Problems of the present economic programme

By

Chief Bassey Ekpo Bassey

AS  government hangs tenaciously to the doctrine of deregulation and “market reforms”, completely disempowered Nigerians daily find that it does not make sense to aspire to independent production or any form of economic activity for which they could raise capital. Factor costs,  particularly those of electricity and fuel do not only make budgeting unreasonable, they see to it that the enterprise does not survive to feed them and their families.  In deed, the entire land is a graveyard of failed businesses and Nigerians are dying in commercial quantities.  The majority of those who live turn to crime  and prostitution  for sustenance. Once more, our sea-ports are choked with imports while new banks and petrol stations sprout everywhere as signal that the new economic policy  of “democratic dividends” has no place for domestic production, only commerce. Trade liberalisation, the battle cry of the champions of the brave new world, which democracy seeks to build, sees to it that all kinds of  foreign goods, from many brands of dangerous chemicals masquerading as fruit drinks, to toothpicks, beer and textiles, finally put local industry to rest; consume so much foreign exchange as to render the Naira weak and of little value.  And service a narrow political elite whose conspicuous consumption in the midst of sprawling poverty poses an unabating threat to the survival of civilian rule in our time.  Indeed political leadership keeps teaching the lesson that it is better to steal than to work. To all this and many more, you are likely to respond that your government is battling the rot occasioned by many years of military rule in every aspect of our national life, and that this government cannot be counted as  part of the problem.  

There is afterall, an anti-corruption law and some hapless officials are facing investigation or prosecution.  You have a poverty-alleviation (is it eradication?) programme and there is a drive to generate, transmit and distribute 4,000 megawatts of electricity by the end of this year, etc. And for industry, an industrial bank with a capitalisation of N500 billion is soon to be established by government. It would be impolite for me to dismiss all you are doing with a wave of the hand, but I am impatient with “development” or recovery schemes that are at best eclectic, without visible  elements to match growth with change. In fact the policy framework adopted by your government is such that you are bound to keep failing even in the undemanding Nigerian method of evaluating development in project-to-project terms.  It is unusually difficult for you to take a project and see it through, on account of the grave consequences of your apparent surrender to the dictates of the IMF and World Bank. It is now well known that by the instrumentality of IMF and the World Bank, the United States of America and its hangers-on, intend, not just to create a world after their own image, but also to continue to dominate, approach and monopolise the resources of the world. Tremendous advances in information technology, self-serving organisations and protocols like the World Trade Organisation and the Cotonou Agreement, operate to ensure for the rich countries of the world, free movement of their capital and a one-way flow of the world’s wealth.  

Their fancy name for this structure of brigandage (which is secured by constant threat of subversion and military intervention) is GLOBALISATION. Globalisation means the institution and enforcement of an international division of labour where underdeveloped countries (politely called Less Developed Countries in some quarters) — 33 of the world’s 48 are in Africa — will specialise in agricultural products to feed the industries of the rich nations; and the rich nations will monopolise industry (which they might combine with agriculture). It means that the IMF and the World Bank, through their loans, “performance criteria”, on-the-spot inspection of payments in the Central Banks of victim countries, implacable objection to public sector investments, etc will ensure compliance with that division of labour.  

The federal government of Nigeria cannot pretend to harbour any honest interest in either the development of industry or the restoration of capacity  utilisation to the few  industries that exist in the country today, since it is operating in the framework of IMF and World Bank cosmology. Our government’s plan for an industrial bank is likely to be rejected by these new prefects of the Nigerian economy as an unwarranted extension of public expenditure.  If it is allowed, it will be in the assurance that the policy will fail. There is another sense in which the industrial bank deserves to fail.  The Nigerian policy discourages the ownership of banks by state governments.  In more depressed segments of the national market (like Cross River/Akwa Ibom) it is state-owned banks, more than any other factor, that have been responsible for the creation of anything resembling a business class.   Giant, octopus banks with headquarters in Lagos can hardly be expected to support a poultry project in far-away Calabar or be sympathetic to the Etinan industrialist who defies the demands of locational efficiency to mount his  plant at home. We have had industrial banks in the country before and they pandered to existing narrow market bases in the country, thus helping to create the unequal exchanges that now threaten to tear Nigeria apart.  

This one will not be different except that now that the economic climate does not encourage industrial activity, it will just have the effect of bulging pockets in some parts of the country to the exclusion of others. What went wrong? We have abandoned the pursuit of our national interests and economic nationalism; we are now trying to palliate an economic atmosphere, which does not, by the wildest stretch of the imagination, help us in any way.  In whose interest is  this government privatising our national assets, liberalising and deregulating? Actually, deregulation and liberalisation are about subjecting all the important decisions and processes of the economy to determination by market forces.  It is assumed that the interplay of demand and supply can be relied upon, not only to free economic agents to operate optimally in the interest of and the World Bank and in June 1986, Structural Adjustment Programme was introduced to please them and a Second-Tier Foreign Exchange Market in September of the same year, effectively removed from government, power to determine the exchange rate of the naira.

When the Babangida and Abacha regimes realised the true intentions of the IMF, however, they began to drag their feet.  The World Bank asked Gen. Babangida to disinvest from Iron and Steel.  Abacha was asked to allow the  exchange rate of the naira go into three digits, privatise government holdings in the oil sector which Babangida had failed to do and remove all subsidy from petroleum products.

We must continue to condemn Abacha for his gruesome human rights records, the unprecedented state terror unleashed on the Nigerian people; but we must note his stand against the rampaging demands of the IMF and use it to call our present government to order before our economy is permanently damaged.

We are told that the world is now a global village and that we must conform to the rules of the village, in other words, reconcile ourselves to the facts of power in the world.  But the new unfair World Economic Order, superintended by the United States of America, is being resisted in so many places by patriotic governments of the Third World, and indeed by the impoverished masses of the Northern countries.  Four times in the last 17 months, the thieving chiefs of the Global Village have met under the platform of World Economic Forum.  In Seatle, Prague, Melbourn and Davos, they met in heavily guarded buildings with police doing battle with hundreds of thousands of demonstrators outside who were protesting the unequal consumption, mass poverty and other iniquities of globalisation and market forces.  And yesterday in Genoa, a massive demonstration outside the venue of the G-8 meeting, left a protester dead and very many injured.  There is no safe place for the plunderers to meet anymore.

Long ago, Julius Nyerere explained the role of the IMF and the World Bank when he said that America had less than 10% of the world’s population, but consumed 60% of the world’s wealth,  partly through the instrumentality of the Bretton Woods institutions.

And the current President of the World Bank James Wolfensoln himself, was at Davos, forced by the massive demonstration outside to admit that “80% of the world’s six billion people receive only 20% of its income; half live on less than $2 a day.”

So why is the  federal government of Chief Olusegun Obasanjo so anxious to comply with every dictate of the IMF?  Why is it doing what  Babangida and Abacha were afraid to do?   Why does  President Obasanjo not see that everywhere in the Third World, including Nigeria, the prescriptions of the IMF deepen the problem rather than solve it?  How does he hope to cope with the mass poverty and economic violence, associated with deregulation and privatisation? Is the social situation in Nigeria not bad enough?  Hear the UNDP 1993 Human Development Report:

 Chief Obasanjo’s government knows that the objective contradictions which apply everywhere not withstanding, that subjectively, Nigeria is NOT ready for the market: With an installed capacity of less than 6,000 megawatts of electricity; with the present government generating and distributing less than 2,000 megawatts, with a plan to increase capacity utilisation to a mere 4,000 (note that excess capacity alone in South Africa is 8,000 megawatts!); With rail transport, which is the cheapest, safest and most efficient means of mass transportation, grossly underdeveloped (and almost extinct) in the country; With only some 700,000 telephone lines in a country of perhaps, 120,000,000 people; With crippling corruption that subverts all processes, legal, bureaucratic, electoral, business, development, etc; With far less than one computer per 1,000 people (Sweden has 191.55) and a mere indicative use of the Internet; With the school system totally undermined and stultified by government personages whose children school abroad;  and With a healthcare system, which is underdeveloped, even by West African standards.  

Way forward:  

Halt and reverse the dominance of the Nigerian economy by market forces; return to economic nationalism such as was initiated by the 1970-74 National Development Plan, as a starting point.  Negotiate a living room with the World Trade Organisation.  (With the possible exception of the USA, the world does not have an example of a country whose development was marked-led): direct participation by government in the mining sector, as directed by our membership of OPEC;

In one word, make the Nigerian State a partisan  of workers, formers, students, professionals and national (industrial) capitalists.  

Invest massively in iron and steel production, machine tools and other heavy industry, petrochemicals education and healthcare;  

Hand the rehabilitation and development of electricity over to the country’s Polytechnics and the Engineering faculties.

   Bring the emoluments of political office holders to the level of other public servants.

   Ban the use of private electricity generators in private homes starting from Aso Rock; and make it a criminal offence for public servants to educate their children abroad.  

    Finally, dear minister, I understand that as you traverse the country you have made part of your journey by road.  You must have noticed the staggering difference between roads in the old Eastern Nigeria and elsewhere.  You are an unusually honest person, tell your boss the truth, that the civil war ended in 1970, the reintegration of the East with the rest of Nigeria is long overdue.