Why is Nigeria filled with entrepreneurs and resources but so much less developed than the West: Musings, anecdotes, and questions.

Before I left for Nigeria I created a Rebel of the Week profile for Glenn Cripe of the Language of Liberty Institute, whom I was traveling and working with.  I spent nine days with LLI there working with eager students who were learning about libertarian principles and economics.  It was inspiring to see the thirst for liberty that comes from a place which has had it so denied and to contrast to places I’m familiar with back home where people take it for granted and complain about relatively minute obstructions of personal liberty.

Nigeria was a puzzle for me.  There is this buzz everywhere you go of people running businesses in formal storefronts or along the street, assumedly unregulated, more banks than I could count and a metropolis so crowded and active that traveling anywhere was enough to make a (somewhat) sensible man like myself say, “screw it. I guess I’ll just live in this hotel. Not worth the effort of leaving.”

While there is this omnipresent entrepreneurial energy we wondered why it was such a challenging place to visit.  It is substantially impoverished in many areas and I saw more slums than I’d seen in my young life.  I haven’t studied much development economics so I’d certainly appreciate any relevant links (I have a copy of The Mystery of Capital by Hernando de Soto waiting for me at home courtesy of the Institute for Humane Studies).  The answer our crew came up with was that many of their shoestring enterprises weren’t necessarily long-term capital investments: they were merely enough to sustain one’s existence.  E.G. They weren’t channeling their fruit sales into better refrigeration or storage, etc. But even this seems like a rather imprecise answer.

Our local host, Adedeji Akintayo, is an entrepreneur who splits his time between studying for a second degree in the Ukraine and working at his multiple businesses in Lagos.  His main business in educational consulting where he helps Nigerians navigate the red tape of the Nigerian and Ukrainian states and the universities in order to study abroad as he himself has done.  Deji was a very thrifty person, learning to save from a young age.  He told me he used to save 3 naira a week (the equivalent of about a penny) as a young child and he has never stopped since.  His frugality and willingness to take a longer time preference for consumption has allowed him to study and travel as well as create capital investments like a computer, office space and a diligent employee.

We also met his uncle who goes by the name Mr. Paradise. Why is his name Paradise? He told us the story of how five years ago he saved up enough money to buy a deep freezer to sell ice to hotels, restaurants, etc.  From there he bought a small bar he named Paradise with a table and two chairs.  Through thrift he saved and continued to buy more chairs and space until now he owns a massive covered outdoor bar, two other private bars in the back, a lovely mansion and is continuing to find other investments in Nigeria to develop.  The street that the bar is on is named Paradise Street.  He’s Lagos’ Ikotun neighborhood’s self-made man!

Through saving and prudent entrepreneurship there are Nigerians who have crawled out of sustenance commerce but there still seems to be something missing from the equation.   There are macro problems regarding things like the fact that the electricity constantly shuts off, the rule of law (I was asked for bribes by government employees both times I was at the airport) and the unavailability of small-scale loanable capital not deriving from individual savings, but time is also a factor.  Western Africa missed a few hundred years of healthy development through the systematic theft of their youth; the generators and implementers of new ideas!  So they have the energy and do appear to be catching up to more developed places but I really cannot offer a precision analysis of the state of the Nigerian people and Africa at large beyond the meager amount you see above.  If any of you out there in cyberspace have additional insights, we’d love to hear it!  Godspeed to the Yoruba, Igbo and Hausa in your country’s development!