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The positionl that the state has NO role in the market is wrong. True, capitalism is the greatest creator of wealth the world has experienced. But to succeed, markets require a competent state that creates truly enabling environments for business and enforces accountability.

In African countries, the state has been a problem because it is heavy-handed, arbitrary, crony-based, and corrupt. This is why we have a few people who are extremely wealthy, and then the vast majority are extremely poor. Huge inequality! Even Jesus Christ said there will always be poor people (because we don’t all work equally hard and we are not equally smart, or even equally interested in being wealthy).

But the hallmark of development is that even the poorest should have opportunities to certain basics of life (including some form of social security). The state can create frameworks for market competition, but there must be a level playing field for all. When, as in the recent past, “connected” individuals could obtain forex from the Central Bank of Nigeria at low “official” rates that are not available to 99% of Nigerians, and then sold at the black market for huge profits, this is not capitalism. It’s a kleptocracy fed by greed, corruption, and the absence of accountability.

Again, the state can’t replace the market. The government should not as a rule set the prices of things or “ban” ordinary products. That breeds arbitrage, corruption, and smuggling. Over-regulation also distorts the market and makes business difficult. That’s why many who succeed in business in our countries achieve success not because of the government, but rather in spite of the government.

When this is the case, the state is failing, often because it lacks capacity to manage the country’s economy, or because peculiar societal forces are at work. Culture can eat strategy for breakfast. In this case, we need to dig far deeper to re-examine the foundation and structures of the state itself as the basis of economic resurgence and inclusive wealth creation.

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