Reversing a mismanaged economy

The fact that President Muhammadu Buhari recently expressed a desire to reverse Nigeria’s mismanaged economy shows that he has finally braced up for the obvious. Nigeria’s economy is in a parlous state following years of mismanagement by successive administrations. Good enough that the president himself is now concerned. The issues are too many to deal with.Had any person or institution, locally or abroad, called on Buhari to reverse the mismanaged economy, he would have taken it as criticism. Before now, some economic experts from local and international arenas had at one time or the other pointed to this fact to no avail. Such interventions are seen as criticism against the government.

For instance, the other day, the foremost British bank, HSBC, in a report released by its Global Research unit, entitled, “Nigeria, papering over the cracks” said “Nigeria’s current economic struggles look set to continue if President Muhammadu Buhari wins a second term in office…”

“A second term for Mr. Buhari raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

The presidency, expectedly, reacted sharply against the damning report. The Senior Special Assistant, Media and Publicity to the President, Garba Shehu, dismissed the report as a form of psychological warfare against President Buhari’s anti-corruption policies. Shehu accused HSBC bank of laundering money for corrupt politicians and alleged that most of the funds reportedly stolen by late Head of State, Gen. Sani Abacha were lodged in HSBC bank.

Those exchanges, to me, amounted to nothing. It doesn’t answer the fundamental question as to why the economy remains battered year in year out despite serious policy interventions and remedies brokered by successive administrations. May be the time has come to begin to address the numerous issues confronting the economy if that is what the president has in mind. It is possible to redress this economy if the government is genuinely committed to that. But it is a herculean task.

That Nigeria’s economy is grossly mismanaged is not in doubt; the whole world knows about it and the adverse effects are with us. I was dismayed the day I was reviewing the Economics curriculum of a neighbouring country’s university and came across a course on mismanaged economy with Nigeria as the case study!

That reminded me of a course I studied at the University of Lagos on a model economy with Japan as the case study. It draws a sharp parallel between the model economy and a mismanaged economy. The fact that Japan is a model economy manifests in the entire socio-economic realities of the country including quality of life. Contrarily, the fact that Nigeria is a mismanaged economy also manifests in the substandard living condition and mass poverty.

Having recognised that the economy is mismanaged with a promise to reverse it, how is he going to achieve that? What policy framework is there to guide the action? How is this economy going to be reversed when it appears to have no “structure”? If you ask anyone what the structure of the Nigerian economy is, the most likely response would be that the economy is mono-cultural, i.e., depending solely on oil. The other thing you may hear is that Nigeria is an import-dependent country that virtually produces nothing industrially.

By that, ours is like a stunted economy where oil is the principal source of revenue while the rest of the resources across the states and local governments are lying dormant. Any reversal of the economy must begin from the villages and their endowments. It is not possible to reverse the economy under the existing framework except there are fundamental structural changes. Besides, talking about reversing the economy from Abuja alone is unrealistic.

There can be no reversal of this economy without involving the states. All the states must be involved. Abuja alone cannot reverse the economy. All the states must be part of it. Reason is that the resources of the nation needed to reverse mismanagement lie with the states. If reversing the economy is seen only from the prism of fighting corruption, then it won’t work.

I tried to find out the meaning of “mismanaged” to be sure I am on the right track. The Encarta Dictionary defines “mismanaged” as follows – manage incompetently – to run, organise, or deal with something incompetently.When applied to the economy, it means that the economy has been run, organised and dealt with incompetently. Incompetency means that the managers of our economy, over the years, lacked the skills, qualities or ability to do the right thing.

But this is curious. I had previously in this column listed some of the great minds that have been part of the economic management team, which included Kalu Idika Kalu, Chu Okongwu, Adamu Ciroma, Ngozi Okonjo-Iweala (a world renowned economist and technocrat), and a host of other eggheads. Why did these people “fail” to redirect this economy to the path of progress and prosperity?

The reason is simple. There is gross incompetence in economic management when out of the huge wealth of resources the country is endowed with all the attention is focused on crude oil alone while the rest are left untapped. Besides, this one and only oil commodity is managed by the Federal Government. And because the oil revenue is warehoused in Abuja, all the politicians and top government officials that have access to it fall over each other in an attempt to steal from the purse while ordinary Nigerians languish in poverty and want.

Furthermore, using a framework that is not known anywhere else in the world, the petro-dollars are shared to state governors who contribute nothing to the economy as allocations. The governors, at the same time sleep over untapped resources– gold, silver, iron ore, limestone, manganese, bitumen, name it, and yet do nothing to exploit or harness these resources to boost the economy. This culture of sharing or free loading breeds corruption that cannot be erased for now except there is a turnaround in the way these resources are managed.

There is corruption in Nigeria because we have a huge cake at Abuja that belongs to nobody. Any person who is privileged to have access to the cake steals part of it. Even if he doesn’t want to steal, his people will force him. The economy can’t be fixed no matter who is president not until there the cake is baked all over the states. That way, politicians and government officials would remove their eyes from Abuja and look inwards.