The Bogey of Reforms

culled from GUARDIAN, August 16, 2006

The cliché of economic reforms by the current administration has become the new political slogan on the lips of every politician who aspires to public office in 2007. The fear of those reforms or better still, the fear of the political forces behind those reforms is the beginning of wisdom for every politician. In order to sound "politically correct" or to appear 'good' in the eyes of Mr. President, every politician brandishes the clichZ of reforms in the media. What they are all echoing quite uncritically is, "when I get into power, I shall continue those reforms". Quite a number probably do not know the content of those reforms or the implications they may have for the future economic wellbeing of the country, yet they are all falling on each-other to glorify the reforms. All of them have become 'reform compliant'. What a shame!

Beyond the fickle character of many politicians in mere wanting to please the president, the president himself has left no one in doubt that he would not hand over power to those who do not believe in him, and the reforms he is undertaking. Recently, the president listed the criteria of his would-be successor, criteria unknown to the Nigerian constitution on the qualification for the presidency. Those criteria were a checklist of reform compliance. As such, in order to gain power, the politicians have succumbed to 'reform flu', coughing, smiling, sneezing, dreaming, talking and singing loudly their allegiance to the reforms to the pleasure of Baba's ears. The media is also reinforcing it, 'we must not return to those unreform days'. Apparently, Baba is enjoying the mood, a delight of leaving a lasting legacy for posterity, especially after the failure of the third term agenda.

The World Bank Country Director in Nigeria, Hafez Ghanem, also added his voice to the reform compliance by the politicians in Nigeria. He was reported in the media as indicating the preference of his Bank in terms of a presidential candidate for the country (See The Guardian, July 10, 2006, with the caption, "World Bank pledges to oppose anti-people president"). Nigeria's next president should be a pro-reformer; otherwise, the Bank may likely withdraw its support for the country. This statement, in my view, borders on professional irresponsibility and indiscretion. A World Bank official should on no account meddle in the internal politics of a member-country. Every country has a right to choose whoever it wishes, even if the person is a fool. George Bush is certainly not one of the brightest in the United States of America, nor is he a people oriented reformer, yet Americans have voted him twice into power. Why did the Bank not complain? Wolfowitz, the new Bank president is a member of the Bush team.

More importantly, the Bank's reforms record in Africa is one of complete failure. The Bank was the arrow head of the structural adjustment programmes (SAPs) of the 1980s and 1990s in Africa; policies that destroyed not only the economic wellbeing of many Africans but the social fabric of society and reduced Africa to a continent of 'second hand" and 'tokunbo' people. The Bank country director should be less flippant in his utterances. Honestly, I am usually very circumspect on the issue of reforms especially when they are based on free market ideology. I am also not convinced that we are having reforms for the first time in the last 20 years in this country. Two regimes-the Babangida and Abacha juntas anchored the credibility and legitimacy of their governments at the doorsteps of economic reforms. Ibrahim Babangida took us through a painful but largely unrewarding SAP, regularly praised by the World Bank. While SAP lasted, it was not short of apostles at home. Olu Falae, Kalu Idika Kalu, and several other characters consistently but arrogantly affirmed that we either take SAP or perish. There was no alternative to SAP, so the story went.

Neither civil society nor the general populace was allowed to discuss or raise issue on the alternative to SAP. When a coalition of civil society organisations tried to organise an "Alternative to SAP" conference in Lagos, they were violently disbanded and attacked by state security forces. SAP was immortal, mortal cannot question it! Today, we know better. SAP meant more poverty, unemployment and pauperisation for the people. Our leaders and the World Bank fed on the pains of the people. Under Sani Abacha, economic reforms were also 'the only game in town'. Abacha claimed that he wanted to sanitise the banking sector. He arrested and jailed directors of failed banks and adopted a fake nationalist posture. After Abacha died abruptly, what did we see? A rogue leader, who looted the treasury with impunity.

I am, therefore, sceptical when I hear clichZs like, "this reform is good for you, take it or leave it", "there is no alternative to these reforms", etc. Definitely, there is alternative to everything in life. There may be different routes to a single destination. Reforms may take different forms and shapes, and not necessarily the way a given regime conceives it. Leadership is about different styles, ideas, initiatives, and vision. A leader that is voted into power (not rigged) has the confidence of the people to create his own ideas and visions of society. He/she should not be stampeded or blackmailed into the vision of his predecessor.

There are some parallels, if only at the level of symbols, between what we saw under IBB and what we are seeing now. Like the IBB era, Baba's reform apostles, his 'economic team', is unabashedly arrogant. They talk of due process but have no iota of respect for people and institutions. They abuse anybody who dares questions them. They inveigh the parliament, and often do not honour its summons. They are the only 'honest' and 'decent' Nigerians on the planet. Everybody else is a 'thief' that cannot be trusted. Hiding under Baba's political cover, they are more powerful than those we voted for, or better still those who rigged their way into power.

Some of the reforms may be good, but they are not unproblematic. Let's take two examples - the bank consolidation and privatisation exercises. The creation of mega-banks may be a right step, but may not be enough to prevent bank failure. The same 'cowboy' bank investors, who collapsed the medium and small banks in the 1990s, can also collapse mega-banks. Again, is there no place for small banks in a chronically under-banked society like ours? Do all banks have to be mega-banks to be functional? In my view, the first step to take in preventing bank failure is to strongly criminalise it. A bank is a public trust, a public entity (no matter the ownership), not another private investment or property. Any individual who partakes in bank failure deserves to spend the next 20 years behind bars without option of bail or pardon. Other measures should complement it. Many of those who destroyed yesterday's banks and the lives of millions of people with it are freemen today and have moved on, in life.

Three main arguments suffice for privatisation - efficiency, cost saving for government, and economic democratisation. I am not sure whether we have achieved the first two objectives, but certainly not the third. Few Nigerians have participated in privatisation, not because they would not have wanted to, but because they are victims of scourging poverty. Privatisation is not one of their priorities. Those who cannot feed themselves or cater for their families will never think of buying shares in divested government companies. Also, the methods of disposing some of those government assets have in some cases left much to be desired. Privatisation has created a new but greedy noveaux riche in Nigeria, at the expense of the people.

If concentrating wealth in the hands of a few is a strategy by the government to create a national bourgeoisie, which would serve as engine of capitalist development in Nigeria, then the focus is wrong. A national bourgeoisie cannot concentrate its attention and energy in the service sector. Manufacturing and industry are at the heart of sustainable economic growth and development, not service sector investments. Unfortunately, this emergent bourgeoisie is virtually absent in those crucial economic sectors. They patronise the cheap money spinning service sector and have bought up all our collective assets in this sector. It is a lazy but over-pampered bourgeoisie.

In its economic reform programme, the government should think less about false figures of 10 per cent GDP growth rate; it must talk about the fundamentals that make an economy work: electricity, good roads and transportation system, security, and low interest rates. Whether under NEPA or the new brand name, PHCN, electricity is still a luxury in Nigeria, the roads are death traps and the rails have disappeared. The President should visit the Lagos-Badagry express way, on an unscheduled visit, to see the shame of a country in the road sector. The road is a gateway to the country, but in a big mess. A reform programme that cannot deliver uninterrupted electricity supply, provide motorable roads, revive the rail sector, and put smiles on the face of manufacturers with one digit interest rate requires some creative rethinking.

The truth is that in spite of the hue and cry about reforms, institutions are still not functioning in Nigeria. The civil service is a shadow of itself, the police is still as corrupt as ever, the judiciary suffers from executive might, the electoral body is weak and incapacitated, and our universities are in deep crises. Building institutions would have been a better reform agenda in Nigeria. Making reform compliance a precondition for a political successor is a futile exercise. Manipulating the political process to clear the coast for a member of the economic team to take over power in 2007, in order to ensure reform continuity will also not work. Many of them lack political clout and the political savvy to lead a country. What the president should do in order to promote policy continuity, is to ensure free, fair, transparent and credible elections in 2007. After all, 120 million Nigerians cannot be wrong.

Dr. Adejumobi is of the Department of Political Science, Lagos State University, Ojo, Lagos