Nigeria and a runaway economy

Akin to a runaway chemical reaction whose kinetics and results are uncontrollable, Nigeria is contending, metaphorically, with a runaway economy, in topsy-turvy, characterised by foreign exchange volatility and attendant inflationary pressure on costs of goods and services.

The floatation of the naira to address some fundamental structural problems in foreign exchange mechanism and the removal of subsidy on premium motor spirit with overhang of sharp practices have combined to hobble Nigerians, now groaning in despair.

The free fall in the value of the naira against foreign currencies notably, the Pound and the Dollar is worrisome and experts’ comments on the phenomenon leave no room for optimism of an early recovery against the backdrop of low, albeit improved, crude oil output (1.503M versus 1.74 M bpd, OPEC quota), low external reserve ($33.37b), high external debt ($43.16, Q2 2023), low local manufacturing capacity and the country’s pathological import-dependence.

It is incontrovertible that the current administration inherited a comatose economy, figuratively, a fallen house. To fix it requires a laborious and slow process of excavation and resetting on a strong foundation. It is an illusion to reset it on the same weak foundation and expect a positive result. The twin corrective policies of this administration – unification of exchange rate and removal of scam –ridden fuel subsidy – are ordinarily plausible only if all things are considered.

The Minister of Finance and the Central Bank Governor have provided some clarifications on their economic policy thrusts and their expectations/optimism in an interactive session with House members. But it is deja vu to anchor their policy thrusts on a weak foundation – a dysfunctional governance structure.

Dr. Okonjo Iweala averred in one of her books that economic policies are futile without a complementary governance structure. A notable example is vision 20:2020 conceived in 2009 by which the country hoped to be one of the 20 largest economies in the world by the year 2020. But it failed.

By the year 2020, Switzerland of less than five per cent the population of Nigeria was number 20 (GDP nominal $703.083 billion, population 8.6 million, GDP/capita $83,716) and Nigeria was 27 (GDP of $448.12 billion, population 200.1million, GDP/capita $2,222).

On enabling governance structure vis-a-vis vision 20:2020, Professor Wole Soyinka in a keynote in 2009 to the Nigerian National Merit Award, titled: ‘Seek Ye First ——-‘, remarked that “even the most dedicated —-farmer—armed with the latest in high-yield, blight and parasite-resistant seedling – cannot guarantee the next harvest without a thorough preparation of the receptive ground” Yes, indeed vision 20:2020 was a fiasco because it was set within a framework of a governance structure that was unreceptive. So are many of our economic policies to date.

The question is: for how long will Nigerians continue to bear the pains of governance that is not working? The Minister of Finance has rightly noted that a sustained increase in crude oil output is a pragmatic way to shore up the country’s external reserves in the short term and to mitigate the pressure on foreign exchange. But it is a frank reminder that ours is a mono-product economy amid a plethora of natural resources.

It is a reminder that our economy is unproductive, lacking the capacity for value-addition to local resources including oil and gas. When will Nigeria work in the absence of power and an epileptic national grid with no capacity to transmit the modicum of power generated? It is a good step that electricity bill has been signed into law decentralising generation, transmission and distribution. But many States are yet to set the machinery for investment in the sector.

For now the country is contending with multi-dimensional challenges with no short-term solutions – insecurity, corruption with impunity, unemployment, poverty, poor health and poor educational system, poor wages, etc. It is worrisome that the federal government has not paid workers’ salaries for January this year. The central government appears overwhelmed by the multi-sectorial problems.

In the circumstance, the principle of subsidiarity by which sub-nationals and local authorities are vested with powers and resources to provide services in the most efficient and effective ways is a sine qua non. But the extant 1999 Constitution is an albatross in its configuration of the prevailing governance system and in its limited provisions for amendment, which for most part has been an exercise in futility.

It is more so an albatross because it contains no provision authorising its abolition and replacement by a new one adopted and enacted into law directly by the people by the referendum mechanism (Ben Nwabueze). In effect, the sovereignty of the people has been circumscribed in contradistinction to the provision of section 14(2)(a) of the Constitution which states inter alia: “Sovereignty belongs to the people of Nigeria from whom government through this Constitution derives its power and authority”. Section (b): “the security and welfare of the people shall be the primary purpose of government”

Now that Nigeria is not working, on the precipice, unable to give primacy to the security and welfare of the people and the primary culprit is the 1999 Constitution which configured the structure of governance, there is an urgent need for a new Constitution which will reflect the will and yearnings of the people because sovereignty belongs to them. It is beyond amendment of the extant Constitution.

In my previous article on this subject titled: “Nigeria in the doldrums, no movement” (The Guardian, March 31, 2022), I referred to Prof. Ben Nwabueze’s proposal on how to circumnavigate the constitutional non-provision for abolition of the extant Constitution and its replacement with a new one as follows: “ that the National Assembly exercising power under section 4 (legislative power) taken together with section 315 (existing law) (1) a and (4) can abolish the 1999 Constitution in its entity by repealing Decree 24 of 1999 to which the 1999 Constitution is annexed as a Schedule”.

Further “that Decree 24 of 1999 is an existing law under section 315(1) and like all existing laws that are within the federal legislative competence is embraced within the National Assembly legislative authority to repeal or amend” (Nwabueze: Further Thoughts on the Nigerian Constitution and Polity). To avoid a lacuna, he suggested: “the adoption of the new (Constitution) should be done at one and the same time with the abolition of the 1999 Constitution.”

As a first hurdle, President Tinubu would do well to send an executive bill to the National Assembly to make provision for referendum in the 1999 Constitution to restore the sovereignty of the people and to pave way for their sovereign right to demand for a new Constitution. There is no doubt that many Nigerians desire to see Nigeria work in a new governance arrangement devoid of constitutional encumbrances.

Professor Eromosele, former Deputy Vice-Chancellor (Academic), Federal University of Agriculture, Abeokuta.