There is no conflict between economic reforms to improve investment climate and enhance business competitiveness, deregulate sectors, privatize government entities involved in essentially commercial activities and seeking to create a private sector-driven enterprise economy as I have advocated for over a decade; and policies to empower the people, redress poverty and unemployment; strengthen regulatory capacity; and ensuring that government devotes fiscal resources towards Nigeria’s crises of poverty, unemployment and inequality!
Anyone who follows this column or has encountered my economic policy contributions on various broadcast media will know that I favour free markets and private capital. I supported telecommunications deregulation, banking consolidation, pension reforms, electricity sector unbundling, privatization, solid minerals sector reforms, agriculture transformation and other economic reform since return to civil rule and in particular since 2003, and lamented suspension of most reforms during the Yar’Adua regime. I celebrated ex-President Jonathan’s reinstatement of electricity sector privatization through the power sector roadmap and there is probably no one who has publicly advocated and endorsed free market reforms, including unpopular ones such as downstream petroleum sector deregulation and oil subsidy removal, the Oronsaye Committee public sector reform, and upstream petroleum sector reforms, more than this columnist. I understand that free enterprise reforms will produce wealthy people – the Nigerian economy is capable of producing thousands of millionaires and billionaires, and there is nothing wrong with that. Indeed, I recently celebrated Aliko Dangote, Tony Elumelu, Aig Aig-Imoukhuede and others in “Dangote and African economic integration” – anyone who secures and deploys private capital and entrepreneurial energy at significant risks is deserving of the rewards and should be celebrated as inspiration to others.
Policy must, however, balance macroeconomic reforms to facilitate enterprise and private sector growth with social sector reforms to reduce poverty and empower people. The best model of capitalist society is one in which there are many wealthy people who invest, employ people and reap the rewards of entrepreneurship in a free and competitive market place; a large middle class which is educated, in stable employment, own homes usually through mortgages, with modest but decent standards of living; many SMEs who employ much labour and contribute significantly to national output; and few people who may be poor, but whose poverty is not due to policy failures. A situation in which 70 percent of the population is poor is neither just nor sustainable; and is not in the interest of the rich and middle class – crime, illiteracy, disease, violence and social crises and inevitably political instability will characterize such societies as evidence from Nigeria and many other nations in Africa, Asia and Latin America very clearly illustrates. On the other hand, imagine the business fortunes of our banks, FMCGs, retail sector, housing developers and mortgage providers, the construction sector, capital market, etc if the 70 percent of our population presently classified as poor or near-poor were instead a comfortable middle-class with decent purchasing power! It is in the enlightened self-interest of our elite to advocate and support effective and sensible pro-poor policies to improve social cohesion.
The NEEDS document implemented during the 2003-2006 economic reforms recognized this policy imperative; it was founded on three pillars – empowering people (“The Social Charter: Investing in the Nigerian People”); promoting private enterprise; and changing the way government works. In my assessment, government more-or-less ignored the elements of NEEDS related to empowering people; paid lip service to reforming government through half-hearted public service reform initiatives; and concentrated on promoting private enterprise! The poor who have no representatives in Abuja lost out! In effect, an alliance of politicians, bureaucrats, technocrats, the Obasanjo presidency and the economic elite decided on which aspects of NEEDS to implement and subsequent governments adopted the same template! Evidently, what this article advocates is no different from official reform policy, except that I suggest that government should redress the non-implementation of reforms relating to investing in people. Jonathan made some efforts through “YOU-WIN”, “Almajiri” schools, youth internships, “NEDEP”, agriculture e-wallet scheme, etc, but these were still a drop in the ocean!
I think that inequitable socio-economic policies and exclusionary fiscal spending has contributed to large-scale poverty, illiteracy, unemployment and inequality; and produced alienation, despair, anger and hopelessness which manifest in violence, crime, insurgency and instability. With poverty or near-poverty incidence in Nigeria afflicting 60-75 percent of the population, ignoring the malaise is a ticking time-bomb and national emergency. The constitution imposes responsibility on government for the welfare and security of the citizens – that must include the majority who are poor and vulnerable; and resolving Nigeria’s crises of poverty will enable long-term sustainable growth and development and produce shared prosperity, a win-win for everyone!
The areas policy must focus on as it confronts this problem are the critical needs of the poor with potential for socio-economic transformation – qualitative public education including quality of teachers and technical and vocational skills relevant to business and consumer requirements; public health especially primary health care; youth empowerment and entrepreneurship; female emancipation; smallholder agriculture; rural infrastructure; urban mass transportation; and social housing.
Interventions must be smart and sustainable; creative in design so as to optimize impact; and fiscally responsible so as not to bankrupt the state, like Greece, in the process of providing social benefits. Wherever possible, interventions must work through existing government or private institutions and must be subject to stringent controls, measuring and evaluation to ensure social investment does not become a source of graft, resource leakage or political gerrymandering.
Opeyemi Agbaje
