Mallam Sanussi - 'The Governor' - heads up the Nigerian Central Bank with style and intelligence.

Mallam Sanusi – Governor of the Central Bank of Nigeria – looks like Lenin would have done had he been born in Kano. Beautifully turned out in pin-striped suit, red (silk) bow-tie and flashing an expensive looking watch from his right wrist, his precise mannerisms and slow laconic sense of humour give the impression of a man totally at ease with his surroundings and subject. People tend to refer to him as “˜The Governor’, which made me think of a refined East End gangster, or possibly a football manager. However, his heritage is far more aristocratic than this – his grandfather being the Emir of Kano.

Sanusi comes through London quite regularly these days. Perhaps, suggested a colleague, because he can’t wait to get out of Nigeria. But the reason is more likely that he’s fast developed into an international financial star – the FT conferring upon him Central Bank Governor of the Year in 2011, and Time magazine including him in its list of 100 most influential people worldwide. The Governor is the sort of speaker people who like to tweet tweet about, whilst he’s speaking – creating the impression of international importance to remarks made in Central London to an audience dominated by members of the middle class Anglo-Nigerian diaspora.

Beyond the snappy dress sense, and prestigious awards, what does the man actually think? The topic of discussion last night was “˜Neither the Washington Nor Beijing Consensus: a new developmental paradigm to fit African realities and cultures.’ The Governor set his stall out early on.

Whilst contesting the idea that there was such a thing as The Beijing Consensus – there being no ideological mantra behind Chinese engagement with Africa – he juxtaposed this with the history of Washington-imposed economic policy which, he went on to argue, has had a deleterious impact on African economies.

Nigeria is what he knows best, so Nigeria was the focus of the talk. Sanusi going on to detail particular features of the country’s economy, focusing in particular on the disparities between the long list of commodities produced in Nigeria – cotton, cattle, oil etc and the even longer one of products that have to be imported  because the country is unable to develop domestic  industries that “˜add value’ to its raw materials.

The above situation is well-known; the question is why does it happen? Sanusi posits that it’s all because of the inappropriate imposition of neo-classical economic theory on a country un-prepared for such medicine (The Washington Consensus). Still with me?

The principles of liberal economic policy – particularly that of absolute opposition to anything that might be conceived of as “˜protectionism’ – have not helped countries like Nigeria establish their own domestic industries that can compete internationally. For the last 30 years, developing economies have repeatedly lost in this battle with Chinese producers.

Whilst Washington (and Europe) may impose strict free-market principles on the developing world, they never applied such rules to their own economies. “Every country builds its economy and then preaches free trade,” said The Governor, with a twinkle in his eye.

Other policies such as the devaluation of the Naira in the 1980s were also ineffective at making the Nigerian economy more competitive. Devaluation simply allowing foreign currency to “buy up the country.”

Whilst The Governor was most critical of the Washington Consensus, he also argued that Africa should not simply try to copy the Chinese. Internationally, they still cannot hope to compete with Chinese goods. However, internally, within the African continent, as China develops and has to pay its workers higher wages (consequently increasing the price of its own goods), there will be an area of realistic competition. Nigeria must first focus on this.

Only when the economy is diversified away from primary exports, which support the corrupt “˜rentier’ state which the country is so famous for, will it be able to develop. No country ever pulled itself out of poverty without adding value to the production chain through the process of industrialisation.

So, fixing these value chains is all important. Enabling business to process commodities from rice to crude oil, developing infrastructure, so the country is no longer in the crazy situation where it’s cheaper to ship raw materials to another continent for processing, then import them back to Nigeria, that is the path to development.

Responses to Sanusi’s plan came from the Eritrean Ambassador to the UK Tesfamichael Gerahtu, and the well-known developmental economist, Paul Collier. Gerahtu’s response suggested a man pleased to be invited to speak at anything (the Eritreans not even being included in the recent London Conference on Somalia, despite their key role in the region,)  and was a rather rambling exposition against “˜development models’, dubiously placing Eritrea as the leading example of independent African achievement over the past 2 decades.

In contrast to Gerahtu, Paul Collier is from Yorkshire, where brevity is an art form. “It’s late, so I’ll keep this short” he began. Then followed it with a familiar argument that for countries to develop they must have rules, institutions and most importantly, a critical mass of citizens able to understand and defend the above 2 things.

The Governor sat and nodded impassively, seemingly in agreement.

Intellectual solutions to Nigeria and Africa’s problems can often seem simple in the hands of skilful wielders of economic theory like Sanusi and Collier. However, the implementation of such plans, in messy and complicated environments, may be another matter entirely.

Magnus Taylor is Managing Editor, African Arguments Online