The challenges confronting the Nigerian econ omy in the 21st Century are diverse and enor mous. The unacceptable state of Nigeria's economy is most galling given Nigeria's enormous endowments of natural and human resources. This is more so given the fact that Asian countries, such as Singapore and Malaysia, with similar colonial heritage and attributes attendant thereto, and simi lar natural resource endowments, have recorded significant successes in the development of their economies since 1965 when they were at par or even behind Nigeria.
Singapore, some 30 years later had a per capita income of some US $10,000; whilst that of Nigeria was US $300. Nigeria's eco nomic decline, especially during the last 20 years is illustrated by the fact that per capita income, which was US $1000 in 1965 had declined to US $300 by 1998. Within some 18 years, Nigeria had declined from being a low middle income country and amongst the fifty richest countries in the world to one of the 30 poorest.
The major causes of the decline in Nigeria's economic fortunes have been political instability and bad governance, most especially in the 1990s. Military rule in Nigeria, as has been the case in most other countries with prolonged military rule, led to economic and social stagnation and decline. Similarly, the advent of an elected government at the dawn of the 21st Century after almost three decades of military rule should afford Nigeria the opportunity to arrest the decline in her socio-eco nomic development and embark on economic revival.
This chapter examines the prospects and challenges ahead. There is no doubt that Nigeria is endowed with enormous human and natural resources which if efficiently harnessed and managed will ensure that Nigeria's immense potentials are realised. The Obasanjo Administration has pledged to provide efficient, transparent, honest and democratic gov ernance which will facilitate and enhance the process of reviving the Nigeria's economic fortunes pursuant to the Administration's economic pro gramme.
Chapter 5 provides an overview of the Nigerian economy since 1960 and the Administration's economic programme. Political changes facilitated to a great extent by advances in technology, especially in communica tions, have, especially during the last decade of the lage.
The demise of the Soviet Union coupled with the increasing acceptance by most countries, espe 's cially China and India, of market informed econom JS ic policies especially during the last two decades of is the 20th Century is transforming the world into a global village.
Economic liberalism is virtually the universal norm; and increasingly so, political liber ii- alism. This is not surprising given the logical con 'd sequences of the adoption by the world's most pop iir ulous countries of free market inspired economic or policies which are derived from liberal philosophy with its emphasis on the individual and freedom of choice.
Nigeria in the process of making up for the sub is stantial ground she has lost in her quest for devel :h opment, especially in the last 20 years, must do so )y within the context of a world economy charac >d terised by some significant features. These fea id tures include the following: (i) Advances in technology will continue at a rapid pace, and is more likely to be exponentially rather than arithmetically.
(ii) Investment in science and technology in will become more important than invest e, ment in equipment as investment in human capital will become the major at element of capital formation.
(iii) Information technology will become the main engine of economic growth. It will displace oil, just as oil displaced steel in the second half of the last century, as the main engine of economic growth.
(iv) Consumption of energy and primary raw materials per unit of manufactured out if put will continue to decline as a result of at advances in technology and environ ie mental factors.
(v) Production will increasingly be knowl v- edge based and an increasing propor ie tion of the knowledge will be privately owned and protected by various forms of intellectual property rights.
(vi) Increasing advances in information technology, especially in the telecom munications sectors, will quicken the pace of globalisation of finance and trade.
(vii) Environmental management, including conservation and orotection, will increasingly become a people driven rather than government driven process.
The Obasanjo Administration recognises that Nigeria's efforts to revive and grow her economy must be effected within the context of a world econ omy dominated by globalisation, liberalisation and technology; especially information technology. It also appreciates the imperative tor Nigeria, within the shortest possible time, to become integrated into the emerging 21st Century global economy. In this regard, the Administration must succeed in its efforts to attract investment, local and foreign, in the Nigerian Economy, once again .
The end of military rule, the advent of an elect ed civilian administration, the renewed national commitment to the nation's development coupled with the country's natural and human endowments provide the bases for optimism that the Administration will succeed in the efforts to attract foreign investment to hasten the process of eco nomic revival in Nigeria. However, the issue of Nigeria's debt burden must be satisfactorily resolved to enable the Administration meet its tar get of attracting net in flows of US.$10 billion per annum within the next 10 years for the purpose of providing required infrastructure, diversifying the economy and making the required investment in science and technology to enable the economy be competitive in the 21st Century. In addition, those policies and practices which hitherto hindered investment in the Nigerian economy must be removed.
The process of creating linkages between the productive sectors of the economy through the use of knowledge so as to facilitate the formulation of policies which will promote the adaptation and use of science and technology in production can then be meaningfully implemented. Through a combina tion of investment in the application of biological, mechanical and information technology (IT), pro duction in the agro allied sector can be enhanced.
The formulation of policies to ensure maximum use of the results of research findings and their delivery to farmers through the efficient use of IT for instance by way of interactive 2-way wireless con ference systems is imperative to enhance produc tivity in the agriculture sector.
Nigeria is well endowed with raw materials and natural resources which, with the application of appropriate technology and production processes, will promote linkages between her raw and natural resources, production capability, and industry. It is the continued lack of this linkage between the oil and gas sector and industry which has largely been responsible for the oil and gas sector being exoge nous to the rest of the economy. To promote this linkage, the Administration must implement as promptly as possible its proposal to deregulate the downstream sector of the oil and gas industry.
Again, the examples of Malaysia and Indonesia demonstrate the need for the prompt implementa' lion ot the proposal. The integration of the oil anc gas industry into the domestic economy will facili tale the emergence of a modern productive sectoi based on the knowledge industry. Thus, the contrr bution of the oil and gas sector to the Nigeriar economy will cease to be essentially that of Â£ provider of rent.
Brain power is already emerging as the majo engine of economic growth world-wide. This is true of both developing and developed countries, lr India, for instance, the export of computer software as of 1999 was already in excess of U.S. $2 billior and is set to be become India's largest expor industry before the end of the first decade of the 21st Century.
The impact of the information tech. nology industry on the domestic economy is aisc impressive and is responsible for creating new investment and employment opportunities in India Nigeria has those attributes which have attracted IT companies, such as Microsoft, to invest in the IT industry in India: large domestic market, skilled labour and extensive use and knowledge of the English language.
Focused and imaginative pro motional efforts by the Administration are desirable so as to attract investment in the IT sector. Such efforts must include the prompt and efficient imple mentation of its policy on the deregulation of the telecommunications industry so as to provide for an investor friendly industry with a responsive, consis tent and transparent regulatory regime.
The Administration's success or otherwise in implementing its economic agenda will determine the nature of Nigeria's participation in the 21st Century's emerging global and technology driven economy. What are the prospects that Nigeria will succeed in her quest to create and nurture an econ omy with the attributes that will ensure her partici pation in the emerging 21st Century global econo my along with the progressive and advanced economies of the world?
The essential ingredients for success exist. What is required is the will to suc ceed; and the prognosis is that it exists and will con tinue to impact positively on the process of eco nomic revival in Nigeria. Support for this view is provided by the renewed national commitment to succeed. In the words of Chief Philip Asiodu, Chief Economic Adviser to the President.
The imperatives for success are the will and the resolute commitment of the lead ership, the continuous striving for excel lence and to meet international standards; persistence - staying the course for as long as it takes to succeed, patience and, of course, doing every thing continuously to carry all stakeholders along.
No doubt, given the disappointments and degradation of the past, the goals and the required discipline may appear very ambitious, and the odds may appear daunting especially in the much harsher and more difficult world we are about to enter in the next millennium.
However, our own achievements in the 50s, 60s and 70s, and the recent Asian success stories demonstrate that those goals are achievable with our enormous resources and present leadership. We shall succeed.