The seemingly perpetual disequilibrium in the economy

A straightforward technical explanation of the socioeconomic ills afflicting Nigeria is provided in this essay on the country's economy. Unfortunately, we have been dealing with this issue for the last 60 years or so. and might stick with us for a while if we don't find the appropriate people to guide us through a long enough period of reparations. This group of people has to know enough about the current state of affairs to be able to navigate the woods. In addition to having the ability to work hard and manage both human and material resources effectively, they must be sincere about the actions they are pursuing and be able to govern and lead society with the key principles of service, passion, integrity, resourcefulness, inclusivity, and teamwork (SPIRIT).
It is such leadership that can bring us out of the present situation. In view of the almost permanent nature of this parlous state, which can be aptly described as a perpetual state of disequilibrium and a situation which can be perceived as hopeless, the task will be herculean!

Generally, a disequilibrium situation is one that deviates from the norm or ideal position and needs restoration through serious thinking and hard work. A good example from the science of economics is that equilibrium is attained when the supply of a commodity is equal to the demand for the commodity in the market. In such a situation, the price of the commodity is optimum because at that price, the supplier of the community is willing to sell, and the customer is willing to buy. The optimum price is therefore the equilibrium price for the commodity at a particular time, ceteris paribus (all things being equal).

When a disequilibrium situation occurs in the market for commodities, it is reflected in the prices gyrating up and down. For example, if the demand for a commodity is more than the supply at a particular time or place, the price of that commodity will be above its equilibrium price and vice versa. In an increased price situation, the market is sending signals to those that can influence the supply to increase supply of the commodity, in order to moderate the price and restore equilibrium. This market could be a “rice market” or “dollar market” as presently manifested in the Nigerian commodity markets. Such situation, however, occurs in a market in which some structural problems do not hinder the production and/or supply of the commodity. If any structural problem exists to hinder supply on a permanent basis, equilibrium will not be restored and the dislocation in the system continues, leading to a perpetual state of disequilibrium.

In the real world, the commodity space is multifaceted and complex, with many commodities and prices. Imagine a market situation in which there are no shortages, meaning that everyone has access to everything they need in the right quantities, at the right times, in the right places, and at the right prices. This type of market situation can be compared to a bliss point in life, or a state of extreme happiness similar to what clerics preach about heaven. However, there is ample evidence that our world in Nigeria is very far from this condition.
In our case, it is a situation of shortages galore from food shortages to limited availabilities of non-food goods and services, from very limited employment opportunities to shortfalls in foreign exchange, from poor supply of electricity to bad rural-urban and trunk roads, from dysfunctional rail networks to limited schools and health facilities that are equally below standards, from lack of potable water to ineffective security, and shortages of a host of other goods and services that can make life meaningful to the average human being.

The foregoing itemization of deviations from the norms in the Nigerian economy is not exhaustive in any way. These signs of anomalies are obvious on a daily basis, and they have to be corrected, and equilibrium restored to make people happy. Restoring equilibrium is a herculean task that needs a large dose of strength, diligence, discipline, courage and intelligence that are generally in short supply amongst the core set of political and administrative leaders we have at the national and sub-national levels of government. The situation is more challenging at the sub-national levels where, for example, local government councils are completely dysfunctional and not performing any of their constitutional roles in grassroots development. And most state governments are poor managers of resources engaging mainly in wasteful and politically visible large projects (like building airports, universities, dual carriage city roads and mega schools) that eat-up their meagre resources with nothing left to perform their traditional development roles, failing to pay salaries of public servants and pensions and gratuities to retirees when due.

The situation at the federal level is not different with constitutionally too much ascribed fiscal responsibilities and penchant for wasteful and relaxed spending. By the latest count, there are over 400 MDAs with other numerous cost centres in the executive and legislative arms of government and hundreds of thousands of federal public servants expending over 70 per cent of the annual budgets on recurrent expenditures with little left for development projects. A fundamental outcome of this approach to governance in which plenty of money from government is being continually pumped into the economy without a strong productive base and functional infrastructure results in too much money chasing too few goods with the attendant upward pressure on inflation. This is the situation we are today in all our various markets.
In conclusion, it will be prudent to take a few cues from Robert S. McNamara, a wise economist who lived during the administration of the late President John F. Kennedy of the United States of America. About 60 years ago, McNamara claimed in one of his outstanding works that a society cannot be peaceful if it does not progress. A society is considered developed if there are no food shortages, population growth, low productivity in the manufacturing and agricultural sectors of the economy, low personal income (also known as poverty), low production technology, dysfunctional and inadequate economic and social infrastructure, and high unemployment. Economic history teaches us that if these favourable circumstances do not materialise, that is, if market equilibrium is not restored economic history teaches us that conflicts within the society will occur, often resulting in ethnocentrism with likely occurrences of violence, bloodletting and war as happened in Europe prior to the Second World War, before our own Civil War, and before the present conflict in Syria. The absence of development begets ethnic tension, tribalism, nepotism, corruption, and other unwholesome human behaviours common in poor societies. These are the societal problems government at all levels must strive to resolve through politico-social and economic interventions.