I think the most important thing you highlighted here is the arbitrage and information asymmetry are big money makers in Nigeria, the rules of the game are what consistently produce the outcomes we complain about. From business to bureaucracy middlemen are everywhere profiting off the information asymmetry, consistently rewarded. The actual producers suffer, be it the pre colonial cloth production in Kano or modern day internal agricultural market, most of the profits go to middlemen.
The Arabs (Ay-rabs to our Yanqui invaders) are another trading civ. Might be interesting to examine their disparate response to industrialising impulses from the Orient. They're all 'effectively' monarchies, yet one can observe industrial disparity between Morocco, Egypt, and the Gulf States (Levantine Arabs nah another tori). Our soon-to-be-Ecowas overlords are obviously playing on a different field.
Point is that China is here. It's up to everybody else how they adapt by grafting onto their trunk. For the Nigerian car buyer, what will you do with the surplus that no longer flows to the middleman? You can listen to some Google Ad and 'satisfy your cravings', lever into a 2x ETF, or check out some Alibaba listings for yet another side hustle. There are no easy answers, but involution is just the market economy at work.
Agreed. I'm not sad to lose some car dealers to the Chinese wave. Might shed a tear briefly but no more than one tear. I am more concerned as you say with the response that Nigeria and Nigerians can muster.
Believe it or not , this change is already under way a lot faster than you can imagine. The Chinese have moved from setting up trading houses here to setting up or buying factories. Dangotes cement monopoly will soon meet a chinese company making prefabricated concrete buildings. Soon the cars will be assembled in Nigeria in greater scale. Trading persists in Nigeria because anything other than trading taxes our sadly minimal innovative ability. We are adaptable but not innovative enough either as people or as a society.
Not one of your best pieces, if you do not mind my say so. You list the manifestations of a real trend, but did not attempt to provide any historical or economic issues leading to these trends. I suggest that, if the latter was your intent, you could have met it within the length of your piece. This particular article reminds me of your article about Dangote not being about to industrialise Nigeria. You notice the symptoms, comment on them, but not, in my opinion, in any way that illuminates the relevant political economy issues to your readers. And in a lot of cases, the relevant political economic issues can be laid bare using everyday words. By the way, in my opinion, one policy of the Nigerian dominant political classes which has created the background, for what you are described in both articles, is that they (the dominant Nigerian classes, who are doing very well from importing and selling foreign-made goods) do not want to create the infrastructure for the growth of SMEs, or any significant local production in Nigeria. See how much effort they are putting into electrification. A look at Rwanda, for example, exposes a different set of priorities. There are much to detest about Paul Kagame, but one can still appreciate the efforts of his regime, if yet unsuccessful, to build a Rwandan textile industry. The Nigerian ruling classes do not prioritise the development of any industry. The actions of Dangote (monopoly opportunities and no need for R&D to fight rivals) and those of the Chinese wideboys in Nigeria (the leaders of the corrupt/weak state, which do not have a national industrialisation policy, only interfere when there is personal gratification for one of its members, ) are obvious results. By the way, even the more experienced EU political leaders, and the CEOs of long-established German car companies, are struggling as to how to deal with the influx of cheap Chinese-made cars into Europe!
If I knew what the cause was I would have listed it in the piece. Hence why I said explicitly I have not been able to find an answer? But you have also repeated the point without saying much either - why is it the case that the Nigerian elite or whoever else do not prioritise production as you say? Is it a genetic endowment or learned behaviour?
I am not sure what to make of the Rwanda point - electricity there costs about 6x what it costs in neighbouring Ethiopia. There is no real manufacturing going on there hence why it's an economy focused on services. If one were to compare Rwanda to Ethiopia on that basis, would it just be enough to say it is because Kagame does not prioritise the development of industry relative to Ethiopia but prioritises it more relative to Nigeria?
I think the most important thing you highlighted here is the arbitrage and information asymmetry are big money makers in Nigeria, the rules of the game are what consistently produce the outcomes we complain about. From business to bureaucracy middlemen are everywhere profiting off the information asymmetry, consistently rewarded. The actual producers suffer, be it the pre colonial cloth production in Kano or modern day internal agricultural market, most of the profits go to middlemen.
Yes, this is a longstanding problem and it leads to all kinds of weird behaviour that incentivises information hoarding since information is money
The Arabs (Ay-rabs to our Yanqui invaders) are another trading civ. Might be interesting to examine their disparate response to industrialising impulses from the Orient. They're all 'effectively' monarchies, yet one can observe industrial disparity between Morocco, Egypt, and the Gulf States (Levantine Arabs nah another tori). Our soon-to-be-Ecowas overlords are obviously playing on a different field.
Point is that China is here. It's up to everybody else how they adapt by grafting onto their trunk. For the Nigerian car buyer, what will you do with the surplus that no longer flows to the middleman? You can listen to some Google Ad and 'satisfy your cravings', lever into a 2x ETF, or check out some Alibaba listings for yet another side hustle. There are no easy answers, but involution is just the market economy at work.
Agreed. I'm not sad to lose some car dealers to the Chinese wave. Might shed a tear briefly but no more than one tear. I am more concerned as you say with the response that Nigeria and Nigerians can muster.
Believe it or not , this change is already under way a lot faster than you can imagine. The Chinese have moved from setting up trading houses here to setting up or buying factories. Dangotes cement monopoly will soon meet a chinese company making prefabricated concrete buildings. Soon the cars will be assembled in Nigeria in greater scale. Trading persists in Nigeria because anything other than trading taxes our sadly minimal innovative ability. We are adaptable but not innovative enough either as people or as a society.
Oh no! Dangote Cement facing Chinese competition? That will make me very sad 😐
We may all then have to be ready to be sad (or is it sadder?) as Chinese competition would not notice our tears!
Not one of your best pieces, if you do not mind my say so. You list the manifestations of a real trend, but did not attempt to provide any historical or economic issues leading to these trends. I suggest that, if the latter was your intent, you could have met it within the length of your piece. This particular article reminds me of your article about Dangote not being about to industrialise Nigeria. You notice the symptoms, comment on them, but not, in my opinion, in any way that illuminates the relevant political economy issues to your readers. And in a lot of cases, the relevant political economic issues can be laid bare using everyday words. By the way, in my opinion, one policy of the Nigerian dominant political classes which has created the background, for what you are described in both articles, is that they (the dominant Nigerian classes, who are doing very well from importing and selling foreign-made goods) do not want to create the infrastructure for the growth of SMEs, or any significant local production in Nigeria. See how much effort they are putting into electrification. A look at Rwanda, for example, exposes a different set of priorities. There are much to detest about Paul Kagame, but one can still appreciate the efforts of his regime, if yet unsuccessful, to build a Rwandan textile industry. The Nigerian ruling classes do not prioritise the development of any industry. The actions of Dangote (monopoly opportunities and no need for R&D to fight rivals) and those of the Chinese wideboys in Nigeria (the leaders of the corrupt/weak state, which do not have a national industrialisation policy, only interfere when there is personal gratification for one of its members, ) are obvious results. By the way, even the more experienced EU political leaders, and the CEOs of long-established German car companies, are struggling as to how to deal with the influx of cheap Chinese-made cars into Europe!
If I knew what the cause was I would have listed it in the piece. Hence why I said explicitly I have not been able to find an answer? But you have also repeated the point without saying much either - why is it the case that the Nigerian elite or whoever else do not prioritise production as you say? Is it a genetic endowment or learned behaviour?
I am not sure what to make of the Rwanda point - electricity there costs about 6x what it costs in neighbouring Ethiopia. There is no real manufacturing going on there hence why it's an economy focused on services. If one were to compare Rwanda to Ethiopia on that basis, would it just be enough to say it is because Kagame does not prioritise the development of industry relative to Ethiopia but prioritises it more relative to Nigeria?
Not sure what insight we can obtain from that.