It is a new one: China has overtaken the United States as the world’s top destination for new foreign direct investment . Also, in 2020, China was the only major economy  to grow its GDP.  Since 2017, foreign direct investment in the U.S. has been slipping. Of course, if you do not allow China to invest in your economy, that is a default expected outcome.

China overtook the U.S. as the world’s top destination for new foreign direct investment last year, as the Covid-19 pandemic amplifies an eastward shift in the center of gravity of the global economy.

But that is not the message: the message is that China is doing today what actually made America great. China has invested in infrastructure and deepened its human capital  – “China has 60,000 miles of high-speed rail; America ZERO”.

2) China forty years ago consciously adopted the American Model for economic growth–large sustained public investment in infrastructure and human capital. America has largely abandoned these investments and has already declined significantly (See Alden, Failure to Adjust). China has 60,000 miles of high-speed rail; America ZERO. Europe has several thousand miles. Our infrastructure is rotting and extracts an annual “tax” north of $600 BILLION; we don’t spent enough to fill potholes let along build a modern airport or port. China, India, and Europe have all vastly improved their universities and research centers; America’s have declined and shrunk. America once led the world in both infrastructure and human capital–we are now an also-ran. 1993 America was 1st in college completion rate for that cohort, now ranks 19th or lower, nearly last among all developed economies. And now 28th in publicly funded University based research, behind Slovenia!

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The main purchasing power party in China – Middle Class has been growing rapidly after 2018. The huge amount of educated factory workers gives China a competitive advantage among the international competition. Modern infrastructures and stable social environment bringing more and more foreign investment into China. In 2020, Chinese authorities established a new economic model called “The Inner-cycle”. In the future, China will spend more time focusing on a more openly domestic financial market, new technology, and innovation in order to achieve its vision in 2050 – a fully developed country.

Largely, China did two main things:

• It invested in infrastructure and that helped it to improve the efficiency of business systems in the country. With that, productivity has improved, making production largely competitive against most competitors.
• It invested in core technical education positioning itself as the manufacturing center of the world. Today, China has young people with top modern skills to work in factories. 

If  Nigeria does these two things and some others I have noted in this Harvard Business Review article, we will emerge. These constructs are fundamental if you trace the history of modern societies: nations do not rise faster than their abilities to accumulate and utilize knowledge. In other words, if you cannot create new knowledge, and have the capacity to use it, you will fade. But if you do, you will thrive.

Of course, investing in infrastructure and educating the young people require resources. Nigeria has blown its oil resources, and getting into the building phase at this time of limited resources, in the midst of the expanding population, would be challenging. But if there are ways to make those happen, good things will happen. From roads to energy to healthcare systems, Nigeria has to invest in critical infrastructure. Then following the investments with a revamped technical education will offer a new vista for growth and prosperity.

President Buhari’s legacy looks cloudy and he is not getting any vibe from any angle. I am not sure he has new ideas for the economy. Possibly, they will just play it out, as the nation looks like it is on autopilot, with no vision to connect the citizens into nation building. Perhaps, it could be that the National Orientation Agency is not doing its job. 

Pardon me, I do not honestly understand at this point what his government wants to achieve. During Obasanjo, we could argue that he was trying to liberalize the economy through privatization. Jonathan lost election partly because he lost focus later in his presidency. Initially, there was that effervescence on improving systems and processes to drive Nigeria into a new economic era. 

But for Mr. Buhari, he has multiple challenges: insecurity, a battered economy and now a reputation that Nigeria is the den of corruption. Yes, the Transparency International’s Corruption Perception Index (CPI) 2020 has put Nigeria on 149th position out of 180 countries. The nation also scored 25 out of 100 points (the higher, the better).

With this new ranking, Nigeria is just below Guinea-Bissau on the scoreboard of the most corrupt nation in West Africa. That is a second for Mr. President, but I am not sure he would be happy for that one.

Yet, Mr. Buhari is a victim of Nigeria, but as the president, we have to put everything on his feet. The impunity in the Nigerian Judiciary is the biggest issue in the land. Why should it take 15 years to try a former governor for corruption? Why should it take 10 years to try bank looters? I mean, you can go on. 

Mr. President, your nation is not healthy – you need to lead.

Comment on LinkedIn Feed

Comment #1: Prof. Ekekwe, your colleague, Prof Wole Soyinka said discussing the Buhari presidency is not good for his sanity. So, he now prefers to live as if the administration does not exist. Hence like millions of other Nigerians, I have tuned off on the regime.

However, the woeful performance of the regime is the best argument against rotational presidency that makes the grossly incompetent president. Alert was sounded on that grave risk in my “Distorted Federalism and Pervasive Insecurity” serialized by The Guardian in March 2013 ever before the present regime could dream of gaining power. Yet, those who prefer lootocracy to democracy banded together to install the Buhari government.

Rotational presidency is fit only in a confederacy where the incompetence of the central government does not negatively impact the federating units – the presidency is ceremonial. But here in our unitary government the progress of all is hamstrung by a rotational president. That informs the cry for restructuring that is now almost deafening.

My response: Nigeria is not working – everyone is a victim. Like I say, if Yobe has a literacy rate of less than 20% and Imo has 96%, Yobe kids have not been served even if the governor has been rotated in all villages there. Rotating inefficiency is not a solution. The key is building healthy competition and productivity in systems: I support a revamped and restructured economic federalism so that the principle of comparative advantages will work.

I was in Usman Danfodio University a few years ago and saw a GREAT renewal energy project. Those kids could power the north under market systems. But Nigeria slows them just as the ones in south are slowed in their passions. We need to be honest that NG is not working.

Another commenter follow-up: Prof. Ndubuisi Ekekwe, please you are even going too far by comparing Yobe State with Imo State because the two states are not mates. Imo state is 15 years older than Yobe State

Yobe State and Abia State are classmates as they were created on 27th August 1991. On GDP per Capita basis (as of 2007 data), Yobe State have $843 while Abia State have $3,003, in simple terms people in Abia State earn 3.6 times more than people in Yobe State – since this is calculated by dividing the area’s total income by its total population.

But the puzzle is this:

Yobe State have 17 LGA, Population = 2.757 million
Abia State have 17 LGA, Population = 4.112 million

Both States presumably have been receiving the same amount of money from the FG Federal Allocation Money Sharing Scheme since August 1991, so if after 16 years (as of 2007) of receiving the SAME amount of money from FG based on the same number of LGA and even with a lesser population and Yobe State GDP per Capita is almost 4 times smaller than Abia State’s GDP per Capita, then Nigeria is in trouble!

I only picked just Yobe State and Abia State because you mentioned Yobe State. We can run the numbers for other states.

No System can continue to function in this type of mess!

My response: This man, that is a Master’s thesis you just summarized here. Great perspectives and it goes to Tekedia blog under this entry. To add to your point, take those LGAs to UBE (universal basic education) which moves funds via LGAs for basic education. If states were getting the same money (per capital) and one produced 96% literacy and another <20%, has somebody asked where the money sent via UBA to train the kids went into? Ideally, someone diverted the funds, resulting to the outcomes.

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