In April 2015, the Nigerian electorate took a bold and unprecedented decision: it sent a ruling party packing. The voters ended the Peoples Democratic Party’s/PDP’s sixteen-year reign, and cast their lot with an untested and cash-strapped opposition known as the All Progressives Congress/APC. Though comprising individuals with divergent interests and worldviews, the APC had promised the electorate what the later craved most—change. Change, in this sense, meant combatting corruption and impunity, rehabilitating and upgrading the decaying infrastructure, creating jobs to occupy the teeming hordes of able-bodied but unemployed school leavers, ending the Boko Haram’s terrorist grip on the north-east and the group’s sporadic attacks in other parts of the north, securing life and property across the country, improving and expanding access to essential services, and, for most of the preceding wishes to materialize, diversifying and strengthening the economy.
These are tall ambitions. Curiously, when the APC was dreaming all those dreams, nothing dramatic had yet happened to prepare the party and Nigeria for the turbulent times ahead. However, no sooner had the party of change taken power than it ran into troubled waters. As it battled with entrenched interests within its fold and the polity at large, the APC found itself blindsided by a steep decline in oil receipts. Petroleum is the economy’s nest egg, accounting for approximately 80 percent of total export earnings. Succeeding governments have consequently leaned heavily on this vital revenue source. The immediate past regime was particularly notorious for squandering oil earnings. Instead of ploughing the earnings back into productive ventures, it chose to indulge in profligate spending, condone corruption and impunity, and generally behave as if there was nothing called tomorrow.
Nigeria is now paying dearly for the PDP’s lack of foresight and prevision. All the same, and regardless of what the past was or might have been, the challenge of the moment—the one the APC-led Federal Government is currently wrestling with—is how to balance the pre-election pledge with the new fiscal reality. In contrast to 2013 when the price of crude oil stood at an inflation-adjusted level of $120 dollars per barrel, by December 2015, the price had plummeted, hovering between $42.00 and $44.00 per barrel. It crashed to $29.44 in February 2016.
As it is in the medical so it is in the economic and other social sciences. How a condition is diagnosed will to a large extent determine the remedy prescribed to cure it. This is the case with the challenge facing the contemporary Nigerian economy, and the APC-led Federal Government. As viewed by some, today’s fiscal crisis is a reoccurrence of past, notably, the 1980s’, ailments, in other words, a reprise of the past “structural imbalances”. As the government’s oil-based and externally sourced revenue heads south in recent months, experts of the neo-liberal persuasion see a contagion similar to that of the 1980s—a contagion that could not be tamed without the administration of standard “structural adjustment” prescriptions. As they did back in the 1980s, these experts see, albeit, erroneously, an economy wrestling with fiscal and macro-economic disequilibria. The symptoms, or is it the “causes”, are, according to the experts, unmistakeable–Big Government that “over-crowds” the “productive” private sector, needless subsidies and bureaucratic controls, rising public expenditure, widening fiscal and current account deficits, worsening terms of trade, and, above all, an ‘over-valued’ currency.
The original prophets of structural adjustment—the founders of Reaganomics and Thatcherism whose gospels our own local experts regurgitate—know precisely why they prefer the Invisible Hand to an intrusive government. Their notion of rationality was shaped not only by their history but also, and more especially, by their socially constructed belief about the nature of man. To them, the “supply-side” economic doctrine is an article of faith—one that is as sacrosanct, and therefore on the same pedestal, as a religious dogma. Among the assumptions underlying the neo-liberal economic belief are:
(a) The individual (rather than the group or society of which s/he is part) is the only unit and object of analysis;
(b) This individual is a rational, economic being–-one who looks out for her/his best interest, and whose “self-interest” neither threatens nor cancels out the interest of others;
(c) The self-seeking individual is more rational than the state, even though the latter most frequently pretends to be ‘rational’ by hiding behind altruism, or to be precise, false altruism;
(d) Democracy (based on majority rule) is an illusion, in so far as the method applied in obtaining the mandate of this majority is, at best, suspect, at worst, grossly irrational;
(e) When decisions are taken collectively, there is plenty of room for mischief-making–-that is, for oligarchic monopoly of access to information, for the exploitation of mass ignorance and/or apathy, for misuse/abuse of power and bureaucratic authority, for gross misallocation of resources and corruption, and for accountability failures;
(f) In light of the state’s ‘imperfections’, the less the decision-making power that is entrusted to it the better for the cause of ‘rationality’ and development;
(g) By the same token, the market (made up of ‘rational’, ‘economic’, and ‘competitive’ individuals) should have an increasing share of powers for resource allocation decisions.
The first question Nigerians have to address therefore is whether they accept as the gospel truth all the assumptions underpinning neo-liberalism, along with its macro-economic policy off-shoot, that is, structural adjustment. To put it bluntly, do we earnestly believe that in a heterogeneous society like Nigeria—a society in which wills and interests frequently collide–government is an evil, a gratuitous one at that? Is government incurably corrupt, instinctively wasteful, by nature averse to productivity and economic growth, and always an unreliable arbiter of conflicting individual wills? Is democracy an elaborate scam? Is the individual in his/her best form when left alone, unrestrained by a central authority–a central authority whose only claim to legitimacy is the conduct of occasional but largely sham elections? Of even greater salience than any of the previous questions, did Nigerians willingly vote for change in April 2015 or were they hoodwinked into throwing out the PDP?
While the matter is far from settled, it is doubtful if we can, in clear conscience, dismiss government as casually as neo-liberal economists and their intellectual camp followers are wont to do. At the very least, and regardless of whether it is viewed in good or bad light, government is an indispensable fact of human life. If it is an evil, it is a necessary one. Besides, within the context of Nigeria’s heterogeneity, government cannot but be a force for good. The inference is thus clear: it is wrong medication which requires the patient to forswear government or to diminish government’s importance. Such quack medication will address neither the symptoms nor the underlying causes of our current fiscal and macro-economic disorder. It will instead bring further complications, like swelling ranks of the unemployed; hurried and non-transparent sell-off, at rock-bottom prices, of commonwealth assets to a few well-connected oligarchs; widening income disparities and inequality; entrenched corruption; restricted access to public goods and services; and tendency to place those on fixed or no income at the mercy of profiteers.
Even on the off-chance that structural adjustment was the correct prescription for the 1980s’ economic malaise, it has since, due to the nature and magnitude of the new challenge, become an expired drug. The drug expired–and should have been taken off the policy shelf—the instant it brought new complications, without curing the original malady. The blind rage directed at Big Government led to spending cuts in critical areas, such as infrastructure rehabilitation and development, education and health, energy generation, petroleum exploration and crude oil refinement, police protection, urban renewal, and highway traffic management. Meanwhile, agency proliferation continued unchecked, and the wage bill kept rising. The result is the maintenance, on SAP’s watch, of public entities that do nothing except move staff around and pay salaries. A reported submitted in 2012 reveals how recurrent expenditure rose faster than capital spending over a five-year period, 2006-2011, a period coinciding with the relentless implementation of structural adjustment programmes (See M J Balogun, Sam Amadi, and Perez Ayoola, 2012, Issues and Priorities in the Reform of the Civil Service: a Minority View, Presidential Committee on the Review of Public Service Reform Process, Abuja)
The SAP advocates’ diagnostic and prescription error is not confined to the redefinition of the role of government, but extends to the formulation of fiscal and macro-economic policy. A case in point is the premise underlying SAP’s “over-valued” currency argument. That argument would have made sense had Nigeria’s economy been highly diversified. Unfortunately, and notwithstanding the steep and successive devaluations of the Naira since the 1990s, the economy remains basically mono-cultural. The economy relies heavily on the export of unprocessed raw materials, including crude petroleum. In the 1970s, before the advent of SAP and its “conditionalities”, the Nigerian Pound was at par with the pound sterling, and exchanged with the US dollar at the rate of N£1 to US$2. Today, the official exchange rate for US dollar is 1 to N199. The unofficial, black-market rate is as high as 1US$ to N300.
Nigeria has yet to derive any significant benefit from devaluation largely because it is a trading-post agent, nay, a sales representative of foreign manufacturers. Rather than produce and export, Nigeria distributes products manufactured in foreign lands, including machinery and equipment, replacement parts, and pharmaceutical products. Worse still, it has not controlled the urge for imported luxury items such as “designer” clothes, watches, and sun-glasses. Naturally, it is obliged to pay the prices charged by the foreign suppliers. It continues to export crude for measly returns, and import refined products at exorbitant rates.
Corruption also accounts for steady revenue leakages, with millions of American dollar being laundered by politicians and civil servants, or stashed away in deep-freezers, closets, and, don’t laugh, soak-aways!
Die-hard supporters of structural adjustment will scoff at the suggestion that there is an alternative to their economic dogma. It is all well and good, they will say, to rail against structural adjustment and root for a strong Naira. Where will either get Nigeria in the interim? These are fair questions. No right-thinking person would object to the search for practical measures aimed at addressing the precipitate challenge we are up against, notably, declining oil receipts at a time when the APC-led Federal Government is under pressure to deliver on its election promises?
Whatever we do, we must not for a moment give up the search for viable policy alternatives. We must reject the idea that there is no alternative to structural adjustment. To proffer solutions to the current fiscal and foreign exchange crunch, our experts should cease behaving as the foreign ideologues’ intellectual trading-post agents, and begin to think out of the box. By “thinking out of the box”, I do not mean proceeding impulsively with half-baked ideas on exchange controls and the like. I mean, developing sophisticated econometric models that not only faithfully capture our objective realities, but also include scenarios under which scarce resources (including dwindling foreign exchange receipts) would be optimally allocated to priority sectors without, at the same time, opening the door to partisan political favouritism, corruption, bureaucratic manipulation, and procedural delays.
We must not lose sight of the need to reposition the government (and its civil and public service agencies) for the current and unfolding challenges. A hands-on, innovative, incorruptible, and results-oriented public administration is not an option. It is the only option for any country beset with, and determined to overcome, monumental challenges like those facing us. It does not matter whether it is China, India, Singapore, Kenya, Mauritius, Namibia, or South Africa. No country has ever successfully placed its economy on a change trajectory without first getting a grip on its public administration system. The public administration system that I have in mind would:
(a) Continuously wage a relentless war on corruption and impunity;
(b) Hold political functionaries and career officials accountable for the delivery, within agreed time-frames, of measurable outputs and outcomes, and for the maintenance of ethical and quality service standards;
(c) institutionalize the culture of accountability by binding Ministers, Permanent Secretaries and Holders of Posts of Confidence to carefully negotiated, outcome-oriented Performance Contracts;
(d) Introduce Results-based Budgeting and support budget implementation with the application of the appropriate Monitoring & Evaluation instruments/mechanisms;
(e) Rejig and re-engineer civil and public service processes for performance, productivity, and measurable outcomes/impact/results;
(f) Promulgate Citizen Service Charters for MDAs, based on performance indicators that are formulated in close consultation with citizens, tax-payers, and direct beneficiaries of each MDA’s service(s).