that the topmost need in the scale of preference is barely met by the citizens.
Could it be that Nigeria does not pay attention to history or is it that they easily forget the past? It is time Nigerian leaders will put the needs of the citizens at the forefront of the economic reform ahead of the broad needs of the Bretton Wood institutions. The controversial issues that have kept the economy depreciating and the living standards of citizens jeopardized should be appropriately streamlined. Ranging from the issue of subsidy removal to hike in pump price and the accompany riots. Democracy has been marred. Some are actually benefitting from the economic atrocity while the man in power presents the harsh policies to the already burdened masses. Humans freedom is threatened with the power to coerce, whether in the hands of a monarch, a dictator, an oligarchy, or a momentary majority.”Friedman 1982.
High Increase of Corruption
Nigeria has remained poor not because it lacks the resources for economic growth; but because it lacks the preconditions necessary for meaningful economic growth. Before Nigeria will think of change, it has to step on many corrupt practices and the mindset of the populace needs to be changed too. According to TI (Transparency International) ranking, Nigeria shamelessly emerged as the third most corrupt country globally in 2003.
Dr.Peter Eigen rightly pointed to corruption as a huge obstacle to sustainable development because it spreads its wings towards all meaningful direction. Corruption in Nigeria as kept its educational system backward, it affects healthcare and frustrates effort towards poverty alleviation. Additionally, society has needs of a good road network, comfortable environment, stable political system and moderate rule of law. Once the political system is not stable, it will negatively affect the economy of the country. Democracy as a system of the government is not enough to boost the economic growth of the country and lack of it hinders economic growth too and leads to instability in the system. This is the point where Nigeria economic system is if not worse.
Failed Education System
Another reason why Nigeria remains behind in terms of development is as a result of its failed educational system. Nigeria has overlooked an important aspect of development; it has failed to invest in human capital. According to the United Nations, Human Development Index of 2004 Nigeria was grouped among the nations least liveable nations. The index used in the analysis includes life expectancy, the income of the citizens and educational qualifications. Nigeria was not able to meet up because its educational system is lacking backward and no country could maintain a reasonable economic system without at least a moderate educational system.
Nigeria needs to give attention to its vocational-technical education to produce entrepreneurs and creative youths with innovative ideas. With that, the citizens could have personal freedom and the country’s economic system will improve.
Again Nigeria lacks adequate monetary policy. When a country’s monetary policy is not properly implemented, growth and economic reforms will remain at the mud. To be precise, the country needs to work on its monetary policy in terms of the budget which is very important in shaping the country’s economy.
Poor Export Trade
As Friedman pointed, a country’s potency is proved in Lenin’s famous dictum; when you remove money from a society, you have destroyed the society economically. However, money does not have to be attached much value to. Because money reduces a country’s export thereby limiting the availability of its products in the international market. But constant naira devaluation will neither do the country any good. Outside of petroleum, Nigeria has nothing valuable to offer in terms of export trade, and petroleum price is never stable. Trade has never been able to liberate the country from its economic tragedy.
Local industries in the country import materials from other countries thereby making the chances of production available to only a relative few. This method of production affects the country’s balance of payment position because imports are higher than exports. Evidently, Nigeria is now a dumping ground for cheap international goods and the local products are often neglected.
Poor Government Intervention in Countries Economic System
Nigeria knows no government intervention in the economic system. Individuals who feel deprived by the government will likely exempt themselves from the political system. This is not good for a country’s economic growth. When the economy is favorable, the people will be free to express themselves politically and otherwise. Expanding the freedom of peoples allows them to express themselves fully in a more social setting and have a better influence in the world. It also teaches them to values that which has enriched their lives.
The solution to Nigeria’s under development is in the hands of the leaders and the masses at large. The mainstream needs to be adjusted, that is the petroleum industry needs a proper readjustment in terms of storage, exportation, distribution, marketing etc. The cost of petroleum needs to be moderate because it affects the production and distribution of other goods and services. The sector needs competition. At present, the federal government is fully in charge of the sector shrinking the positive competitions that will bring the best out of the sector. More refineries need to be built even by individuals who are capable. The old system of federal government climaxing over the entire affairs of the petroleum industry needs to be adjusted. Again any fund in the form of a loan with harsh policies should be avoided. The welfare of the citizens should come first to minimize extreme poverty presently confronting the nation.
The policy prescription from the Bretton Woods institution will by no means minimize the current situation confronting Nigeria as a country. Nigeria has to grab the bull by the horn and desist from foot-dragging. Issues like corruption, bad leadership, poor educational system, and ruined social institutions; to mention a few need to be addressed. The monetary system needs to be properly guided because, without money, a country is ruined. These are a few reasons why Nigeria despite being blessed abundantly still, have a greater number of citizens who manage to sustain themselves on a daily basis and the country itself has remained grossly poor.