Economic agents in any economy broadly consist of the government, private sector, households and their families. In market or near-market economies, this sector is perceived as the engine of growth. It is more often the vibrant sector that combines all the factors of production to produce goods and services needed by an economy for sustenance and reproduction. The private sector prides itself on competition. It is seen to be active in manufacturing, housing, agriculture, mining, services, among others: hence, the private sector drives and propels the capitalist system, no matter how it is defined.
Even in economies that are politically attempting to build a socialist system, the private sector still plays a vital role. A good example is China, a country governed by the Communist Party but one with a thriving private sector. Recently, some hiccup in the Chinese Stock Market (where the private sector raises funds for investment) sent panic measures across the globe. In the emerging economies of Asia –– China, South Korea, Malaysia, India, Indonesia, etc, –– the private sector is involved in production. Broadly, this sector in these economies is not parasitic. It is innovative in all spheres of operation, contributing an average 35 per cent to GDP. In these countries, particularly China, the private sector is heavily regulated by the government.
In dominating the economies of the world, players in the private sector are often very rich and influential. They are close to those who control state power and employ the political process to accumulate more. Even in advanced economies like the USA’s, the principle is the same. However, in the case of the latter, the private sector is not only “tamed” by government but also works tirelessly to predict government actions. Consequently, players in the private sector in such economies can be perceived as “enlightened capitalists”.
In Nigeria, the private sector is not properly defined. Does it exist? Is it engaged in production? In fact, does it exist in the real sense? Does it support research or innovation on a consistent basis? Here in Nigeria, there is the organised private sector with membership in various chambers of commerce and manufacturing associations. It is not fully engaged in manufacturing. In many factories, most of the inputs used for production are imported, including the much talked about cement industry. The sector adds less value to the production chain of most goods and services. While pretending to be independent of government, it cannot do without government patronage across all areas of its activity. The sector panics when government budget is delayed. Thus, it is very difficult to find a Nigerian private sector player who does not become extra rich through government largesse…