• Sunday, June 23, 2024
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BusinessDay

So you think you’re a socialist? (2)

Manifesting unity and progress: An analysis of Nigeria’s new national anthem!

Statism is incompatible with our reality

When Nigeria’s political elite began to incorporate aspects of Marxist Communism in their ruling doctrine, two significant facts were ignored.

First of all, even though colonialism was rightly seen as a result of western capitalism, decolonization did not have to mean ditching the economic framework of capitalism. An examination of how western countries used capitalism to achieve world-leading economic results within their own countries would have served Nigeria better than an emotionally satisfying “screw you!”

Secondly and more importantly, the USSR was an incredibly well organized and – for a while – superbly run industrial powerhouse, in addition to being perhaps the world’s foremost military power. Centrally planned economics could just about work for them – for a while – because they had the state capacity, societal cohesion and infrastructure to make it happen. Nigeria by contrast, is a country that has never successfully carried out a credible census – there is no comparison.

The Nigerian state simply does not have the ability to carry out the responsibility it insists on arrogating to itself, and those in power have a track record of using state power wrongly. Siting a moribund steel mill in Ajaokuta instead of Onitsha, against professional advice because of ethnic politics, is just one example of a vast number of blunders made by a state that consistently overreaches itself. Our government needs to accept that it does not have cash like the Saudis or central planning ability like the Chinese. It is nothing more than your bog standard African state struggling to pay its staff every year.

The Nigerian state simply does not have the ability to carry out the responsibility it insists on arrogating to itself, and those in power have a track record of using state power wrongly

From the layperson’s point of view, there also needs to be a realization that Nigeria is NOT “rich.” Nigeria is actually one of the poorest countries on the face of this planet. A lot is often made of the two million barrels per day worth of oil revenue that come in, but Nigeria has a population of at least 150 million people. For the government to afford to provide services worth just $1,000 to every Nigerian citizen annually it would need at least $150 billion – about 7 and a half times our total federal budget.

Nigeria’s primary economic problem is not “corruption” as a good number of populists and semi-literate talking heads continue to insist, against all mathematics and common sense. The main problem is poverty – the economy is too small. Empowering the state to further police how the existing pie is shared will not in any way change the reality that the pie is too small, and we need to bake a bigger pie.

Read also: So you think you’re a socialist? (1)

The solution to Nigeria’s economic quagmire is for the state to get out of the way of innovators, job creators and investors so that they can get to work baking a bigger pie, instead of quibbling over who gets to steal what part of the pathetically small pie we are forced to share. The dollar ocean of the 70s is gone forever, never to return, so the government needs to let go of its nostalgia and accept that its days of being a sovereign sugar daddy are long over. Now more than ever, the state needs to shrink itself and promote the economy instead of the other way round.

There are fortunes several times the size of crude oil in everything from remote outsourcing to secondary production. It is the state’s duty to enable such innovation, rather than shut it down and try to be everywhere at once, effectively insisting that everyone must be uniformly and earnestly poor. The status quo can only encourage the so-called corruption we hear about so much.

Small government does not mean “atlas shrugged”

A feature of the conversation around this topic is the false premise that Nigeria faces a choice between the death-by-a-thousand-cuts status quo and a state of nightmare capitalism where the rich feast on the poor, as though that is not already happening. Stoked by Abuja’s old populists in new clothing, Nigeria’s everlasting class war has taken on the false appearance of being a zero-sum game between continued survival of “the masses” and the unrighteous profiteering of “the rich.”

The point has been made earlier that regardless of how much the government extends itself to interfere in Nigerian markets, the bogeyman of elite capture is already very much here with us – petroleum marketers who benefit more than anyone else from fuel subsidies for example, are very much members of “the rich.” Even more important however, is the point that reducing government interference in Nigeria’s economy does not mean condemning Nigeria to becoming an unregulated libertarian fantasy from the pages of an Ayn Rand book.

As Cambridge University Economics professor Ha-Joon Chang famously argued, there is no such thing as a “free market,” because economics is inherently political. Even the U.S., which is regarded as the standard-bearer of capitalism, has extensive social welfare regulations covering education, healthcare and employee rights. Conversely, China, which is a Communist state on paper, has one of the most business-friendly regulatory environments in the world. Both countries have tweaked their economic ideologies to fit their own realities and it has worked for them.

If Nigeria intends to achieve better results than the past half century, we need to find our own midpoint between the myth of communism/socialism and the myth of a perfect free market. This midpoint would clearly prioritise expansion of the ‘pie’ by enabling innovation, investment and business, while focusing government intervention on education, research, healthcare and (some) infrastructural investment.

To this end, Nigeria needs to establish once and for all what its national ideology is. In 2019, I had a conversation with a respected friend and mentor, Dr. Richard Ikiebe. He made the point that every successful nation has an economic and social ideology that is clearly expressed in its constitution. Everyone knows for example, that the U.S. is a capitalist state with some socialist extensions. China is a communist state with extensive capitalist extensions. Both are now the most powerful countries in the world with GDP of $14 trillion and $11 trillion respectively, so clearly whatever they are doing is working for them.

What is Nigeria’s ideology? What is our national purpose, and how do we intend to achieve it? At what point will the Nigerian state consult the people to establish what we want and how we want it as a people? Does our constitution – written in private by a small group of people – really represent the thoughts and aspirations of the alleged 200 million people in Nigeria’s six geo-political regions? That ultimately leads into a much wider conversation about whether Africa’s largest country will – or should – continue existing in its current form much longer.