A former Deputy Governor of CBN, Prof. Kingsley Moghalu has blamed the crony capitalist system in Nigeria as a reason for the high rate of poverty in the country.

Moghalu pointed this out while giving his keynote speech at the annual lecture and international leadership symposium of the Centre for Values in Leadership (CVL) programme on Monday, held at the MUSON Centre, Lagos.

The professor pointed out the different forms of capitalism practiced in the world by top economies, which he said are “entrepreneurial capitalism, welfare capitalism, crony capitalism and state capitalism”.

According to him, the Chinese communist government patented the State capitalism, while South Korea and Russia have thrived on crony capitalism. Explaining that every country practices more than one type of capitalism, he said Nigeria operates both entrepreneurial and crony capitalists’ systems at different levels.

The entrepreneurial capitalist’ system, which is recommendable, is operated at the bottom level to lift citizens out of poverty. However, he said, the system practiced in Nigeria is not sustainable enough to encourage wealth creation.

He added that only the elite in Nigeria practice crony capitalism, giving them access to state resources. He advised that if Nigerians were given opportunity to create wealth, and be lifted out of poverty, Nigeria should adopt the method of crony capitalism South Korea used in reshaping its economy.

Moghalu said that South Korea’s conglomerates owned by top families allowed wealth creation by creating supply chains. Over there, citizens at the lowest levels create wealth by supplying different aspects needed and used by the conglomerates.

Speaking on the topic – “Africa’s Post COVID Economic Evolution”, the ex- CBN deputy noted that the case also applies to Africa because the system of capitalism in the continent is not inclusive.

His statement in part read, “Africans say we are capitalist, but what happens is that we’re creating wealth for a few individuals, not for the masses or citizens. There are three things that you must have for a capitalist economy to thrive and create wealth that is inclusive. You must have property rights, innovation and capital.

“The second thing is that government must make conscious choices between the different kinds of capitalism. There is, and state capitalism, which china is using. The patented form of capitalism. The only one in the world. Normally, no country can be purely one of these. They can be mixed. For Nigeria, I will recommend entrepreneurial capitalism, because we are dynamic people. We hustle, but hustling is not good enough. Honestly, we use that and take pride in it, because we do not have a government that can create an enabling environment for wealth creation.

“But what we find in Nigeria is not really an entrepreneurial capitalism. You have that at the bottom of the pyramid, where the groundnut seller or even the tech start-up guys operate. At the top, what we have is crony capitalism, where people determine the state because they have connections and monopolise the economic wealth. A few people enjoying advantages that are huge because they have access to the state. We have crony capitalism in Nigeria in its worse form.

“You have it as a system in South Korea and Russia. But in South Korea, it builds their wealth. Why, because it was consciously designed. The economy of the country runs on supply chains to those big conglomerates owned by families. This is a system we can use here.”

He said, “A president can decide that he wants 20 to 30 Aliko Dangotes in the country. Our economy can be redesigned, that those big guys (billonaires) become the chain of economic wealth creation downwards,” as those at the bottom level who create and supply different and important aspects, become a part of “their big conglomerates”. He added, “It’s a choice, but it takes a certain point of capacity to manage that can kind of choice.”

The CVL symposium held to commemorate the birthday of former Delta State governorship aspirant, Professor Pat Utomi saw in attendance key economic experts, who include, the African Union Commissioner of Economic Development, Trade, Industry and Mining, Ambassador Albert Muchanga, Vice Chairman, Technical Committee of the National Council on Privatisation (TC-NCP), Dr. Ayo Teriba and other dignitaries.

The chairman of the event tagged, “Economic Evolution of Life After COVID-19: Measured to Rebuilding Economies in Africa”, was a former Permanent Secretary and Chief Economic Adviser to the President, Chief Phillip Asiodu.

Source: Investors King