Like i promised earlier this week , my faithful readers need not go for long without having their succulent posts from The AMAZON ! and so far , i am keeping my promise, so keep yours by faithfully reading( as you usually do) and of course commenting. Now , this post is peculiar because it has me dabbling into troubled waters. Lately , we have all been assaulted with the use of the term “economic recession” , so i looked through my hive of unpublished Articles and found one that best fits this situation.
Ironically, this article is another entry in an essay competition, however , it was particularly chosen because it embraces policy solutions which simply put is our “way forward”. Please read and comment. Let’s hear your views . You just might be the “change” being sought for! And while you’re at it , always remember, my amazing quill loves you 😉
Economic liberalization is simply the lessening of government regulatory control in a state’s economy, either through restrictive policies or mandatory dictates, in exchange for major participation by private enterprises. Succinctly put, liberalization is “the removal of controls” in order to encourage economic development.
Like shackles on horse feet stills the progressive race of the animal, the sometimes suffocating embrace of governmental policies on the market economy may not only prove stifling , but may altogether stagnate any form of development which ought to ensue from a free market economy.
The Nigerian economy, has over the years been fraught with undue governmental involvement. In an effort to modernize the economy, the early political leaders adopted a development planning strategy which allowed the country to to produce some of its consumables locally and in effect reduce dependence on external sources for the supply of such items. However the insatiable urge to quicken the pace of development gave rise to heightened demand for imports. Consequently, governmental trade policies were enacted to restrict and moderate import demand pressures and are present till date.
To effectively restructure the economy, a most viable solution is Liberalization. Economic Liberalization would require the removal of barriers to international investing since investing in emerging market countries can sometimes be an impossible task if the country has several barriers to entry. These barriers can include tax laws, foreign investment restrictions, legal issues and accounting regulations that can make it difficult or impossible to gain access to the country.
The economic liberalization process begins by relaxing these barriers and relinquishing some control over the direction of the economy to the private sector. The primary goal of economic liberalization is the free flow of capital between nations and the efficient allocation of resources and competitive advantages. An increased flow of capital into the country makes it cheaper for companies to access capital from investors as a lower cost of capital permits companies to undertake profitable projects that they may not have been able to with a higher cost of capital pre-liberalization. This may lead to higher GDP growth similar to the spurt witnessed in China in the late 1970s.
Economic liberalization is a beneficial and desirable process for developing countries and Nigeria ought to avail itself of its benefits.