Understand Economics and Economic Terminologies Before Comments on Economic Issues
By Dr Francis Ilenloa Igberaese,mnes
Secretary Nigerian Economic Society,Edo State Chapter.
We, in the Nigerian Economic Society have observed that most comments emanating from the public, including Political Office Holders are usually born of ignorance and misunderstanding of the terms used. These ignorance and misunderstanding have led to angry comments by the public, insinuating that Economists are parts of the economic problems of the country.
Even some very educated people point figures to Economists whenever statistics about the economy are being released, whereas politicians, who believe that they can do everything alone and are afraid of having Economists in their midst are the cause of our economic woos. Politicians are not trained in economic policy making, they don’t know what it takes to plan the economy. There are different gestation periods for different policies to fully manifest, and Economists alone are suppose to lead the cooking of mere ideas, which would eventually become policies. Politicians take ideas, which are mere raw materials in policy making process to be policies. There are too much complications in the process of policy making and implementations, which would be extremely difficult for Non-Economists to understand. It is even so complex in today’s world that no even one Economist trained for many years can mend all the angels. This is why most governments across the globe work with Economic Teams, composed of different specialists in the different aspects of Economics. It is like different doctors specializing in different aspects of medicine in the theatre room.
For countries and states that have succeeded, these different economic specialists are busy day in and day out in the board runs proferring solutions to the different problems created by the many past failures of future prospects, in order to meet with the lee-way of resources. We usually do not hear about them because they don’t bother so much to explain every step, believing that the end products would worth it for the citizens. At times the process involved the citizens swallowing some bitter pins and unfortunately at times, just like in medicine, it can happen that even with the right apparatus in the hand of the most qualified practitioner, the patient still die.
However, when Economists merely interpret the situations on ground, every Tom, Dick and Harry begin to talk with too much simplicities, as if it is that easy. For example, when we say inflation rate is falling, people begin to compare the prices of commodities and boo us as part of the problem without asking us what it means for inflation rate to fall. It only means the speed of increase in inflation is not as much as the speed of increase in the previous period(s). That is, for each successive interval, inflation is increasing at a decreasing rate. This does not mean that inflationary gap has been closed but just a hope that if things continue in the manner, inflationary gap can be closed. Therefore, what happens next depends on the consciously directed efforts to sustain the gains made within that period(s).
But in a country where governments only make flashes of success because the economic handlers are not trained, too much frustrations usually set in. This is the same with exchange rate management where counter-cyclical policies of the CBN and government are not in harmony. Again, many do not look at the “Law of One Price” before comparing countries currencies. All these are because politicians believe too much in themselves.
We, in Edo Chapter of the Nigerian Economic Society want the governor to appoint a trained Economist as an Economic Adviser, who should head the state Economic Team, if he wants to make any headway. There is nothing he can achieve, even with the annual summit without the correct people to fine tone and implement the ideas from such summit.
May God help Nigeria.