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Why the economy can’t be fixed

By Luke Onyekakeyah
18 December 2018   |   3:55 am
It is no longer news that the Nigerian economy is battered. Virtually every sector is in the red needing urgent intervention. The oil sector, which is the backbone of the economy...

Aerial view of buildings and markets on Lagos Island.

It is no longer news that the Nigerian economy is battered. Virtually every sector is in the red needing urgent intervention. The oil sector, which is the backbone of the economy, is the most battered and mismanaged. All efforts to bring sanity to the Nigerian National Petroleum Corporation (NNPC), the behemoth managing the oil industry have proved abortive.

On regular basis, what we hear are unremitted revenues running into billions of dollars, shoddy subsidy payments, embezzlements, missing funds and things like that. This has been the trend for decades, meaning that the problem is not necessarily the economy per se but the human elements involved in its management.

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.”

Such damning report against a sitting government in an election period will naturally attract barrage of pros and against from supporters and the opposition parties.

Expectedly, the presidency 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 the late Head of State, Gen. Sani Abacha were lodged in HSBC bank.

These exchanges, to me, amount to scratching the issue at the surface. 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.

While the HSBC is looking at the unhealthy state of the economy and making projections based on that, Shehu, as government spokesman, was only interested in debunking and attacking the bank for making such uncharitable pronouncement against his principal in election time.

But neither HSBC nor Shehu, was able to diagnose why the economy is in such distress. Since 1979, 20 ministers of Finance have handled this critical portfolio in the cabinet of the successive administrations.

Some of the great minds that have been part of the economic management team included Kalu Idika Kalu, Chu Okongwu, Adamu Ciroma, Ngozi Okonjo-Iweala (a world renowned economist and technocrat), among others. Why did these people “fail” to redirect this economy to the path of progress and prosperity?

I have not mentioned the host of other gurus, eggheads, technocrats and experts that have served in various capacities at the topmost level of different administrations. I have not tried to list out some of what one could call most ambitious blueprints and programmes that have been introduced by one administration or the other that failed to see the light of the day.

I don’t believe that any of the presidents that have presided over the affairs of Nigeria, particularly, since 1999, came with ill intentions. All have come with enthusiasm and perceivable patriotism to change things and make the economy work but to no avail.

For instance, when former President Olusegun Obasanjo won the presidency in 1999, he was so furious (having been just released from prison) with the abject state of affairs in all fronts that he vowed to give electricity to Nigerians within 18 months. Nigerians believed him but what did we see at the end, colossal failure, particularly on the electricity front with alleged wastage of $16 billion on phony independent power plants.

Obasanjo handed power to former President Umaru Musa Yar’Adua, who, immediately rolled out a Seven-Point Agenda aimed at putting the economy on a sound footing. Yar’Adua’s early demise truncated what could have made a difference.

Then came the former President Goodluck Jonathan, who was perceived as a simple man without large ambition to rape Nigeria. Frustrated by the intractable power supply problems, he appointed a power wizard in the person of Professor Barth Nnaji to drive his Power Reform Programme. A blueprint was prepared and launched in Lagos in the presence of who is who in Nigeria. The blueprint set clear targets and timelines and the expectation was so high.

Unfortunately, the forces that are holding Nigeria to ransom attacked and pushed Nnaji out and that was the end of Jonathan’s power reform programme. That force went ahead to unbundle the Power Holding Company of Nigeria (PHCN) and sold it to vested political interests that lacked the capacity to manage a privatized power supply structure. Now government is in a fix not knowing what to do next.

The emergent generating companies (Gencos) and distribution companies (Discos), that were expected to turnaround the power sector have turned out to be the greatest mistake ever made in the power sector by any government. The private companies have not only failed woefully to remedy the power supply situation, they have gone ahead to increase tariff on unsupplied power through outrageous crazy bills. Nigerians are crying.

The cumulative effect of all these failures forced Nigerians to cry for change, which President Buhari’s All Progressives Congress (APC) administration hid under to snatch power from the incumbent Jonathan’s government in 2015. Three and half years into the administration, nothing has changed significantly in the economy, which warranted international observers like HSBC bank to express reservations that things are going to get better in the near future under the present government.

The issue at stake is why this economy has defied all remedies to make it work. Why should people like Okonjo-Iweala be an asset in other countries but a “failure” in Nigeria? Why should a man like Babatunde Fashola, a former governor of Lagos State, revolutionise governance and recorded tremendous progress as governor but appears not to be making impact as minister at the federal level?
The answers to these questions are not far-fetched. The problem with the economy is not in policy making but in implementation. There are myriads of well-articulated policies that are gathering dust un-implemented.

Two, there is no unity of purpose in the attempt to fix the economy. There are divided interests, which are as many as there are states, zones, ethnic groups, opposition parties and individual greed and avarice by top government officials.

This division explains why the opposition will never see anything good in the incumbent administration. The economy cannot be fixed because at every moment, no matter how good an idea put forward by the incumbent government is, the opposition and those seeking their private pocket must kick against it. They will do everything to frustrate it so long it doesn’t favour them at that material time.

That is why Obasanjo’s independent power projects failed; that is why Yar’Adua’s Seven-Point Agenda died with him; that is why Jonathan’s power reform programme collapsed and that is why the change mantra of the Buhari administration is failing.

What is the way out? The way out is restructuring. The first republic succeeded because government was close to the people. An Igbo man could not steal money in Enugu and go free; a Yoruba man could not steal public money in Ibadan and still walk freely on the streets; a Hausa man could not rob his people in Kaduna without being stoned. That was why things worked then.

But today, we have a huge cake at Abuja that belongs to nobody. Any person who is privileged to be appointed in government thanks his chi (god) for giving him the opportunity to have access to the cake. Even if he/she doesn’t want to steal, his/her people will compel. The economy can’t be fixed no matter who is president not until the country is restructures.