Random Musing…Recalibrating Northern Nigeria’s Economy By Adamu Tilde

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Random Musing
By Adamu Tilde

To anyone abreast of the ongoings in Nigeria, it is not news that Northern Nigeria is on the fringes of Nigeria’s economy. Take any industry of your choice, you will find Northerners operating, at best, in the periphery or, at worst, totally absent. For example, of the 25 major commercial banks operating in Nigeria, Northerners control a negligible percentage of the shareholding. Another evident instance can be observed in the IT sector. Just recently, Andela, a global tech-hunting company, raised $200 million seed funding. Earlier, Flutterwave, a payment company, raised $170million in funding. The combined valuation of Interswitch, Flutterwave, OPay, and Andela is close to $5 billion. What is striking is that all this is happening in Lagos. You can observe similar poor representation of Northerners in insurance companies, investment banks, telecommunication, oil and gas, manufacturing, and services. A visit to the listed coys on Nigerian Stock Exchange will clear your doubts.

The north’s abysmal participation in the ownership and management of business ventures is even more pronounced in other highly lucrative coys that are not listed on the Stock Market, such as pharmaceutical industries, maritime, Health Maintenance Organisations (HMOs), private equity firms, assets/wealth management, securities trading/brokerage services, heavy industries – such as utility and mining companies, commercial law practice, aviation, and ancillary services. Further, the poor representation of the north in ownership of business enterprises transcends to informal businesses providing value addition services to various sectors of the economy. In a rare occurrence of having a Northerner as a controlling shareholder of any company of repute, chances are that the shareholder was a former military officer or a friend to former military personnel. Few exceptions can be counted with one’s fingers. You may be left to wonder and ask yourself: are the Northerners asleep, or awake but perilously unperturbed?

What perhaps explains the dismal performance— and near absence— of Northerners-controlled businesses in Nigeria’s formal economic sector is the long association of Northerners with the corridor of power. State power is used to control the economy and to appropriate wealth. This strategy created an unproductive state of inertia which disincentivized and discouraged entrepreneurship. Economic success is dependent on state power or state patronage, or both. So people directed their energy to seek the inside track of power which guarantees access to state resources. Delving into the murky waters of entrepreneurial activity became unnecessary since wealth could be accumulated faster and with less risk by using state power. Since not many people can have access to the state’s resources, this created isolated cases of extremely rich but few elites amid large population of helpless poor people. Northern Nigeria is one of the most unequal societies you can ever imagine, sadly. A quick caveat. Northerners are not alone in this dispensation but theirs is more pronounced.

Sustainable economic growth and development that we all yearn for cannot be achieved on a platter. We must work for it, earn it, and have it. The economic stagnation of Northern Nigeria cannot be corrected with the cosmetic gestures of conditional cash transfer, NAPEP, political patronage among others that have become the pastime of politicians and policymakers. These gestures may seem to be clipping the fangs of poverty in the short term, but it is utterly ineffectual and detrimental as the clock ticks. We will understand this better when we study developed nations and the genesis of their [economic] development. China, for example, did not remove over 300 million of its population from abject poverty by dashing not-worked-for tokens to unproductive, idle youths. Nigeria, especially the northern part, does not stand to be an exception.

The economic ingenuity of the Northerners can only be ignited by denying its rent-seeking elites access to freebies and the state’s purse. By so doing, they would be forced to engage in genuine, real economic activities that will bring growth and prosperity to its malnourished and poor population. The south is not in any way doing spectacularly different or operating at its optimum level, but compared to northern Nigeria, it is far ahead. There is no need to reinvent the wheel. Northern Nigeria can learn a lot from the economic transformation that is taking place in southern Nigeria.

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