The Backward North and Forward South: The Reason For Regional Inequality (I), By Nasiru Ahmad
…the elites group quit investment in tangible businesses in the region and went on searching for government jobs and contracts. This diminishes the chances for the region to revamp and have sustained development, and thus, aggravates its menace by the systemic production of thousands of unemployable youth. In a nutshell, the elites group who are the supposed benefactors of the region needs to understand why the region lags behind…
The sharp difference in the standard of living between the northern and southern regions of the country is alarming. The poverty rate of the northern part stood at 73 per cent in contrast to the southern part, which stood at 53 per cent, in a survey conducted in 2010. Also, the analysis of the poverty rate depicts the northern states as the champions with 17 states, all from the North, crossing the national poverty rate of 70.8 per cent, out of which ten touched the ceiling for carrying the banner of poverty rate above 80 per cent. And the gap must have widened to date with the increased household size in the northern region. Many factors were ascribed to the backwards step of this region, with the most prominent factor attributed to a weak mechanism of income redistribution. For instance, while on average the southern states spend $294.13 on each citizen, their northern counterparts spend $78.10. In terms of educational performance, the southern states’ school enrollment is far ahead of that of the northern states. In the same vein, the number of universities in the North and South stood at 102 and 58 respectively. Consequentially, the foregoing have the effect of increased poverty levels among the northern populace. Despite the assorted interventions of federal and foreign donors, the common people in the North have been treated poorly and forced to walk off the plank by the class which they have entrusted their guardianship with.
The recent assertion that Nigeria is made up of the developing South and the backward North in a summit titled “Awakening the Arewa Spirit” in Kaduna gives an accurate picture of the situation. The governor of Kaduna State, on his part, equated the northern side to a war-ravaged Afghanistan and urged for the revival of our dead spirit. He summoned up courage and said we need to tell ourselves the truth. He demanded that the recommendation of the summit be tendered to the chairman of the northern state governors. The governor’s appeal gave me more power, as I remain unbendable in advocating the move of emancipating the North from the grip of its bad elements. In support of the proposition, I have tried to use a different tool to examine the woes of the North, in contrast to what was highlighted during the event. It shed light on why the two parts have differences in development indicators, despite having similar economic and political settings. Before delving into further discussion, I believe in the ability of the economic mechanism deployed objectively and transparently to ensure equitable distribution of scarce resources in the country upon certain conditions. This is while not being overly optimistic that in the long-run things would be better, as opined by Adam Smith. I still hold some reservations against Robert Malthus on the assertion that the end might not be good, looking at the threat of the population boom as in the case of the northern states. I believe that the condition of the lives of the proletariats needs to be improved for the aristocrats and their young ones to live in a better Nigeria. Hence, I intend to assess the reason for this dichotomy in light of ignorance and cultural hypothesis.
The ignorance hypothesis asserts that poor nations are poor because they are devoid of good policymakers and economists and, as such, cannot proffer solution to ensure the effective distribution of wealth across economic agents. This is because economic agents are players who intervene in the economy under specific rules determined by the economic system and institutions and, as such, shape the economy by deciding the allocation of goods and services. The economic agents include households, firms, and governments; each of whose decisions affects the economy. Therefore, the optimisation targets of each economic agent, which are, in most cases, divergent, need to be managed by economists. This is to enable the creation of an efficient system that ensures the effective delivery of goods and services to the economic units.
More critical facts have emerged, disproving the cultural hypothesis as a reason for inequality. Although clinging onto some rare beliefs could be a bottleneck to development, especially nowadays, changes in technology have become so constant and leave no room for cultural adjustments.
The proposition that the ignorance hypothesis accounts for the significant reason why some nations are poor cannot hold water. Practical and real-life events nullify the hypothesis. This is evidenced in the collapse of the Soviet Union despite the existence of its first five-year plan developed by a pool of experts. The government, in its socialist agenda, decided to solve everyone’s problem in a paper, which resulted in lots of mistakes and continued revision of the document. Despite its comprehensiveness, only 30 per cent of the document was believed to have been implemented through the plan and showed signs of success at the beginning, when the country recorded 6 per cent economic growth. Subsequently, the economy plunged. A body of expert knowledge was used to develop the plan but this still could not save the union from the economic mess. On the other hand, Ghana, after independence, faced a serious economic challenge, despite the presence of renowned experts in the economic team. A good economic plan was developed, which cumulated in the spurring of manufacturing companies. For instance, the government constructed a juice manufacturing company in a location where mango was not produced, and the factory was gigantic in order to serve the world’s demand. The elephantine project was traced to the president’s political interference. Thus, the ignorance hypothesis could not be a reason for their economic woes.
In the same vein, the cultural factor was also hypothesised to be the cause of inequality between the rich and poor nations. The cultural hypothesis posits that poor countries performed woefully because their culture is inimical to economic development. The populace is clinched to values, norms, and beliefs that are sandwiched between superstition and rigid religious myths. This was said to be the reason for their lack of openness and close-mindedness, which resulted in the reluctant acceptance of fresh ideas. The hypothesis used this to justify the economic inferiority of sub-Saharan and South American countries. More critical facts have emerged, disproving the cultural hypothesis as a reason for inequality. Although clinging onto some rare beliefs could be a bottleneck to development, especially nowadays, changes in technology have become so constant and leave no room for cultural adjustments. The difference between North and South Korea’s states in development indices suggests a divergent view which debunks the cultural hypothesis, considering their historic cultural similarities. Also, the fact that Nogales’s region cuts across Arizona (US) and Sonora (Mexico), having similar norms, values, and beliefs and yet different living standards, raises more questions as to the validity of the cultural proposition.
The above discourse, if analysed in the context of Nigeria, shows that the ignorance hypothesis and cultural hypothesis cannot be the reasons for the northern region’s economic setback. To extrapolate facts from the ignorance hypothesis, a series of development plans and economic programmes, such as Vision 2010, Financial System Strategy 2020 (FSS2020), NEEDS, the seven-point agenda, and anchor borrowers’ programme were developed and implemented to a varying degree by experts from both sides of the country. The development plans attempted to bring about diversification, strong small and medium enterprises (SMEs), a positive balance of payment, reduction in recurrent expenditure, elaborate socio-economic programmes, effective collaboration between monetary and fiscal agencies to achieve financial system stability, as well as sustained economic growth across the country. Despite these efforts, the North is nowhere to be found in terms of economic prosperity. This suggests that the country possesses versatile policymakers that cut across the two parts that can bring about glad tidings in terms of economic fortunes to the nation. Records showed, however, that the North, just like other oil-rich Arab countries, celebrates this fortune only when there is a global increase in the oil price, which automatically reverses itself whenever there is oil glut. To mitigate this problem, the economic think tanks always call for diversification, and the nation is still battling to implement it but making little or no progress. The above discussion portrays that Nigeria has the required technocrats from both regions with the requisite technical know-how to provide the answer to the economic mystery, but something remarkable is missing, which needs to be explained by the same experts.
In contrast to the South, the North solely relies on federal allocations and subventions to implement projects and pay salaries. The liquidity in the states dries up by the mid-month as the money flees to the South and China for the purchase of goods; they (northerners) need but cannot produce.
On the cultural perspective, the menace in the North, which ranges from terrorism, banditry, the almajiri system, drug addiction, gender inequality, self-serving politicians, class differences, and incessant tribal and religious riots cannot be in any way attached to the cultural beliefs but rather the economic subordination of the masses by a stronger class. As in the case of South Korea and North Korea, the sharp divide is mainly due to the economic sanction imposed on North Korea, which jeopardised their success potentials. This is similar to the northern region, where there is a sharp divide in the standard of living between two groups: the elites and proletarians. The elites group consists of the wealthy public officials, politicians, imams and emirs (chiefs), and the proletarians group represents the peasants, minimum wage-takers and political and social thugs. A social class difference was artificially created, placing the proletarian group on a systemic poverty line, while the elite group sat at the peak of a ladder difficult to reach, except by a few within the cycle. Although the two groups have a similar cultural disposition, praying in the same manner and observing similar religious rites, the elites benefit the most from the economic and social conditions of the region. Therefore, while the elites flourish in abundant riches, the proletarians groan and perish in abject poverty, despite comprising up to 80 per cent of the population.
In contrast to the South, the North solely relies on federal allocations and subventions to implement projects and pay salaries. The liquidity in the states dries up by the mid-month as the money flees to the South and China for the purchase of goods; they (northerners) need but cannot produce. The elites group shun the region and invest abroad and/or in already established companies in the South, having selling points across northern markets. This further drains away cash resources received from federal allocation as the region turns to a consumer-based economy, producing nothing worth exchange across the artificial borders. The northern region has a poor structure upon which a strong economy is based. There is the near absence of manufacturing industries, and the few there are devoid of skilled and semi-skilled labours from the region. Due to the absence of consumer goods’ industries in the region, items such as confectioneries, flour, sugar, and other household provisions are purchased from the South. Thus, business activities in the region have been reduced to retail with a larger portion of the profit margin being gulped by the products’ manufacturers, having their ears down in the market, continuously closing off any unexpected margin. Meanwhile, the elites group quit investment in tangible businesses in the region and went on searching for government jobs and contracts. This diminishes the chances for the region to revamp and have sustained development, and thus, aggravates its menace by the systemic production of thousands of unemployable youth. In a nutshell, the elites group who are the supposed benefactors of the region needs to understand why the region lags behind and work towards restoring its lost prestige.
Nasiru Ahmad, a chartered accountant, is a public finance and corporate governance expert.