IT was only last October that the President of the World Bank, Dr. Jim Yong Kim told the developing countries that there will be no economic growth without infrastructure. Speaking at the opening of the Annual Meeting of IMF and the World Bank in Washington DC, USA, Kim said economic growth is the most powerful tool needed to end poverty. Yet, without infrastructure – electricity, water and roads – growth will never take off. ‘‘Yes, I will explain, the world’s deficit of these building blocks of growth is substantial. Just think about the fact that sub-Saharan Africa generates as much as Spain, if we are to end poverty, we need to power Africa.”
He said the World Bank group’s finance for infrastructure reached $24 billion in fiscal year 2014 nearly 40 per cent of our total commitments. But our loans and projects will fall far short of what the developing world needs. The infrastructure gap is simply enormous – an estimated $1 trillion to $1.5 trillion more is needed each year. To fill this gap, we need to tap into trillions of dollars held up by institutional investors, most of which is sitting on the sidelines. We then direct those assets into projects that will have great benefit for a range of developing countries.
‘‘Today, the developing world spends about one trillion dollars on infrastructure, and only a small share of those projects involves private actors. Overall, private investment and public-private partnerships in developing countries totalled $186 billion in 2012. So it will take the commitment of all of us to help low and middle income countries bridge the massive infrastructure divide,” Dr. Kim added.
Accordingly, the World Bank has created the Global Infrastructure facility which is designed to attract financing for the infrastructural needs of developing countries. The platform, called FIF, will bring together institutional investors, development banks and public officials to tackle the infrastructure deficit in new and creative ways. Together, they will create a robust pipeline of infrastructure projects for poor and emerging markets.
Thus, while building infrastructure will promote growth in the long run, ending poverty by 2030 also requires our being vigilant against threats to the growth of the global economy. In a world where natural disasters, conflict, financial crashes and epidemics are more rampart than ever before, the World Bank and the IMF become all the more indispensable. This means the Nigerian economy must be run in such a way as to be able to access growth facilities of the fund.
Indeed, the World Bank has lately engaged in fighting two of the global threats to development: Ebola and climate change. These threats exemplify how the World Bank has become indispensable in solving development needs of developing countries, because nation states cannot fight Ebola and climate change all alone.
Moreover, in the middle of our gross infrastructure deficit, the Ebola outbreak and climate change arise the security challenges ravaging our nation. Our economy is endangered by the continued spectre of insecurity with bombings in Northern Nigeria, kidnapping in the Niger Delta and the south in general. The error is with the Federal Government for not recognizing security as being essential to development. It is only when the Federal Government manages Nigeria’s resources to provide the wants and needs of the people that national security can be guaranteed.
Poor management of our resources has exacerbated divisions along ethnic and religious lines with the active connivance of the people in power at the centre. Actively promoting religious and ethnic dissensions is subversive of national unity and security. These divisions along these cleavages are being promoted now than ever before. Since the return to civil rule in 1999, insecurity has emerged a most intractable challenge to peaceful governance. These challenges are increasing by the day. There have been Egbesu Boys in the Niger Delta, the Bakassi Boys in the South East, the Oodua Peoples Congress (OPC) in the South West, then the present Boko Haram in the North.
At different times, these groups have held Nigeria to ransom with our security agencies being unable to deal with them. They have been emboldened by our incapacity to tackle them.
In June 2013, nine students were killed in a school in Damaturu. In July of the same year, 29 students were killed in a school in Mamudo. The litany continues: September 2013, 40 were killed in Gujba; in February 2014, 29 killed in Buni Yadi, in April 2014, 276 students were kidnapped in Chibok and just in November, 49 students were killed in Potiskum. Aside of the North, endemic violence which the securities agencies are incapable of solving thrive in southern Nigeria. This crude oil theft and refining is an organized crime which the government has been incapable of stopping. But no economy develops in the midst of high insecurity.
In a recent paper, two economists: Stephen Broadberry and Leigh Gardner, in their book: Africa’s Growth Prospects in a European Mirror, A Historical Perspective, say, ‘‘history suggests that such optimism could be misplaced.” Why? Africa’s growth in the past has the habit of growing and falling rapidly. With each decline wiping out the gains made during the growth period.
The two scholars argue that pre-Industrial Europe’s economic history followed this pattern. Thus, Africa’s economic behaviour isn’t the exception.
Hence, what Africa needs is breaking this boom and burst cycle, to sustain a continuous economic growth and ensure future prosperity are institutions and vibrant civil society organisations. It was the Glorious Revolution of 1688 with its various institutional changes, which gradually transformed the political economy of Britain. The revolution brought the balance of power between the Crown and Parliament. But the economic history of Nigeria, in spite of her riches, has been a journey in the wilderness. However, the promise of riches with oil wealth was reversed by the civil war. And since the discovery of oil in Nigeria in 1958, Nigeria has been through several booms and bursts. To protect Nigeria from internal and external shocks, we need institutions such as independent newspapers, radio and television. Others are the Excess Crude Account and the Sovereign Wealth Fund which are shielding the Nigerian economy from declining oil revenues. The active Central Bank of Nigeria (CBN), the development of a bond market and the Nigerian Stock Exchange are areas promoting our economic development.
What Nigeria needs at the moment are institutions that ensure security of lives and prosperity – hospitals, state police and independent judiciary. The growing carnage in the North and the unprecedented oil theft in the south present an environment of limitless violence perpetuated by the enemies of the nation who wrested the monopoly of violence from the Nigerian state.
Finally, in countries wide apart as Israel and Singapore, science, technology and creative innovation lie at the heart of today’s prosperity. Thus, Nigeria must look beyond oil and focus instead on deploying creative problem solving as a means of locking ourselves into the global value chain of prosperity. For effectiveness, government must be able to balance their books. Ancient Roman Empire failed largely because fiscal prudence was not observed. Added to that was moral turpitude. With a stand-by Marshall Plan for the development of small and medium scale enterprises, Nigeria may usher in a golden age of prosperity to the delight of a