A former CBN Deputy Governor, Professor Kingsley Moghalu has blamed the crony capitalist system in Nigeria as the root of the country’s high rate of poverty.
Moghalu underscored this during his keynote speech at the annual conference and international leadership symposium of the Center for Values in Leadership (CVL) program on Monday, held at the MUSON Center, Lagos.
The professor highlighted the different forms of capitalism practiced around the world by major economies, which he said are “entrepreneurial capitalism, social capitalism, crony capitalism and state capitalism.”
According to him, the Chinese communist government patented state capitalism, while South Korea and Russia thrived on crony capitalism. Explaining that every country practices more than one type of capitalism, he said Nigeria operates both entrepreneurial and crony capitalist systems at different levels.
The entrepreneurial capitalist system, which is commendable, is operated at the lowest level to lift citizens out of poverty. However, he said, the system practiced in Nigeria is not sustainable enough to encourage wealth creation.
He added that only the elite in Nigeria practice crony capitalism, giving them access to state resources. He said if Nigerians had the opportunity to create wealth and lift themselves out of poverty, Nigeria should adopt the method of crony capitalism that South Korea used to reshape its economy.
Moghalu said South Korean conglomerates owned by big families have enabled wealth creation by creating supply chains. There, citizens at the lowest levels create wealth by providing different aspects needed and used by conglomerates.
Speaking on the topic – “Africa’s post-COVID economic evolution”, the former CBN MP noted that the case also applies to Africa as the system of capitalism on the continent is not inclusive.
His statement read in part: “Africans say we are capitalists, but what happens is that we create wealth for a few individuals, not for the masses or the citizens. There are three things you must have for a capitalist economy to thrive and create inclusive wealth. You must have property, innovation and capital rights.
“The second thing is that the government must make conscious choices between the different types of capitalism. There is, and state capitalism, which China uses. The patented form of capitalism. The only one in the world. Normally, no country can be purely one of them. They can be mixed. For Nigeria, I will recommend entrepreneurial capitalism, because we are dynamic people. We hustle, but hustling is not enough. Honestly, we use that and are proud of it, because we don’t have a government that can create an environment for wealth creation.
“But what we find in Nigeria is not really entrepreneurial capitalism. You have that at the bottom of the pyramid where the peanut seller or even the tech start-up guys operate. At the top, what we have is crony capitalism, where people determine the state because they have connections and monopolize economic wealth. A few people enjoying huge benefits because they have access to the state. We have crony capitalism in Nigeria in its worst form.
“You have it as a system in South Korea and Russia. But in South Korea, it builds their wealth. Why, because it was consciously designed. The country’s economy runs on supply chains of these big, family-owned conglomerates. That’s a system we can use here.
He said: “A president can decide he wants 20 to 30 Aliko Dangotes in the country. Our economy can be redesigned, that these big (billonaires) become the chain of economic wealth creation down”, while those at the lower level who create and provide different and important aspects, become part of “their big conglomerates” . He added: “It’s a choice, but it takes a certain point of ability to handle those kinds of choices.”
The CVL symposium held to commemorate the birthday of former Delta State governorship aspirant, Prof. Pat Utomi, brought together key economic experts including the African Union Commissioner for Economic Development , Commerce, Industry and Mining, Ambassador Albert Muchanga, Vice Chairman, Technical Committee of the National Council on Privatization (TC-NCP), Dr. Ayo Teriba and other dignitaries.
The chair of the event titled “Economic Evolution of Life Post-COVID-19: Measured to Rebuild Economies in Africa”, was a former Permanent Secretary and Chief Economic Advisor to the President, Chief Phillip Asiodu.
Source: Investors King
