Problems We Face As an Emerging Economy

Sat, 3 Sep 2011 Source: Baafi, Alex Bossman

By Alex Bossman Baafi

Since 1992, we have enjoyed political stability that is one of the conditions necessary for economic growth and development in this country. Since then, successive governments have pursued policy programmes to develop the country in order to improve upon the living standards of our people. Even though some progress have been made, we still have a long way to go because we still have a lot of people facing economic hardships as they continue to wallow in abject poverty and underdevelopment. There are a lot challenges militating against our developmental progress. Some of these problems are rarely discussed because perhaps we think they are not important yet, they need to be addressed if we were to lift ourselves from the poverty trap to enjoy economic independence. Some problems that are also worthy of discussions include our attitudes, population pressures, savings, investments, and public administration.

The first problem that hinders progress in our struggle for economic growth and development is our attitude. Our attitude towards work and time is not the best in this country as compared to the advanced world. We all have 24 hours a day and because time and tide wait for no man, we should approach our wok and time diligently to make maximum use of the time. In other parts of the world, productivity goes on day and night. With the exception of very negligible number of companies that operate day and night, the 24-hour shift system is not common in this country. We need to accept new ways of doing things. Our people, especially the political and economic leaders, must become receptive to new ideas and new ways of doing things. Studies have shown that where there have been receptive to change, progress has been more rapid. India and China showed much more willingness to adopt new approaches in the early 60s and have now become more powerful emerging economies to be reckoned with. We must remember that people who work only to live as their grandfathers did are certainly not susceptible to economic development. New social, economic and political institutions are required to encourage private enterprises if we are to find the target of economic emancipation.

We should check our population growth. Where the size of population is pressing against national production, further growth is more a liability than a benefit. The problem then is to prevent such a continued rise. In our country, demographic statistics put annual population growth rate at averaging 2.4 percent. Government should make it a duty to educate the public on the need to control the population size. This is because, once the adults of procreating age see the possibility of increasing the standard living of their families by restricting births, they will do so. As long as it is not understood that a reduction in births will raise their standards, there is little incentive or efforts to restrain the growth of families. Probably the time has come for us to take a critical look at certain traditional practices like the polygamous marriages that breeds fertile grounds for mass children production. I believe because of our traditional family systems, extended family systems, population pressures lead to higher dependency ratios, mass unemployment, rural urban migration, lack of adequate social amenities and infrastructure as well as the social vices associated with population growth. Perhaps as a long-term solution, we should strive to raise productivity relatively faster than the rate of population increase as was done in the developed world in the nineteenth century. I believe that some of the population pressures may be relieved even in the short-run if the government intensifies and encourages birth control and we will be making some headway if we sell it to the people as a pre-condition of improving upon our economic development.

One of the basic reasons for us being poor is our poverty. Most people have not cultivated the habit of saving towards capital formation. We have very little capital investment and the incentives, which must exist, to encourage savings are virtually absent. On the side of the supply of capital fund, there is little ability to save, because the levels of real incomes are low. The low levels of real incomes are the result partly of low productivity that in turn results from lack of capital. On the side of the demand for investment fund, the incentive to invest in our country is low because of smallness of market, lack of economic stability and virtually the non-existence of an enabling economic environment. The major problem of capital formation is how to generate it domestically without leading to inflation. When the redirection of resources to capital formation is done by the government financing through a budget deficit, the possibility of inflation exist. Many countries have resulted to this as a means of popping out of the poverty trap, but unhappy results have arisen on the other count. We have not been able to rely on internally generated funds for our investments needs. We have depended very much on foreign loans, which does not auger well for us because more often than not those loans come with certain conditionalities that favour the lender community. Among others, there are no simple solutions to the problem of capital formation. Private saving, investment, and government spending are needed to provide economic growth in our country. However, the successful use of these depends heavily on the political will of the government and quality of our public administration in this country.

Generally, the public administration of this country is not of the best quality. Most of our civil servants are frequently ill trained and underpaid. They often rely for their livelihood on their ability to use their offices to “squeeze” others. Many are part of a bureaucracy filled with clannish people, friends, relatives, or party supporters of successful office-holders. Such officials are so driven by their desire for prestige and power such that they spend large amounts of time carrying political favour instead of working effectively. The officers especially the political and economic leaders are spin professionals who politicize serious socio-economic problems to their advantage. They use their offices to oppress the poor by taxing them excessively but those elite who are in the better position to pay taxes evade them. Development programmes including projects are designed to bring prestige to the people in government. Public works, projects and developments are planned and executed to provide personal monuments rather than public service. Although a cancer in the world, the level of corruption is appalling in all sectors of our country, where square pegs are put in round holes yet quality results are expected.

In the midst of the entire problems, there are those who have genuine experiences and new ideas to advise or assist but they will not be given the opportunity because of the winner takes all attitude. Political leaders are happy to preside over poor quality public administration that may be either incompetent or unable to carry effectively the functions necessary to the development process. Their inability is sometimes the results of obstacles stemming from the social mores, customs and unproductive traditional religious beliefs or our unwillingness to grow with today’s technological age.

In conclusion, to surmount the above problems, more institutions for health and education, more effective and efficient public administration, political administration more representative of the will of the people, good governance, modernization of business procedures, mechanisms of capital formation and the changes in the usual size of families are required. We must also strive for high living standards and greater economic stability by curbing corruption, strengthening our institutions, improving upon our infrastructural assets base to attract both local and foreign investments. We must eschew inferiority complex and believe in ourselves.

I know it will be a challenge to change the attitudes, old normal habits, unproductive traditions and religious beliefs of the people within a short period. This is because the changes will lead to certain people losing certain privileges and power, nevertheless, we must press ahead to change our old ways of doing things otherwise our efforts to fight poverty, diseases and underdevelopment of our people will be meaningless.

Email: abkbossman@yahoo.co.uk

Columnist: Baafi, Alex Bossman