grandstar:


Things you naturally gravitate to in a free trade environmental or where foriegn direct investors are very keen on investing on. They generally target areas you have comparative advantage in.

For instance, the British tried to encourage farmers here to produce rice but they preferred cocoa and other cash crops.

Under free trade, it will be economically suicidal to produce rice. Without the high import duties on it which makes it less affordable to the poor who consider it a staple (the primary cause of hunger is not a lack of food but a lack of money) no one in his right mind would grow it. The country has zero comparative advantage in it.

In some areas, foriegn investors know areas have comparative advantage in as they have both the know-how and capital to exploit it.

A good example are cars.

When many Central European countries like Slovakia and Romania joined the EU, many Western European countries set up manufacturing plants there to exploit their much cheaper labour.

Manufacturers EU countries focus on areas they have comparative advantage because they are in a common market. Germany won't start producing t-shirts and asking for high import duties to protect their local manufacturers against competition from fellow EU competitors. It won't simply be given

Is this because of terrible electricity ?

omohayek:

It isn't really something "a country" knows, it's something discovered at the level of individual firms. For example, the British didn't think Nigeria had any particular comparative advantage in cocoa production, and their original plan was to force Africans off the land into large plantations; it was only through the initiative of the native farmers in the Western Region that cocoa farming took off and became recognized after the fact as an area of comparative advantage.

To give a more recent example, who could have foreseen that movie-making would prove to be an area of comparative advantage for Nigeria, and that Nollywood would one day become amongst the biggest earners of non-oil revenue? Certainly not any of the politicians or civil servants who were busy making futile plans to throw more money at white elephants like Ajaokuta.

Just about the only thing competent governments can really do is to work on things like higher-quality mass education, a highly stable and rational regulatory environment, fast and corruption-free courts, policing that keeps crime down to low levels, a transparent and stable currency regime, etc. No Nigerian government has ever done a decent job of a single one of these things, so it's not as if there's room to spare for fancy industrial policies which haven't worked even in much better run countries like the UK or Japan. The key thing is to empower - and here I mean it in the real sense rather than Nigerian style "empowerment" (aka misusing government funds to hand out gifts to a few) - ordinary citizens to start and grow new businesses, whatever those may be, instead of trying to second-guess the market by favoring one kind of business over another.

Woow !!! I never knew that about Nollywood .

In your opinion, how can the govt make Nollywood more profitable and attractive to investors ?

urahara:


Woow !!! I never knew that about Nollywood .

In your opinion, how can the govt make Nollywood more profitable and attractive to investors ?

The same way it can make most other field of creative enterprise more profitable and attractive - by reforming the courts so that movie-makers can enforce their copyrights quickly and cheaply, by reforming the police so that mass piracy is no longer risk-free, by abolishing all currency controls and instead keeping the Naira stable through budgetary restraint, by carrying out a wholesale overhaul of the dysfunctional power sector so businesses can get reliable power at commercially viable rates, by easing right-of-way issues so private telcos can lay fibre-optic cables across the country, etc. As you can see, there is hardly any type of business which wouldn't benefit heavily from these things.

We need to entirely abandon the old Nigerian mindset of doing "special" things for "special" industries, and focus instead on making Nigeria a place where one can easily do business in a safe environment. The creativity of 180 million people is more than any handful of planners can ever hope to predict, and nobody knows where the successes of tomorrow may come from.