All nations will prosper if they are able to develop their wealth. All nations have comparative advantages over each other as there is no nation without natural resources like land and people located in a unique environment. National prosperity is created, not inherited. It does not develop solely from a country’s natural endowments, its labor pool, its interest rates or the value of its currency, as classical economics emphasizes. National wealth is created from the efficiency of the residents living in a country. Prosperous nations are not those with large populations or small populations; it is not those endowed with natural resources but those who can use their population, large or small, and natural resources to increase population efficiency and harness research and development to maintain an edge. There are two types of economy: the knowledge economy and the agrarian economy. The knowledge economy or advanced economy describes the commodification and economic value derived from research and development. The agrarian economy is an economy heavily dominated by primary industries such as agriculture, fishing, logging, etc. and subsistence means of production. The wealth of a nation depends on the most used economy.
Four factors contribute to the production of goods and products on which the production of services is based. These factors are entrepreneurs, land, capital and machinery. There is no nation without land that can be used for the production of food and products. What makes the difference between rich nations and poor nations is how they are able to organize their factors of production to generate wealth (that is, how they are able to develop their land, their entrepreneurs, their capital and their machines to create wealth). A country’s competitiveness depends on its industry’s ability to innovate and modernize. It also depends on what its industries produce. Rich nations are those whose industries produce not only consumer goods, but also large machinery, airplanes, munitions, automobiles, ships, and rockets. Businesses are getting the edge over the best competitors in the world due to pressure and challenges. They benefit from powerful national rivals, aggressive local suppliers, government support and demanding local customers. Local customers are able to demand goods, products and services when they have strong purchasing power. Wealth is created by the number of bankable customers with “good debts” and the number who have access to “direct loans”.
Abraham Maslow’s theory of human motivation in Maslow’s Hierarchy of Needs, which states that human needs are insatiable yet predictable, should be harnessed beneficially by all nations. Maslow postulated that human needs are on five levels, from the bottom of the “needs” pyramid upwards. Human beings basically need food, water, shelter and clothing (psychological needs); safety and security of life and property, job security and environmental peace and order (security needs); friendship, recognition, being loved and loving someone (needs for love and belonging); confidence (self-esteem needs) and fulfillment (self-actualization needs). The basis of Maslow’s theory is that we are driven by our needs as human beings. The most important thing about this theory is that if our basic needs are not met, we would be unable to meet our other needs. The constitutional role of governments is to ensure that everyone’s psychological and safety needs are met. This theory can be used to explain why Africans are mostly not innovative and inventive, and why they remain poor!
In a world of increasingly global competition, nations have become more important. As the basis of competition has shifted more and more towards the creation and assimilation of knowledge, the role of nations has increased. Competitive advantage is created and maintained through a highly localized process. Differences in national values, geographical location and culture around the world are now exploited to develop the wealth of nations. No nation with a youth unemployment rate above 40%, as is the case in most African countries, can prosper. Government is defined as the group of people elected, selected or appointed to provide security and ensure the welfare of the people of a nation. No nation with insecurity of life and property can attract investment and no nation in Africa without an effective tax system can prosper. The government should add to the value chain of the nation by organizing the people to fend for themselves. This is done by exploiting the comparative advantages of nations. In Africa, most nations have comparative advantages in agriculture, petroleum resources, tourism and solid minerals. The government should consider these areas of comparative advantage as means of job creation and wealth creation.
According to the history of human settlement, human beings have historically settled in areas where they can engage in at least one means of subsistence such as farming, logging, fishing, and hunting (primary industry). The specialization of trades caused some people to focus on farming and depend on others for their other needs. Striker trading was initially practiced before the discovery of “currency equivalence” and money. Production was at subsistence level and sustainable. Over time, local farmers, with the help of the government, focused on making exportable products like “cash crops”. The government’s goal of ensuring that everyone is employed has led to the creation of industries for the manufacture of goods and the provision of services. Corruption was abhorred by many and was not a national scourge as we have it now. Everyone was ethical and industrious because good names were worth more than gold and silver! The lack of dedicated leaders and institutionalized corruption, not colonization, have led to underdevelopment in Africa. And unless we learn to create wealth on our own, based on our land resources, Africans might not emerge.
There are different types of land use in which a community can be mapped. These include agriculture, housing, offices, industry, medicine, transport, education, services (waterworks, sewage, landfill), defence, recreation, religious and tourism land uses, etc. To be able to channel the efforts of citizens towards efficiency and the creation of wealth, there must be a rule of law and the level of corruption in Africa must be reduced to a strict minimum. There must be discipline, merit must be the watchword and not national character or nepotism. The three basic human needs are food, shelter and clothing. These needs in the modern age have been expanded to include transportation, education, medical services, and security of life and property. Governments should be able to capitalize on these basic and modern human needs to create wealth. Wealth is an abundance of valuables or money. The wealth of a nation is the abundance, or at least the adequate supply, of basic infrastructure such as food, housing, roads, hospitals, schools, drinking water, industries, land recreation and sports grounds. It also includes the credit balance sheet of nations.
Adam Smith, March 9, 1776, published an Inquiry into the Nature and Causes of the Wealth of Nations, generally called the Wealth of Nations, which dealt with the mercantilist system. Mercantilism held that wealth was fixed and limited and that the only way to prosper was to hoard gold and tariff products from abroad. This theory asserted that nations had to sell their goods to other countries without buying anything in exchange in order to have a monopoly on trade. This is an exaggerated scenario! No nation is an island unto itself. Literally, nations that want to create wealth and prosper must have a “trade balance” in excess of other nations. Nations must be able to identify their areas of comparative advantage and jealously develop these comparative advantage activities to their benefit. A nation with arable land should develop its agriculture and food adequacy, while a nation that has a spiritual and religious history should develop its tourism potential. No nation can prosper by allowing its markets to be turned into dumping grounds. Without healthy competition with other developed nations, no nation can prosper.
- ESV. Oyedele, property surveyor and appraiser, writes from Lagos
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