PETERSIDE ECONOMIC REVIEW

Chamberlain S. Peterside, Ph.DWednesday, August 11, 2010
[email protected]
New York, NY, USA

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POST-COLONIAL ECONOMIC POLICY ANALYSIS
…WHERE DID NIGERIAN LEADERS GET IT WRONG?

…50 years in the Making

ifty years is quite a long while in the life of any nation, especially measured by pace of global progress these days. The lame excuse that it took some countries in Western Europe and United States centuries to get things right on their path of economic development and democratic experiment is not good enough to justify why Nigeria should be in the current state.


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By hinging the root causes of backwardness in Nigeria on circumstances beyond anyone’s control, or so-called “developmental process” we so often divert attention from inherent problems plaguing the nation and absolve leaders of major responsibility. Let the truth be told – successive leaders whether military or civilian somehow got things wrong in their effort to run Nigeria. Why and how not to repeat the errors is what we should concern ourselves.

The overarching goal of vying for leadership position in any normal society (and Nigeria shouldn’t be an exception) is principally to serve and improve upon conditions of your fellow citizens. Nigeria’s post-colonial experience has been far from ideal, whereby the express purpose of most high office holders and aspirants is rather self-gratification that rarely aligns with interest of larger society.

Some African elites are culpable in obviating the truth and often deviating from the underlying reason for economic malaise in the continent. Many continuously point accusing fingers at the colonial powers alone, first for invading and annexing disparate sections of the continent then entwining African economies to their apron strings and Western European markets. In Nigeria for instance, some economic-history books have vociferously argued that the railway system was designed and built to run from the Southern axis (seaports) through the Eastern and Western flanks to the Northern region, thereby connecting principal sources of agricultural cash crops to export terminals - but doesn’t that make sense given prevailing economic circumstances and geo-political conditions at the time?

…What Have They Done Lately?
So 50 years later, we are yet to see marked improvement on the narrow-gauge railway system or successful transformation and diversification of the economy from raw materials export (whether agricultural produce or crude oil/gas) to value-added manufacturing. Based on my critical assessment, the new crop of leaders after independence ought to have done far better job given tremendous leverage at their disposal, underscored by substantial financial and human/natural resource-base. The human factor was simply not adequately harnessed as witnessed by inept political leaders that took charge and failed to capitalize on opportunities.

Whether on the political front and/or especially in the economic arena, the conditions on ground today speak volume of wrong moves each step of the way. This wasn’t for lack of trying, but mostly occurred from misguided efforts that now leave the economy prostrate, amidst a populace that remain mired in abject poverty half a century after colonialism.

During the period leading to and immediately after independence, Nigerians were full of hope and aspiration for gaining self-rule, only for reality to set in soon after. The country was characterized by incessant political upheavals, which ushered in military rule by 1965 and bitter civil war in 1967-1970. Those events underscored the voracious appetite for domination and resource-control and were initial telltale signs of the failure by new national leaders to grapple with unexpected complex socio-economic challenges that confronted the country.

Prior to that, most of the existing infrastructure facilities were carry-over from colonial times, including the beleaguered railway system that was last extended in 1964; most major cities like Lagos, Ibadan, Kano, Enugu, Port Harcourt, Kaduna, Calabar, Aba etc were planned and built under the tutelage of colonial administrators; public utilities in most urban areas were functional and efficient. All that is necessary was to maintain, expand and modernize them to keep abreast of time and growing population – that was never to be.

The public service systems at both the national and regional levels were also mostly colonial legacies. The personnel were quite adept at running existing modest infrastructure, thus delivering value to society and helping sustain relatively better standard of living (well into 1970s) – namely, access to primary healthcare services, primary and secondary education, electric power supply (in mostly urban areas), clean/portable water-supply, law courts and other social amenities. On per capita basis, most Human Development Indicators (HDI) were more favorable than in recent years.

…Collapse of the Great Groundnut Pyramids
That Nigeria was a major producer and exporter of agricultural produce like Palm Oil, Cocoa-Beans, Groundnut etc is already well-known fact, however the foundation for that wasn’t a result of the plans and sweat of post-colonial leaders but was laid well before the country achieved independence. The demise of famous groundnut pyramids in Kano was mainly due to lack of continued support for this economic mainstay by the new leaders in charge.

The practice of setting ambitious 5-year developing plans which started in the 1960s was discontinued in late 1980s with little to write home about. At the core of its failure was the inability to understand new realities and craft then execute forward-looking policies that reflected the changing times - building upon subtle progress already achieved. Rather, grandiose white elephant projects were designed and undertaken, if at all well executed. Ajeokuta Steel Plant for instance was conceived during the 1960s but never completed until 1990s and remains comatose.

…Pursuit of Ideology Rather than Reality
Essentially, development policies in most African countries, not excluding Nigeria during the early post-colonial era was mostly shaped by international events and bandwagon-effects with loud, autarkic and ideological postulations like Socialist Orientation (best represented by famous Ujamma ideology introduced by Julius Nyerere in Tanzania), Protectionism and Economic Self-Reliance, Export Promotion/Import Substitution Strategy, Indeginization Policy etc in a “New World Economic Order”.

To what extent these concepts succeeded in transforming the economies are anyone’s guess? It didn’t. At the forefront of such diverse policy prescriptions were the World Bank/IMF with its notorious Structural Adjustment Programs (SAP) and United Nations/African Economic Commission with ideas that neither sufficiently spurred local production nor successfully stimulated export of processed agricultural produce.

Asian countries like South Korea, Taiwan, Malaysia and Singapore weren’t quite convinced and vehemently refused to buy these empty slogans whole-hog. For the most part they relied upon home-bred strategies and succeeded tremendously. Meanwhile Nigeria remains largely import-dependent spending hard-earned oil revenue on importation of food and all manners of basic consumer products.

At issue wasn’t just the content of the ideas or policy formulation per se, but the people espousing and executing the ideas. If there were some bright spots in the post-civil war years in Nigeria, it would be the planning and construction of network of new federal roads. During the oil boom years, Lagos was massively rebuilt and modernized just as Abuja the new capital city was conceived and built. New seaports, several airports, numerous educational institutions and health care facilities were built across the length and breadth of Nigeria. The resultant external debt from the jumbo loans became a serious financial burden that couldn’t be resolved until 2005.

Reform policy history of Nigeria will be incomplete without special attention to the external debt-deal struck with the Paris Club of creditors in 2005. This paved the way for eliminating huge debt-stock accumulated throughout the 1970s/1980s amounting to over $35 billion at its peak in 2004. Coupled with this debt repayment strategy was the sudden and unprecedented accumulation of foreign reserves that currently stands at over $32 billion.

This twin measures combined can be considered the most remarkable economic achievements in Nigeria’s recent history. The fiscal stability occasioned by low to zero external debt-service payments and financial war-chest built to protect the local currency and fund at least 22 months of import-bill is one of the highest amongst any country in the world today. It can usually provide breathing space and conducive atmosphere to attract additional foreign investments for expanding the local economy – but we are yet to see that happen in a significant way.

…Sustaining the Tempo
Ordinarily by building the network of infrastructural backbone and engendering fiscal prudence it is expected that multiplier effect on the economy can be generated to systematically catalyze productivity. Not surprising that Nigeria posted some of the most impressive growth rates in the world during the mid to late 1970s and again during the period from 2003 to 2009. While public sector remained at the commanding heights of the economy through most of the post-colonial era, there was a sudden realization of the drain public enterprises was exerting on the nation’s coffers, which gave the impetus for massive privatization and commercialization of these enterprises during the mid to late 1990s and early 2000.

Whereas the least performing public entities like power holding company (NEPA/PHCN) and former telecom monopoly (NITEL) have remained a thorn in the flesh, they consistently were unable to deliver desired service-quality and value to consumers despite gulping colossal sums of money. Not until the deregulation and auctioning of mobile phone/GSM licenses in 2002 did Nigeria experience exponential growth in the telecommunication sector that has now truly energized business activities thereby pushing growth rate to unusual highs in recent years.

Deregulation and recapitalization in the banking sector between late 1980s to mid 2005 saw a rapid growth then sudden decline in number of banks with attendant spike in their capital structure. Even in the face of such changes and bulking up of banks, long-term lending to real and productive sectors like manufacturing, small and medium enterprises, agriculture and mass housing remains an aberration rather than the rule, which might partly explain the failure of protracted government effort to make serious dent on unemployment, poverty alleviation and improvement of living-standard for most citizens. But as government spending spree and reform effort lasted, some of the most neglected aspects of national development were electricity generation capacity, upgrade of national transmission grid and mode of transporting bulk cargo through the railway network.

…The Lost Decades
Due to inadequate investments, colossal pilferage and wastage of resources plus poor planning and declining fortunes from oil revenue, Nigeria’s growth spurt reversed course after the later 1970s and have never fully recovered. This period has become known as the lost decades.

The human factor as key driver in the continuum during the lost decade was ignored and grossly mismanaged. Senior civil servants in the early post-colonial period could be considered quite focused. They had better work ethics, were more honest and committed to serving consumers and the nation in their respective roles. When contrasted with the caliber of leadership that emerged from the ensuing political confusion (whether military regimes or civilian administrations), what you got was a mismatch that was retrogressive and counter-productive.

Therefore the key determinant that explains dismal economic performance in post civil-war years I must say was the mix of corrupt, unenlightened, visionless and self-centered personnel that occupied the highest decision-making positions in the nation. It was one thing to develop smart programs and proffer lofty solutions to economic and social problems and a totally different matter for the top brass in charge to listen and implement meaningful policies. Unless leadership is sufficiently competent to make the right choices amongst all possible variables and implement same, how can consistent positive results be achieved?

…Failure of the Human Element
You might rightly argue that the young military cadres and some civilian cronies that took charge of Nigeria’s affairs most of the post-colonial period and hay-days of the oil-boom simply lacked the intellectual capacity, decision-making skills, requisite exposure, foresight and practical knowledge to navigate the nation by properly selecting and following through on whatever economic blueprint that was presented. What they all had in common and in abundance was ambition and over time, the incompetence became a curse that permeated all facets of national life, from which the country is still struggling to emerge.

The attendant decline in public psyche and individual well-being is due mostly to inability to execute the right policies or adapt to constantly changing realities. Giving rise to soaring social tension, decaying public infrastructure, non-adherence to basic rule of law, widespread survival of the fittest battle and politics of rancor whereby what matters most is individual pocket at any cost. Tell you what, no modern and prosperous societies was built on such principles, ultimately that could lead to anarchy.

Some people are accustomed to believing that social vices like corruption and indiscipline are main reasons for underdevelopment in Nigeria, whereas I will strongly argue that those ailments are rather consequences of historical decedent leadership, failed policies and incompetent execution. In such circumstance, differences rather than commonalities amongst the citizens become accentuated. It is extremely difficult no matter how much you wish or try, to live peacefully in midst of such inequality and fierce battle for limited resources. As notable Kenyan Nobel Laureate (Wangari Maathai) said - that the main cause of conflicts in Africa is the fight for resources.

…Do Or Die
In Nigeria the struggle for greater share of dwindling national pie derived from crude oil, in the face of botched policies is sure to remain a defining issue in the political arena for many years to come. That leaves the bottom echelon of society killing each other for the crumbs, whereby they seek to blame their deplorable conditions on whoever they find and vent their anger violently.

If there will be another 50 years of independence to celebrate in Nigeria, then the effort must start now. The current crop of leaders should retrace their steps to see where egregious errors were made. Attention should shift to baking a larger pie and sustaining the building-blocs that could remedy current tension. This can happen by focusing on infrastructure and electricity supply, primary healthcare delivery, qualitative basic education, entrenching the rule of law, while empowering the private sector and civic society.

A very crucial aspect of that transformative process might include the honorable exit of erstwhile, worn-out military and civilian so-called “god-fathers” from active politics and jostling for power. As empirical evidence clearly reveals, except for self-fulfillment it is hard to decipher what tangible social and economic progress that would be derived from having this crop of leaders return or remain at the epicenter of Nigerian politics. The burning and distracting debate on zoning and who has the right to run for office in Nigeria might have been a non-issue were it not for the presence of irresponsive leaders and their army of sycophants in the political space.

The world is advancing and becoming quite globalized as tools of technology and socio-economic progress get increasingly sophisticated far beyond what was obtainable in the 1970s or even the 1990s, how in the world does this caliber of leaders hope to understand such changes and fast-paced trend? How will they apply the necessary skills and knowledge in a new global dispensation if historical evidence clearly demonstrates that they woefully failed to lift the country when they had the best chance?

Chamberlain is a New York based financial professional and member of Rivers State Economic Advisory Council.

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