Low Productivity, not Corruption is the Real Problem
By: Tope Salahudeen
Tags: Nigerian Economy, Nigeria, Productivity, Economic Growth, Corruption

Productivity growth

A few days ago I asked the question; what important truth do very few people agree with you on?. Today’s my turn to answer the question too. Here goes, please feel free to agree or disagree in the comment. Here’s my answer! 👇🏾

Corruption isn’t the biggest factor in our economic stagnation.

Low productivity is a significantly bigger problem.

To explain my answer, let me first talk about corruption, then I’ll focus on the bigger culprit, low productivity.

Firstly, Corruption is certainly a big deal and should be taken seriously, however, I’m of the strong opinion that putting the war against corruption at the centre of our economic growth plan is a total misplaced priority.

It is a classic case of “putting the cart before the horse”.

The corruption-poverty cycle is a self-reinforcing cycle; low resources in poor countries encourage corruption and higher corruption makes them poorer.

So it’s understandable that many think to become rich we just have to get rid of corruption.

Unfortunately, it’s not that simple and in the next posts, I’ll share 2 reasons why.

1. Corruption will always thrive in a country with low resources and no amount of anti-corruption crusade can stop it.

Humans will always take the least path to success, and corruption generally represents this path in a country with low resources.

That’s why almost all low-income countries have high corruption rates and the reverse happens in high-income countries. It’s not by accident that this happens. It’s the same reason why we can’t get rid of fraud (Yahoo) however hard we try.

2. Fighting corruption is expensive and low-income countries generally can’t afford the resources and systems necessary to fight it.

Having 10 anti-corruption agencies isn’t going to help if they don’t have the resources and systems to do their jobs.

What’ll just happen is what we see regularly in Nigeria, we just change the circle of thieves and nothing much after.

So Tope, if focusing on fighting corruption isn’t the answer, what is?

Also, what should we do to the likes of Dasuki and Diezani, should we just let them go free?

On the first question, the only way to be rich is to focus on wealth creation and be intentional about it.

Just fighting corruption won’t do much, we need to focus on increasing productivity and wealth.

Nigeria is a poor country given our population, so even if we could eliminate corruption by some miracle, we’d still be poor.

But won’t the corrupt officials just steal more if we create more wealth?

The truth is when it becomes easier to gain “wealth” from other sources different from corruption, the rate of corruption generally tend to go down because people that become corrupt due to unfavourable life circumstances would desist and chase cleaner wealth.

Similarly, the more distributed the wealth of a nation, the easier it is for leaders to be accountable to their citizens. That’s what happened in Europe, in America and the richer Asian countries.

Also, a little back of handkerchief calculation, let’s say we currently lose 60% of our budget, let’s assume it’s $100 billion to corruption, we’d only have $40b left for national development.

However, if we create more national wealth and get the budget to $1trillion and lose 90% to corruption, we’d have $100billion left. Still Higher in nominal terms even with the increased assumed corruption rate.

This calculation is of course simplistic, but you get the gist.

Finally, on the question of corrupt officials, I believe we should go after them as much as we can, but not waste scarce resources on them.

I know it’s unfair, but life isn’t fair generally. We should prosecute them if we can, but the focus should be more on increasing productivity.