The duo of Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy and Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN) along with other key stakeholders in the management of the economy in the administration of President Bola Tinubu have been doing a yeoman’s job trying to rescue what is essentially a trapped economy and seeking to retrieve it from the brink of insolvency and bankruptcy to the path of accelerated growth, recovery and sustainable development. Happily, only a few voices in the administration have resorted to the easy blame game of heaping the challenges confronting the economy on the polices and excesses of the preceding President Muhammadu Buhari administration. The key economic actors in the Tinubu administration have rolled up their sleeves and are toiling day and night to confront inherited dysfunctions largely through painful economic reforms – removal of fuel subsidy and merger of parallel exchange rate markets – that have regrettably but unavoidably brought pain to the majority of the populace.
The most serious problem the administration has had to confront just like its predecessor is the challenge of safeguarding the lives and property of Nigerians from the ravages particularly of kidnapping, banditry and terrorism in volatile states of the North. This in turn has had negative repercussions on the economy especially with thousands of farmers abandoning their farms and communities in fertile, arable belts of the country due to insecurity.
The administration does not have the luxury of confronting and seeking to transcend these twin challenges sequentially but is having to do so simultaneously with a not insignificant number of citizens hoping it makes no headway in finding solutions all because of their grievances over the outcome of the last elections. The concern of this column this week is with the economy since it is logical to conclude that with increased economic growth, stability, enhanced generation of jobs, improvement in power supply and growing prosperity, for instance, there is also likely to be a marked decline in the rate of criminal activity across the country. And with the tentative steps being made towards the decentralization of power supply through laws empowering states and private entities to generate, distribute and transmit electricity within their jurisdictions as well as the new national consensus on decentralizing policing functions, the structural imperatives for multisectoral development are being addressed.
As the administration continues with the arduous task of systematically strengthening the value of the Naira, detecting and plugging sources of resource hemorrhage, aggressively combatting industrial scale oil theft and motivating states and local government councils to offer meaningful palliative succor to the vast majority of Nigerians particularly as a result of enhanced Naira revenues accruing to the three tiers of government following the removal of fuel subsidy, it becomes critical once again for the administration’s brain trust to seriously consider if the transient economic crisis is synonymous with the more fundamental and trenchant crisis of underdevelopment. I do not think so. The economic crisis will most likely respond relatively positively to the neoliberal economist’s policy toolkit such as anti-inflationary measures, interest rate manipulations or greater dexterity in the management of foreign exchange rates with hardly a dent made on the more deeply rooted problem of underdevelopment.
The abnormal pattern we have seen since the inception of this civilian dispensation in 1999, to cite an example, of impressive growth during periods of heavy accruals to the nation’s coffers in terms of abundant oil revenues without any concomitant concrete improvements in terms of measurable and specific development indices aptly captures the point I am trying to make here. In my recent piece in this space titled ‘Is Nigeria Developing’? I had referred to the political economist, Professor Okwudiba Nnoli’s irrefutable contention that the mere acquisition of the artifacts of modernization such as modern road networks, airports, fast track trains, sports stadia, large scale industries all predicated on foreign investment, partnerships or expertise without any accompanying transfer of knowledge and skills to local or domestic productive forces can hardly be described as development. In his classic, ‘How Europe Underdeveloped Africa’, the great Walter Rodney defines development as one, mastery by man of the laws of nature (science) and two, the application of such knowledge to create the necessary tools and mechanisms to master, subdue and manipulate the environment (technology).
This implies even if Rodney does not explicitly say so, that all meaningful development must, first and foremost be local. The most fascinating and expansive projects and facilities built for us by Chinese, American, European, Japanese or other external financial or technological expertise cannot rightly be described as development – at least for us. This is why, in many cases, long after such projects have been completed and handed over, further maintenance contracts are signed for their supervision and management still by the same external forces. Thus, Nigeria lacks the capacity, for instance, to get the massive Ajaokuta steel complex to work or even carry out what has become the unending Turn Around Maintenance of our comatose petroleum refineries.
With a Bachelor of Commerce (Hons) degree obtained as an external student from the University of London before he went on to study law at the same institution in 1944, Chief Obafemi Awolowo tutored himself to become a brilliant Keynesian economist and first- class manager of financial resources. His unrivaled distinction in this regard was demonstrated when as Minister of Finance and Vice-Chairman of the Federal Executive Council in the Gowon administration, he helped in managing the nation’s finances so dexterously that the federal government prosecuted the war with no external borrowings. In a lecture in Ibadan on 16th May, 1967, on the financing of the Nigerian civil war and its implication for the future economy of the nation, Awo did not resort to esoteric economic jargon. Rather, he identified strict and unflinching fiscal discipline as the most critical factor in handling a country’s economy in times of grave national crisis.
Noting the three principles that guided the military regime’s financial management during the duration of the war, Awolowo identified these as (1) to economize our financial resources; (2) to raise additional revenue; and (3) to save our foreign exchange reserves from being run down to a dangerous level, thereby avoiding balance of payments difficulties and preserving the strength of the Nigerian pound. Continuing, he cautioned that “In any situation similar to the one in which we found ourselves, where recurrent revenue trails behind fleet-footed expenditure, the obvious first line of attack is to economize and maximize available resources. Unless this was done, and done with Draconic firmness, it would be futile to raise additional revenue; and any claim to prudent financial management would be sheer reference”. Firm and unwavering national discipline anchored on a strong national ideology to mobilize the citizenry to cooperate towards the attainment of set national objectives was thus for Awo a minimum desideratum for economic recovery and national development.
He believed seriously that at the time he spoke in the early 1970s, it was within the power of Nigeria within two decades, to raise the agricultural, industrial and commercial competence of the country to make her not only able to feed her teeming populace but to contribute effectively to finding solutions to the problems of international hunger and liquidity. But to achieve this, Awo returned once again to the theme of discipline stressing that “But in order to succeed in attaining these ends, we need a strong national motivation generated by enlightened patriotism and sustained by an intense, absorbing and unflagging desire to advance our own economic interests, backed by clear-headed forward planning, hard work, and the constant application of acute and disciplined minds dedicated to the accomplishment of our declared objectives”.
There is certainly much of importance for President Tinubu and his economic policy advisers to chew on in these words of wisdom. How much are our political office holders at all levels willing to curtail their appetites and cut down drastically on avoidable wastages as necessary sacrifices to return the country back to the path of economic sanity and growth? Only if the leaders set the requisite examples will the majority of the citizenry be persuaded to adopt discipline, restraint, self-control and self-reliance as habitual philosophies of life. Let us never forget the example of Pandhit Nehru who was said to have declared at his country’s independence in 1947 that “What India does not produce, she will not consume” and that “if India cannot clothe herself, let her go naked”. It is no surprise that India is today a global economic power.
