Since Adam Smith wrote his classic, in 1776, the Wealth of Nations, to upend the mercantilist system and set forward the basic foundations for modern classical economics, the world has changed. The core pillars of productivity and division of labour have remained the tenets of firms which thrive. A free market system has provided the cement mortars in states, seeding the pillars for the massive translation from invention to innovation.
The simple difference between a nation like the United States and another like Nigeria is that one is an innovation society while the other is an invention society. There are so many ideas in the latter but hardly enough products and services.
Until nations transmute from being inventive to innovative, they will remain poor. No nation has become rich without that translation. Yes, always remember that most of the pioneers of the most fundamental aspects of physics, mathematics and chemistry died poor. They were bright people – but they ended up poor. Why? They lived in societies of ideas with no products because there was no transduction from invention to innovation.
Nigeria has built a massive arsenal of idea-creators but it has struggled to find ways to deploy those ideas. From universities to mechanic garages, ideas everywhere but NOT a single solution to problems. So, you have a nation with legions of engineers but no water, roads, and electricity.
But this is fixable and it comes down to building the anchors: the anchor is productivity driven by competition. It would be hard for Nigeria to rise if the states are not incentivized to compete. The law of comparative advantages must work in Nigeria for it to rise, and fiscal federalism is the gunpowder that will WIN poverty for Nigeria.
Without that productivity, unlocked through fiscal federalism, Nigeria will remain poor and keep getting poorer!
1. Advance your career with Tekedia Mini-MBA (Sept 13 – Dec 6, 2021): 140 global faculty, online, self-paced, $140 (or N50,000 naira). Click and register here.
2. Click to join Tekedia Capital Syndicate and own a piece of Africa’s finest startups with a minimum of $10,000 investment.