The Next President Must Import Human Capital

(All references are after the first comment.)

My friends know I am reading Patrick Radden Keefe’s Empire of Pain (1). It’s about the Sackler family, embroiled in the opioid crisis that has engulfed the United States. There are still a lot of pages to go, but as I turned the pages this morning, a story jumped out at me, and my brain jumped through loops in my hippocampus, as usual, to find connected facts and stories to arch up lessons we can learn in Nigeria. In the 1900s and 1910s, Arthur Sackler, born to Polish immigrant parents, realized that Brooklyn was burgeoning with wave upon wave of immigrants from the Old World. New faces arrived daily with the unfamiliar music of new tongues on the street corners. The arrivals were not haphazard. With a booming economy, the US government, urged on by the fathers of capitalism like Rockefeller, Carnegie, and Vanderbilt, needed industrial workers. Many other multi-millionaires needed agricultural workers. To aid the workers, the government expanded schools, built housing, and argued about the best healthcare system to adopt.

It was an opportune time. Fleeing crop failure, land and job shortages, rising taxes, and famine, many came to America because it was perceived as the land of economic opportunity (2). Between 1900 and 1915, more than 15 million immigrants arrived in the United States. That was about equal to the number of immigrants who had arrived combined in the previous 40 years (3). New York state was incredibly welcoming to new people. In 1910, three-fourths of New York City’s population were either immigrants or first-generation Americans (i.e., the sons and daughters of immigrants).

This was not a one-off event. In fact, in the immigration wave before that, about three decades earlier, due to the avalanche of new faces and the onset of hard economic times in the 1870s, European immigrants and Americans began to compete for the jobs traditionally reserved for the Chinese. With economic competition came dislike and even racial suspicion and hatred. Such feelings were accompanied by anti-Chinese riots and pressure, especially in California, for the exclusion of Chinese immigrants from the United States. This pressure resulted from the Chinese Exclusion Act, passed by Congress in 1882. This Act virtually ended Chinese immigration for nearly a century.

But the general reception of Americans to immigrants, mainly from Europe, worked. Yesterday, I stumbled on a map that showed the GDP per capita of regions/states in Canada and the United States. New York is the only state in the United States with a GDP per capita in the region of $90k-100k, more than California or Washington, DC. New York thought about the future and brought in as many people as needed for as many industries as possible.

Nigeria’s Anti-Immigration Culture

This brings me back to Nigeria. A few months ago, Al Jazeera released a story about Chinese workers kidnapped in Niger State (4). Gunmen attacked a local mining site, killing “many security personnel” and abducting some workers, including the four Chinese nationals. Earlier in January, three Chinese nationals were abducted in a similar attack while working at a hydroelectric power plant (5). What surprised me were the reactions of Nigerians to the abductions. Instead of sympathizing with those in captivity, I read comments on how the Chinese are taking over the country and should be stopped. Someone, who has since deleted her post, asked that the terrorists leave Nigerians alone and concentrate on foreign workers so Nigerians can take their jobs.

This anti-foreign worker stance is common. In almost any high-skill sector, there are complaints of foreign workers taking the jobs of locals. The national president of the Nigerian Institute of Building (NIOB) once said that Nigeria loses N9bn to foreign artisans annually (6). The Nigerian Shippers’ Council Executive Secretary has also said Nigeria loses $9bn to foreign ship owners annually (7). Just two months ago, the national president of the Association of Nigeria Licensed Customs Agents said Nigeria loses N130bn annually as foreigners take over 90% of freight forwarding jobs (8).

What do we mean when we say Nigeria loses? Do these workers not do their jobs? Do they not pay taxes? Do they not spend money on the economy? What exactly do we lose? Nigerians are proud people. Even if they have no capacity to get these jobs done, there is no shortage of chutzpah for them to say they can do it. I once saw NTA interviewing a construction site worker, saying he was unhappy that he was taking orders from a Lebanese. In his words, “Is it not just to see that the line is straight?” Someone has even told me that China sends prisoners to work on Nigerian soil, and it is unacceptable when he, who I know just finished university, can do anything a Chinese worker can do. As you can see in the quality of work done by the Nigerian artisans you hire, to get a ‘straight line’ in the construction industry is not as straightforward.

Of course, there is a lot to be said about the treatment of Nigerian workers at the hands of Chinese supervisors. BusinessDay once reported the House of Representatives directing the Inspector General of Police to free 1,000 Nigerian workers detained by a Chinese company (9). It was at the onset of COVID, and instead of allowing the workers to go home, the Chinese company locked down its Nigerian workers within the company’s facility, thereby depriving them access to their families. The Cable also did an investigative report on the working conditions of Nigerians employed at Chinese-run quarries in Ogun. The least that one can say about that article is that Chinese companies have a flagrant disregard for labor laws (10).

But there is a difference between decrying lapses in enforcing laws and being anti-progress because, as I will explain, that is what the ‘Nigeria is losing so and so billions’ rants boil down to. We all know and may have worked in Nigerian companies where workers’ abuse is rampant, and we know companies led by foreigners that treat workers much better than Nigerian companies. Therefore, it shows that any prolonged toxic workplace activity is about regulatory incompetence. Humans have the capacity for exceedingly great kindness as well as supreme wickedness.

Mass Immigration 2.0

The country is going into a phase of mass immigration 2.0. Incidentally, the first wave in the 1980s started during the first reign of the current president. The Migration Policy Institute describes how a “well-developed culture of professional migration emerged” as Nigerians began to stay abroad for a more extended period and saw little incentive to return due mainly to political upheaval and economic stagnation in Nigeria (11). In recent years, Nigeria has become one of the fastest growing source countries for immigrants to the UK, US, and Canada. Since 2017, a large section of the Nigerian middle class has been moving out. A 29-year-old digital expert told Quartz in 2019 that one of her biggest fears now is having a child in Nigeria (12). No fewer than 6,068 medical doctors moved to the United Kingdom in 2015 (13). In 2019, about 14,000 UK study and work visas were issued to Nigerian nationals. In 2021, the number had more than tripled (13). In Canada, more than 15,000 Nigerians were granted permanent residence in 2021, compared to about 4,400 in 2016. Most of these people are skilled workers taking their skills with them. How do you make up for the shortage of skills?

A Falling Naira and the Opportunity for Productivity

Most Nigerians hate that the Naira is losing value. And for a good reason. They see that the devaluation affects their disposable income. Yesterday, the media reported that the Naira had fallen to N720 per dollar (14). Yet, for all the hues and cries, the devaluation provides an opportunity to increase our production capacity. The two pro-market candidates in the coming elections, Peter Obi (15) and Atiku Abubakar (16), have said they favor production and manufacturing. The devalued currency is an avenue for Nigerians to sell their goods and services abroad for more. Devaluation makes exports attractive. The challenge is that we do not produce enough, whether for those within the country or outside. We need to get production going within the borders of Nigeria. I could care less about who is doing the production. More production means that Nigerians can buy more kinds of goods at better prices, that there will be more jobs, and that the country will earn more foreign currency when these goods are sold abroad. Ironically, one of the only things that can halt the slide of the Naira is more foreign exchange earnings.

Objecting to who is doing the production will be pointless; the woman who sprinkles water in front of her kiosk to wade off dust has inadvertently made passing in front of her shop easier. This concept of not caring who is doing the production has been embraced for hundreds of years.

History Offers a Pathway

Using a historical example, Argentina is renowned for having some of the best soil in the world. It is believed that the soil is so good that a plant’s roots could extend 15 feet into the ground without running into rocks. Argentina was still importing wheat in the middle of the 19th century, so this good soil was just half the story. That rich soil was almost useless for Argentines who weren’t ready to till it. In truth, the Argentines did not have the skills to engage it meaningfully. So, the government decided to engage those who could maximize the returns on the land. The Volga Germans were about the best in the trade. To lure them into farming the land in Argentina, the then-Argentine government dispatched agents to Europe and offered them attractive compensation (17). These Germans had previously been recruited by Catherine the Great to the Russian Volga Valley region in the 18th century. A century later, the laws changed, taking away all the things that had attracted them to Russia in the first place.

These Germans moved to Argentina and established what is now known as Argentina’s wheat belt. Indeed, it can be taken for granted that Argentina is now a significant wheat exporter and has been doing so for many years, despite its government’s crazy policies. Today, it is Argentines exporting wheat — no one cares if it is the descendants of Volga Germans.

Or we can use the example of the manufacturers chased out of Uganda by Idi “Big Daddy” Amin in the early 1970s. Idi Amin took their businesses and handed them over to fellow Ugandans, many of whom didn’t have any idea how to run these firms (18). This action wrecked Uganda’s economy. The real value of salaries and wages plummeted by 90% in less than a decade. Gross domestic product (GDP) fell by 5% between 1972 and 1975, while manufacturing output tumbled from 740 million Ugandan shillings in 1972 to 254 million shillings in 1979. Britain accepted these skilled workers. The British government set up the Uganda Resettlement Board to assist in relocating these refugees. Church halls were turned into temporary reception centers, and volunteers came forward to assist these new arrivals. Within a brief period, many refugees expanded their businesses from family-run enterprises to major global trading companies. Some have made it to the UK rich list and the boardrooms of FTSE 100 firms.

I was in Ilorin when white Zimbabwean farmers chased away by Robert Mugabe landed in Kwara on the Shonga farm project. We have all heard about their great productivity. Looking up Google now, I read stories of how they started with so little. “We arrived to virgin bush. We were basically just given GPS points and told to mark them out, clear the bush and find water, build the house, build the sheds, and import cattle,” one of the farmers said (19). Their efforts led to large-scale farming and an increased local food supply. Within a short period, the agriculture commissioner reported that 15 new commercial farms had been developed by these farmers, in addition to the 13 at Shonga and that 3,000–4,000 people had found work (20). Unfortunately, the tremendous Nigerian factor has stemmed their progress (21). Still, it is a point to what can happen if policies are done right.

Time to Learn from the Past

Such tales of deliberately importing skills for the country’s progress are abundant in history. The British learned what they knew about money from the Jews and Huguenots who fled persecution overseas. The financial center of the world is currently London. Human capital is a vital part of the equation, which is why Cubans who fled Castro’s regime in Cuba with little more than the clothes on their backs quickly became one of the wealthiest Latino communities in America.

If Nigeria wants to prosper, Nigerians must ditch their anti-immigration position. Right now, foreigners tell me that Nigeria is one of the most challenging countries to get a visa. I know we were jarred when the United Arab Emirates tightened its belt against Nigerians (22), but do Nigerians have any idea how long it takes foreigners to get a Nigerian visa? In the entire world, only citizens of 17 countries can visit Nigeria without a visa. We can visit 47 countries without needing a visa. None of these 17 countries is in Europe or North America. For a country that cries about foreign exchange earnings, the revelation of how incredibly difficult it is to get a visa to Nigeria shocked me. Why does a poor country make it so difficult for citizens of rich nations to visit her shores? All 17 countries that can come to Nigeria without needing a visa are in Africa, most of them in West Africa. Someone asked me my policy suggestions for my preferred candidate in 2023; I said one of them would be to institute visa-free policies for countries with a GNI per capita above $30,000. Why is that? Because a country is considered a high-income country once its GNI per capita hits $12,746 (23). Double it, and you get a list of about 35 hyper-high-income countries that have invested a lot in the skill development of their citizens. Those citizens, adequately incentivized, would be helpful in the development of Nigeria.

Just as the current high oil price, which we are gaining nothing from, is teaching us, Nigeria is in the business of wasting opportunities. We shouldn’t waste the chance that mass migration and the constant drop in the value of the Naira give us.

References

1. https://www.amazon.com/Empire-Pain-History-Sackler-Dynasty/dp/0385545681
2. https://www.loc.gov/classroom-materials/united-states-history-primary-source-timeline/rise-of-industrial-america-1876-1900/immigration-to-united-states-1851-1900/
3. https://www.loc.gov/classroom-materials/united-states-history-primary-source-timeline/progressive-era-to-new-era-1900-1929/immigrants-in-progressive-era/
4. https://www.aljazeera.com/news/2022/6/30/gunmen-kidnap-four-chinese-workers-in-northwest-nigeria
5. https://apnews.com/article/business-africa-niger-nigeria-96e943e537b32a6c51f18de2e0de770c
6. https://www.blueprint.ng/nigeria-loses-n9bn-to-foreign-artisans-annually-2/
7. https://punchng.com/freight-nigeria-loses-9bn-to-foreign-ship-owners-annually-says-nsc/
8. https://www.sunnewsonline.com/nigeria-loses-n130bn-annually-as-foreigners-take-over-90-freight-forwarding-jobs/
9. https://businessday.ng/news/article/reps-direct-igp-to-free-detained-1000-nigerian-workers-by-a-chinese-company/
10. https://www.thecable.ng/investigation-inside-chinese-quarries-in-ogun-where-safety-is-alien-and-workers-are-treated-like-slaves/amp
11. https://blog.remitly.com/immigration/nigerian-immigration/
12. https://qz.com/africa/1615518/nigerias-middle-class-keep-emigrating-to-canada-australia/
13. https://punchng.com/6068-nigerian-doctors-move-to-uk-under-buhari/
13. https://punchng.com/nigerias-japa-migration-phenomenon/
14. https://businessday.ng/business-economy/article/naira-crashes-to-all-time-record-low-against-dollar/
15. https://www.vanguardngr.com/2022/09/we-should-borrow-for-production-obi/
16. https://twitter.com/atiku/status/1539956062140436481
17. https://www.volgagermans.org/history/immigration/argentina
18. https://m.aliran.com/thinking-allowed-online/idi-amins-expulsion-of-asians-in-1972-devastated-ugandas-economy
19. https://www.reuters.com/article/us-nigeria-zimbabwe-farmers-idUSTRE5AJ01P200911201
20. https://en.wikipedia.org/wiki/Shonga_Farms#Impact
21. https://punchng.com/ex-gov-ahmed-replies-kwara-govt-as-amcon-takes-over-shonga-farms/
22. https://www.vanguardngr.com/2022/09/fg-advises-nigerians-travelling-to-uae-on-new-visa-regime/
23. https://worldpopulationreview.com/country-rankings/high-income-countries