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40 Years of Nation-Building

Analysis, Tempo (Lagos), 12 October 2000

Lagos—A newly-independent Nigeria was poised to take its rightful place in the comity of nations. A significant upshot of Harold Macmillan's wind of change, the country was positioned for leadership of the African continent.

With over a quarter of the continent's population, a large measure of earnings from the export of agricultural products and non-ferrous metals, a nascent oil sector, and a relatively educated middle class, it was only a matter of time before the new nation leveraged on its enviable status on the continent, in search of a bigger role in the world. Or so most activists of the period thought. And so the Giant of Africa was born.

This propitious circumstance was not to endure much longer than the initial euphoria of nationhood. With each passing year, key social indicators—life expectancy at birth, and adult literacy levels—plummeted. And the population grew relentlessly. Unfortunately, real gross domestic product (GDP) increased at a much slower pace. At length, much of the latter increase came to be explained by the growth in the oil sector of the economy, as the non-oil sector increasingly accounted for a dwindling share of the nation's wealth-creating process.

The resource illusion which subsisted in the economy for as long as crude oil prices were at stratospheric levels ensured that an adequate response to these falling indices was never going to be fashioned in time to have any chance of success. Even then, it is unclear if at all, given the quality of the national leadership at this period, the problem had been properly framed by policy planners. But for a people who had invested so much emotional capital in the promise of flag-independence, unemployment and hyperinflation increasingly became their lot. The worsening of the misery index in the last forty years has been exacerbated in the last decade-and-a-half by some of the most benighted leadership ever known to man. Currently, the population of this country is still growing at a little under 3 per cent, with real GDP growing at a little over 2 per cent. Ultimately, this deficit is evidenced in poor adult literacy rates (currently 57 per cent), life expectancy at birth (54 years) and dismal government finances.

Overall balance of payments as a percentage of GDP is -2.3 per cent with negative current account balances accounting for the larger part of this variance. External reserves at $7.1bn are scarcely adequate for three months of imports. And the real sector of the economy languishes, with manufacturing capacity use lying at about 30 per cent. A big part of the problem is an overaching public sector; one, which currently accounts for 87.95 per cent of total credit in the economy. Given the miserly allocation of credit to the private sector, it is small wonder that gross fixed capital formation as a percentage of GDP stands at a little over 5 per cent.

For these reasons and many more, there was excitement in the air early last year with the promise of an early return to civil rule. Unquestionably, a large part of the pre-May 1999 sentiments had to do with the wish on the part of a great many Nigerians to be rid finally of the Nigerian Army's bullyboy presence in our political life. The electorate was willing for this goal to lend its imprimatur to any arrangement however Fustian. In the main though, the desire to evict the army was inspired by the realisation that the dismal state of the economy owed almost entirely to its incompetent management under military rule. The economy, therefore, was at the heart of the matter. But almost two years into civil rule, not much has changed.

The near endless queues at filling stations, which became the hallmark of the last-but-one regime, are back with vengeance. Blackouts and brownouts plague the industrious and the libertine with equal fervour. The misery index has worsened, as both inflation and unemployment bite harder. And irony of ironies, Transparency International has listed the country, run by one of its former members, the world's most corrupt. What has gone wrong? Not much. Indeed, very little has changed. In some respects, the current administration connects very well with the right buzzwords. In spite of this, it frequently seems trapped in the legacy of inertia to which it is heir. This is no where more evident than in its privatisation programme.

It has paid lip service to the necessity through this programme to address the public sector's burden on the economy. Loss-making state-owned enterprises have contributed to the public sector's huge budget deficits over the years. The monetisation of the public sector's debts by the Central Bank on the other hand, has diminished the quantum of credit available to the private sector. And because a large part of the public sector's expenditure profile is recurrent, the net consequence of this vicious cycle has been the dismal levels of capital formation in the economy. Yet, in its privatisation programme, the incumbent administration has proceeded at an unhurried pace. Now and again, the management of the programme has, in fact, appeared less than transparent. And in respect of the key parastatals, NITEL, NEPA and the NNPC, government has quite clearly been pussyfooting.

Unfortunately, the private sector's divestment from the economy is but one part of the road towards freeing the economy from the dross it has gathered in the last forty years. Better infrastructure will, no doubt, conduce to an investor friendly climate. But improvements in law enforcement, the cessation of the Central Bank's financing of the government's deficits, and the broadening and deepening of financial markets will be more welcome progress in this direction. These reforms are necessary, not just because they hold out the promise of more efficient resource allocation mechanisms.

But for the reason that the public sector might now have to finance its deficits by resource to the capital markets. The transparency, which will follow there from, will rebound to the benefit of all. But even more important is the fact that a government bond market will provide a much-needed tool for investors in the economy. The yield on these instruments will provide the hurdle rate for clearing private sector investment proposals.

And yet, the bigger task for the government is to free product markets and stop its avuncular interference in labour markets. One key product market reform is the abolition of the banker's committee. Once, possibly, it was a veritable instrument of public policy. But today as with most other guilds operating in this economy, it has become a let on competitive practice. By collectively determining bank tariffs, this committee guarantees that tariffs will be set at the level of the most inefficient member of the committee. And so it is with other industries. As for labour, the challenge is to dispense with industry-wide bargaining procedures, thus permitting individual work units to tie their employees' remuneration to productivity levels. This may not be as glamorous as the frequent trip abroad undertaken by this administration, but no serious progress is ever likely to be achieved in the absence of these reforms to the economy.

The Society

There is a social crisis in Nigeria. Its manifestations are everywhere, leaving society in a state of turmoil. Forty years after independence, the perennial scourges of poverty, disease and ignorance have been reinforced by corruption and insecurity. The result is a society that is stagnating or regressing, unable to break new ground or incapable of sustaining whatever initiatives emerge. Transforming the Nigerian society is a critical challenge if a meaningful future is to be rescued from what has been, for most people, a long night of backwardness. It will be a huge undertaking, but that is what the dismal state of things requires.

Nigerians are poorer today than they were two decades ago. The World Development Report, published by a UN agency, ranks Nigeria amongst the poorest countries on the globe. What the figures cannot capture is the pain, the hunger, the dislocation and the assault on dignity that poverty brings. Equally grievous is the fact that poverty not only limits life chances, it also stunts the capacity to comprehend and demand change. Yet, a genuine and sustained assault on poverty has not been launched. As poverty ensnares ever-larger segments of the population, ever-wider disparities in wealth are becoming apparent. A tiny minority is finding it easier to lead first world lifestyles, living it up like sybarites while millions of their compartriots are clamped in penury. As if the widening rich-poor gap is not worrisome enough, a culture of corruption has entered the mix, leaking valuable resources away from the public purpose in a way that further tightens the poverty noose in which most Nigerians are trapped.

Corruption is a tragic matter, not just because Transparency International has declared Nigeria as the most corrupt country on the globe. Rather, the tragedy lies in the embrace of corruption as a way of life. It expresses a lack of faith in the prospects of a people, and enthrones the subversion of due process and procedure as the appropriate survival tactic. Can a society so robbed by its members endure, or even promise prosperity? In 40 years, a thieving elite has transformed corruption into a general malaise; the involvement of the leaders makes corruption an even more formidable enemy.

In a sense, the resilience of corruption is indicative of the crisis of citizenship, the absence of a sense of belongingness. The state is unable to command affection because it has not guaranteed a society that can be trusted to promote the well-being of its members. The absence of such loyalty has compromised the search for a new public morality that establishes new benchmarks of leadership supported by critical citizens.

The prevailing ethos privilege the state above the citizen; as such the state is engaged in perennial but losing quest for legitimacy. The state is unable to offer security. Crime is a huge problem. Armed robbery, assassinations and the traffic in children pose a severe challenge. But law enforcement is not keeping pace with the increasing sophistication and brutality of the criminal underworld. Indeed, the attitude of the police seems attuned to the denial of citizens' right rather than exerting the institutional might to facilitate and protect the enjoyment of these rights.

The security of the citizen is assailed as much by the police as by criminals, hooligans and fraudsters. A review of the whole essence of policing recommends itself as a plank of the effort to restore the citizen and his needs to centrality.

Such a review would be part of a broader reassessment of social policy.

Weaknesses in education, for instance, have become apparent. A knowledge gap is developing as the educational system is failing to deliver quality.

The rot at the primary, secondary and tertiary levels is calling to question the country's ability to build a quality human resource base from its teeming population. We welcome the current government's commitment to the Universal Basic Education Scheme. It has the potential to reverse the decline in the educational support, but that would require massive investment in teachers' education, educational infrastructure, workshops and laboratories. The state would also have to ensure that it enforces the right of every child to compulsory basic education. At the tertiary level, the environment requires transformation. Most campuses have suffered severe decay that calls to question their suitability as centres of learning. The curriculum has to be upgraded alongside efforts to attract students to national priority areas that have to be defined within the ambience of the global marketplace.

Similar efforts would be required in the health sector. AIDS is a crucial challenge, as infant mortality and the many disorders arising from malnutrition. Access to healthcare needs to be expanded. Government also has to examine the prospect of encouraging the local manufacture of generic drugs that can treat such diseases as AIDS and cancer. In calling for expanded access, this paper is arguing that the cost of providing healthcare must as far as is possible be resolved in favour of the citizen. Healthcare must, at least in the public sector, not be priced out of the reach of largely poor populace.

The country's failure to plan for its burgeoning population is nowhere more evident than in housing where there is an acute shortage. The shortfall in the availability of decent housing is compounded by rather lame mortgage sector. Long-term financing for housing is rarely available; rather the market is distorted to require instant settlement. Yet, a nation cannot hope to prosper if it confines its people to hovels and slums. Similar failures of planning have also created traffic problems, as the road network has not been expanded to cope with the increase in users. The quality of living problems created by poor housing and a bad road network is further compounded by the absence of a comfortable mass transit system.

Yet, correcting a dire social situation such as exists in Nigeria would require a new approach based on subsidiarity. Policy makers have to embrace the notion that local problems are best handled at local levels. An overcentralised state cannot efficiently redress the mounting social problems in the country if it chooses to solve them in the big brother manner. Rather, it can best tackle the problems by reconfiguring the distribution of powers and responsibility to empower the states and local governments. That way the country can be built from bottom up and leadership redefined as the provision of problem solving services. This new approach would advise the Federal Government to drop plans to construct housing estates all over the country. While the centre could take a lead in setting national quality standards for housing, it should leave the actual delivery of housing services to the lower tiers and private interests. It is a constitutional matter, but the argument for devolution is difficult to assail once it is conceded that the purpose of society is not to worship the state but to empower its members.

Such a constitutional reevaluation may help check the increasingly fragmenting sense of community across the country. Religious and other diversities remain prone to violent expression while community ethos are surrendering to the selfish attractions of the rat race. In this sphere, it must be conceded that community is what its members make of it. The challenges are to foster an inclusive and participation sense capable of attracting the voluntary loyalty of all members. Nigeria in its first 40 years has not proven adept at fostering a harmony that is comfortable with difference. It is not too late to make the effort.