Okonjo-Iweala And The Crises Of Nigeria Economy By Charles Onunaiju
Speaking at an independence anniversary lecture organised by the Lagos State Chamber of Commerce and Industry, the Coordinating Minister of the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, told her audience that contrary to insinuations from some quarters and the agonising face of many Nigerians, the nation’s economy is in good health. According to her, “The micro-economy is stable, the economy is doing well. We may experience cash flow problems but that does not mean the economy is in trouble. Continuing, she claimed that, “Our reserves are healthy and if we are not doing well, people will not be coming to invest in the country”. For the minister, “If the economy is comatose, the private sector would be carrying placards by now”.
All over the world and especially in developing countries, successful economic reforms and performance are notable for the number of people pulled out of poverty and into the middle class. China, the most outstanding economic reformer and performer in contemporary times, is famous for pulling more people out of poverty in the shortest period ever in all human history.
Brazil’s outstanding economic performance in the nearly one decade of the leadership of the Workers Party has been able to pull up to 30 million Brazilians from poverty within the period. Whether in Vietnam, Indonesia, South Korea, Malaysia, or even in South Africa, economic well-being and performance have never been measured by the comfort or otherwise of the private sector. For Nigeria’s finance minister, the evident trend of sustained deindustrialisation, decline in the real sector of the economy, continuous shrinking of the job market and its explosive social consequence, evident in the astronomical rise in crime, terrorism and numerous anti-social vices do not constitute an alarm bell on the precarious state of the economy until the “private sector carries placards”. Would the socially insensitive economy minister realise that the Nigerian economy is in ruins? The governors in political opposition to President Goodluck Jonathan may have raised the alarm about cash flow, for which the minister may have rightly declared, that “does not mean the economy is in problem”. The governors’ parochial concern of cash flow to their coffers does not in any way raise the questions of the overall economic performance and therefore could not have raised the crucial question of key fundamentals of economic issues revolving around the broad matters in economic construction and performance. Seizing on the reductionist concern of cash flow by some governors, who are fat cats in their own right, and whose obvious concern is to tend to the patronage system of their political constituency, to declare as healthy an economy, in which over 90 per cent of the population operates outside its mainstream and forages on its fringes for bare subsistence, is the height of recklessness from the country’s chief economic policymaker. The depth of economic abyss for which the country is destined to fall into, under the direction of the finance minister can only be imagined. Nigeria’s economic disconnect in which there is no sectoral complimentarity is an open sore which does not need any special economic insight to notice. The crucial disarticulation of the real and productive sector further accentuated by the existing preeminence of service and auxiliary sectors deepen the crises of disaggregation and distortions.
Paradoxically, Okonjo-Iweala as the coordinating minister of the nation’s economy does not seem to appreciate or even understand the centrality of the massive disconnect between the traditional economic structures and the hybrids, whose symbiotic relationship should reinforce each other. In much of the world, the private sector is the crucial driver of national economies but not exclusive players. Classical private sector operators are independent economic players whose capital is generated from autonomous entrepreneurial activities outside the state or government realm. In Nigeria, private sector operators are well known politically connected business persons whose accumulation of capital is not derived from autonomous entrepreneurial activities, but state guaranteed public funds like bank loans usually declared toxic and assumed and paid by state run asset management company, over-priced government contracts, illicit collaboration of state officials with private sector practitioners and the transfer of public assets to private operators through such collaborations. A privileged group with extensive connections to the government, through which it assesses public funds and assets, are whom the minister of the economy places much hope “to carry placards”, before she accepts that the economy is “comatose”. She did not mean independent artisans, small factory owners, whose businesses have long gone burst and their hands and limbs grown too feeble and weak “to carry placards”.
As a supply side economist, Okonjo-Iweala’s seemingly ideological fidelity to classical economic liberalism gives one concern of obvious deficit of imaginative originality. The obvious overlap in the strands of contemporary private sector to the state through evident political relationship with the government makes any such precise definition of the group a difficult one. The private sector kingpins in Nigeria are well-known and key state manipulators and are either fronting for the government or the government is fronting for them.
It is commonly understood that any performing economy stands on functional infrastructure, both physical and institutional. The physical infrastructure under which any meaningful and productive economic activities can take place is patently absent. The most crucial of this physical infrastructure is the power sector, which itself, in spite of over 10 years of reform has yet to register any appreciable impact. Key physical infrastructure such as electricity, roads, harbours, and rail and airports are generally known to be comatose. Institutional infrastructure remains murky and largely dysfunctional making it impossible for predictable business environment. Perhaps, the only functional sector of the economy, the oil sector, is a hub of state directed corruption, with investment in the sector both foreign and local, hobbled by murky transactions, whose proceeds feed the already fat cats and reinforce the hegemony of the tiny cabals in the country’s public life.
Nearly a decade ago, when the current coordinating minister of the economy, negotiated the repayment of Nigeria’s debt to a club of western creditors, she said funds that had for over several years serviced the interests accumulated from the debt would be channelled into infrastructure construction and rehabilitation and would trigger both public sector jobs, thus enabling liquidity. Now, the same minister led a road show to secure low interest and concessionary credit facility from China to undertake the same infrastructure construction which saving from debt repayment to western creditors would have accomplished.
Nigerian public officials are the luckiest of their peers in the world, for they need not answer hard questions or account for their action or inaction. Without mincing words, the Nigerian economy is in deep trouble, and not only is the challenge of building and creating a pool of skilled manpower in jeopardy as a result of crumbling education and health sectors but the marginalisation of a considerable size of economically active agents, mean that recovery is not even in sight.
Even the Chicago boys, a bunch of freewheeling neo-liberal hot heads, unleashed by Prof. Milton Freidman to such free market economic laboratories as former President Pinochet’s Chile would shudder at Okonjo-Iweala, who, without batting an eyelid, is disfiguring their beloved economic neo-liberalism whose trenchant hallmark is the minimal state. Here, we have the paradox of overwhelming state sub- letting roles to its accredited agents using the over-abused language of the private sector.
•Onunaiju, a journalist based in Abuja, wrote in via email@example.com
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