Re-engineering prosperity

The whole world awaits with bated breath for the rolling out of the main economic policy thrust of the new administration. Foreign investors and domestic economic actors are holding back until they can confirm in which direction the wind is blowing. The Nobel laureate Robert Lucas made his name in economic science by providing a formal framework for the theory of rational expectations and how it influences how economic actors anticipate the policy choices made by governments and how they build these into their own behaviour in the real marketplace.

The APC-led administration appears to wallow in the naïve illusion that the campaign manifesto that used to win an election could double at the same time as ablueprint for future economic policy. Winning is one thing; running a government and steering the economy to improve human livelihoods is quite another. A new economic blueprint is long overdue. Somebody somewhere ought to have been thinking about it long before the administration was inaugurated on that historic day of 29^th May.

For my part, I believe that a new economic plan has to be anchored on the theme of “reengineering prosperity”. Nigerians were once a prosperous lot. Money was not the problem but how to spend it. Sadly, those days are gone. Global oil prices have plummeted. And they are forecast to remain permanently on a downward curve, thanks to the new technology of fracking in the United States and thanks to desperate efforts by Europe and the West to free themselves entirely from the curse of a carbon-based industrial civilisation. Nigeria has no alternative than to bravely face a future where petroleum no longer provides the main source of energy for the global economy.

When President Buhari took over the helms of affairs in May he was said to have been shocked by the grim spectre of a virtually empty treasury.  Apparently, the erstwhile PDP administration had been secretly borrowing heavily just to pay salaries and to remain afloat. We can’t also run away from the fact that the scale of grand corruption had reached frightening proportions, dwarfing everything that had been done under IBB, Abacha, Alibaba and OBJ combined. Security alone had walloped a quarter of the budget even as Boko Haram terrorists were having a field day in the North East, with their pillage and rapine over defenceless peasants, women and children. We were losing, more than $1 billion a month for years under connivance of people in government, the armed forces and reptilian types from as far afield as Lebanon and Ukraine. Meanwhile, the new electoral-political cycle between the last quarter of 2014 and the first of this year found us in another spending spree. This time it was dollars galore.

The end result was the fuelling of inflation as well as massive dollarization of the economy. The combined forces of rent-seeking, political financing, geopolitical crisis and insurgency, falling oil prices, inflation, political uncertainty and massive dollarization of the economy was to put heavy pressure on the exchange rate, leading to devaluation of the naira. For a heavily import-dependent rentier economy, devaluation puts additional pressures on all sectors of the economy, leading to recession, layoffs and a deepening crisis of unemployment and widespread misery.

The omens are far from promising. It reminds me of how President W. Bush and his neoconservative brethren wrecked the American economy online to hand-over the mess to a frail-looking Black man by the unlikely name of Barack Obama in 2009. Muhammadu Buhari has inherited an economy almost as bad as that of the United States when the republican goonies left the scene for Obama and the democrats. Buhari will need our support and prayers if he is to succeed in clearing up the mountainous weight of corruption and misgovernment.

This is why I was rather taken aback by the gratuitous advice from the mouth of my esteemed big brother and Bishop of the Catholic Diocese of Sokoto, Matthew Hassan Kukah. The Abdulsalam Peace Committee had no business dabbling in issues of crime, when their brief is stricto sensu on the question of peace. I am glad that President Buhari has promised to ignore every entreaty and undue pressure to allow treasury looters go Scot-free.

How do we reengineer our common prosperity in the middle of such inherited chaos?

Rethinking our economic future will require focus on two fundamental pillars: first, rebuilding our institutions and wrestling down the monster of corruption while plugging the financial haemorrhage that has bled our country dry over these years; second, building on some of the good work that has been done in the past.

During the Obasanjo years we had the National Economic Empowerment and Development Strategy (NEEDS). This oversaw the first-generation reforms that were pursued as the key economic policy thrust during the Third Republic. Then we had the Seven-Point Agenda by the Umaru Musa Yar’Adua administration. If he had not been afflicted by chronic illness Yar’Adua might have turned out to have been one of the best leaders this country has ever had.

His successor, Goodluck Jonathan, anchored his economic programme on his so-called Transformation Agenda. Despite his foibles, some important milestones were registered. There have been some improvements in infrastructures development, in electricity and energy and in agriculture and education, health and human development. But the Transformation Agenda lacked a clear focus and fell short in terms of both clear prioritisation and rigorous implementation. It was a government without direction and with no clear sense of national purpose and destiny.

One of the criticisms of our national development strategy is the fact that it has fostered growth while making little or no inroads on poverty. Indeed, the World Bank, in a major report on the Nigerian economy a few years ago, characterised our development path as that of “jobless growth”. It is therefore no surprise that poverty, joblessness and deepening inequities characterise the lot of the vast majority of our people. While the economy is doing well, the people are not. Suffering, hunger and desperation are the lot of millions of jobless young people. When confronted with these grim realities, President Goodluck reportedly retorted: “How can they say we are poor when our people have so many private jets?”

It is therefore easy to see why nobody mourned for the PDP when they were disgraced out of power – why there was little or no appreciation for all the progress that they made in terms of building of roads, railways and the lot.

Clearly, we need a different approach anchored on re-engineering prosperity and accelerating growth throughout the country while building fool proof institutions that enable government to effectively deliver on their programmes and policies.

In terms of key priorities for the new strategy of re-engineering prosperity and accelerated growth, I would focus on the following seven  priority sectors, namely, (1) Security and the Rule of law; (2) Macroeconomic Stabilisation; (3) Good Governance and Social Delivery; (4) Poverty and Unemployment; (5) Human development; (6)Infrastructures Development; and (7) Diversification of the Economy. Next week we shall consider each of these priority areas in some more detail.

 

OBADIAH MAILAFIA