Nigeria must turn to entrepreneurs of innovation and deep thinkers, to address its economic development challenges

The future belongs to Africa" is a commonly heard phrase, and for good reason. With the largest youth population and a rapidly growing population, Africa holds enormous potential. Nowhere, is this more evident than in Nigeria, the continent's largest country with a population of 230 million, over half of whom are below thirty-five. However, a stark reality exists: four out of five Nigerians must create their jobs to survive.

Despite numerous strategies and programs implemented by successive administrations, there has been trivial improvement in Nigerian society over the past decades. The country has regressed to become the poverty capital of the world. The population's growth has led to a surge in unemployment and poverty. Nigeria is fighting a losing battle, engaging in an economic struggle it cannot win. Population growth is outpacing economic growth.

?Fundamentally, economists seek equilibrium between supply-side and demand-side economies as the optimum state for optimum development and this has been the conventional or preferred state by most economists.

However, a closer look at the local conditions shows that an equilibrium between supply and demand economies will fail. A supply-side economy assumes consumers with purchasing power will drive industrial growth. The local condition is an antithesis to that idea. We have low wages and an impoverished population with poor purchasing power. The emphasis on infrastructure first, to meet the requirements of a supply-side economy is forcing us to take on an enormous amount of debt that is debilitating and a pitfall for future efforts at growing the economy. We already see the shortsightedness of the Buhari regime which embarked on a splurge of road construction with debt that leveraged future earnings for the nation.

We must tilt, however slightly, towards a demand-side economy. Supply-side economics, (once referred to as trickle-down economics) is founded on the theory that by creating a business-friendly environment, with the necessary incentives there will be an expansion of industries leading to job creation. However, this economic model requires massive capital investment, and the construction of infrastructure to support an economic boom that is not assured, in an impoverished society with low purchasing power. Consequently, Nigeria may find itself indebted to the West and China, without a resulting economic growth thereby jeopardizing the future of its youth.

A close look at some of the supply-side strategies being deployed by the current administration in the fiscal economy and why they may not be beneficial to the population.

Student loan – debt for students to make them employable, however, most cannot find jobs after graduation and if they do, wages are too low, paying back the loan will be impossible. Construction of airports - for a population that cannot afford airline tickets.

A shift in strategy is imperative. Nigeria must turn to entrepreneurs of innovation and deep thinkers, to address its economic development challenges. We must push textbook economics aside and apply basic common sense to restructuring our economy. Importing or relying on local entrepreneurs of opportunity, no matter how successful, will not be sufficient to address the massive unemployment levels, nor lift wages. Many entrepreneurs of opportunity entering the market are attracted because of low wages which is counterproductive to the economic objective of building a middle-class society.

?A simple exercise will demonstrate how ineffective the supply-side economy will be, applied to the objective of full employment in Nigeria.

?Invite one thousand local and foreign new businesses to enter Nigeria and create three thousand jobs each, they will collectively create three million jobs. An average of just 83,000 jobs per state, a ridiculously small number of jobs, considering the level of unemployment in the country. Nigeria must create between 25 and 35 million new jobs in the next 5 years to avoid slipping further into a deeper state of poverty. A dramatic shift in strategy is a MUST.

The government must acknowledge that creating jobs through entrepreneurs of necessity does not effectively grow the economy and has led to low productivity, unemployment, and increased poverty. Entrepreneurs of necessity are not interested in creating jobs, they are simply interested in feeding their families.

?Demand-side economics, which emphasizes developing human capital and creating jobs with living wages will be the catalyst for economic development. For Nigeria, the push-pull effect on the supply side will be similar to a gold rush as entrepreneurs of opportunity are naturally drawn to a demand-pull. The effect is an expansion of industries to meet the demand created, thereby becoming a catalyst for industrialization. This will result in a surge in internally generated revenue reducing the need for borrowing and a diversification of income to the government.

The government needs to invite entrepreneurs of innovation into its circle, ideas to create 15-20ml jobs with living wages without triggering inflation exist and should be utilized to restart the economy.

Tilting however slightly, to a demand-side economy may offer more promise for Nigeria and Africa. It is an imperative shift in strategy.