PETERSIDE ECONOMIC REVIEW

Chamberlain S. Peterside, Ph.DTuesday, August 22, 2006
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New York, NY, USA

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POST-REFORM SCENARIO
…HOW DIFFERENT WILL NIGERIA BE, ASSUMING ECONOMIC REFORMS TAKE HOLD?


…Anguish and Prospects

he visual imagery of Nigeria’s future after the current debacle got me thinking hard so much that I couldn’t help but try piecing together a possible scenario. Ever so often you hear about Nigeria’s problems and prospects, unfortunately the myriad of issues besetting the country continues to make front-page news, and it might not be abating soon. Not only for the fact that the country stands on the edge of precipice prior to forthcoming elections or going by U.S. intelligence report on possible disintegration, but also due to the human tragedy visited on the populace daily. Statistics speak volume of deplorable life-condition. In less than a month, two notable political figures vying for governorship slots in Lagos and Ekiti States under the ticket of the ruling party were murdered right at home just like similar high-profile cases, and by last count 16 oil workers were captured as hostages within two weeks in the Niger Delta – what future could anyone be talking about for such a country? Skeptics might wonder.


Let us for one moment assume that beyond the anguish and cynicism perhaps lies a silver lining in the horizon. If historical precedence and experience of other societies are anything to judge by, then it is logical to infer from conventional wisdom that “night is darkest before dawn”. No country or people have succeeded in the long-run without enduring such a harrowing experience of socio-economic distress or political crises in their formative stage, sometime much worse than Nigeria is undergoing. Quite often it results to tremendous human toll and suffering. The height of anarchy in Nigeria was the civil war, however prolonged economic deprivation seems to be igniting renewed tension that might make that episode look like a picnic. Despite all that, I’d still maintain that black people in South Africa went through more trying times in their homeland than Nigeria.

A cursory look might indicate that after four decades of roller-coaster, Nigeria indeed stands on the brink of a cliff beyond which it would either tip-over and crash or recede and thrive. President Obasanjo in one of his recent remarks said that the task of reforming Nigeria for him is akin to a liberation struggle – hopefully that struggle won’t end on his watch. During a recent speech, Governor of Central Bank Mr. Soludo also made bold to describe some of the challenges confronting Nigeria in the reform process – according to him a generation of “big shots” with rent-mentality who are not used to working hard, had grown affluent at the expense of larger society and not amenable to reform because their easy means of livelihood is under serious threat. No fair-minded person could disagree with that. Little wonder why the economy stagnated. Against that background, it is understandable that a battle for the soul of Nigeria is indeed raging on - between a progressive future in the interest of majority or status-quo and retrogression.

…Looking Back In History
The fact that recent reform efforts have began to bear some fruit despite spirited opposition by entrenched forces is subtle sign that at the end of the day, it is impossible to scuttle the course of history. If I were to draw historical analogies, the experience of former socialist countries in 1990s quickly comes to mind, for the simple reason that in recent past, those societies went through exactly the same kind of evolution that Nigeria is currently undergoing, but on a rudimentary scale. Lets consider some of the similarities:

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  1. For four decades after the second world war, socialist ideologues and communist apparatchiks held sway in Poland, Czech republic, Hungary, Bulgaria, Romania and Easter Germany as well as in former soviet republics. This occurred against the popular will of ordinary citizens, whose opinions were mercilessly suppressed. The main pretext for such exploitative regimes was to build a utopian society. Meanwhile, the same high echelon and political class enjoyed unfettered privileges and perks that were out of rich for the common man. These officials as history has shown, were for the most part heartless and manipulative, yet pretended to be running a humane society. This compares to Nigeria, where for over three decades the military junta and their cohorts ruled through the barrel of the gun, often truncating democratic process on the guise of entrenching discipline and combating corruption, whist fraudulently enriching themselves at the expense of poor citizens

  2. Due to centralized control and command economic system, socialist countries were inherently inefficient, corrupt and riddled with favoritism as individual initiative was stifled. Therefore only those close to corridors of power profited and secretly acquired illicit wealth– which was no different from Nigeria over the last three decades, where ineptitude and cronyism was the norm.

  3. When the die was cast in these socialist countries, hard core reformers like Mr. Gorbatchov and Boris Yeltsin took charge in Russia in the 1980s as the wind of change blew across the region. First with the collapse of former Soviet Union and then the velvet revolution in Eastern Europe. Entrenched forces were uprooted, but not without a fight. Ultimately, the pace of change accelerated and as we speak those countries are now free market, democratic and competitive economies, which underscores the triumph of the human spirit. We are witness to sweeping reforms initiated in Nigeria, such as fiscal discipline, due process/transparency, fight against graft, and so forth, albeit imperfect. These measures are no different than the radical restructuring in those erstwhile socialist countries.

More importantly, the fact that Economic and Financial Crime Commission (EFCC) is turning out to be quite implacable, whilst its helmsman Mr. Ribadu is impervious to the barrage of critism and making some high profile arrests, going as far as stepping on the toes of entrenched forces is simply unheard-of in the annals of Nigeria. That augurs well for the future of that country and underscores signs of a changing time.

…Repositioning For the Future
People have become accustomed to this notion that ethnicity and religion is the core of Nigeria’s problem. Contrary to that view, corruption in high places combined with abject poverty and struggle for survival by a massive underclass in my opinion is more of a determining factor. As Wangari Maathai, the Kenyan Noble peace prize-wining environmentalist rightly said, the urge for control of scarce resources, whether it is land, water, forestry or mineral resources is the root cause of most crises on the continent, including Nigeria. Crude oil as the major export-earner and means of subsistence for millions of wretched people is at issue. This vital resource holds the ethnic groups together in a fragile union and remains the most crucial element in politics and benign source of instability.

Various regions clamor for the presidency and political office in Nigeria, not necessarily for any altruistic purpose, but to gain access to financial resources and hopefully line their pockets, especially in an environment where there is limited opportunity and unequal access to wealth. It is from this prism that one must look at the whole reform endeavor. Any serious attempt to tackle favoritism, utilize resources more efficiently and distribute income fairly based on effort and input across-board could possibly ameliorate the current crisis. It is certainly such inequalities that economic adjustments are designed to correct whether in Eastern Europe, China or Nigeria.

There is no gainsaying that reform is a continuous process and has a long way to go for Nigeria to become a competitive free-market arena, where rule of law reigns supreme. However, a repositioned Nigeria would be a far cry from what it was for the past four decades. Firstly, the various strata of society and their access to wealth as we know it would have changed forever. There could be a new generation of hard-working business and political class that will need to prove their worth in a lawful manner. It doesn’t have to necessarily be a winner-takes-all atmosphere, but it is not impossible that new oligarchs and moguls might be formed from the ruins of current system. The financial industry consolidation and privatization are part of the process that is slowly but surely re-defining the economic landscape and reconfiguring key players in Nigeria.

…Engendering Equal and Fair Access
The good news is that in a modern democracy, economic risk-takers and managers are rewarded commensurately according to their knowledge and effort, rather than based on religious background, ethnic origin or political affiliation, just as the electorate could afford basic livelihood. A competitive climate will engender efficient allocation and utilization of resources, increase productivity, create more jobs and improve standard of living for majority of the population. Nothing guarantees success in a free-market and law-abiding society than your courage and ability to take calculated risks and labor hard.

Fundamentally as knowledge and talent begin to play more decisive role in the society; you could see the abundant prowess of Nigerian citizens begin to bloom and spawn different opportunities in business, art and sciences. Thus far, all this has been impossible due to obscure economic climate in which people embraced an inordinate get-rich-quick mentality and glorified illicit and easy wealth. Under normal circumstances based on life experience, the act of success is not a walk-in-the-park. It is serious painstaking business.

Unlike in Nigeria, due to unfortunate harsh economic realities of the last three decades occasioned by mismanagement and corruption, the urge to strive hard and strong work ethics amongst inhabitants was evaporating. Sustenance for the average civil servant or university lecturer became an uphill task, as most youngsters ventured into robbery, cultism and advanced fee fraud. If there was better and equal opportunity in Nigeria, most of these vices couldn’t have been so rampant. Simply put, Nigeria is threading on a proven path of human development. Therefore it is imperative that reforms continue and succeed for justice and fair-play to triumph.

Chamberlain is the Founder & President of New Era Capital Corp. and MyCompleteFinance.com, a New York based financial services group. He was previously a Financial Advisor in the Global Private Client Group, of Merrill Lynch.