The New Growth Model

Watch: Nigerian presidential candidate Peter Obi on his plans to transform Nigeria’s economy

Nigeria’s economy is now dependent on agricultural exports for more than 90 percent of its revenues and is heavily dependent on hydrocarbons for its remaining 6 percent. According to a recent African Development Bank (ADB) report, Nigeria’s economy will need $30 billion annually more in order for the country to achieve its goal of a per capita income of $1,000 by 2015. By 2020, poverty is expected to rise to 50 percent. The report also predicts that Nigeria’s oil exports will cease and that Nigeria will begin to see a significant rise in the price of oil. Even without these two important components, the economy is expected to suffer a massive loss in growth. According to some analysts, the economy is even worse off economically and could fall into depression if the present trend of economic growth is not reversed immediately.

This is why Peter Obi wants the government to reverse its course and to embrace a new economic theory called the Tobin Tax.

His “New Growth Model” is based on the principle of the Tobin tax, which was first proposed by the American economist M. William Tobin in an article entitled: “An alternative to the prevailing model of global growth.” According to Obi, the current growth and trade model was developed by the U.S. government in the late 19th Century, which focused on export-based economic growth.

“The model was developed to help grow the overall economy by exporting its way to new markets while the manufacturing sector was left stagnant. This model, however, has never been applied and has no basis for making it meaningful.”

The problem with the current model is that the economy is still based on export-based economic growth, but there are some disadvantages about this model. One of the disadvantages is that the trade balance is always in the wrong direction: In the past, the U.S. and the U.K. had a trade surplus, but nowadays they have a trade deficit. Also, the U.S. and the U.K. depend on consuming their exported goods

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