In the last two years, I have noticed that discussions about Nigeria frequently end with someone mentioning the word “Rawlings”! If I was a Nigerian political office holder, given the number of times I have heard compatriots conclude, after searching interminably and in vain for a solution to Nigeria’s crisis of governance, that the only way out is the “Rawlings Solution”, I would be afraid to go to bed at night, wondering if that night some middle level officer or group of officers might hearken to their countrymen’s call for a radical way out.
I suspect that our Governors, Ministers, Senators, Members of the House of Representatives may of course not be privy to such discussions. Naturally such conversations may not take place in their vicinity either due to the Nigerian penchant for sycophancy or just timidity. Or perhaps their “excellencies” and “honourables” are not usually in the company of people likely to harbour such “pro-Rawlings” sentiments. They are more likely to be surrounded by their personal assistants, legislative assistants, commissioners, civil servants, and political hangers-on who are at least picking some crumbs from their masters’ tables and may actually wish that the status quo should endure. Unfortunately all political office holders from the local government to the federal level and such hangers-on are not quite up to two million people, less if you care to do the numbers than one percent of our population. Unfortunately too, most military officers, security personnel, policemen, students, youths, farmers, factory workers and para-military personnel are part of the remaining ninety-nine percent along with columnists (such as yours truly!), journalists, the vast number of unemployed people, the 54 percent of Nigerians who officially live in poverty, and the additional 25 percent or so who may live in semi-poverty, all of whom do not benefit from our corrupt and unsustainable status quo.
If our political leadership was previously unaware that more and more Nigerians are loosing faith in the ability of the establishment to transform their circumstances, lives and country and may be looking towards more radical solutions, I thought the “Boko Haram” crisis in Northern Nigeria and the attempted suicide bombing by Farouk Abdul-Mutallab should have caused some introspection on why so many in Northern Nigeria would so lose faith in western education and values (and implicitly secular governance) that they would be prepared to confront and attempt to overthrow the state; or wonder why the well-educated son of a billionaire banker and businessman would be prepared to attempt a suicide bombing.
If these signals still proved remote and obscure, the public declaration by a professor of constitutional law, Ben Nwabueze that Nigeria requires a revolution should have registered in the minds of our political rulers. Professor Nwabueze was never known to be an anarchist. He made his reputation as a pro-establishment intellectual advocating constitutionalism, rule of law, democracy and an end to military rule. He spent part of his working career in the banking sector advising on corporate law. As a post-graduate student of constitutional law in 1988/89, Professor Nwabueze’s articles were my bible (even though he shocked me soon after as he joined Babangida’s transitional military government as Secretary of Education and acted more like a military man than democrat!) and his whole academic career was devoted to constitutional rule and democracy. What would drive such a person to call for a revolution?
Is spite of all these warnings, our political establishment continues to press harder on the self-destruct button! They continue to act as if blissfully unaware of the danger to our democracy from a citizenry becoming more and more disconnected and disaffected from its rulers. Instead they seek to increase their already over-bloated remuneration while poverty increases in the land; they ignore public demands for a freedom of information bill; they regularly dismiss public interest in their ïntra-party affairs” as if the parties are no longer vehicles for engaging the citizenry; and they continue to act as if democracy was instituted for their own benefit while the citizens are spectators. When a provision for independent candidacy is suggested by some to allow excluded persons some room for political participation, they block it showing they don’t understand the principles of democracy; and they increase taxes, duties and charges on citizens and businesses without increasing public transparency, accountability or responsibility! Perhaps this is the case of the Yoruba dog that refuses to hear the hunter’s whistle!!!
I believe democracy represents the best and most rational route to empowering our people and transforming our nation. However unfortunately what we now have is democracy without democrats; democracy without a real political party system; democracy without accountability; and power without responsibility! My review of history and politics tells me such is not sustainable. They also say that those who make peaceful change impossible, make violent change inevitable! In choosing candidates for 2010, I suggest that all the parties look for credible reformist candidates who understand the need for a democracy centred on people, rather than one that seeks to institutionalise a master-servant relationship with the citizens.
Wednesday, August 25, 2010
Wednesday, August 18, 2010
PDP, Zoning and Jonathan
Opening the Peoples Democratic Party (PDP’s) National Executive Committee (NEC) meeting last Thursday (12/08/10), President Jonathan (GEJ) mocked non-PDP members joining their debate over “zoning” of the presidential ticket forgetting that but for non-PDP members in civil society, media, opposition groups, military and the international community, perhaps the PDP cabal who did not (and still don’t) want him as President may have succeeded in shunting him aside. He may yet need these groups again! More interesting were the decisions affirming zoning (without clarifying to whom and when); declaring Jonathan free to run for presidency (being part of the subsisting joint ticket with Yar’adua); and conceding the right of every party member “from any part of the country” to contest the presidential primary.
These decisions are consistent with 2003 when then Vice-President Atiku Abubakar (North-East), Dr Alex Akwueme (South-East), Chief Barnabas Gemade (North-Central) and Alhaji Abubakar Rimi (North-West) contested against then President Olusegun Obasanjo (South-West) and 2007 when Peter Odili and Donald Duke (South-South), Abdullahi Adamu (North-Central) Sam Egwu and Rochas Okorocha (South-East), General Aliyu Gusau (North-West) and others contested the PDP primaries before most were forced to step down for Umaru Yar’adua by Obasanjo (and Nuhu Ribadu!)! By several accounts, but for that intervention, Peter Odili may have been on course to winning. In effect since 2003, the PDP presidential ticket has been available to any party member from any geo-political zone who could win the primaries!
I consider the argument that a president in his 50s (providentially thrust into office for only thirteen months by virtue of constitutional provisions consequent on the death of the earlier occupant) should not contest his party primaries insulting and contemptuous of GEJ’s person and political stature! As I once asked on this page, would Atiku Abubakar as Vice-President have abandoned the Presidency in favour of South-West candidates in similar circumstances? The argument is more presumptuous given that Jonathan is from the Niger-Delta which supplies all the resources sustaining the federation and which has never provided a Nigerian leader! In my view GEJ’s sole obligation is to conduct free and fair elections and to govern well in the interim!
Democracy guarantees that presidential candidates must engage the whole country. Moreover the constitution requires a winning president to score at least 25 per cent of the votes in two-thirds of Nigeria’s states apart from winning the plurality of votes. The reality of politics is that no serious contender for presidency can ignore the votes of the Hausa/Fulani, Kanuri, Northern Middle-Belt, Yoruba, Igbo, Ijaw, Edo, Urhobo, Ibibio or other ethnic groups. The constitution mandates “federal character” in government positions to reflect Nigeria’s ethnic and religious diversity and requires appointment of at least one minister from every state of the federation. Many federal statutes now require representation from the six geo-political zones on the boards of federal institutions. Zoning or not, the North has not been, and is unlikely to ever be disadvantaged in Nigeria’s politics!
Even though the second republic National Party of Nigeria (NPN) introduced zoning into our political lexicon between 1978 and 1983, we must remember that MKO Abiola won the SDP primaries and Nigeria’s presidency during the aborted 1990-1993 transition without zoning! It was the soldier-politicians who re-introduced “zoning” first by picking Ernest Shonekan as Head of the Interim Government to weaken Abeokuta, Ogun State and Yoruba resolve over the annulled “June 12” election and having failed, pushed for an Obasanjo compensatory presidency in 1999. Chief Emeka Anyaoku has reminded us all that with the way the PDP zoning debate was going, we might as well commence arrangements for the voluntary winding-up (my words) of the Nigerian federation!
There is no virtue in President Jonathan stepping away from the challenge of repairing Nigeria and opting for early retirement! Obasanjo in 1979 was a military leader who had to make way for a democratic transition. Mandela was an old man who had accomplished his life mission-ending apartheid and creating a harmonious state for South Africans of all races. In Nigeria, corruption, ethnic divisions (we have since seen Babangida and Atiku Abubakar become “Northern leaders”), power shortages, undemocratic elections, unaccountable governments, poverty and dilapidated infrastructure all remain with us. Why should a fresh hand who has an opportunity to confront these challenges abdicate in favour of persons who had opportunities in the past to remedy the situation and failed or neglected so to do?
The PDP NEC has essentially cleared the way for GEJ to obtain its ticket for the general elections in 2011. But Jonathan must now alter his approach. In politics, naivety is not a virtue and tentativeness is a vice! Both traits are perceived as signs of fear and weakness and they embolden your adversaries. If Jonathan wants to be President, he would have to be bold, seize the initiative and project himself as a formidable politician and leader. While he should negotiate with all groups and constituencies, he must not be intimidated by any. His easy-going style and consensual approach has its uses (navigating through the power struggle during Yar’adua’s illness for instance), but winning the Presidency in competitive PDP primaries and general elections may be a different matter altogether!
The PDP cannot presume that once their candidate is selected, the presidency is his. I suspect that General Buhari’s CPC and the new ACN may mount a stronger-than-expected challenge!
These decisions are consistent with 2003 when then Vice-President Atiku Abubakar (North-East), Dr Alex Akwueme (South-East), Chief Barnabas Gemade (North-Central) and Alhaji Abubakar Rimi (North-West) contested against then President Olusegun Obasanjo (South-West) and 2007 when Peter Odili and Donald Duke (South-South), Abdullahi Adamu (North-Central) Sam Egwu and Rochas Okorocha (South-East), General Aliyu Gusau (North-West) and others contested the PDP primaries before most were forced to step down for Umaru Yar’adua by Obasanjo (and Nuhu Ribadu!)! By several accounts, but for that intervention, Peter Odili may have been on course to winning. In effect since 2003, the PDP presidential ticket has been available to any party member from any geo-political zone who could win the primaries!
I consider the argument that a president in his 50s (providentially thrust into office for only thirteen months by virtue of constitutional provisions consequent on the death of the earlier occupant) should not contest his party primaries insulting and contemptuous of GEJ’s person and political stature! As I once asked on this page, would Atiku Abubakar as Vice-President have abandoned the Presidency in favour of South-West candidates in similar circumstances? The argument is more presumptuous given that Jonathan is from the Niger-Delta which supplies all the resources sustaining the federation and which has never provided a Nigerian leader! In my view GEJ’s sole obligation is to conduct free and fair elections and to govern well in the interim!
Democracy guarantees that presidential candidates must engage the whole country. Moreover the constitution requires a winning president to score at least 25 per cent of the votes in two-thirds of Nigeria’s states apart from winning the plurality of votes. The reality of politics is that no serious contender for presidency can ignore the votes of the Hausa/Fulani, Kanuri, Northern Middle-Belt, Yoruba, Igbo, Ijaw, Edo, Urhobo, Ibibio or other ethnic groups. The constitution mandates “federal character” in government positions to reflect Nigeria’s ethnic and religious diversity and requires appointment of at least one minister from every state of the federation. Many federal statutes now require representation from the six geo-political zones on the boards of federal institutions. Zoning or not, the North has not been, and is unlikely to ever be disadvantaged in Nigeria’s politics!
Even though the second republic National Party of Nigeria (NPN) introduced zoning into our political lexicon between 1978 and 1983, we must remember that MKO Abiola won the SDP primaries and Nigeria’s presidency during the aborted 1990-1993 transition without zoning! It was the soldier-politicians who re-introduced “zoning” first by picking Ernest Shonekan as Head of the Interim Government to weaken Abeokuta, Ogun State and Yoruba resolve over the annulled “June 12” election and having failed, pushed for an Obasanjo compensatory presidency in 1999. Chief Emeka Anyaoku has reminded us all that with the way the PDP zoning debate was going, we might as well commence arrangements for the voluntary winding-up (my words) of the Nigerian federation!
There is no virtue in President Jonathan stepping away from the challenge of repairing Nigeria and opting for early retirement! Obasanjo in 1979 was a military leader who had to make way for a democratic transition. Mandela was an old man who had accomplished his life mission-ending apartheid and creating a harmonious state for South Africans of all races. In Nigeria, corruption, ethnic divisions (we have since seen Babangida and Atiku Abubakar become “Northern leaders”), power shortages, undemocratic elections, unaccountable governments, poverty and dilapidated infrastructure all remain with us. Why should a fresh hand who has an opportunity to confront these challenges abdicate in favour of persons who had opportunities in the past to remedy the situation and failed or neglected so to do?
The PDP NEC has essentially cleared the way for GEJ to obtain its ticket for the general elections in 2011. But Jonathan must now alter his approach. In politics, naivety is not a virtue and tentativeness is a vice! Both traits are perceived as signs of fear and weakness and they embolden your adversaries. If Jonathan wants to be President, he would have to be bold, seize the initiative and project himself as a formidable politician and leader. While he should negotiate with all groups and constituencies, he must not be intimidated by any. His easy-going style and consensual approach has its uses (navigating through the power struggle during Yar’adua’s illness for instance), but winning the Presidency in competitive PDP primaries and general elections may be a different matter altogether!
The PDP cannot presume that once their candidate is selected, the presidency is his. I suspect that General Buhari’s CPC and the new ACN may mount a stronger-than-expected challenge!
PDP, Zoning and Jonathan
Opening the Peoples Democratic Party (PDP’s) National Executive Committee (NEC) meeting last Thursday (12/08/10), President Jonathan (GEJ) mocked non-PDP members joining their debate over “zoning” of the presidential ticket forgetting that but for non-PDP members in civil society, media, opposition groups, military and the international community, perhaps the PDP cabal who did not (and still don’t) want him as President may have succeeded in shunting him aside. He may yet need these groups again! More interesting were the decisions affirming zoning (without clarifying to whom and when); declaring Jonathan free to run for presidency (being part of the subsisting joint ticket with Yar’adua); and conceding the right of every party member “from any part of the country” to contest the presidential primary.
These decisions are consistent with 2003 when then Vice-President Atiku Abubakar (North-East), Dr Alex Akwueme (South-East), Chief Barnabas Gemade (North-Central) and Alhaji Abubakar Rimi (North-West) contested against then President Olusegun Obasanjo (South-West) and 2007 when Peter Odili and Donald Duke (South-South), Abdullahi Adamu (North-Central) Sam Egwu and Rochas Okorocha (South-East), General Aliyu Gusau (North-West) and others contested the PDP primaries before most were forced to step down for Umaru Yar’adua by Obasanjo (and Nuhu Ribadu!)! By several accounts, but for that intervention, Peter Odili may have been on course to winning. In effect since 2003, the PDP presidential ticket has been available to any party member from any geo-political zone who could win the primaries!
I consider the argument that a president in his 50s (providentially thrust into office for only thirteen months by virtue of constitutional provisions consequent on the death of the earlier occupant) should not contest his party primaries insulting and contemptuous of GEJ’s person and political stature! As I once asked on this page, would Atiku Abubakar as Vice-President have abandoned the Presidency in favour of South-West candidates in similar circumstances? The argument is more presumptuous given that Jonathan is from the Niger-Delta which supplies all the resources sustaining the federation and which has never provided a Nigerian leader! In my view GEJ’s sole obligation is to conduct free and fair elections and to govern well in the interim!
Democracy guarantees that presidential candidates must engage the whole country. Moreover the constitution requires a winning president to score at least 25 per cent of the votes in two-thirds of Nigeria’s states apart from winning the plurality of votes. The reality of politics is that no serious contender for presidency can ignore the votes of the Hausa/Fulani, Kanuri, Northern Middle-Belt, Yoruba, Igbo, Ijaw, Edo, Urhobo, Ibibio or other ethnic groups. The constitution mandates “federal character” in government positions to reflect Nigeria’s ethnic and religious diversity and requires appointment of at least one minister from every state of the federation. Many federal statutes now require representation from the six geo-political zones on the boards of federal institutions. Zoning or not, the North has not been, and is unlikely to ever be disadvantaged in Nigeria’s politics!
Even though the second republic National Party of Nigeria (NPN) introduced zoning into our political lexicon between 1978 and 1983, we must remember that MKO Abiola won the SDP primaries and Nigeria’s presidency during the aborted 1990-1993 transition without zoning! It was the soldier-politicians who re-introduced “zoning” first by picking Ernest Shonekan as Head of the Interim Government to weaken Abeokuta, Ogun State and Yoruba resolve over the annulled “June 12” election and having failed, pushed for an Obasanjo compensatory presidency in 1999. Chief Emeka Anyaoku has reminded us all that with the way the PDP zoning debate was going, we might as well commence arrangements for the voluntary winding-up (my words) of the Nigerian federation!
There is no virtue in President Jonathan stepping away from the challenge of repairing Nigeria and opting for early retirement! Obasanjo in 1979 was a military leader who had to make way for a democratic transition. Mandela was an old man who had accomplished his life mission-ending apartheid and creating a harmonious state for South Africans of all races. In Nigeria, corruption, ethnic divisions (we have since seen Babangida and Atiku Abubakar become “Northern leaders”), power shortages, undemocratic elections, unaccountable governments, poverty and dilapidated infrastructure all remain with us. Why should a fresh hand who has an opportunity to confront these challenges abdicate in favour of persons who had opportunities in the past to remedy the situation and failed or neglected so to do?
The PDP NEC has essentially cleared the way for GEJ to obtain its ticket for the general elections in 2011. But Jonathan must now alter his approach. In politics, naivety is not a virtue and tentativeness is a vice! Both traits are perceived as signs of fear and weakness and they embolden your adversaries. If Jonathan wants to be President, he would have to be bold, seize the initiative and project himself as a formidable politician and leader. While he should negotiate with all groups and constituencies, he must not be intimidated by any. His easy-going style and consensual approach has its uses (navigating through the power struggle during Yar’adua’s illness for instance), but winning the Presidency in competitive PDP primaries and general elections may be a different matter altogether!
The PDP cannot presume that once their candidate is selected, the presidency is his. I suspect that General Buhari’s CPC and the new ACN may mount a stronger-than-expected challenge!
These decisions are consistent with 2003 when then Vice-President Atiku Abubakar (North-East), Dr Alex Akwueme (South-East), Chief Barnabas Gemade (North-Central) and Alhaji Abubakar Rimi (North-West) contested against then President Olusegun Obasanjo (South-West) and 2007 when Peter Odili and Donald Duke (South-South), Abdullahi Adamu (North-Central) Sam Egwu and Rochas Okorocha (South-East), General Aliyu Gusau (North-West) and others contested the PDP primaries before most were forced to step down for Umaru Yar’adua by Obasanjo (and Nuhu Ribadu!)! By several accounts, but for that intervention, Peter Odili may have been on course to winning. In effect since 2003, the PDP presidential ticket has been available to any party member from any geo-political zone who could win the primaries!
I consider the argument that a president in his 50s (providentially thrust into office for only thirteen months by virtue of constitutional provisions consequent on the death of the earlier occupant) should not contest his party primaries insulting and contemptuous of GEJ’s person and political stature! As I once asked on this page, would Atiku Abubakar as Vice-President have abandoned the Presidency in favour of South-West candidates in similar circumstances? The argument is more presumptuous given that Jonathan is from the Niger-Delta which supplies all the resources sustaining the federation and which has never provided a Nigerian leader! In my view GEJ’s sole obligation is to conduct free and fair elections and to govern well in the interim!
Democracy guarantees that presidential candidates must engage the whole country. Moreover the constitution requires a winning president to score at least 25 per cent of the votes in two-thirds of Nigeria’s states apart from winning the plurality of votes. The reality of politics is that no serious contender for presidency can ignore the votes of the Hausa/Fulani, Kanuri, Northern Middle-Belt, Yoruba, Igbo, Ijaw, Edo, Urhobo, Ibibio or other ethnic groups. The constitution mandates “federal character” in government positions to reflect Nigeria’s ethnic and religious diversity and requires appointment of at least one minister from every state of the federation. Many federal statutes now require representation from the six geo-political zones on the boards of federal institutions. Zoning or not, the North has not been, and is unlikely to ever be disadvantaged in Nigeria’s politics!
Even though the second republic National Party of Nigeria (NPN) introduced zoning into our political lexicon between 1978 and 1983, we must remember that MKO Abiola won the SDP primaries and Nigeria’s presidency during the aborted 1990-1993 transition without zoning! It was the soldier-politicians who re-introduced “zoning” first by picking Ernest Shonekan as Head of the Interim Government to weaken Abeokuta, Ogun State and Yoruba resolve over the annulled “June 12” election and having failed, pushed for an Obasanjo compensatory presidency in 1999. Chief Emeka Anyaoku has reminded us all that with the way the PDP zoning debate was going, we might as well commence arrangements for the voluntary winding-up (my words) of the Nigerian federation!
There is no virtue in President Jonathan stepping away from the challenge of repairing Nigeria and opting for early retirement! Obasanjo in 1979 was a military leader who had to make way for a democratic transition. Mandela was an old man who had accomplished his life mission-ending apartheid and creating a harmonious state for South Africans of all races. In Nigeria, corruption, ethnic divisions (we have since seen Babangida and Atiku Abubakar become “Northern leaders”), power shortages, undemocratic elections, unaccountable governments, poverty and dilapidated infrastructure all remain with us. Why should a fresh hand who has an opportunity to confront these challenges abdicate in favour of persons who had opportunities in the past to remedy the situation and failed or neglected so to do?
The PDP NEC has essentially cleared the way for GEJ to obtain its ticket for the general elections in 2011. But Jonathan must now alter his approach. In politics, naivety is not a virtue and tentativeness is a vice! Both traits are perceived as signs of fear and weakness and they embolden your adversaries. If Jonathan wants to be President, he would have to be bold, seize the initiative and project himself as a formidable politician and leader. While he should negotiate with all groups and constituencies, he must not be intimidated by any. His easy-going style and consensual approach has its uses (navigating through the power struggle during Yar’adua’s illness for instance), but winning the Presidency in competitive PDP primaries and general elections may be a different matter altogether!
The PDP cannot presume that once their candidate is selected, the presidency is his. I suspect that General Buhari’s CPC and the new ACN may mount a stronger-than-expected challenge!
Wednesday, August 11, 2010
Is Our Economy Growing?
Economic growth has been controversial lately. Bismarck Rewane started the debate when he publicly doubted National Bureau of Statistics’ (NBS) 7.23% first quarter 2010 growth arguing that indices used worldwide as proxies for growth such as housing, automobile and retail sales and manufacturing output did not support NBS’ data. That resonates with Nigerians who cannot feel growth in their pockets as poverty and unemployment remain prevalent. Bismarck is right that economic growth has not translated into improvements in firm and consumer prosperity, but that is not because the data is wrong! While I accept NBS growth data as probably correct, I identify two fundamental factors which make economic growth (without more) largely irrelevant to business performance and individual well-being in Nigeria!
Irrespective of GDP growth rate, Nigerians may feel no improvement except we change the economic structure and alter the flow of benefits of growth in favour of businesses and citizens. And this is not a strange phenomenon in economics! Economists are familiar with notions like “jobless growth”, “inflationary growth”, “non-inclusive” and “lop-sided” growth, “growth without development” etc. Nigeria’s GDP is essentially dominated by agriculture (42%); crude petroleum and natural gas (20%); and wholesale and retail trade (23%). Together these account for approximately 85% of Nigeria’s economy! Crude exploration and export is an enclave activity with few jobs and linkages and limited (if not negative) domestic impact! Agriculture remains primitive and doesn’t generate modern employment!! And trading (especially in predominantly imported goods) adds little value and requires insignificant domestic investment!!! All other sectors-telecommunications, manufacturing, solid minerals, real estate, building and construction, finance and insurance, power and utilities, hotels and restaurants and services collectively account for only 15% of economic output!!!
I don’t think Bismarck sufficiently takes this defective economic structure into account! If manufacturing contributes 25% of GDP, manufacturing output will be a useful proxy for growth, but certainly not here where it tragically accounts for only 4% of GDP! Automobile sales may mirror growth in countries with a large middle class, but not where only government, large companies and banks buy cars. When 54% of our populace live in poverty (and another 25% perhaps in semi-poverty), do we seriously expect retail sales or housing data to reflect growth? Given our current economic structure, unfortunately the dominant proxies for growth will be reflected in rainfall and food production, Niger-Delta peace and crude oil output, and dollar purchases at the CBN! Moreover, the sectoral make-up of NBS’ overall growth projection tallies with sensible analysis-telecommunications grows consistently at more than 30%; finance and insurance growth rate declined in third and fourth quarters of 2009 (the highpoint of Lamido Sanusi’s intervention); agricultural growth correlates with rainfall patterns; manufacturing growth is only modest; and the “amnesty effect” is revealed as oil sector output growth gets positive from second quarter of 2009 after years of negative performance.
In my article titled, “Has the Economy Turned the Corner?” (28/10/09), I argued that irrespective of economic growth, “the substantive point about the structure of our economy remains”; that “the most depressing statistic about our economy however remains the contribution of manufacturing to output-4%” and asked Nigerians and policy makers to “imagine the results in employment generation and other economic indices if we could raise manufacturing output to 20% of GDP and increase capacity utilisation to 90%”. Indeed I have constructed an ideal model if we want jobs, poverty alleviation and inclusive growth-manufacturing-20%; agriculture-20%; services-15%; oil and gas-10%; wholesale and retail trade-10%; solid minerals-7.5%; power-5%; telecommunications, post and ICT-5%; real estate and construction-5% and others-2.5%.
That leaves the second problem-how are the benefits of economic growth shared? A company may grow turnover, but shareholders may receive lower dividends for a variety of reasons-input costs, operating expenses, energy costs, management profligacy, employee salaries, taxes and municipal charges, excessive compensation and bonuses for executives, fraudulent procurement practices etc. Nigeria Inc is that company! Corruption means resources are diverted to private uses rather than public good. Distribution of economic resources is grossly lop-sided in favour of political office holders, legislators, senior bureaucrats, and politicians. Even if the economy grows at 15% per annum, these factors ensure that businesses and citizens may not feel any impact.
A clear illustration is the capital and recurrent budget for the National Assembly which has grown from N7billion in 1999 to over N120 billion in 2010. That excludes “constituency projects” which are recorded as executive expenditure, but in reality resources devoted to maintaining legislators. The budgets for the Presidency, Ministers and Special Advisers, Governors, Commissioners, Local Government Chairmen and Councillors and federal and state legislators in addition to all manner of board chairmen and members, special assistants, senior special assistants and personal assistants means that little if any resources trickle down to the people.
As we so often find with economic and policy analysis, the apparent explanation is not always right! Instead of blaming NBS growth data, economists should focus on other data which reflect Nigerian economic reality-poverty prevalence, human development indices, unemployment, private sector credit, manufacturing share of GDP/capacity utilisation, local content in industry, power and infrastructure deficit, absence of economic linkages, import reliance, interest rates, taxes and multiple charges, high business operating costs, ratio of oil to non-oil exports, crime and insecurity etc. The solution lies in economic re-engineering and diversification and dealing with governance, corruption and the incentives for public service.
Irrespective of GDP growth rate, Nigerians may feel no improvement except we change the economic structure and alter the flow of benefits of growth in favour of businesses and citizens. And this is not a strange phenomenon in economics! Economists are familiar with notions like “jobless growth”, “inflationary growth”, “non-inclusive” and “lop-sided” growth, “growth without development” etc. Nigeria’s GDP is essentially dominated by agriculture (42%); crude petroleum and natural gas (20%); and wholesale and retail trade (23%). Together these account for approximately 85% of Nigeria’s economy! Crude exploration and export is an enclave activity with few jobs and linkages and limited (if not negative) domestic impact! Agriculture remains primitive and doesn’t generate modern employment!! And trading (especially in predominantly imported goods) adds little value and requires insignificant domestic investment!!! All other sectors-telecommunications, manufacturing, solid minerals, real estate, building and construction, finance and insurance, power and utilities, hotels and restaurants and services collectively account for only 15% of economic output!!!
I don’t think Bismarck sufficiently takes this defective economic structure into account! If manufacturing contributes 25% of GDP, manufacturing output will be a useful proxy for growth, but certainly not here where it tragically accounts for only 4% of GDP! Automobile sales may mirror growth in countries with a large middle class, but not where only government, large companies and banks buy cars. When 54% of our populace live in poverty (and another 25% perhaps in semi-poverty), do we seriously expect retail sales or housing data to reflect growth? Given our current economic structure, unfortunately the dominant proxies for growth will be reflected in rainfall and food production, Niger-Delta peace and crude oil output, and dollar purchases at the CBN! Moreover, the sectoral make-up of NBS’ overall growth projection tallies with sensible analysis-telecommunications grows consistently at more than 30%; finance and insurance growth rate declined in third and fourth quarters of 2009 (the highpoint of Lamido Sanusi’s intervention); agricultural growth correlates with rainfall patterns; manufacturing growth is only modest; and the “amnesty effect” is revealed as oil sector output growth gets positive from second quarter of 2009 after years of negative performance.
In my article titled, “Has the Economy Turned the Corner?” (28/10/09), I argued that irrespective of economic growth, “the substantive point about the structure of our economy remains”; that “the most depressing statistic about our economy however remains the contribution of manufacturing to output-4%” and asked Nigerians and policy makers to “imagine the results in employment generation and other economic indices if we could raise manufacturing output to 20% of GDP and increase capacity utilisation to 90%”. Indeed I have constructed an ideal model if we want jobs, poverty alleviation and inclusive growth-manufacturing-20%; agriculture-20%; services-15%; oil and gas-10%; wholesale and retail trade-10%; solid minerals-7.5%; power-5%; telecommunications, post and ICT-5%; real estate and construction-5% and others-2.5%.
That leaves the second problem-how are the benefits of economic growth shared? A company may grow turnover, but shareholders may receive lower dividends for a variety of reasons-input costs, operating expenses, energy costs, management profligacy, employee salaries, taxes and municipal charges, excessive compensation and bonuses for executives, fraudulent procurement practices etc. Nigeria Inc is that company! Corruption means resources are diverted to private uses rather than public good. Distribution of economic resources is grossly lop-sided in favour of political office holders, legislators, senior bureaucrats, and politicians. Even if the economy grows at 15% per annum, these factors ensure that businesses and citizens may not feel any impact.
A clear illustration is the capital and recurrent budget for the National Assembly which has grown from N7billion in 1999 to over N120 billion in 2010. That excludes “constituency projects” which are recorded as executive expenditure, but in reality resources devoted to maintaining legislators. The budgets for the Presidency, Ministers and Special Advisers, Governors, Commissioners, Local Government Chairmen and Councillors and federal and state legislators in addition to all manner of board chairmen and members, special assistants, senior special assistants and personal assistants means that little if any resources trickle down to the people.
As we so often find with economic and policy analysis, the apparent explanation is not always right! Instead of blaming NBS growth data, economists should focus on other data which reflect Nigerian economic reality-poverty prevalence, human development indices, unemployment, private sector credit, manufacturing share of GDP/capacity utilisation, local content in industry, power and infrastructure deficit, absence of economic linkages, import reliance, interest rates, taxes and multiple charges, high business operating costs, ratio of oil to non-oil exports, crime and insecurity etc. The solution lies in economic re-engineering and diversification and dealing with governance, corruption and the incentives for public service.
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