In discussing how to reposition the economy, The famous Harvard development economist, Dani Rodrik, once quipped whether “anyone can name the (Western) economists or the piece of research that played an instrumental role in China’s reforms.”  He went on to say that “economic research, at least as conventionally understood,” did not play “a significant role.” This shows that Nigeria’s economic experts need to draw inspiration from China’s unconventional economic transformation.

Nigeria finds itself at a crossroads, facing the shortcomings of conventional economic policies that have not yielded the desired outcomes. To navigate this challenging terrain, Nigeria must foster a culture of rigorous economic debates. This debate should focus on identifying alternative, bold, and groundbreaking policies that are tailored to the nation’s unique characteristics. The result of such genuine and intellectual debates must be a well-theorised, contested, and defended economic policy against shock therapy.

1. Webber, in her work: ‘How China Escaped Shock Therapy,’ posited that the economic policies that China adopted in its transformation from state socialism are well-known and researched. She said, “However, vastly overlooked is the fact that China’s gradual and state-guided marketisation was anything but a foregone conclusion or a ‘natural’ choice predetermined by Chinese exceptionalism. In the first decade of ‘reform and opening up’ under Deng Xiaoping (1978–1988), China’s mode of marketisation was carved out in a fierce debate.”

Economists arguing in favour of a shock therapy–style liberalisation battled over the question of China’s future with those who promoted gradual marketisation beginning at the margins of the economic system. “Twice, China had everything in place for a ‘big bang’ in price reform. Twice, it ultimately abstained from implementing it. China chose a unique path that defied conventional wisdom at the time and went on to achieve remarkable growth and development.”

Nigeria could draw inspiration from China’s willingness to explore uncharted economic waters and develop strategies that suit its own context. The proverbial rain of economic distortion has been beating us for a while and recourse has always been one economic theory or the other, without sitting down to look back and reflect on our history, antecedents and peculiarities to fashion and develop suitable economic policies for our country.  History matters, as Daron Acemoglu and James Robinson, argued in ‘Why Nations Fail.’ It is also important in building suitable economic policies.

For Nigeria to break free from the current economic retrogression, it must be bold enough to refuse to follow popular reform and policy recommendations on the grounds that these “universally applicable” reform measures do not fit into the nation’s reality. Nigeria should be ready to deviate from the acclaimed practices of the advanced market economies in the long run and redefine its own market economy from past and present realities. All countries have different initial historical conditions and face distinct and different contemporary constraints, however similar; thus making it certain that there is never a one-size-fits-all economic or policy theory solution to all the woes of developing countries. Nigeria must devise new and never-before-seen policies that take into account its unique circumstances and aspirations. A one-size-fits-all approach cannot unlock the country’s potential.

According to Yingyan, in the book, “How Reform Worked in China,” there is no doubt that China’s economic reform has worked, but this economic reform is still puzzling to Western economists.   This is because China was bold enough to fashion its economic policy outside of the acclaimed Washington consensus of transitioning from a planned economy to a market economy.  Stabilisation, liberalisation and privatisation – it was adjudged an economic suicide for a transitioning country not to follow this route, and such a reform will fail.  Although China has adopted many of the policies advocated by popular economists such as trade liberalisation, yet, for the most part, China’s reform succeeded without complete liberalisation and without privatisation, which normally ought not to be so, judging from popular economic positions.  For instance, instead of shocking China’s planned economy to death, it created a dual price system approach, which is the opposite of shock therapy.

Instead of liberalising all prices in one fell swoop, it continued with its planned economy and set the prices of essential goods while the prices of surplus output and non-essential goods were successively liberalised. As a result, prices were gradually determined by the market. The essence here is to show the unconventional approach engaged by China outside of popular economic theories and to show that Nigeria’s economic miracle lies in the birth of a rigorous policy guided by our particular circumstances, history and antecedent.

A recent buzzword, in the last few months, on every Nigeria lip, is “market forces” because the government is currently subjecting all facets of governance to market forces; but we must learn to fashion a means to use the market as a tool in the pursuit of our larger development goals. Yes, economic theories posit the need for a free market, the need for the free reign  of the invisible hand of the market, yet we should understand that the ‘invisible hand of the market’ needs the ‘visible hand of government.’   Even the United States, the self-declared pioneer of free enterprise, retreated to a pragmatic approach in its use of the visible hand to stem inflation; at a point it even deployed price control as a form of central planning.

The crux of President Bola Tinubu’s manifesto is based on a planned economy, which advocates active state involvement.   His manifesto even went as far as proposing the return of the price control board of the late 1960s and 1970s; and an active government involved in economic transactions. But the recent policies of the government is speaking otherwise, and making a little attempt at a command economy; especially now that the country’s vital indices are nosediving and economic hardship rising. A complete and sudden transition to a market-driven economy is not ideal for Nigeria’s weak production and industrial sectors. A post-mortem of our economic failure shows the reluctance to commit to a rigorous and radical transformation of economic models. Previous policymakers were less programmatic in their adopted reform process, which has brought us to this point.

In conclusion, given the intricacies of global finance and economics, Nigeria must embrace unconventional economic measures to address its multifaceted challenges.  Our economic challenges are multifaceted, requiring innovative approaches that address its unique circumstances. Conventional policies, while theoretically sound, may prove inadequate in grappling with the interwoven issues of inflation, unemployment, external debt, and domestic growth. The way forward is a strategically planned approach to economic development that focuses on redefining the market economy from past and present realities and lived experiences to deliberately removing all constraints holding back people from production.