We all heard about the director in Kogi State civil service who committed suicide after being owed his remuneration for 11 months. Another civil servant in Kogi was shown on social media weeping over his dead daughter, whose hospital bills he could not afford because he was being owed as well. I received two separate visitors in my office last week who randomly hinted that they think sometimes about killing themselves. One just lost a job, and immediately fell into penury, with no prospect of getting another job or a business going. The other has always suffered from serious financial squeeze as a lady entrepreneur in Nigeria’s brutal business environment. We cannot disparage them or call them weak. Not all of us will be strong in the same way, and so mere preaching to them can only help marginally. The reality is harsh. And it is not just a Kogi State affair, but a countrywide one.
I would have intellectualised the matter, and called for a new economic order; a scenario where the president, state governors, top politicians and our economic managers think honestly and seriously about what is going on, realise that Nigeria is finally on a one-way street to disaster, and make an urgent course-correction. But with the current array of events, I doubt if they can understand or be helped. Most large companies die because their top directors ignore the signals, sleepwalk and party through boom and busts. Anyone who warns them is seen as a spoilsport, or someone complaining because they weren’t included in the largesse. For a country, it’s worse. Our politicians cannot even help themselves. Each one is restricted to his/her own fiefdom. As we can see with all the infighting going on in government today, everyone has their own territories, and a silo mentality is the order of the day. Therefore, there is no one charged with the responsibility of assessing the whole scenario from an eagle-eye perspective and sounding the warning signal. What is more? Even where we can find such person, s/he dares not speak up and tell the leader the truth. For now, even the few honest people in politics and government can only bellyache and keep quiet. They feel so helpless. All of them just live from day to day, go with the flow and keep whatever comes to them from the loot that flows around in their circles.
Debt For What Exactly?
Nigeria is a particularly interesting case study. The IMF and World Bank have warned several times about our rate of borrowing. These institutions usually encourage borrowing, so what is going on is quite odd. We are behaving like drug addicts, with the drug being debts. We want more of it. We need more of it. And if we don’t get some urgently, we are told that we are likely to collapse and die. But how did we get here? The debts we have collected, for which we need new debts to pay accrued interests upon, are impossible to account for in projects. How come the debts haven’t translated to a booming economy and opportunities for more Nigerians? Which new industry has come up in recent times that we can say is employing more Nigerian youth? Which industries are booming presently and which are sustainable into the near future? I hope the government doesn’t believe its own propaganda that says manufacturing is booming? I hope they understand that the boom recorded in agriculture is seasonal in nature?
Entrepreneurs are ready for business. But where is the business? Shops are not selling because there is no cash in the hands of people. Nigeria’s economic recession was as a result of a fall in purchasing power, fueled by the widening of income inequality, simple. The seeds have been sown over the years and it germinated rapidly in the Jonathan era. There is a problem in governance in Nigeria, and that problem is that leaders usually stop having a view of the common majority once they obtain power. There is, therefore, a tendency to plan only for a few people around them, and powerful people with influence who can access them. What this means is that Nigerian leaders are wired only to make the rich get richer, and by extension, the poor, poorer. Their challenge, however, should be how to ensure the income gap is narrowed so as to provide a basis for everyone’s prosperity. The Buhari era and its tight confederal structure has merely exacerbated this crisis and so there is trouble in the land; trouble like never before.
It’s Our Turn To Eat?
Some say things are tight today because we have new kids on the block and a certain section of the country believes this is their own time to ‘eat’. A better explanation may be that Buhari’s anti-corruption strategy got off to a false start, focusing hard on Jonathan’s people in a microscopic fashion, but failing woefully to address the fundamental issues. There is also no moral underpinning to the corruption war. And so those who have found themselves in power and position today, are meaner with the cash flow, and have a very keen sense of self-preservation. They still have bills to pay, lives of luxury that must be lived, new exotic cars that must be bought, mansions that must be built to impress their friends, new wives that must be married, expensive foreign trips and executive education for themselves, and of course children in elite schools abroad that must be catered for. When all these are put in play, the downtrodden can only rue their own fates.
As much as we love to vilify the military era, there is one advantage it had, and that is the non-proliferation of offices. The military works by command and control, and so it is fairly easy to get things done by fiat. But they soon fell under a spell too, and impunity got the better of them. The top echelon of the military were able to siphon billions of dollars for themselves. Now we have the civilians and it’s a different type of problem. In the first place, a political system such as ours, has way too many politicians in different spheres of influence, all competing for the little resources in the land. We have party leaders, mebers of houses of assembly, the national assembly, ministers, director-generals and other political big men to feed from our tiny budgets and underperforming economy.
The problem is that these politicians have also become quite desperate. The kind of corruption that the military boys noticed in 1966 is nothing compared to what exists today. The type that Buhari and his boys noticed in 1983 among out then reckless politicians is chick feed compared to what happens today. Where people were talking of 10 percent kickbacks, today it is anything like 50 percent, if a contractor is even lucky to find a job. If we explore the psychology of our times, we may discover that things are much worse today because the fabric of our unity as a people is now threadbare. People just don’t care anymore, and government has been a disappointment for not being able to create a moral compass for all to follow. Many people in government are even enemies of the state. Most politicians are tribal warlords. Sometimes it feels like there is a mad rush to quickly liquidate the country, and anyone who is unlucky or too retarded not to grab his/her own share will have himself or herself to blame.The Role of Government In the Economy
Our economy is still largely driven by government. Don’t let anyone deceive you; this is how it is everywhere else. The government – through the instrumentality of tax collection – is the largest entity in any economy, and through its contracting processes pumps money back into the economy and ensures that the wheels are turning. In the USA, 15 percent of the working population is employed by government. By 2013 figures, the UK government employed 25 percent of its entire working population. In Nigeria, the figure is less than five percent by every estimate. It may be unpopular to advocate for more people to be employed by government, because we have been conditioned over time by these same superpowers, to believe that employment in government is an anathema, and that government should not be pivotal to the development of an economy. It is a great miseducation, but we have Google there to help us find out the truth if we would avail ourselves. In order to get different results from what we have today, we have to turn things on their heads for a change. Before we move into the ‘private sector’ mode, we would have to achieve responsibility in government. The point we should pursue is to see how those employed in government can be useful and productive as they are elsewhere.
I will explore that point on another day, but for now we will stick to the current economic situation of a majority of Nigerians.
So, when we consider the pivotal role of government in an economy, we will see clearly where this economy and government are letting down their poor people. Today, like never before, the politicians are out in full force to take everything. Every bid is rigged to favour them and they always lean on ministers and the headship of agencies to get what they want. If you see where a politician is pursuing contracts, you will understand the meaning of aggression. Private sector players now have to go and collect letters from these politicians or they are done for. The politicians will then dictate what each person gets and your guess is as good as mine about who gets the chunk. These politicians even influence private sector contracting, especially in organisations that need favours from them. To this extent, businesses are dying.
As someone who has lived in Abuja since 2001, and done business since 2006, I am certain it never used to be like this.
Meanwhile, the little crumbs that fall from the tables of aggressive politicians are also cornered by the big men in the MDAs. They too have bills to pay; children in Harvard and Oxford need to be catered for. Their pay – especially in core ministries – is rubbish anyway. So this becomes double jeopardy for the private sector hustler, who will ultimately do the job, but get little or nothing therefrom. Also, many private sector players have imbibed the teachings of business schools, and so are trying to perfect their stances as lone wolves. They don’t cooperate. Unfortunately, they are lone wolves in a world of hyenas; it is easy to isolate and maul them and that is what is going on now. In my field, we are unable to even amend prices up from what it used to be in 2004. This means that we are earning perhaps a quarter of what we used to earn then because the value of money has fallen four times. Inflation and devaluation have seen to that. Yet, we are only interested in outsmarting each other. The folly is touching. Even Okada and Keke Napep Riders are smarter. They came together and found a voice. Today, the government accords them more respect than turenci-blowing ‘intellectuals’, as they are always called to meetings and their opinions sought. At those meetings, you will see the lone-wolf consultant in suit and tie, grinning from ear to ear because he just outsmarted his colleagues to win a contract that will be split in half between him and the big man who facilitated it.
So, except the Buhari government urgently dialogues with itself, things will only get worse. More businesses will collapse and more Nigerians will be thrown out of work.Perhaps, I should itemise the issues in closing:
1. There is a serious and deliberate miseducation of the Nigerian mind, and especially those who float to the top and run government, about how economies work and the role of governments in them. But this can be unlearnt if we care.
2. Even if we understand the role governments should play in economies, the problem is that we have already corroded our space with tribalism, nepotism, wanton stealing and a terrible lack of vision, and so government is not going to play the role it has played in successful economies. This means we suffer double-jeopardy.
3. As noted in my last write-up, we also suffer from an affliction whereby the same government – the largest spender in any economy – dreams too small but has high tastes. This means opportunities for everyone is shrunk, while most of the little budget goes on foreign goods.
4. The private sector underperforms without knowing it. We are happy to score cheap points against one another, instead of understanding that a rising tide lifts all boats. The dog-eat-dog approach is going to leave us all bloodied. That is why when you go on the streets, what you see are underfed, savage-looking Nigerians who seem to be waiting for their own opportunities to disrupt and devour. The humanity of the average Nigerian has not been positively affected. We are not producing an improved species of Nigerians en masse.
5. What we have instead is a scenario of widening inequality. The children of the super rich are so rich they don’t know what to do with themselves. The children of the poor are on the other side of the spectrum. We have ignored the warnings of global economists (WEF) that income inequality is the real issue for now.
6. What we are experiencing is not too new. In the mid 1980s, we also saw this – in the era of devaluation. People were laid off from work and the pensions they depended upon became worthless as well. The state and federal government found it tough to pay salaries and many were owed, sometimes for a whole year. When a nation goes into this mode, pulling back becomes very problematic, especially when there are so many people gaming the system.
7. There is a tendency for government to focus on big projects, which it is unlikely to complete within its tenures. On one hand, the World Bank and other agencies have since documented that the majority of corruption in developing countries are perpetrated under the guise of infrastructure projects. Someone also commented that state governors focus on road projects because it is great for kickbacks. This may be true, because this country will not need major road projects if it simply and constantly maintains what we have for now. On the second hand, a focus on large projects mean that a majority of the people are further excluded from the economy. The minister for information, Lai Mohammed, is quoted as saying that people cannot see the work of the government because its projects are large. Someone commented that their size should be the reason for their visibility. Not necessarily. Some very large projects spend much time at the consultancy stage, where huge amounts would have already been paid out. And this does not guarantee their eventual success, much less their usefulness to the people. Their maintenance is another issue altogether. The problem here is the strategy for development that we have adopted. We haven’t built a basis for the self-fungibility of this economy and so are borrowing basically hot money to create these emergency huge projects, like Mambilla power project or even the rail system.The above point taps into two issues – the unoriginality of the administration’s economic strategy and ideas on one hand, and its slow pace of decisions on the other; a factor fed by the president’s absenteeism due to health challenges. We are only now talking about boards of parastatals, 30 whole months after they ought to have been constituted, and barely 450 days before the next elections, according to INEC time tables. Again, given that there is no anomaly in having government as the pivot of the economy, given the experience in advanced countries, this delay is a sin against God and man, and the promise of additional ministers, ill-conceived and unnecessary. The effect has been to shrink the economy, which is what recession and depressions are about. Many economists believe we are effectively in an economic depression. Another effect of this unnecessary and callous delay in ‘settling’ the many wounded political lions and hyenas who helped Buhari in 2015, playing the usual stomach infrastructure politics, is that they unleashed themselves unto the business and contracting space and crowded everyone out using their influence and political power. Today, without equivocation, I can confirm that professionalism and competence hardly counts anymore in our public space. Influence and who you know is the name of the game. Buhari’s era is that of scorched earth economics, where the downtrodden are ground in the dust.
9. We need a new economic order. We need to think for the collective. We cannot keep thumbing our noses and telling people off for being lazy. Even if people are lazy, leaving them in that mode soon catches up with the valiant. The truth is also that if more people in the country had opportunities, the rich will get richer, crime will reduce, Nigerians will be happier, and we will get more respect in the comity of nations.
I interpret my role as an economist/statistician from the rule of averages. It is not to be disputed that no matter how bad an economy is, some people still experience effervescence. Some people may dispute my thesis here. Some who are close to government or close to the action, are making money. I also hear of the millions that young boys spend in bars every night; those boys must be making money somehow, and the owners of those bars and nightclubs are also smiling to the banks. I was, however, shocked when two of my young friends said candidly the other day that they regretted not ‘doing yahoo-yahoo’ while they were in university. Apparently their friends who did are the kingpins today. Also, some point to the painful Buhari ‘reforms’ as having led to the birth of some new home-grown industries. I personally believe that if the leaders hadn’t shown inconsistency and dishonesty themselves, we could have actually been on our way. What we are seeing today is not sustainable and I stand to be corrected. Whatever faith people could have had in the government’s ability to reform, has been greatly eroded by several scandals, including the medical trips abroad, Maina-gate, Baru and Kachikwu-gate, the mismanagement of the Paris club refunds, Babachir-gate, the Jibrin budget-padding scandal, the Misau and IG of Police N12 billion bribe issue, and many more.
Nobody should be fooled into thinking Nigerians are not aware. They are keenly aware of goings-on around them, and are reacting accordingly. No Nigerian would be thinking of playing the mumu and sticking to the straight and narrow when he knows that his leaders are not fully honest, especially when he sees poverty staring at him and breathing hot air down his neck. If the government desires a better country, or at least wants the country to keep surviving at all, it is high time it gets real with itself, deals with our human problem, takes action with respect to income inequality, and reorder this economy urgently.
Again, it’s a game of numbers. I may be entirely wrong. So I ask, what is the experience at your end? Let’s take a poll.
‘Tope Fasua, an Economist, author, blogger and entrepreneur, can be reached through firstname.lastname@example.org.