Podcast Summary: "Why Is Africa Underdeveloped?" ft. Kingsley Moghalu

The CGD Podcast | Host: Center for Global Development
Guest: Kingsley Moghalu (Former Deputy Governor, Central Bank of Nigeria; author, Emerging Africa)
Date: March 17, 2015

Episode Overview

This episode tackles the question: Why is Africa underdeveloped? Host Rajesh Merchandani speaks with Kingsley Moghalu, who draws on his book Emerging Africa and his experience at Nigeria’s Central Bank. Moghalu challenges common explanations—such as colonial legacy, corruption, or globalization’s impact—arguing that Africa’s development ultimately depends on Africans themselves, particularly by cultivating a purposeful, economic mindset and industrial strategy.

Key Discussion Points & Insights

1. Globalization and Africa’s Economic Position

• Main argument: Economic globalization has “hurt Africa” because Africans have “embraced globalization without interrogating it,” assuming it to be always beneficial.
  • Quote: "Africans have blithely assumed that globalization is a good thing at all times and in all ways… if you operate a completely liberal trading regime and all you’re trading on is just raw materials, of course you’re bound to be at a disadvantage." (Kingsley Moghalu, 01:00)
• African economies are often mere markets for globalized goods, not participants in the value-added production chain.
  • Quote: "If you don’t do this [get into the value chain], then you’re not getting benefit. You’re simply a market, and that’s not good enough." (02:09)

2. The Importance of Mindset and Worldview

• Moghalu stresses that development starts with a “mindset” and “worldview.”
  • Quote: "Development begins in the mind. That’s the central thesis of this book. Development doesn’t come through economic equations… people having a vision of how to engage in productive economic production and going about it single-mindedly." (02:47)
• Africa’s decolonization succeeded due to a clear political worldview, but economic worldview and execution have lagged.
  • Quote: "They had a worldview of decolonization... but where African countries, including Nigeria, have not been as successful is in developing and articulating and executing a worldview of economics." (03:23)

3. Nigeria’s Economic & Institutional Challenges

• Nigeria’s economy is overly reliant on oil; the lack of economic diversification results in vulnerability to oil price swings and currency crises.
  • Quote: "You've got to have an industrial manufacturing economy that produces value-added things and exports them. That should be the basis for the value of a currency." (05:10)
• Fiscal indiscipline, especially lack of savings and “quality of spending” by the political class, undermines resilience.
  • Quote: "A lot of politicians are driven by the need to be ‘popular.’ And so they love to spend and they don't understand or appreciate enough that you must save as well as spend." (06:52)
• Banking sector reform after 2008 exposed both global and domestic weaknesses. The Central Bank stepped in with interventions and reforms, including:
  • Capital injections ($4bn to stabilize the banks)
  • Firing CEOs of failing banks
  • Creating a “bad bank” to manage toxic assets and encourage healthy lending
  • Quote: "We ring-fenced depositors' funds from speculative trading... and we created a bad bank, an asset management corporation which bought up all the toxic assets." (09:41–10:50)

4. Role of Development Finance

• The Central Bank of Nigeria provided funds and concessionary financing to support small and medium enterprises and agricultural/industrial sectors—the “developmental role” of a central bank in a developing country.
  • Quote: "We're a central bank of a developing country… so we cannot just focus on price stability. We also play the central bank’s developmental role by providing concessionary financing." (11:25)

5. Infrastructure and Barriers to Growth

• Nigeria’s biggest infrastructure challenge is unreliable electric power, which increases costs for all businesses and impacts job creation and economic inclusion.
  • Quote: "The absence of electric power is the biggest infrastructure problem that we face in our economies… until the power sector reforms come to maturity, only then can the costs of doing business begin to come down." (12:28)

6. The Need for Inclusive Development ("Pro-Poor Economics")

• Moghalu advocates development strategies that reach beyond GDP growth and “trickle-down” effects, urging policies that tackle unemployment and infrastructure directly and create jobs.
  • Quote: "Not just GDP growth... It's important to address the infrastructure problems of electric power especially and other problems. Job creation is absolutely essential to move to pro-poor economics." (14:16)
• Political stability (such as free and fair elections) is essential for development, alongside continuous improvement in institutions. (15:14–16:32)

7. Elite Capture and the Need for Civic Engagement

• Nigeria (and other African countries) have problems with political/elite capture and self-serving leadership. Voter education and responsibility are critical for change.
  • Quote: "A lot of people see public office as an opportunity, not as an honor or a privilege to serve and contribute to progress… another dimension of the problem is voter education and voter responsibility." (16:56–17:35)
• Poverty limits citizens’ ability to demand better leadership; inclusive development can break this cycle.

8. Security & Boko Haram’s Impact on Stability

• Boko Haram severely affects Nigeria and the region’s stability, but recent military successes have been under-publicized.
  • Quote: "The government, the army and the multinational forces have been winning a string of victories against Boko Haram and beating them back and driving them out of territory." (18:34)
• Lasting stability is essential for inclusive growth; defeating groups like Boko Haram is a government priority. (21:16)

9. Policy Recommendations for Nigeria’s Next Government

• Focus on job creation, electricity reform, and overhaul of the educational system to boost technical skills and economic transformation.
  • Quote: "The next government will need to look at the question of electricity… in the next five years, Nigeria’s electricity energy situation must change fundamentally." (21:40–22:23)
• Support from foreign investors (not just donors), especially in infrastructure and value-added sectors, is needed—but Africa’s destiny shouldn’t depend on “outsiders alone.”
  • Quote: "Foreign investors are a significant player if they invest in the right things… you make them invest in areas that create economic complexity." (22:54–23:44)

10. Financing for Development: The Addis Ababa Conference

• Moghalu urges more “imaginative thinking” at the conference, emphasizing that “real transformations must come from within” through domestic financial systems and capital.
  • Quote: "If it is just another conference about foreign aid… it will continue the old paradigm which has not brought about transformation." (23:53–24:30)

Notable Quotes & Timestamps

• On Globalization:
  • "Africans have blithely assumed that globalization is a good thing at all times and in all ways…" (01:00)
• On Mindset:
  • "Development begins in the mind. That’s the central thesis of this book." (02:47)
• On Political Worldview:
  • "...they had a worldview of decolonization... but not of economics." (03:23)
• On Political Spending:
  • "A lot of politicians are driven by the need to be 'popular.' And so they love to spend and they don't understand or appreciate enough that you must save as well as spend." (06:52)
• On the Importance of Job Creation:
  • "Job creation is absolutely essential to move to pro-poor economics and anything that will create jobs is what the Nigerian government should be doing." (14:16)
• On Civic Engagement:
  • "The responsibility of the citizens themselves to assert themselves and demand the type of leadership that is in their best interest." (16:56–17:35)
• On Security and Boko Haram:
  • "In recent times, the government, the army and the multinational forces have been winning a string of victories against Boko Haram..." (18:34)
• On Financing Development:
  • "Real transformations must come from within those countries themselves, whether it’s finance. They must create systems that unlock finance from within those systems..." (24:03)

Timestamps for Key Segments

• 00:52 – Moghalu’s critique of globalization for Africa
• 02:47 – The role of worldview and mindset in development
• 04:33 – Challenges of Nigeria’s economic management
• 07:10 – Oil, savings, and fiscal management
• 08:19 – Banking crisis and reform
• 10:50 – Development finance: support to SMEs
• 12:28 – Infrastructure challenges, especially electricity
• 14:06 – Need for “pro-poor” or inclusive development
• 16:32 – Elite capture and role of civic education
• 18:34 – Security, Boko Haram, and regional stability
• 21:35 – Priorities for Nigeria’s next government
• 23:53 – Financing for Development: Looking to Addis Ababa

Tone & Conclusion

Moghalu’s tone is candid, analytical, and optimistic about Africa's potential—if the right policy mindset and structural investments are embraced. He emphasizes African agency, the need for practical economic vision, and the importance of tackling both systemic and immediate impediments to growth. The podcast avoids simplistic answers, instead highlighting the complex interplay of history, policy, and leadership in Africa's development trajectory.