Political economy of the change mantra

IN formulating the principles of governance that the Muhammadu Buhari administration should adopt to give effect to his party’s change mantra, we have three parts: adopting a new orientation, a new style of governance and the economics of the change agenda. Just as the Minister of Information and Culture, Lai Mohammed said, there is need for new attitudes and orientation. We must eschew tardiness, parochialism and opt for merit, experience and professionalism. We must apply 21st century techniques of doing things. By being technologically compliant, everybody will be living on the same wavelength and accept new ways of doing things.

Two, by the adoption of new styles of governance, we shall come to terms with the use of technology in the governance of the people. This entails using fewer manpower through the adoption and application of computers where manning was the norm. Adoption of new technology forces us to reduce the federal and state civil services by half.

The adoption of a new management style forces us into new strategies for survival via self-employment, import substitution and entrepreneurship. Three, the economics of the Change Mantra is the lodestar of Buhari administration’s change agenda. In Nigeria’s present circumstances job creation, poverty alleviation and import substitution are the primary issues of the day.

To achieve meaningful results in these areas, a structure for solving and executing plans must be put in place as against the norm. Thus, President Buhari should establish the Council of Presidential Advisers (CPA) for the purpose of creating and supervising policies. The CPA should have committees headed by advisers. The economic adviser or chief economist will head the committee on poverty alleviation. The committee on employment will be headed by a presidential assistant with that title.

It is the CPA that will formulate and supervise the implementation of policies for Mr. President. Like the United States Council of Economic Advisers, the CPA will ensure optimum employment in the nation and that the Central Bank of Nigeria makes loans available as high as 300 per cent of Nigeria’s gross domestic product.
In implementing the policies formulated by the CPA, ministers with new orientation come into play. The new orientation mantra would have taught us that there are more factors at play in prosperity than prayer. If India, Japan and China can be prosperous without Christianity, Islam and oil, then there are other factors we are ignoring which kept us in poverty even with oil.

In Nigeria, we had credit of 20 per cent of our GDP in 2013. Although we could have achieved more. Sadly, both the federal and state governments have clung to unpatriotic measures meant to perpetuate the corrupt self-enrichment of government functionaries. That is why government has allowed the prohibitive interest rates in domestic lending to the disadvantage of the national economy; but simultaneously to the benefit of foreign economies from where we obtain loans in hope of foreign direct investment (FDI).

Thus, the recent slashing of interest rates from 13 to 11 per cent is in the national interest. Indeed, sound economic policies begin from a regulated non-interest, non-collateral loan schemes for SMEs and import-substitution industries. Also, unless and until Buhari directs the Central Bank to implement its proposal of August 14, 2007 to reverse the improper treatment of the federation account dollar allocations which were overruled, the economy will remain comatose for eternity.

Which is why unless the improper use of federal dollar is reversed, stopping devaluation by fiat will not stem naira depreciation with its associated compounding distortions of the economy. Invariably, imitating economic policies of successful economies is the answer to our woes.

In 1950, South Korea and Pakistan earned the same income yearly. Today, the two countries are centuries apart. While South Korea’s per capita income had grown 23 fold since then, Pakistan has experienced only a three fold increase. Since Nigeria is in the same boat with these Asian tigers, how can we move Nigeria forward into the guild of well to do nations? That is what the change mantra is all about. South Korea’s success is there for us to imitate. This means empowering every Nigerian with better health, qualitative education, and longer life.

Many of the 169 Sustainable Development targets enumerated by the UN for the next 15 years have at their hearts, concerns such as poverty eradication and gender equality. However, one of the targets, full employment, isn’t really an achievable target. It is a dream, for in economics, a nation must have some unemployment to allow workers change jobs. Research affirms that politicians would use the full employment tag to support expensive, protectionist policies that generate great jobs but drive many into the informal sector of the economy. Thus, full employment would end up doing less good than it would cost, and that is certainly not the way to reduce extreme poverty.

An even better job creation scheme is migration. Millions of people today work outside of their homes. As rich nations age, they need more young workers. Moreover, Nigerians are very productive given a good environment, with an improved skills perfecting education, Nigeria can nurture skilled manpower for export to Europe and North America. It is estimated by researchers that for every dollar spent on migrant workers, home remittances from Nigerians in Diaspora would produce more than $300 per migrant.

After the Communist threat disappeared the developed world started applying policies that had the opposite effect on poor countries. Therefore, in crafting principles for the change agenda, Buharists must beware of being misadvised by foreign economists.