The Economy, I Tire!
“WITH ALL DUE RESPECT TO THE LEARNED SILK, IF CORRUPTION IS NOT ERADICATED FROM OUR POLITY, EVEN IF STATE GOVERNMENTS ARE ALLOCATED OIL BLOCKS, IT WILL BE OF NO USE; THE PEOPLE WILL STILL NOT BENEFIT FROM THEM, BECAUSE MOST OF THE REVENUE WOULD END UP IN PRIVATE POCKETS ANYWAY”
Mr Robinson, the Macroeconomics Teacher
The other day, I went somewhere with my friend, and someone I know approached me saying, “Ikepo, please, give me money. Anything. I don’t even have N500”. A grown man with a family! I felt sad. I immediately started to wonder what Nigeria has become, and how people have become so impoverished. I suddenly remembered our A level Macroeconomics teacher, in the UK. I think his name was Mr Robinson. Which economic theory would Mr Robinson have used, to describe the current situation that obtains in Nigeria? Would he say that Nigeria is experiencing ‘stagflation’, amongst other economic phenomena? That is, high inflation plus high unemployment and a stagnant economic growth? In my friend’s case, he is gainfully employed; his salary is just no longer a living wage, as it does not seem to be able to cover his outgoings anymore – rent, children’s school fees, feeding money and so on. With the 2015 devaluation of the Naira, and the resulting increase in prices, most people’s books stopped balancing a long time ago.
I didn’t particularly like that Mr Robinson. His style of teaching, just seemed to make the course harder and more confusing. He loved excitedly and animatedly introducing new economic theories, almost on a daily basis. Before you finished grasping one theory, he was annoyingly on to another. Starting from the “Father of Economics”, Adam Smith, his book “The Wealth of Nations”, and his famous “Laissez-faire” policies, which included a free market economy (capitalism of sorts) and limited government intervention in regulation, taxes, tariffs and subsidies, to John Maynard Keynes (Keynesianism), to Karl Marx’s Communism, that is, the antithesis of capitalism - economic equality, abolition of private property, based on the fact that he believed that capitalism results in economic inequality, and consequently, enjoyment for a few and suffering for the majority.
1999 Constitution and Communism Even though Chapter 2 of the 1999 Constitution of the Federal Republic of Nigeria (as amended)(the Constitution), is not exactly justiciable, it would have been easy for Mr Robinson to draw a similarity between, say for example, the provisions of Sections 14(1), (2)(a), 16(1) (a)-(d), (2)(a)-(d) of the Constitution, and possibly, Marxian Communism – a sort of government of the people, by the people, for the people, harnessing the country’s resources to promote national prosperity, distribution of the resources of the nation to serve the common good, promotion of a planned and balanced economy, and most importantly, that wealth or means of production, must not be concentrated in the hands of only a few. People oriented. Alas, in reality, this is not what obtains in our country. As I have always maintained, most of the constitutional provisions seem to be decoration, and nothing else.
Last week, I watched an interview of Learned Silk, Femi Falana, on the Channels TV programme, Sunrise Daily, in which Mr Falana said “You have individuals that are richer than State Governments, by simply trading off or leasing out oil blocks given to them by the Government.... So, why are you not giving it to State Governments? I have repeatedly campaigned for the distribution of oil blocks to State Governments, because the Constitution, Section 16 provides.....”.
The Way Forward While Section 16 of the Constitution and Mr Falana’s assertion, seem to somewhat be in consonance with Communist type/ common good theory to an extent, this is the opposite of laissez-faire/capitalism. Mr Robinson, please, come to my aid. What should we do? Which theory should Nigeria follow, Adam Smith or Karl Marx/ Friedrich Engels? Our economy seems to be in shambles.
Honestly, I believe the answer to the latter question is NEITHER, or maybe a combination! Statistics show that in most fields, Nigeria has some of the best brains in the world. We should encourage our Economists, to develop our own home grown economic system, best suited to us, as opposed to copying and pasting economic theories which may not exactly apply to our circumstances. It is crucial that such an initiative, must go hand in hand with a more effective system of fighting corruption.
Corruption With all due respect to the Learned Silk, if corruption is not eradicated from our polity, even if State Governments are allocated oil blocks, it will be of no use; the people will still not benefit from them, because most of the revenue would end up in private pockets anyway. Several Governors from the previous administrations, are facing graft charges, and a couple of them have even been imprisoned. A few weeks ago, I discussed the accusations which Reformed-APC Chairman, Alhaji Buba Galadima, openly levelled against the former Governor of Edo State and current Chairman of APC, in an interview, with regard to amassing ‘unexplained’ wealth. Likewise, the other day, a video was trending about a South East Governor and his wife, showing a vast estate which his wife had purportedly built during his tenure. With more money from oil revenue, such Governors would build more estates, and amass more personal wealth for themselves!
Minimum Wage The recent issue of the standoff between labour and government on the increase of the minimum wage from N18,000 to N30,000 - what would Mr Robinson have said about this situation? Would he have proposed that we adopt Adam Smith’s theory that workers are entitled to a living wage, and therefore, in our situation, N18,000 is certainly not a living wage? We would also consider the issue of if N30,000 is indeed, a realistic living wage. Meanwhile you have Parliamentarians and government officials, being paid obscene salaries and expenses/allowances! So inequitable.
Would Mr Robinson have been on the side of Economists, who believe that an increase in minimum wage will make workers happier, more productive and stimulate consumer demand, possibly making the economy fare better? Or on the side of those who believe that a high minimum wage could increase unemployment, as it may fix the price of labour above the demand for it. An illustration - a small factory producing ‘pure water’ wants to employ three members of staff at a salary of N25,000 per month each, but the minimum wage is N50,000 per month, that is, N150,000 monthly for three workers, as opposed to the budget of N75,000. In this scenario, the factory will only be able to employ one staff member at N50,000, leaving the other two slots unfilled and two more people, unemployed. Or would the issue of minimum wage only be applicable to government workers, and organisations that meet certain criteria?
Proletariat Revolution One of the conclusions of the Marxian theory, is that, eventually, there will be a revolution by the angry Proletariat - the Workers, against the Bourgeoisie, that is, “the capitalist class who own most of society’s wealth and means of production”, to overthrow them. In fact, Karl Marx believed that, such a revolution must include some members of the middle class, to succeed. Here today, we have many dissatisfied/penurious members of the middle class like my friend (the one who said he didn’t even have N500), who have even had to withdraw their children from the more expensive private schools, to either cheaper ones or public schools, or bring their children back to Nigeria from institutions abroad, because of the prohibitive foreign exchange rate. In the Nigerian scenario, I would imagine that government officials and the political class, may also be considered to be a part of the Bourgeoisie.
My standard illustration of this Proletariat Revolution principle, is that, in a country where there are 100 citizens, and only 10 of them are living well; the remaining 90 citizens, the majority, are starving and wallowing in abject poverty and misery; such a country is unsafe. What stops the 90, from overwhelming/killing the 10 by whatever means necessary, and taking over their assets and belongings?
Poverty, lack and blatant inequity and inequality, are a perfect combination for corruption, crime and desperation. For instance, the situation in which each of the 109 Nigerian Senators are said to earn about N14,220,000 per month (according to their fellow Senator, Shehu Sani, about N720,000 monthly salary plus N13.5 million in monthly expenses) – at the former N18,000 minimum wage, the salary of one Senator could pay almost 800 workers, and at N30,000, 474 workers!
A Government that came in on a mantra of ‘change’ (change for the better, we presume), even though some of these imbalances were not of its own making, should search for ways to try to bridge this huge gap of unevenness, or at least, give the masses a better life, not make it worse.
A word, they say, is enough for the wise. “Eni a wi fun, oba je o gbo” (Let him who has ears, listen)!