So you think you’re a socialist? (1)

I want to tell you a story about a man called Fakunle and his friend whom we shall call Stephen. Fakunle grew up in 1950s Badagry in the days before Nigeria had its first expressway, and Lagos was still a two-day journey away from the border town. His dad had three wives and multiple children, so there was no chance of having extra resources for something like school fees. Fortunately, the Premier of Nigeria’s Western region Obafemi Awolowo had introduced a free basic and secondary education policy, so Fakunle was able to go to school and expand his mind.

After secondary school, he packed up and left Badagry to do his A-levels at the Federal School of Science (now Federal Science and Technical College) in Yaba, Lagos, where he met Stephen. Fakunle and Stephen both aced their A-levels and found themselves inundated with American and Russian university scholarship offers. At the height of the cold war, the US and the USSR were locked in a battle for the minds of the best and brightest of a newly independent Africa.

Stephen took a USSR scholarship and left to study Medicine in Hungary, while Fakunle took an American scholarship and went off to Ghana to study Biochemistry. After their programs, they both returned home at the peak of the oil boom in the 70s and walked into successful careers, complete with a house and car.

Then things started to change in the 80s. Salaries came in late; promotions took longer and became political. The word “generator” entered their vocabulary. Their kids had to go to private schools because state schools had become substandard. Bribery became standard. Physical infrastructure began to deteriorate. Both men realized that they were becoming poorer in real terms after currency devaluation.

My dad and his contemporaries grew up with the expectation that Nigeria would always be a sort of African Saudi Arabia, with an endless supply of government funding

They remembered a time when Nigeria rewarded hard work, competence, and good faith. What had happened to the country that effectively guaranteed them a full ride from cradle to career? Neither of them had the answer, so they dealt with the circumstances as best they could. Stephen took a job offer in Hungary and moved his family with him. Fakunle moved his family into a GRA and spent the next 30 years working hard to shield them from Nigeria’s reality.

In 2017, Fakunle died, leaving behind five children, three of whom no longer live in Nigeria. In keeping with how he lived his last three decades on earth, his last journey from his house to the morgue took place in a private ambulance after the government service failed to show up. At his funeral, Stephen and his other friends kept shaking their heads and repeating the question, “What happened? What happened to this country?”

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“The good old days” of African socialism

As you know by now, Fakunle was my dad, and all events and people described in this story are real. The sense of grief and longing for a lost country is very real. Amidst their anguish, however, what my dad’s friends failed to understand was that the heady, optimistic, cash-flush Nigeria of their youth was never going to last.

Newly freed from the shackles of colonial resource expropriation and tax impositions in the 1950s and 1960s, Africa’s post-independence governments found themselves with huge pots of cash and apparently endless things to spend it on. Military Head of State Yakubu Gowon famously remarked at the height of the 1970s oil boom that Nigeria’s problem was not money, but rather how to spend it.

As a result of this abundance mindset, my dad and his contemporaries grew up with the expectation that Nigeria would always be a sort of African Saudi Arabia, with an endless supply of government funding to do everything from subsidising Nigeria Airways flight tickets to building steel mills.

As mentioned earlier, the Cold War provided an incentive for the USSR to promote communist thinking in Africa’s upcoming middle class at that time. Even if beneficiaries of Russian generosity like Stephen did not necessarily subscribe to Communism, the fact that their mere citizenship of a country called Nigeria gave them access to such privileges created a set of expectations for what Nigeria could and should do for them going forward.

As politicians generally do, Nigeria’s leaders were happy to feed this petroleum-fuelled optimism, tying down government funds into every type of recurrent expenditure one can imagine, from refined fuel import subsidies to state-owned football clubs.

What Nigeria is, and what it is not

On the surface, Nigeria is a highly entrepreneurial environment, populated by business-minded, resourceful people. Below the surface, however, our entire economic structure is held up by a plethora of 70s-era government largesse that is now unsustainable to the point of becoming a national existential crisis.

Nigeria’s government interferes at all levels of the country’s economy, including agricultural subsidies, import subsidies, onerous business licensing regulations, multiple taxation, retail price controls, exchange rate controls, import and export licensing and tariffs, and import prohibitions to name just a few. For a country with a GDP of just about $500 billion, Nigeria’s government is overextended not just in financial terms, but on an operational level.

Nigeria is not in fact pursuing a socialist ideal but is actually trying to be statist – a country that exists at the mercy of the state, instead of the other way around. Clearly, this cannot work with the world’s largest population of extremely poor people to deal with, because the government budget of barely $20 billion – a significant part of which goes unfunded – is too small to make any meaningful impact.

Rather than recognizing its limitations and getting out of the way, the Nigerian state insists that it must dictate to the economy, and the results are clear for all to see. The World Bank recently revealed that Nigeria spent N731 billion (about $2 billion) on fuel subsidies alone in 2018. That means that the Nigerian state now spends nearly 9 percent of its total annual budget on one single unnecessary recurrent expense.

[To be continued on Friday]