Who says Nigeria’s economic policies aren’t working

Ordinary or marginalised Nigerians are in pain, concerned middle-class Nigerians are confused but the politicians are happy with how the economy works. So, whether the economic policies are working or not depends on your perception and the group you belong to.

Contending theories of political economy identify three types of economic doctrines namely Liberalism or Capitalism; Marxism or Communism; and Corporatism. Capitalism and communism are the common doctrines that have dominated political discussion and treatise over time while literature is silent on corporatism. We assume that if an economy is not operating on capitalism or communism, it is a mixed economic system. Pure capitalism is where the economy is dominantly controlled by market forces or demand and supply of goods and services. The government has a minimal role to play. It provides an enabling environment for businesses to operate.

A communist system on the other hand relies largely on government to determine what to produce, how, and for whom to produce. The distribution of the outputs of production is also done using government machinery. That is why it is called a controlled economy. However, a mixed economic system is a variant of these two doctrines.

Paul Samuelson, a Nobel Laureate economist, opines that all economies today run mixed economic systems because there is no economy where the government and private sector are not involved at one level or the other. Thus, an economy where government participation is around 20 percent can be categorized as capitalism while the economy with over 70 percent government participation can be seen as communism or a socialist economy, using the term interchangeably.
Plato developed concepts like totalitarianism and the communitarian corporatist system, In his opinion, these are natural-based classes and natural social hierarchies organised based on function whereby, groups would cooperate to achieve social harmony by emphasising collective interests and rejecting individual interests. However, this type of corporatism is different from that of a political system where large businesses are protected. It is called communitarian corporatism.

From the 1850s, there was the emergence of progressive corporatism which was developed in response to classical liberalism and Marxism. Progressive corporatism is where the middle class and the working class come together to secure cooperation among the classes and protect themselves against the capitalists. Thus, corporatism in theory brings about the institutions and practices that involve a system of interest representation. There are variants of corporatism in different societies and political systems due to metamorphosis. Do not let me bother you with the evolution and theoretical construct of this corporatism doctrine, but espouse the veil on the kind of capitalism we are made to believe is being run in Nigeria presently.

Nigeria is currently running corporatism which can be regarded as a state-society relationship controlled and regulated by the state, existing law, and the predominant social norms incorporated into the formal state structure, guided by the state or political authority. It is often referred to as an extreme form of capitalism in which large businesses dominate the political field. It is sometimes referred to as leadership by corporate managers.
A corporate state is a system of political representation in which geographical parliamentary constituencies are replaced by industrial, occupational, or functional groups organised in national syndicates. In the formal sense, the economic interest group, the business class in this case organises itself into a political institution and takes control of the economy for its benefit. Sometimes it is referred to as Maga-bureaucracy.

Business entities whether as industrialists or in merchandising are always interested in profit-making, not the welfare of their customers. People have referred to President Tinubu as a private-sector actor and an astute politician. A combination that is more concerned with self-interest as in the emilokan verbiage. The economic policies so far are injurious to production and productivity but not so to profit making. Raising prices of goods that are essential for human existence, which we refer to in economics as necessities, will normally generate profit for businesses.

When the President put up his economic team which comprises mainly his business friends, I thought we were going towards corporatism. The business entities are the recipients of policies and they are to advise the President on policies. They cannot afford to commit class suicide by advising the government to go hard on businesses. They must protect themselves with laws that will make their businesses flourish and their incomes grow. To the citizens, it is the survival of the fittest. Those who cannot survive, leave or die.

The President, political allies, and hangers-on are the beneficiaries of a government of corporatism while the people and the economy, on aggregate, suffer. Since SMEs generate more employment than large industries, employment will not grow rather unemployment rate will increase. Take a critical look at what is happening to the Nigerian economy now! The economy is comatose and the political system is on the way to the ICU. Operators of corporatism are less concerned about that and more concerned about their profit and economic dominance.

So, what you say about the economy or what you see and how you rate the economy depends on the class you belong to. Not all businesses will grow. Small- and medium-scale businesses are likely to suffer while large corporate businesses and financial institutions are the major beneficiaries of the economic policies; declaring staggering profits amid an economic quagmire.  The economy will be run more on support from philanthropic non-governmental organisations and private philanthropists.

The major beneficiaries of the economic strangulation sometimes get involved in providing succor to the people to keep them alive as customers rather than citizens, through some palliative measures like the government has been engaging with us. It is not being benevolent or patriotic but being creatively sarcastic. The World Bank and IMF have told us that the government’s current reforms will take up to 15 years to have full benefits. Even if the President has another term, he cannot spend another eight years. Another government will come in and start its reforms and we will be told that macroeconomic instability made the reforms fail.

We have had unlimited reforms since the adoption of Structural Adjustment Programmes in 1986 except the Abacha years. As it were, we are in a ‘one chance’ economic quagmire and a rethink can save us. There is a need for economic deliverance. An economic transformation. But who is to introduce that if the President refuses to sacrifice personal interest for the national interest? The President needs to jettison corporatism for a truly capitalist economic system that can, at least, allow all businesses to function without preference for some type and non-market determination.
Talking about interfering with market price, the current fuel price from Dangote is not reflective of the market price. The price was forced down its throat by NNPCL acting as the agent in the economics of corporatism. Most costs from transportation and insurance were eliminated through the domestic supply of the crude which should reduce the production costs and by extension the selling price. The NNPCL’s harassment of and tactics on Dangote must have resulted in negotiated price in favour of profit maximisation and supernormal profits from which the government gets huge tax returns.

 We are already at this crossroads and can only continue to demand what we want from our government rather than folding our arms and waiting for 2027. We require a national development plan with the draft nationally discussed by various interest groups before being presented to the National Assembly for further consideration and authorization. The plan will be sacrosanct, such that any government that wins elections in the future will maintain the national focus even if the modus operandi is changed. The national plan will keep the government on its toes in meeting the national aspirations. It will serve as the barometer for judging the success or failure of any government.

We need a government that will truly and deliberately reduce the national debt, both domestic and foreign to create breathing space for future endeavours. A government that believes in reducing recurrent expenditure in the annual budget and promoting capital budget. We want economic policies that work for everybody and bring out positive feedback. We are hoping for a government that will consider ordinary Nigerians as their responsibility to give decent living. This should be the concept of renewed hope.