A tale of two sleeping giants

Obodo Ejiro

China and Nigeria are both giants on their different continents: Asia and Africa. Both were regarded as sleeping giants for decades; but while China has woken up and made remarkable progress, Nigeria lags behind.

Though Nigeria has attained the status of biggest economy in Africa, the truth remains that size matters less when there is widespread poverty, inequality, decomposing infrastructure and an economy that stutters small businesses.

A shot at greatness

China’s journey to economic ‘super-power-ship’ is a brilliant tale of long term commitment to development planning, reform, sweat and sacrifice. But there was a time when Nigeria was ahead of China on several economic indicators.

For instance, from 1960 to 1985, Nigeria’s per capita income was consistently higher than that of China. China’s per capita income was just 22% of Nigeria’s in 1980 (Nigeria: $871 versus China: $193) and that was the case for many year. But things have changed dramatically. Last year, Nigeria’s per capita income was 42% of China’s (Nigeria: $3,185 versus China: $ 7,594).

In recent times there have been fears that after three soaring decades of growth, China is on the decline.  However the rate of growth posted by the country in the last three decades has continued to fascinate economists.

China grew its economy by an average of 9.82% in the last 36 years, becoming the second largest economy in the world in 2010. The World Bank famously says China pulled 500 million people out of poverty in the last three decades. Already, it is projected that China’s economy will surpass that of the United States by 2025. But how did China attain this feat?

China’s ascent began in the late 1970s when it finally embraced on market reforms as opposed to pure central planning. This became necessary because in the 1960 and early 1970s, while China's neighbours were industrializing and making serious progress, its citizens could hardly feed or cloth themselves properly.

It was obvious that the country had to head in the direction of its more liberal Asian neighbours (including Japan, the Republic of Korea, Singapore, Taiwan, and Hong Kong). The way to do this was to reform.

Reforms in China did not immediately mean that it dumped communism; however, minor adjustments were made to the country’s development strategy. For China it was an experiment: New ideas were introduced in small localities and if they worked, the whole country adopted them.

Like most modern development successes, China made creative use of short and long term development planning.

The period between 1979 and 1989, which marked the beginning of the reform process, was designated the “period of readjustment.”  During that period, key imbalances in China’s economy were corrected and a foundation was to be laid for a well-planned modernisation drive.

The major goal of the readjustment process was to expand exports rapidly; overcome key deficiencies in transportation, communications, coal, iron, steel, building materials, and electric power; and redress the imbalance between light and heavy industry by increasing the growth rate of light industry and reducing investment in heavy industry.

In 1984, China made a significant move to designate fourteen of its largest coastal cities commercial and industrial centers. The aim was to create productive exchanges between foreign firms with advanced technology and major Chinese economic networks. These centers have since grown to become large export hubs.

Over the period of reform, plans were continuously reviewed where necessary and new projections and goals were set in line with realities. 

In this regard, China differs from Nigeria, where in the last twenty years; most leaders have preoccupied themselves with dismantling and discrediting their predecessors instead of acknowledging the progress that has been made and consolidating on them.

Also, the quagmire in which Nigeria currently wallows can be traced to some of the dislocations caused by military adventurers who took every opportunity to dislodge sitting governments so as to institute their looting campaigns.

On the other hand, China has enjoyed political and policy stability in the past three decades. One has to fathom the size of China in the late 1970s to fully appreciate the task the country accomplished.

Its 969 million people (in 1979) were distributed among 23 provinces (24 with Taiwan), 4 autonomous regions, 4 municipalities plus Hong Kong and Macau; 18 of those provinces had population number of between 90 and 35 millions.

At present, China has more cities of 1 million-plus population than the rest of the world combined. Among China’s stated-owned enterprises there are 500 that employ more than 100,000 people. It has been estimated that China creates 10 million to 15 million new jobs every year!

Nigeria’s untapped potential

A key lesson from the Chinese is that they never deluded themselves with visions of false riches as a nation. They saw themselves as a poor country and rectified the problem.

Nigeria has not done so in the past three decades. Nigeria is a poor country that is sitting on vast potential! It will remain poor if it does not tap into its power points. (Take away the oil sector, which is even shacked by archaic laws, and see how poor a country Nigeria is).

It must be understood that Nigeria’s major advantage lies not in the oil wells but the vast potential inherent in its teeming population, especially, its youth population.

These should be engaged in factories. But the factories will remain elusive if policies that make the Ease of Doing Business easier are not implemented.