“I ask you to ensure that humanity is served by wealth and not ruled by it.” – Pope Francis
This powerful, yet sobering statement was made by the Holy Father, Pope Francis, to an audience of over 2,500 men and women – world leaders, heads of government and corporate captains – representing some of the most powerful human an legal entities on earth. It contained the kernel of his message to the world leaders who had gathered at Davos in Switzerland in January 2014, for the World Economic Forum (WEF).
The WEF is an international institution with a commitment to improve the economic and social states of the world. It is famous for its well-publicised and also well-attended annual meetings. Since inception in 1971, the forum has grown from a meeting of a handful of European business leaders to become one of the most important gatherings of world leaders, where issues of critical importance to the world are discussed.
The Holy Father’s message came at a time when the world was jolted by a report on the worsening state of inequality in the world. The report was produced by Oxfam, an international confederation of 17 organisations working in about 94 countries, in search of solutions to the problems of poverty and injustice in the world. The gist of the report was that the 85 richest people on earth own as much wealth as the poorest half of the population of the world, which comes to about 3.5 billion people. This report, of course, is in consonance with other pieces of information coming out on inequality in the world. It has been reported, for instance, that inequality of wealth in the world has doubled during the last ten years.
Last weekend, and still in Davos, the same world leaders, including Nigeria’s President, Muhammadu Buhari, came back to continue their discussion. Guess what? They were told that 1 percent of the people in this world now own more wealth than the rest of the people. This is the reality of the inequality the world now faces. It is growing rapidly because people are getting more greedy and selfish.
Apparently, the recent fast growth of the Nigerian economy, which averaged about 7 percent in the last ten years, was creating a new generation of the wealthy. Don’t ask me what they manufacture and sell to make such vulgar wealth. The fact is that the patronage-centred distribution of economic opportunities, coupled with economic renteering fed by ineffective licensing and unaccountable discretion has worsened inequality.
Extreme inequality of income and opportunity is a recipe for disaster. There is already too much tension everywhere and we cannot look away unperturbed. In the same vein, we cannot continue to create institutions and programmes that simply further this scourge. There are many initiatives in Nigeria that aim to soothe one pain or the other but end up creating new opportunities for rent seekers thereby worsening the bad situation. Without doubt, much of the crises we face today are traceable to poverty, fuelled by a waning sense of care on the part of a society that is comfortable with growing inequity.
A winner-takes-all society has but a little time before descending to a Hobbesian enclave. Nigeria should not only continue to encourage enterprise development initiatives but also make honest and sacrificial attempt to provide the needed infrastructure to enable individuals exercise their passions.
There is no question as to whether societies have realized these facts. They have and efforts have gone on for too long to reduce economic exclusion occasioned by the anomalous income distribution. This is why microfinancing and other poverty alleviation strategies are gaining much attention. The challenge however is that these programmes have not produced the right results, either because of poor implementation or wrong policy choices in relation to the target challenge.
Empowerment, whether economic or social, is a process and not an event and the objective is simply to give basic opportunities –social, political and economic – to marginalized people. The evidence of economic exclusion is everywhere visible around us. We need to realize that distributional equity and economic empowerment are complementary and mutually reinforcing.
I would like to make some suggestions. First, we must recognize the changing attitude of our youths to the many things their fathers held sacrosanct. Take work for instance, the youth no longer believe that one must graduate, work for a while before starting one’s own business. They now go straight to obtain some entrepreneurial training and launch out. We need to adapt the economic system to protect those that take this route. Infrastructure is key here.
Second, we should promote the effort of the many organizations helping to develop entrepreneurs, including the many foundations doing great things in this area, e.g.; the Enterprise Development Centre (EDC) of Pan Atlantic University, the Tony Elumelu Foundation, FATE Foundation, and many banks promoting SMEs.
Third, we must genuinely resolve the infrastructure problem, especially power, water, roads and other key deficit infrastructure. All hands must be on deck. Those that have decided to play in the SME sector, including financiers, particularly microfinance banks, should be true to their calling.
A minimum wage of N18,000 is still possible despite the fall in oil prices. All we need to do is find out how other countries with less endowment even at our present financial state are able to do it. The key is in cutting waste. The shame that a Nigerian works for 30 days in a month and is unable to take home N18, 000 becomes bigger when we deflate that figure with the exchange rate. The Nigerian economy has recorded a real GDP growth rate that average 7 per cent over the past ten years. Why the lives of the people got worse is simply a question of equity.
We agree that many problems face any government trying to execute empowerment programmes. For instance, the financial resources for the required programme may not be available. It might be difficult to reach the most vulnerable members of the target group, especially if engaged in the rural informal sector. And there may be administrative impediments and legal obstacles to resource reallocation towards the poor. Notwithstanding these challenges a humane state will plan to protect its weakest members.
Fuel subsidy, which was simply a scam of Hollywood movie proportions, survived for too long because some people thought the SURE-P funds were reaching the poor people of Nigeria. That was wishful thinking only by those who have no connection with the rural poor. Economic justice begins with distributional equity. If we cannot monitor and guarantee that the target objective of any programme is being hit, we have no need for it.
Distributional equity presupposes allocative equity, when a fund like the MSME Fund is concerned. It implies locational or spatial equity, when development finance activities like those of the Bank of Industry are concerned. Ditto for public all other major policy initiatives.
Emeka Osuji
