Okonji-Iweala advocates new social contract between citizens, govt

The Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonji-Iweala, has advocated for a new social contract in Nigeria where certain policies in the economy and society are sacrosanct and must not be changed when administrations change.

She stated this on Sunday at the opening ceremony of the Nigerian Bar Association (NBA) Yearly General Congress in Lagos State.

She lamented that Nigeria is not presently where it ought to be as a nation, noting that part of the problem includes a lack of policy consistency, where every government abandons the policies of the previous administration.

She said: “A very important part of the explanation for why we’ve not been able to succeed is lack of policy consistency. Successive administrations failed to continue good economic and social policies put in place by predecessors, allowing politics to frame policy — what we can call the not-made-in-my-administration syndrome.

“We all understand that where policies are bad and not working, of course, politics should intervene. But where things are working to the good, we ask, why fix what is not broken? To minimise the volatility of economic and social policy and to set our country on a steady growth and development path, rather than an episodic growth path, I have become increasingly convinced that Nigeria needs a social contract.

“By this, I mean a fundamental cross-party, cross-society agreement that certain things in the economy, in the country, in policy, and in society are sacrosanct and shall not be touched or changed when administrations change.

“We have seen protests in this country a few weeks ago, but we have also seen protests elsewhere on this continent and beyond. These difficulties should make us think deeply and reflect on what is needed to move this country forward so we can have the right type of conversation — not about blame games or recrimination, but about what we actually need to do to tackle present and emerging problems, to assure a bright future for our young people in this country. That is why my speech today is entitled, ‘A Social Contract for Nigeria’s Future.’

“If we look back to the early years of independence, it’s clear Nigeria had what it takes to succeed, and yet we’ve fallen behind countries that were on par with us back then. I want to remind people that in the first half of the 1960s, our per capita income in 1960 dollars was roughly equal to that of South Korea, in the neighbourhood of $100 to $120 per capita, according to World Bank data. But then South Korea’s growth took off, as it went from exporting primary products like tungsten oil and dried seaweed to manufactured goods.

“Back then, it was textiles and footwear, compared to today’s integrated circuits, electronics, ships, and autos, not to mention services exports, such as gaming and entertainment, where South Korea is also strong. Meanwhile, Nigeria’s export basket went in the opposite direction and became less diversified. In the early 1960s, mining exports made up half of our exports, and food and animal or vegetable oils together about a third, with manufacturers accounting for five to seven percent.”

She added that since 1974, oil has dominated, often accounting for 97 to 100 percent of Nigerian exports, with its share rarely dipping below 90 percent.

She said, “The good news is that our economy itself is quite diversified, and with the capacity to do much more in terms of agricultural exports, critical minerals, and services such as entertainment, and I want to commend ongoing efforts by this government to diversify the exports of our country. Last year, Nigeria’s per capita GDP was $1,620, while South Korea’s was $33,000.

“Korea’s growth miracle was exceptional and world-beating, but even more modest performers have outpaced us. Thailand’s per capita GDP was comparable to Nigeria’s in the early 1970s and is now $7,200. Peru, a country I will come back to, was about even with Nigeria in the early 1980s, but now has a per capita GDP of nearly $7,800.

“Even India, which into the 1990s and 2000s had a per capita GDP well below Nigeria’s, recently surpassed us on that mark and is now $2,484. India is now the third largest economy in the world, one of the fastest-growing and modernising economies. I cite all these numbers not because GDP is a perfect measure, but because, as Daniel Susskind, a scholar on economic growth at King’s College London, recently put it, and I quote, GDP is correlated with almost every measure of human flourishing.

“So whether we like it or not, it does tell us an important story and affords us a measure of comparison. Many of the big questions the NBA is grappling with at this conference have at their root Nigeria’s failure to sustain rates of economic growth and development that consistently outpace the growth of our population. We have had episodes of reform and faster economic growth that were not merely a function of the price of oil, but we were unable to consolidate and build on them.”

Okonji-Iweala noted that a social contract could become a basis for the virtuous circles of reform, growth, peace, security, and trust that have too long eluded us. “Turning now to potential ingredients of that social contract, the first element should be a shared understanding that we must prioritise the security of lives, property, and national assets. We cannot have economic or social development without security, and we certainly cannot have security without development,” she said.