Human Progress, the Engine and the Driver  

Postscript by Waziri Adio

It is one of those simple but profound frames. In a racing competition, the capacity of the engine of a race car matters a lot but not more than the quality of the driver. Except in autonomous vehicles, the skills and the experience of the driver and his support team determine how competitive even the fastest car can be. This is a pretty obvious point in its original context. But it is not a point often used as a mental model for discussing economic growth, human development and the role of critical actors. Yet it is a powerful analogy.

Mr. Aigboje Aig-Imoukhuede, the Chairman of Coronation Capital and the co-founder of the Aig-Imoukhuede Foundation, deployed this simple but apt analogy on Tuesday when he spoke at a policy conversation in Abuja. I don’t think he invented the analogy. I doubt if he was using it for the first time. It doesn’t matter. But as great and memorable parallels go, it did its job. The analogy helped to unify the points made by many other contributors at the frank, engaging and cerebral conversation and, beyond the event, it assisted in situating the critical task for Nigeria at a most critical period.

Aig-Imoukhuede spoke at a high-level policy event jointly organised by the US-based Carnegie Endowment for International Peace, one of oldest and most respected think tanks in the world, and Agora Policy, an Abuja-based policy think tank which I founded. The theme of the event was: “How Nigeria Can Build a Post-Oil Economic Future.” The dialogue was held against the backdrop of the global conversation about the transition away from oil and other fossil fuels, the glaring failure of Nigeria’s commodity-centred approach to development, Nigeria’s historical economic underperformance and current fiscal challenges, and the opportunity embedded in the transition to a new administration. 

The former GMD of Access Bank joined other eminent speakers such as the former governor of Central Bank of Nigeria (CBN) and current governor of Anambra State, Professor Charles Soludo; the former director-general of the Bureau of Public Enterprises and the governor of Kaduna, Mallam Nasir El-Rufai; former economics professor at Columbia University and the World Bank Country Director in Nigeria, Dr. Shubham Chaudhuri; and the Director of the Carnegie Africa Programme, Dr. Zainab Usman.

The event also featured special interventions by the following: Khalifa Muhammadu Sanusi II, economist and former governor CBN; Dr. Kayode Fayemi, former governor of Ekiti State and former chairman of the Nigeria Governors’ Forum; Mrs. Maryam Uwais, Special Adviser to the President on Social Interventions; and Professor Ode Ojowu, former Chief Economic Adviser to the President. Dr. Usman also presented highlights of her latest book, entitled “Economic Diversification in Nigeria: The Politics of Building a Post-Oil Economy.” The well-received book was voted as one of the Best Books of 2022 on economics by the Financial Times.

The event was an intellectual feast, offering both deep diagnoses of the Nigerian condition and practical prescriptions for bringing to good economic health Africa’s most populous country and biggest economy. In this piece, I will attempt, beyond the nuts and bolts issues already reported in the press, a broad-brush highlight of five key points made by the various speakers and intersperse these important points with my comments and observations.  

Aig-Imoukhuede provided the car engine and the driver analogy in the context of the roles of the private and the public sectors in development. He acknowledged that the private sector is the engine of Nigeria’s competitiveness. This is expected of a private sector chieftain. But he added a twist when he invited the audience to think of Nigeria as a vehicle in competition with other countries that are also vehicles. “A vehicle doesn’t move unless it is started,” he said. “A vehicle goes in the direction that the driver takes it. All vehicles are driven by government. So, however powerful that engine is, even if it is one billion horsepower, [it is] the capacity of the driver that will dictate how far it can move.”

Other speakers touched on this point in various ways. Professor Soludo maintained that the difference between Nigeria’s moments of economic “surge and decline” is a function of the quality of the leadership and the stock and content of human capital in government at those points in time. Mallam El-Rufai insisted that having a competent core team is a critical success factor. Khalifa Sanusi spoke about the necessity of not just assembling a competent team but of matching them to their areas of competence.  

My take-away from this important point made in different ways is that state capacity is critical to development. It doesn’t matter whether we subscribe to a lean or a big state. We need a state that is efficient and effective for it to be able to drive growth and development. However, state capacity is disturbingly thin at the moment—and we hardly speak enough about this. The challenge will not be resolved by just drafting in a few technocrats of “incredible capacities”. At best, that can only be a stop-gap measure. Building or rebuilding state capacity has to be taken as a long-term, strategic and development imperative.

There was unanimity among the speakers that the next administration must be ready to take difficult and unpopular decisions from Day One to steer Nigeria away from the cliff it is hurtling towards. The consensus: petrol subsidies and other wasteful expenditures need to go as early as yesterday. Khalifa Sanusi spoke about the need to separate economics from populism and to stop the naked hedge of petrol subsidy that sucks scarce resources away from critical sectors like education, health and infrastructure. Dr. Fayemi expressed the need to balance competence with courage, and avoid Robert Kaplan’s ‘The Coming Anarchy.’ Mallam El-Rufai warned that the dreaded IMF programme would be inevitable if difficult decisions are not taken early and swiftly by the next government.

These are points that have been well made in well-researched and well-considered policy papers published by Agora Policy, with the support of MacArthur Foundation. The latest was a policy memo which was also distributed at the Tuesday event, entitled “Urgent Actions on Fiscal, Monetary and Trade Fronts.” The memo built on an earlier full-length report entitled “Options for Revamping Nigeria’s Economy,” also produced with the kind support of MacArthur Foundation. Petrol and foreign exchange subsidies constrict the fiscal space for the government and create distortions in the system.  What needs to be done and how have been well laid out. The ball is in the court of the next administration.

The third point I want to highlight from the conversation is that there was an agreement that Nigeria can learn a lot not only from comparator countries but also from itself. Dr. Usman argued in her book and her presentation that Nigeria is neither a failed state nor a developmental state but a state capable of episodic reforms as periods of its economic history has shown. She rejects the tags of resource curse and patrimonialism as valid explanations for Nigeria’s economic underperformance. After Peter Evans, she describes Nigeria as an intermediate state.

Governors Soludo and El-Rufai advocated for the need to prioritise the use of case studies to surface what worked and the reasons why they worked during periods when Nigeria’s economy posted decent and consistent growth rates and undertook some game-changing reforms. In addition, Chaudhuri recommended learning from how the elites of Indonesia and India used period of significant national traumas to put their countries on a more sustainable path: Indonesians agreeing to the need for proper macro fiscal management after the 1997 Asian financial crisis; and Indians in the early 1990s choosing to privilege the role of the private sector in poverty reduction and national development after earlier flirtation with leftist ideology.

I depart from the hopeful characterisation of the Nigerian state. I think the state remains predatory at its core and that the attitude of both the elite and the ruled to state resources remains prebendal. Also, in a socio-political context where power is seen a golden opportunity for those with power to help themselves and those proximate to them and where accountability mechanisms are thin, sudden commodity wealth predisposes those in government to certain choices that will necessarily lead to a collective gnashing of teeth in moments of predictable slump. Development is not only the space where politics and economics intersect, it also has a deep cultural underlay. We need to fix some broken values, pay attention to issues raised by Richard Joseph and Peter Ekeh in their seminal works, especially around how we relate to public office and public resources.

This is a good segue to what I consider the fourth important point: the need for consensus among the elite about certain core values, a vision of society, what cannot be politicised, and a pragmatic approach to development. The speakers framed it in different ways. Dr. Usman calls it political settlement and she advocates for the need to see structural transformation of the economy as a political project. Others label it political consensus or elite bargain. I think they all point at the imperative of a binding agreement among the elite about some broad rules of the road for social, political and economic development of the country. Chaudhuri submits that the elites need a consensus based on the enlightened position to that sees the needs to address both the tragedy of the commons and a commitment to growing a bigger pie to make everyone better off. He thinks addressing the huge trust deficit among the Nigerian elite will be a sine qua non to creating such a Pareto optimal outcome. I am on the same page here. The question is how to broker and sustain such a consensus among actors used to preservation of self and group interests.    

The last point I want to highlight is the eloquent case for the need to transfer responsibilities and resources from the federal government to the state governments. This is the argument for greater devolution or what some loosely call restructuring. Soludo, El-Rufai and Fayemi emphasised this point. In fact, El-Rufai, who headed the ruling party’s committee on restructuring, argued for a return to the elite consensus agreed at the constitutional conference of 1953 and 1954. Soludo made a case for a structure that will enable the country to achieve both speed and sustainability.

It is difficult to argue against further decentralisation. However, it is important to remember that the promise of decentralisation has been delivered largely in the breach in Nigeria. The logic of decentralisation is anchored on the belief that the closer the government is to the people the more effective and efficient it is. Largely, that has not been our experience. This is not to say the status quo should remain unchanged. But the assumption that more responsibility and resources are magic bullets takes the existence of countervailing measures and capacity as a given. Our sad reality is that both factors diminish as we move farther from the centre. This returns us to the important parable of the engine and the driver. Part of the consensus that has to be forged is the need to build and sustain state capacity across the board.

As I mentioned at the very engaging event, the conversation should continue. But we don’t have the luxury of engaging in analysis paralysis. We need urgent actions on key areas.