There is no doubt that the Nigerian economy has been in struggling mode for the past five years, after the initial recovery from global economic downturn and inadequate domestic response. The last five years have seen the country in a more precarious situation in terms of increasing corruption, deepened appetite for borrowing, lack of policy coordination and intractable insecurity. Warnings on the need to stop or reduce borrowing by looking and the debt-revenue ratio fell on deaf ears as the economic managers continued to argue that Nigeria was far from hitting the maximum debt to gross domestic product ratio. Today, lenders are scared of extending loans to Nigeria.
As the Economic and Financial Crimes Commission was arresting some politicians and civil servants caught in corruption saga, the government was busy processing the release of those arrested earlier thereby implicitly encouraging corruption. The inability of the various security agencies to contain the rampaging activities of Boko Haram, bandits and kidnappers and the reasons for the situation is well known to all of us. The negative implications of all these on production, employment, international trade, attraction of foreign direct investments, income inequality and well-being of citizens have led us to where we are today.
The Ukraine-Russian war, unfortunately, created opportunities for Nigeria, like many oil-producing countries, particularly under OPEC, to make some gains from increased oil prices but we were informed that the country was underproducing and could not meet up with its quota. However, it later became clear that the country was unable to meet up because of massive crude oil stealing, not low production. I wish the Minister for Petroleum, Major General Muhammadu Buhari (retd.), had the time for the ministry just like the Minister for Education, Adamu Adamu, was quite busy elsewhere until lately, Nobody heard the voice of the minister for education until the Academic Staff Union of Universities strike was over five months old when the President, Buhari, gave him an ultimatum to resolve the crisis. One would think that the Minister of Labour, Dr Chris Ngige, was directly supervising the ministry of education all the while. The only time we saw the minister of education during this crisis was when NANS sought an audience with him and the whole thing ended in disaster.
The Minister for Finance, Budget and Planning, Zainab Ahned, cannot hide anywhere because the existence of the country depends largely on how the economy is managed. She has been kept on her toes by the underperforming economy. I am not sure she is tapping the resources at her disposal with the array of economists in the Economic Team put together for her by the President some two years ago.
Our concern here of course has to do with the dwindling fortune of the economy, precisely investments. Every day we have reports of businesses, particularly manufacturing outfits, folding up or scaling down or moving out of the country. Just as citizens, most especially the youths, are moving out to look for greener pastures, businesses including local ones, are also looking for greener pastures. The hitherto local businesses want to take advantage of massive depreciation of the naira to go and earn foreign currencies in Benin Republic or Togo or Ghana.. The naira has weakened against all neighbouring currencies and it seems a good idea to move businesses to those countries and earn CFA, a more stable local currency, with low cost of production.
The country is now at a level where both the federal and states have to intervene directly in job creation and employment promotion with the hope of divesting in future. The country has to become developmental state. The developmental state has the characteristics of strong state intervention with extensive regulation and planning.
A developmental state requires high levels of discipline just as it would involve government investments in physical capital that is run with the discipline of private sector. While the Federal Government is busy pursuing loans, to the extent that creditors are getting scared of giving loans to Nigeria, some states are still buoyant and are inaugurating one project or another, hopefully without borrowing. Rivers State has been more visible with projects, particularly roads.
In the developmental state, which does not necessarily mean at the federal level, the government engages in modernisation of education and health institutions, the establishment of manufacturing industries, road and rail infrastructure as well as other social infrastructures. The model is not new in Nigeria but we refused to follow up. We need to check out the model of the old Western Region under Chief Obafemi Awolowo. The Action Group, under Chief Awolowo, started by establishing a solid foundation in education by building schools and offering free education in order to produce the manpower that would work and manage the industries to be established, that would maintain the roads and other physical infrastructure to be constructed and would make governance easy. When citizens are educated, the government has less work to do because everyone knows his or her roles in the economy while government goes about governance with ease, though it has to be on its toes to maintain high performance.
After establishing schools, Chief Awolowo established farm settlements and cash crops plantations for modern agriculture, residential and industrial estates to encourage private industries, which would compete with those of the government under the Odu’a Group of companies. He then established the communication industry via rediffusion and television (the first in Africa). There is a need for a comprehensive study of the Economics of Awolowo. One certain feature of the businesses was that they were never run like public sector businesses, thus the issue of parasitic dependence was eliminated. Lesson for those who believe that government has no business in business. When corruption is built into a business, the elements that make it a business are removed.
The current political landscape where people are asking former governors, and now presidential candidates, to show their scorecards of the past is a good development in the polity. So, governors who build roads without building those who are going to drive on the road, transport their manufactured goods on such roads and have the capacity to maintain the roads in the future run the risk of rejection at the polls. What is being advocated here is that governors can, and should, pursue developmental state in which state development is anchored on strong state intervention with extensive regulation and planning. That the Federal Government has no national development plan should not preclude a state from having its own. Of course, some states have their plans and we can also see that they have ordered growth.
A state does not need to have all the money to invest in agriculture and industries. It can engage in public-private partnerships – PPP- which also have the advantage of successful managerial practices. The types of PPP that exist are many and varied. They include Built & Transfer, Built-Operate-Transfer, Built-Operate-Lease-Transfer, Build-own-operate, transfer, Build-own-operate, Buy- Build-Operate, Build-Lease-Transfer, Design-Build-Operate, Design-Build-Finance, Design-Build-Finance-Operate; Design-Construct-Maintain-Finance; and Operation and Maintenance. Each of these has its advantages and disadvantages and, in many cases, they minimise corruption in business, if not carried out in the Nigerian way.
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