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Ingo Herbert, consul general, Consulate General of the Federal Republic of Germany, advises the Nigerian government to adopt an economic model that will help the country come out of recession
| By Anayo Ezugwu | Dec 5, 2016 @ 01:00 GMT |
INGO Herbert, consul general, Consulate General of the Federal Republic of Germany, Lagos, has advised the Nigerian government to design an economic model that is suitable for the country. He said without an economic model the country would struggle to come out of recession bedeviling the nation.
The consul general gave the advice on Wednesday, November 23, at a roundtable discussion organised by Konrad Adenauer Stiftung Foundation and the German Consulate in Lagos. Herbert said the country must consider an economic model rather than combining socialist, capitalist and free market economy at the same time.
According to him, the German economy is thriving because the country adopted social market economy which has worked for them over the years. He said that the social market economy should not be seen as an ideology rather a programme that is tested and trusted. “In every forum like this, people always ask me why German economy is robust amidst global recession and I always tell them that we focus our economy on small and medium enterprises.
“The major problem of Nigeria is not the fall in oil price rather the country is yet to decide the kind of economic model to adopt. The free market in Germany doesn’t work in Nigeria because it has refused to consider the economic model best for the country.”
In his keynote address, titled “Social Market Economy – A Tool for Economic Development for Nigeria”, Obadiah Mailafia, former deputy governor, Central Bank of Nigeria, CBN, said social market economy forms a pivotal part of Germany’s status as a free and open society; a society characterised by solidarity.
According to him, this model has also proven to be a model that advances economic prosperity while promoting full employment, social welfare and a robust social fabric. Mailafia said under the social market economy, it is the market that balances supply and demand through the price mechanism and ensures that the means of production are used efficiently while consumer costs are kept low.
Mailafia noted that for the system to function as effectively as expected there has to be sufficient competition within the framework of an open market system that prevents individual economic actors from exercising monopolistic market dominance. He said through this process, the market mechanism ensures greater choice for consumers while encouraging suppliers to develop more innovations and technological advances while ensuring distribution of income and profits in accordance with individual achievements.
For Nigeria to come out of recession, he said the country need to adopt the social market model where there is a healthy mix between state and market. According to him, Nigeria need a state that focuses on building a national consensus while providing critical public goods, including social welfare and social safety nets for the most vulnerable.
“The effective exercise of state authority should be in a manner that promotes economic growth while ensuring political stability requires high quality visionary leadership. It requires a sound and professionalised bureaucracy. Public policies must be suffused with social justice, inclusive growth and what the philosopher John Rawls termed the idea of ‘public reason.’
“We in Nigeria are, sadly, a divided people – divided by the fissures of ethnicity, religion and regionalism. For a country with the size, resources and innate potentials of Nigeria, I am persuaded that progress can only come about through the forging of a new consensus among the ruling elites from across the country’s key constituencies. Nation building is a vital requirement for successful economic transformation. Many economists do not realise that this was a major factor in the emergence of the so-called Asian Tigers in the seventies and eighties.
“What is crucial in my view is a common vision and commitment of all the political and economic elites to the creation of a developmental state that would accelerate the process of economic growth and wealth creation. In contemporary development economics discourse, when scholars use the term developmental state, they are generally referring to a country where the government has assumed the driver’s seat in propelling the course of economic growth and social transformation.
“I believe we need to adopt the entrepreneurial state model – that of a smart state that supports innovation and generates critical public goods that support creativity and higher level productivity. We also need to diversify the economy as a matter of urgency. For centuries, Africa has been nothing but a supplier of raw materials. The lessons of world development make it abundantly clear that if all of us are producing the same raw materials we will reap the whirlwind through terms of trade loss and the fallacy of composition,” he said.
On her part, Hildegard Behrendt-Kigozi, country representative, Konrad Adenauer Stiftung Foundation, said the foundation is interested in making Nigeria a better society where the masses enjoy democratic dividends. “As part of our activities in Nigeria, we run civic education radio programmes to enlighten the general public on their civic rights and duties as good citizens of the country.
“Similarly, we promote democracy by supporting and building the capacity of the legislature at state level through training and enabling policy discussions. Especially in 2014, we have addressed security issues at roundtables, and also attempted to promote a peaceful society through our inter-faith dialogues where we looked at the roles of religious institutions in maintaining peace,” she said.
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