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Thursday, November 14, 2024

Scrabble, Monkeys, and Missed Opportunities

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By Abdulrauf aliyu

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In the bustling halls of Abuja, where the grand ambitions of Nigeria are debated, one is often left bewildered by the policymaking decisions that seem to drift further from reality with each passing year. It’s not that Nigeria lacks resources or ideas. Far from it. But the vision seems dim. A few years ago, during a widely publicized economic forum, a Nigerian minister proudly announced a plan to move the nation towards becoming a “top exporter of cassava,” as if this singular agricultural product could be the savior of a complex and multifaceted economy. Such a pronouncement, wrapped in nationalism and a “back to the roots” ethos, was cheered by an eager audience. Yet, it echoed like an old, familiar mistake—a symptom of a much deeper problem Nigeria cannot seem to shake: its persistent distance from the modern economy of complexity.

Ricardo Hausmann, the renowned Harvard economist, has a metaphor for explaining economic complexity that is both striking and easy to grasp. Imagine that you are trying to spell complex words in a game of Scrabble. In order to spell sophisticated words—let’s say “industrialization,” or “technological innovation”—you need a wide range of letters at your disposal. Now, imagine that each letter represents a capability: technical skills, industries, advanced institutions, reliable infrastructure, and a well-educated workforce. The more letters (capabilities) you have, the more complex and valuable the words (products and services) you can create. In contrast, a country with only a handful of letters can only spell simple words—think “cassava” or “crude oil.”

Nigeria, despite its immense potential, is a nation of few letters.
Here’s where Hausmann’s analogy takes a wilder turn. He uses the image of monkeys in a forest to describe how countries leap from one product or industry to another. In a highly diverse economy, the forest is dense and full of interconnected trees, allowing monkeys to swing easily from branch to branch, moving from one high-value industry to the next. In Nigeria’s case, the forest is sparse, with just a few scattered trees—primarily in oil and agriculture—forcing the monkeys to cling to their isolated branches, unable to swing towards industries that could provide more growth and wealth.

Nigeria’s inability to diversify its economy stems from decades of poor choices. Policymakers in Abuja have failed to recognize that the future belongs to nations with complex economies. These are countries capable of producing a wide range of products and services that require intricate know-how and expertise. Nations like South Korea, Singapore, or even India have figured out how to gather more letters for their Scrabble board, while Nigeria still struggles with the same limited alphabet it had half a century ago. It is not enough to export raw cassava or crude oil; in the global game of economic complexity, these are low-value words, barely scratching the surface of what’s possible.

The most tragic aspect of Nigeria’s position is that its potential is enormous. It could be a manufacturing hub for West Africa, a technology powerhouse, or even a leader in the global green energy transition. But instead, it’s stuck in a policy loop that prioritizes short-term gains over long-term complexity. Consider Nigeria’s obsession with oil, a commodity that has fueled much of its post-independence economy. While the country has grown rich off oil, it has also grown complacent, believing that oil alone could sustain its people. Meanwhile, countries without a drop of oil, like South Korea or Taiwan, have outpaced Nigeria by investing in industries that demand higher skills and more intricate supply chains.

To illustrate this, one needs only to look at Nigeria’s tech sector. Nigeria has birthed successful tech companies, yet it lacks the deep ecosystem necessary to sustain significant industrial-scale tech production. The forest of Nigeria’s economy remains too sparse to allow its monkeys to leap from the agricultural branch to the tech branch seamlessly. Tech hubs like Yaba in Lagos, where startups thrive, are celebrated, but they represent isolated achievements in an otherwise barren landscape of complexity. Without significant investment in education, infrastructure, and industry clusters, these successes will remain isolated branches, unable to multiply into a broader, more diverse forest.

Let’s take a look at Vietnam, which provides a sharp contrast. In the 1990s, Vietnam was as dependent on agriculture as Nigeria is today. But instead of doubling down on rice production, the government in Hanoi made deliberate policy decisions to build manufacturing capabilities, invest in human capital, and attract foreign investment in electronics and textiles. They knew they needed more letters for their Scrabble board. Today, Vietnam produces smartphones, cars, and complex electronics that require a highly skilled workforce. The monkeys in Vietnam’s forest can swing from tree to tree with ease.

Nigeria’s policymakers, unfortunately, seem to believe that swinging from cassava to tech is as simple as creating a few policy papers or launching another well-meaning initiative. But that’s not how complexity works. Building a dense forest of interconnected industries requires patience, deep investment in education, and infrastructure, alongside serious reforms that dismantle bureaucratic and corruption barriers. It’s not a glamorous task, and it won’t yield immediate political victories, which is perhaps why it’s so often ignored in favor of short-term populism.

To move towards the complexity economy, Nigeria needs to rethink its approach. The problem is not that Nigerians lack the skills or intelligence to succeed in complex industries—it’s that the environment is too inhospitable for the type of innovation and interconnected industries that would allow for real economic transformation.

At the heart of this issue is a failure to recognize the importance of the letters and the dense forests that Ricardo Hausmann speaks of. Nigeria’s policymakers need to start focusing on expanding the alphabet. That means more investment in education, in industries beyond agriculture and oil, and in creating a broader ecosystem that supports the diversification of skills. Only then can Nigeria’s monkeys swing freely, creating a vibrant, complex economy capable of spelling words far more ambitious than “cassava.”

In this global game of Scrabble, Nigeria is playing with an incomplete set of tiles, and it’s high time Abuja took responsibility for spelling out a better future.

© Abdulrauf Aliyu
07092024

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