Democracy or Meritocracy? The Nigerian Economic Society Weighs in
China just summoned Nigeria and other 53 African countries to the 9th Forum on China-Africa Cooperation (FOCAC) in Beijing, China, between September 4 to 6, 2024.
The forum provides multi-lateral coordination between China and all African countries (except Eswatini).
Historical antecedents show Nigeria could have been the one convening the other African brothers if it had lived up to its early economic prospects and lead over China.
As of 1960, the average output of each Nigerian, Nigeria’s gross domestic product (GDP) per capita, exceeded that of the average Chinese, indicating Nigeria’s lead in unit productivity and prosperity.
Nigeria maintained this lead for 3 decades, but by 1999, the momentum had dissipated. From 2000 onwards, China’s average productivity and prosperity outpaced Nigeria’s with increasing margins.
The trend is similar when the purchasing power of the average earnings in each country is compared instead of just the dollar values (since a dollar does not have the same value in different countries).
China’s GDP per capita in terms of its purchasing power parity (PPP) surpassed Nigeria’s and the rest of Sub-Saharan Africa from 1999 onward.
At $24,558, China’s GDP per capita (PPP) is now four times that of Nigeria at $6,318.
GDP per capita is the Gross Domestic Product (GDP) of a country divided by its population, representing the average economic output or income per person in that country. GDP per capita Purchasing Power Parity (PPP) measures the average economic output per person, adjusted for differences in price levels between countries to more accurately compare the economic well-being and living standards of different countries.
China’s Development Model
China’s rise in terms of increased productivity and prosperity is not mere coincidence. It resulted from certain economic reforms that were undertaken by the Chinese government, beginning in 1978.
Although accounts of China’s economic reform strategies differ, a common thread in all narratives is the deliberate effort by Chinese leaders to propel the country from stagnation to prosperity.
A report by the International Monetary Fund recorded that to revive its dormant economic potential, China promoted the development of rural enterprises and private businesses, liberalised foreign trade and investment, eased state control over certain prices, and invested in industrial production and workforce education.
Another account by the World Bank reported that China prioritised higher savings rates and capital accumulation during the first three decades of central planning. China achieved this by maintaining terms of trade that favoured the industrial sector and restricting wage growth for industrial workers.
The Chinese government prioritised innovation in its economic strategy through several prominent initiatives, including an export-led growth strategy where a country seeks economic development by opening itself up to international trade.
In 2015, China announced its “Made in China 2025” initiative to advance and modernise its manufacturing across 10 critical sectors with significant government support, positioning the country as a leading global player in these industries.
There was also a significant reduction in population growth rates in China. This is based on the assumptions of a growth model – that rising savings rates and falling population growth rates motivate higher capital-labour ratios and rising living standards.
Total fertility rates dropped from 7.5 births per woman in 1963 to 1.18 in 2022. While the fertility rate in Nigeria and Sub-Saharan Africa has also declined in the same period, births per woman in both regions are three to five times higher than that of China.
Consequently, these major economic reforms resulted in China’s critical human capital developments and corresponding economic productivity.
Over the past 20 years, China has made significant progress in key aspects of human development, improving education, health, and living standards for its citizens.
According to the 2022 Human Development Index, China is classified as having “high” human development, with a score of 0.78 ((where 0.90 = Very High; 0.76 = High; 0.64 = Medium; 0.517 = Low).
In contrast, Nigeria’s progress in critical aspects of human development has remained “low” at 0.55 as of 2022.
The careful cultivation of controlled population growth and targeted human development resulted in a more moderate standard of living for China, serving as a key catalyst in the country’s fight against extreme poverty.