Comparative Advantage Theory And Systemic Problems That Make Nigeria Non-competitive

The Oasis Reporters

November 8, 2019

Nigerian flag.
By Gbolahan Olojede

The fundamental theory of “Comparative Advantage”, a very popular post WW2 theme that continues to guide a lot of economic policies has been significantly challenged today by high quality human capital and technology.

We needn’t to go too far to see this. It is with the world’s largest producer of Oil, America.
America did not have comparative advantage in Oil production, and for decades it was not the top producer. Today, it produces more than 7 times or thereabout of what Nigeria produces.

The question is so how come a country that had no comparative advantage in oil production, become the world’s largest producer of oil today ?

If we take cassava today because it is “nature” to us, and we don’t address those systemic problems that make us non-competitive, see what will happen the day the US decides it wants to produce cassava: we will suddenly realise that our production is manual, our processing capacities are not modern, our yield is 10% of what is possible!

The comparative advantage theory has shifted, it is no longer in the wilds of post WW2 nature, it is now significantly in the space of today’s science and technology ambit.

Improve on your production processes, or lose out. Sloppiness and gross inefficiency will be the albatross that will do the country in.

Written by Gbolahan Olojede.

Greg Abolo

Blogger at The Oasis Reporters.

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