How Not To Fix The Economy
Francis E. Ogbimi contends that Nigeria needs industrialisation to grow, and not mere capital investment
The Nigeria of today is certainly not the Nigeria of 1960. Nigeria in 1960, had 15,703 Primary Schools with 2,912618 enrolled; 883 Secondary Schools with 135,364 enrolled; 29 Vocational/Technical educational institutions with 5037 enrolled; 315 Teachers’ Training II with 27,908 enrolled; and three Colleges of Technology, one University College. In the 1997/98 academic year, Nigeria had 39,377 Primary Schools with 23,809000 enrolled; 6000 Secondary School with 6,05600 enrolled; 58 Colleges of Education, 45 Polytechnics, 122 Technical Schools and 40 Universities with 983, 000 enrolled. Nigeria now has over 150 Universities (NUC, 2017) and produces over 300,000 graduates in the year. So, the Nigerian educational system has grown tremendously in quantitative terms and has produced many educated/learned people. Nigerians have also been travelling abroad to virtually all nations to acquire education in various areas of knowledge. Nigerians have learnt a lot in about 57 years. Nigeria is a more knowledgeable nation than she was in 1960s. Sadly, Nigerian politicians have not changed, indeed they are worse than they were in 1960s. This article explains why the political group called the Peoples Democratic Party which ruled Nigeria in the period 1999-2015 and the political group called All Progressives Congress which has been ruling the nation since 2015 cannot fix the economy and promote democratisation.
In two newspaper articles entitled, “Nigeria needs political parties: Present groups are political machines and conspiracies (1),”and “Nigeria needs political parties: Present groups are political machines and conspiracies (2),”published in the Daily Independent newspaper, December 23 and December 30, 2014, I did not consider PDP and APC as political parties because they do not have the characteristics of political parties.
Yes, Nigeria needs political parties because the political groups in Nigeria remain political machines and political machines who seize power. President Dwight Eisenhower (1956) of the United States, reflecting on the issue of a political party, said, a political party deserves the approbation American, only as it represents the ideals, the aspirations and the hopes of Americans. If it is anything less, it is merely a conspiracy to seize power. About 20 years later, Daniel Boorstin (1973), American historian, again reflecting on the issue of a political party, said, a political party is organised for a purpose larger than its own survival; a political machine exists for its own sake, its primary purpose is survival. I agree with President Eisenhower and Boorstin.
Political groups in Nigeria do not represent the ideals, the aspirations and hopes of Nigerians; they exist for their members. Politicians at the local government, state and federal levels get into government and become very rich people in three months. In view of the millions of barrels of crude petroleum sold daily for over five decades, over 70 per cent of Nigerians are very poor. The Nigerian politicians would claim that the nation is doing well. They would not accept the well-known bases for assessing the performance of a government – the state of the economy measured by the levels of employment/unemployment, productivity and inflation, and peace and harmony. Also, Nigerian political machines would not accept globally accepted reports like the UNDP Human Development Report, because they would clearly reveal that they are political machines and conspiracies with no plans to develop Nigeria. They would rather cling to the reports of less known bodies like Fitch and deceive the ignorant people that Nigeria is rated BB-, BC+; Nigeria has the highest GDP growth in Africa that will trickle down one day; Nigeria built roads and bridges, dams; etc., to God be the glory!
Political machines connive with foreigners to deceive the ignorant people to adopt programmes which though have beautiful names, lack growth elements and do not promote growth and development. Nigeria adopted the Structural Adjustment Programme (SAP) in 1986 when the military government of Gen. Ibrahim Babangida was ruling the nation. All governments, including PDP and APC governments since 1986 have continued to implement SAP. The PDP implemented SAP in the period 1999-2015. The APC has been implementing SAP since May 2015. SAP has three principal elements. They are: one) the mandatory foreign exchange market (FEM), two) the sale of public enterprise and liquid assets to the rich nationals and foreigners and three) adoption of deregulation (laissez-faire economics or market economic philosophy or profit consideration, individualism) as the basis for assessing the performance of public projects and activities. African SAPs were introduced to Nigeria and other African nations in the 1980s by the World Bank and IMF. The original document (Bellow, 1986) claimed that the Nigerian SAP has four main objectives. They are to: one) restructure and diversify the productive base of the economy, two) achieve fiscal stability and positive balance of payment, three) set the basis for a sustained balanced non-inflationary or minimal inflationary growth, and four) reduce the dominance of unproductive investments in the public sector. However, the analysis of the Nigerian SAP in the book entitled, “Understanding why Privatisation is promoting unemployment and poverty and delaying industrialisation in Africa (Ogbimi, 2007), showed that the Nigerian SAP lacks growth elements and could not achieve any of its claimed objectives. SAP is merely promoting unemployment and poverty and delaying industrialisation. Consequently, SAP has completely sapped and destroyed the Nigerian economy and impoverished the people. All that is left of Nigeria is a sapped majority of people and a destroyed naira. There are also a few economists, accountants, bankers, lawyers, others in government and business who do not understand the science needed for increasing productivity and transforming an agricultural economy into an industrialised one, who daily repeat the financial clichés associated with SAP and the stock market.
An important warning to all Nigerians is pertinent here. Mrs. Margaret Thatcher, a former Prime Minister of Britain, once said that to destroy a nation, you first destroy her national currency. She was speaking in relation to the experience of Germany when the nation implemented the German SAP 1919-1923. Germany lost WW I in 1918 as the leader of the Axis powers. The Allied powers demanded $33b from Germany as war reparations. Germany could not pay. The Germans were forced to implement the German SAP principally characterised by the mandatory forex market (FEM). The German Market exchanged 4.2 units to the US$1 in 1919. In 1920, 63 Mark exchanged for one dollar. The Mark further depreciated in 1921, it exchanged 200 units to the dollar. The Mark depreciated catastrophically in 1922, it exchanged 2000 units to the dollar. In 1923, the Mark collapsed, it exchanged 4.2 trillion units to the dollar and stopped being a national currency. The Germans and Germany were seriously humiliated. But the strong will of the Germans saved them. They abandoned SAP in 1923 and printed another currency which the value was one trillion Mark, reverting the exchange rate to 4.2 units to the dollar. In the book on privatisation above (Ogbimi, 2007), it was demonstrated that a nation operating mandatory FEM experiences increasing speculation and decreasing productivity. Also the currency experiences increasing devaluation till confusion sets in the nation. The German experience is sufficiently instructive.
Nigeria’s planning has always been devoid of growth elements. What Nigeria needs is industrialisation, not mere capital investment/Foreign Direct Investment (FDIs), not privatisation, not mere erection of infrastructure, not entrepreneurs. Industrialisation is promoted through learning – education and training. The Nigerian economy has been stagnating hence it is experiencing mass unemployment. Only mass education, mass training and mass employment can save the Nigeria of today.