There is a Yoruba proverb that ‘A lie never goes amiss on both sides, if the person lied to does not know that he is being lied to, the person lying knows he is telling a lie, however in the current economic and political climate in Nigeria, there is doubt whether both sides actually know the truth. Just like all presidential candidates mouthed fuel subsidy removal with inadequate feasibility studies, only for the winner to implement and send millions into poverty, are we not just mouthing economic prosperity without a roadmap and the exact destination?
President Tinubu told The Patriots that he was focused on his economic reforms to bring economic prosperity before he can focus on political restructuring. Many responded that only the restructuring of Nigeria will bring the desired economic prosperity. Both appear to be based on sound reasoning until you ask what is the measure and way to economic prosperity.
President Tinubu has been cajoling the masses with his renewed hope campaign message that his neo-liberal economic policies of removing subsidies, floating Naira and raising the tax to GDP ratio will soon bring about economic prosperity, without specific breakdown. General Obasanjo when implementing his Austerity Measures 45 years ago, removing education and other subsidies, assured us that the sacrifices will bring economic growth and prosperity, but our education sector never recovered till date. Then President Ibrahim Babaginda came with to further the same austere IMF policy direction, devaluing Naira and other things, while reassuring us that the ‘darkest time of the day is just before dawn’, yet 40 years later a new economic dawn is yet to come.
Forty five years of economic prosperity promises based on IMF structural adjustment policies has resulted in Nigeria and Sub-Sahara African nations witness poverty increase exponentially, while East Asia nations that were poorer than us between 1960-80 and didn’t implement these policies, have seen their economic growth and prosperity grow exponentially to surpass us. So, it is high time that we raise crucial questions from our leadership, like which specific industries will grow and by how much will they grow to provide employment and income for millions in poverty.
Restructuring has undeniable political benefits of cultural justice and representative democracy, but we must ask those advocates of restructuring that also tie it to economic prosperity, how exactly will devolution of power bring about economic prosperity? What is the economic road map and processes to economic prosperity for states, or their amalgamation into regions, when out of 36 states only Lagos, Ogun, Rivers and Kano are currently viable? We must put facts and numbers to paper instead of mere rhetoric that ends in further abject poverty. Can states or regions even survive without first implementing a Marshall Plan with huge cash infusion to build the necessary infrastructure that can wean them off federal allocations and turn them into productive units?
Examining the structure of the Nigerian economy, the largest sector contributors to our GDP and employment are Agriculture (crops), Services (Retailing) and Industry (food, beverages and tobacco). If these sectors are to be the target and roadmap to the promised future prosperity, has there been a comparative analysis with other subsectors and what is their ranking with regards to their return on investment and the income and employment multiplier effects of these subsectors? Having developed these subsectors for half a century, is it possible that the laws of diminishing returns will prevent the sectors from providing the required increase in employment and income?
From global comparisons, railways sector that spurs growth in heavy manufacturing sector provide the highest return on investment and income and employment multiplier effects. However due to lack of investment or misinvestment, their significant contributions are missing in the structure of the Nigerian economy. Iron/steel, chemical and electrical industrial subsectors that are the highest income and employment providers in industrialized nations, currently account for less than 2% of our GDP due to lack of investment. Or mis-investment in the case of the Lagos-Calabar railway that was initially supposed to be the most significant economic empowering projects, connecting transport nodes and towns like Lagos-Ore-Benin-Warri along the inland East-West Road, but was wrongly turned to a coastal route over economic emptiness.
So, President Tinubu must explain to us his own roadmap, apart from reducing government expenditure to entice foreign investment or World Bank loans with his free market policy. What specific industries would these foreign direct investments or loans spur their growth? No matter the investment in agriculture, can it double its contribution to income and employment without other sectoral development? Can foreign investors invest in heavy manufacturing without other sectors to share the overheads? Can they invest in new industries without backward or forward linkages, unless in the already saturated food, beverages and tobacco processing industries with low multiplier effects?
Can restructuring advocates tell us how states/regions will raise funds to change their production functions? Would their prosperity come from agriculture, mining or other primary production? If for example, a mineral rich state is given back its rights to mine, where would the investment to build the mines come from? Without railways connectivity, how will the heavy metals transported on roads not exact extra depreciation costs on other states passed through to the market or port? What is their estimated rate of economic growth?
Yes, restructuring will in the long run increase employment and income, if Nigeria pumps money to help make them viable? For example, Restructuring the police will help security of farmers and their farmlands, but can anyone tell us by how much will it increase production? Agriculture currently suffers from 40 % wastage due to logistics and freighting, which can only be augured by a federal railway system that can provide logistic and storage through frozen containers. So which of the two policy options should be first addressed, insecurity that accounts for less than 5% of agriculture output, or wastage that accounts for loss of 40% of agriculture output. I say the latter whose solution will not only help the agriculture sector but also increase the GDP contribution of the services sector dominated by basic retailing, with new logistics, warehousing etc. These are the questions and analysis that must be made.
We might need to have economic prosperity to pay for a Marshallian Plan with huge cash infusion, but the question is does Tinubu have a well articulated vision and real roadmap to prosperity? And if not, do we wait forever before politically restructuring for our continued corporate existence based on justice and equity?
Even when we have genuine intentions to improve the nation, we must be very careful to carry out detailed analysis of proposed policies, in order not to jump from fire to frying Pan and suffer greater casualties witnessed from the fallacious premises that led to Tinubu’s subsidy removal policy, making things worse than Buhari ruinous regime.
Chairman Mao regime had a genuine vision to uplift China with his 1958-62 Great Leap Forward program that included the restructuring of agriculture, but unfortunately miscalculations and misreporting led to the Great Famine that killed tens of millions people with hunger. Therefore, it is advisable that we look before we leap or we might just leap into a greater economic abyss than Tinubu’s IMF policies that have failed in over 60 nations over the last 40yrs.
President, ASHE Foundation.
