Nigeria is presently using a mixed economy that includes both capitalism and socialism. Citizens can have private ownership of properties and the government also has ownership of properties.
Which Economic System is Best for Nigeria?
So far, the mixed economy has brought us no development, so it is necessary for the government to try a new economic system. The market economy system seems like the best option for Nigeria, considering our entrepreneurial spirit and the average Nigerian is thrifty. Having a market economy in Nigeria will be a stepping stone to a more developed Nigeria in a few years to come.
However, while it looks enticing, Nigeria isn’t ready for that. The present economic system (mixed economy) is the best for this country at present. Nigeria as a country is riddled with flaws, and here are some reasons why a market economy system cannot work for now —
The Nigerian population has grown over the years and about 60% of them are unemployed and struggling to survive. In market economies, things tend to get pricey because the enterprise owner is usually all about making himself money, so the average Nigerian might not be able to afford it.
This is the main reason why a market economy can’t work in Nigeria. Corruption is a major problem in Nigeria, and it is having a terrible effect on the affairs of the country. If we switch to a market economy system, the rich will get richer while the poor will remain poor, and the middle class will most likely become poor. The few individuals with the most resources will be the ones controlling this country.
On the other hand, a mixed economy allows the government to determine the price of certain services, so they can be affordable for everybody. Since capitalists are all about making money, and we don’t yet have the laws and regulations to keep corruption at bay, capitalism still seems like our best bet.
3. Inadequate infrastructure
Lots of businesses fail in Nigeria due to a lack of necessary infrastructures, and those that are still surviving are unable to realize their worth and double their profits. For instance, all businesses need a constant power supply to operate a business, but there is still an inadequate power supply, so Nigerian businesses can’t produce goods at an adequate level.
Now, if we are running a market economy with these terrible infrastructures, most businesses will go bankrupt. However, if the business owner can sustain the business, it will usually be with his resources and this will drive the price of his goods up, thereby making it unaffordable for the middle class as well.
4. Privatization has failed repeatedly
Different scenarios have occurred in the past, letting us see that leaving the growth of this country in the hands of the private sector could spell doom. A very good scenario that portrays these flaws is the privatization of Nigeria’s power sector.
Even though some people say that the power sector wasn’t fully privatized so it’s impossible to lay the problem at the feet of capitalism, there are other examples in some other key sectors in Nigeria, and one of such sectors is NITEL which got privatized.
The Nigerian Telecommunications Limited (NITEL) is Nigeria’s main telecommunications company. It was owned and controlled by the federal government until the Bureau of Public Enterprises (BPE) sold it to Mtel. After it got privatized, the corporation failed. It’s almost like it is not in existence.
The value of public assets that get privatized tend to decline in value, and its low performance should be an eye-opener to most that running this country with a market economy most likely won’t work.
How to Make The Market Economy Work in Nigeria
There is no doubt that the market economy will help Nigeria a lot, especially in the matter of wasteful spending and mismanagement. If these government-controlled enterprises are in the hands of private citizens, they will be handled better.
What we stated at the top are the reasons why it won’t work for now, but in the future, Nigeria might need to switch to a market economy if it wants to be among the top countries in the world. However, before such can happen, we need the government to repair certain aspects of the country that are necessary for capitalism to thrive.
The government also needs to be ready to play its part in policy formulation, to ensure the capitalists do not become tyrannical to the point that their desire for profits overshadows their goodwill. Humans tend to be extremists if given the chance, so we need the government to have good regulations in place.
All we can do is offer insights on what we think and feel can help the Nigerian economy. In-depth analysis can be given on anything but it’s not until its trial that one can see if an idea is viable. Presently, a market economy doesn’t look enticing and in the future, it can fail, but it’s preferable to still try it out to see if it works or not.