Three Years to Go! Part 2

Two weeks ago, in the first part of this article, we attempted a preview of the Yar’adua regime’s first year in office and made the point, as the title clearly indicated that the regime is running out of time. It has three calendar years, and eighteen to 24 months “policy space” left before its first year is exhausted. We expressed surprise that given the clarity about Nigeria’s policy and economic priorities, and given the amount of input (NEEDS, NEEDS 2, Vision 2020, 7-Point Agenda etc) available to the regime, it had yet to define its strategy for dealing with the problems confronting the nation. We examined the regime’s very sparse balance sheet, with “rule of law” being the only claimed “achievement” and noted that while rule of law is clearly a prerequisite for national development, it cannot suffice as a policy prescription in a twenty-first century economy.

Since then, the President has taken the welcome step of coming out to articulate his views about his government’s achievements (or lack of it) on several fronts-including an interview with the Financial Times of London, and an interview with a panel of journalists led by John Momoh of Channels TV. In all these interviews, the President repeated at every opportunity his achievement in the area of rule of law and explained that he had spent the last one year “planning” the activities the regime would engage in over the next few years. The interviews did not communicate much that was specific about the outcome of these plans beyond promising Nigerians “exciting times” in the next 365 days. Nigerians could of course do no more than exercise faith and optimism that those exciting times would materialise soon, and that the excitement would be of a positive nature.

I must say that the portents do not appear very enticing however. I say this because in the same period, the regime announced the most retrogressive policy statement perhaps in the last decade! This was the policy announcing the constitution of a board for the PHCN which beyond the subterfuge amounted simply to the re-introduction of NEPA. If there was any doubt about what the regime had just done, it appointed a former NEPA managing director as CEO in the new team. The implication of that action is a rejection of a private sector framework for resolution of Nigeria’s power supply problems in favour of a state-controlled national power utility. I interpret the hogwash about the team ‘preparing PHCN for privatisation’ simply as an attempt to cloud the reality of another major policy reversal from the Nigerian people, and perhaps from our development partners.

This column has been reluctant to jump to conclusions about the regime’s economic policy preferences hoping that the evidence of failure of state-owned enterprises in Nigeria is so compelling that no regime interested in development could countenance a return to that failed model of development. But on the other hand, the evidence is now mounting, and only naïve optimism would prevent reaching that conclusion. The regime as we pointed out in the first part has reversed privatisation of the refineries and steel complexes without articulating a fresh process of privatisation. It has not carried out any privatisation of its own, and has also attempted to reverse the privatisation of NITEL and NICON Insurance, and to license NIGCOMSAT as a mainstream telecommunications operator.

In the case of PHCN however, this step actually contradicts the regime’s only touted achievement-the rule of law! If there was one reform that the Obasanjo regime carried out scrupulously in line with the rule of law, it was the power sector reforms. Indeed it was the non-passage of the Electric Power Sector Reform Act between 2001 and 2005 that stalled the power sector reforms, and ensured that the reforms were still on-going when Yar’adua came to power. There is no provision in that law (which is an Act of the National Assembly) for a coordinating committee for PHCN. The law mandates the privatisation of the 11 electricity distributing companies and 6 power generating companies by the Bureau of Public Enterprises, and that process was already in play even before May 29, 2007. The appointment of that committee is not only illegal, it is patently retrogressive and may be the final confirmation that for whatever reasons, the regime is opposed to a private sector-led development.

I do not know how many Nigerians noticed a report in THISDAY of Sunday June 1, 2008, (titled “Private Sector Incursion into Education Faulty, Says Kingibe) in which the Secretary to the Government of the Federation, Babagana Kingibe reportedly “identified the incursion of the private sector into education as one of the mistakes of the reforms of the sector”. In a speech at the Obafemi Awolowo University on Friday May, 30, Kingibe attributed the present sorry state of the country’s educational system to this “incursion” and claimed that “the incursion had brought increasing gap between the cost and quality of education provided by the public and private sectors”. One can only hope and pray that Kingibe was misquoted or else we will see another major retrogressive attempt to expel the private sector from the educational sector within the next few months.

When the anti-private sector momentum is fully unleashed no sector should imagine itself immune-private telecommunications providers may still have many fights ahead of them. The attack will masquerade as concerns over quality or cost of service or some other subterfuge, but the real objective may be to re-establish state control in the sector; private broadcasting-radio and television, private airlines, banking industry consolidation, oil and gas, mining, ports concessioning etc may sooner than later be rolled back into the hands of the state.

It is also beginning to appear that when the President speaks about “planning” he is actually talking about a state-planned economy. Several months back, the president’s Chief Economic Adviser spoke about a return to the National Development Plans that were the Nigerian economic management model in the 1960s and 1970s, and that were the hallmark of the Soviet Union, China, Cuba, India and other communist and third-world economies. It is also true that countries like Japan and Singapore relied on heavy state planning in the context of capitalist state planning, but the whole of the world has since recognised the best role of the state. China led the communist world towards deregulation, liberalisation and privatisation and the entire communist world with the exception of North Korea, Cuba and perhaps Venezuela have departed from such thinking. It is amazing that Nigeria in 2008 is contemplating a return to such economic planning.

Agbaje is Senior Consultant/CEO of Resources and Trust Company (RTC), a Strategy, Consultancy and Business Advisory firm. RTC POLICY is the group’s policy, government and political consulting division.