Prior to and immediately after independence, Nigeria was seen as a country with great growth potentials. In fact, Nigeria was termed the giant of Africa. But one may be tempted to ask the question ‘what actually went wrong with her industrial sector?’ This paper seeks to comparatively analyze the problems that seem to perpetually keep Nigeria behind its allies using South Africa as a case study. By implication, if Nigeria can vigorously address its challenges using the South African model, she will not only come out of its industrialization dilemma, but will reclaim its position as the giant of Africa. This is because, no country can claim to be developed in modern days without being industrialized.
COMPARISON BETWEEN NIGERIA AND SOUTH AFRICA
Nigeria’s high growth rates have been driven by consistently high crude oil prices. Indeed, the story about Nigeria’s growth is predominantly about oil. The primary engine for such high oil prices on the world market has been demand from BRICS countries: Brazil, Russia, India, China and South Africa. However, since the 2008 global financial crisis, BRICS countries have been showing signs of struggling, with growth forecasts for this year cut by almost half. If oil demand continues to weaken due to their sluggish economic performance, Nigeria’s economy could prematurely plateau in a manner analogous to Japan
On the other hand, South Africa’s economy is more diversified, and as a result, its growth rate, though more measured, is likely to be steady
Nigeria has, in comparative terms, a smaller entrepreneurial community than South Africa. Dependency on oil appears to have profoundly discouraged would-be innovators and entrepreneurs from other sectors, such as the ‘smart’ industries of finance or telecommunications. With the exception of well–established conglomerates such as the Dangote Group, Nigeria also struggles with internationalising its companies. Indeed, there is a sense that Nigerian entrepreneurs have more interest in accumulation than in global expansion. The Nigerian economy needs to reach out to international markets if it wants to sustain the momentum initiated by high GDP growth rates
South Africa, on the other hand, has shown that it has the ability to take advantage of regional and international markets, with its companies such as Nandos Restaurants, MTN Multinational and Stanbic Bank, amongst many, showing the potential to become global brands. In a manner akin to the US, South Africa has also successfully ‘exported’ its currency, with the Rand being used as official currency in Zimbabwe, Botswana, Namibia, Lesotho and Swaziland, a move that has boosted trade with its neighbours.
Brain drain system
Nigeria struggles to retain skills and continues to see an outflow of its best minds to London, New York and Johannesburg. For the past 30 years, it has been a country exporting future engineers, economists and doctors. With its workforce, Nigeria will be hard pressed to keep up with the mature knowledge of South Africa, a country whose dynamic economy continues to see it attract some of the best people in Africa
Retain Human Capital
South Africa’s top industries and universities are manned by highly qualified and some of the most sought after professionals in the region, including Nigerians. For the foreseeable future, human capital will remain South Africa’s comparative advantage.
Intractable corruption in Nigeria is a formidable barrier to sustained growth. Corruption is pervasive and the problem is compounded by the fact that Nigeria lacks the political will and effective institutions to address it. To be a dynamic economy, Nigeria needs to demonstrate interest in countering corruption by building the trust of its own people and investors
Strong institution to tackle corruption
In contrast, South Africa has comparatively...
References: 1 http://nigeriavillagesquare.com/articles/guest-articles/the-missing-link-in-nigerias-industrialization-efforts.html
2 http://www.businessdayonline.com/NG/index.php/analysis/commentary/45851-nigeria-and-south-africa-africas-economic- powerhouses-
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