Which Ideas Will Carry the Day?

BY KAYODE KOMOLAFE

0805 500 1974

The power of ideas in governance came into focus again on Monday when former President Olusegun Obasanjo berated Nigerian leaders as lacking in thoughts for development. He warned that that with more people pushed into poverty the country was sitting on a keg of gun powder.

Obasanjo spoke virtually to the launching of a book in Abuja by former Minister of Trade Olusegun Aganga. The book is intriguingly entitled “Reclaiming the Jewel of Africa” in reference the nation’s development debacle.

The former president was unsparing of those in leadership positions.

Among other things in his most uncharitable statement he said: “You will weep for our nation over their level of emptiness as far as development issues are concerned…If you ask why they want to be in the position they are craving for, you will weep for your nation over their level of emptiness as far as development issues are concerned. What do they understand for peace, security, stability, predictability, development, growth and progress to be actualised? I believe that peace, security, democracy and prosperity must be taken together.”

Now to be charitable, both Obasanjo (in his statement) and Aganga (in the book) are only revelling in the benefits of hindsight in their positions, having had the opportunities to make a difference by putting their own ideas of development into practice . This luxury will be exposed for what it is not in a country when a culture of accountability prevails. It is a clever way of evading responsibility for monumental governance failures. Instead of the after-thoughts and pontification, Obasanjo should be telling the public what ideas of development he put into practice in his eight years in power to reduce poverty with of a mix of policies. The former president should also state which of his workable ideas that informed policy-making have been jettisoned by his successors. He should be relating the ideas behind policy-making in his administration with the effects on the nation’s development.

Doubtless, the administration of Obasanjo recorded some undeniable achievements. So while critics of Obasanjo should not be uncharitable like him by dismissing his administration as “empty” in development thoughts, the serious governance deficits of his era are also too glaring to deny. A few of these policy gaps and failures would suffice for the purpose of this discussion. To start with, Obasanjo had no articulated strategy of development until after four years in office when the National Economic Empowerment and Development Strategy (NEEDS) was put together. This happened after his second election. Ironically, among the “groups” to which the document was sold was his political party at the time, the People’s Democratic Party (PDP). In a proper setting, the party ought to be mobilising the people on the basis of the enunciated policies. But a lot of things about governance were upended under Obasanjo’s leadership. Obasanjo was too busy fighting endless political wars to embark on rigorous strategy of development.

This wrong-headed approach to governance, of which he now accuses others, was to have consequences in policy terms in his years in office. The pivotal energy sector provides an ample illustration. When Obasanjo came to power in 1999, Nigeria was importing fuel because refineries were not working to provide products for domestic consumption. By the time he left power in 2007, Nigeria continued to import fuel. The national shame of a crude oil-exporting country that is importing fuel remains with Nigeria till today. For eight years, the administration dished out only slogans about the reforms of the downstream sector of the petroleum industry. The resultant crisis of fuel price plagued the administration. Meanwhile, it should be recalled that within three years, the Obasanjo military administration built three refineries in the 1970s. In the other segment of the energy sector, electricity supply in Nigeria in 1999 was under 10, 000 megawatts. In the eight years of Obasanjo the supply was never raised to 10, 000 megawatts for a country branded as the “largest economy in Africa.” The social sector was not any way better under Obasanjo. Poverty and inequality worsened in the land. In 1999, Nigeria was in the 146th position out of 191 in the Human Development Index and by 2007 the country had slid down to the 158th position. Tertiary public education, a responsibility of the federal government , virtually collapsed during those eight years. A similar situation prevailed in the tertiary health sector. The administration could not boast of any significant infrastructural revamp. In fact, Obasanjo himself in one of his rarely humble moments in 2002, reportedly said that he was “ashamed” of the deplorable state of Nigerian roads. By the end of the administration in 2007, major highways remained unpassable in many parts of the country.

Well, the ultimate verdict of history is awaited on the Obasanjo era. Future economic historians may have to examine the ideas underlying policy-making or lack of policies in the Obasanjo’s administration in order to make a fair assessment of the governance in the period between 1999 and 2007. While he was a military Head of State from 1976 to 1979, Obasanjo was enamoured with some elements of economic nationalism and the idea of a developmental state. Some development scholars and technocrats had some influence on the policies made by the military government. As elected president, however, Obasanjo fully embraced the components of the poverty-inducing Washington Consensus – privatisation, liberalisation, deregulation, trade liberalisation, fiscal adjustment, financial reforms etc. Obasanjo sold everything that could be sold in the campaign for a “private sector- led economy.” Some of the privatised organisations have been run down. Instead of the promised in-flow of capital, technology and efficient management, asset-stripping is what is evident in some cases. The underlying philosophy of Obasanjo administration was that every socio-economic problem had a market solution and government’s intervention in the economy was an economic sin. He was under the strict guidance of the World Bank and the International Monetary Fund.

In contrast to Obasanjo’s Nigeria, China under successive leaders in that last 45 years has shown that market can be used as a tool of economic management without surrendering to its so-called invisible forces at the peril of the society. Today China is an economic giant!

What does the foregoing say about the path to be taken by the administration of President Bola Tinubu and the governments of the 36 state governors? The luxury of the benefits of hindsight is, of course, not available to those in power at various levels today. And they should never hope for a day they would luxuriate in after-thoughts as Obasanjo is cynically doing at present.

However, a lot of lessons in economic management could, therefore, be learnt from the economic history of Nigeria in the last 24 years including the eight years of Obasanjo. The Obasanjo years were used as a sample for this reflection because the former president now sits in judgment over others without any sense of self-criticism. The first lesson is that ideas are hardly separable from economic management because certain ideas inform policy choices even if imperceptible. A highly influential economist of the last century, John Maynard Keynes, made this point in his book, “General Theory of Employment, Interest and Money “ as follows: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”

Years after Keynes made the foregoing observation, history has, in fact, recorded instances when ideas of well-known economists influenced policies. Hence, Milton Friedman and his colleagues of the Chicago School of Economics influenced the controversial reforms of the government of th maximum ruler, President Agustino Pinochet, in Chile. In the United Kingdom, the policies of Prime Minister Margaret Thatcher was influenced by Friedrich von Hayek and other right-wing economists. Even former Chairman of the Federal Reserve Bank in the United States Alan Greenspan admits in his memoirs the great influence of the conservative philosopher and writer, Ayn Rand. Greenspan says her works shaped his views about policies and the society.

Here in Nigeria, when the Structural Adjustment (SAP) was introduced in 1986 by the military government of President Ibrahim Babangida, economists in the administration trenchantly articulated policies thereby generating robust debates in the public sphere. Those who did the articulation of SAP included Dr. Kalu Idika Kalu, Chief Olu Falae and the late Dr. Chu Okongwu. The Babangida administration, of course, later took decisions policy decisions it deemed fit. But the ideas propelling the government’s action were known to policy enthusiasts. They were not denied.

Rather than downplay the place of ideas, thoughts should be generated on economic management. By the way, these thoughts could flow from professional economists and non-economists alike. Some of those who managed the economies of countries of southeast Asia in years of the “miracles” were lawyers and engineers.

Policy-makers glibly talk of non-ideological economic management while the consequences of their action shows that they are not in any way value-free technicians in making policy choices. Ideas are so powerful that they actually drive policy-making even when those taking decisions deny the reality. Attention should be paid to the source of the ideas driving policies and their consequences on the lives of the people. The underlying philosophy behind a policy is as important as the practical components of it when making analysis. Policies are not mechanical games played by some ideologically-neutral technocrats. Hence, there is the need for vigilance against destructive ideas. The ideas urgently needed in Nigeria are anti-poverty ideas. Nobel Prize Winners in Economics, Abhiji Banrjee and Ester Dufflo explain those ideas in the book, “Good Economic for Hard Times.”

The second lesson derives from the first. Policies should be effectively articulated by those in government. It is hoped that when a cabinet is put in place those responsible for different areas of policy in the Tinubu Team would see articulation of policies as part of their duty. It should be done in the spirit of accountability and responsibility and the public would be mobilised in the process.

The third lesson is that the government should be open to multiplicity of perspectives so as to have a balanced view of things before taking economic steps with profound impacts on the lives of the poor. This would enrich the decision-making process. For instance, when economic adjustments are made the enormous social costs should be kept in view. How to underwrite the social costs should be in the policy package.

All told, whatever ideas that will carry the day in policy-making should be informed by the spirit and letters of the constitution of Nigeria which stipulates that the “security and welfare” of the people shall be the primary purpose of government.