What is your role as youth? With 60 million estimated to be between the ages of 15 and 35, that future is in your hands. The power belongs to you.

Yesterday’s men and women can only use you for their dirty jobs while stubbornly clinging on to power and beclouding your future. These perspectives come from lessons from the Arab Spring that swept the Arab world in 2011. Arab youth started the Spring but could not follow through, mainly because their approach was that of the informal politics of street protests while failing to take control of the formal structures of political parties still dominated by members of the old order.

Voting participation by youth in Nigeria remains low. More numbers of youth in Nigeria voted in the 2015 elections, but nothing compared with youth voting figures of 80 percent in Argentina, 78 percent in Brazil, 80 percent in Peru, and 55 percent in Romania.
Moreover, around the world, digital and social media are playing an increasingly large role in election outcomes, but are yet to become decisive. It is yet to be seen if this will be different in a country such as Nigeria where the youth make up a large swathe of the population.
My vision for Nigeria, then, is to have the voting power of the youth, deployed first in preventing bad leaders from returning to power and truncating their stranglehold on our collective progress by electing competent leaders. That decision should be based on the character, capacity, competence, and track record of the contestants. It should also be informed not necessarily by a perspective of youth for the sake of youth even where the candidate may lack the requisite qualifications. But we recognise as well that gerontocracy is an unhealthy bane of Nigeria’s politics and that the time has come to send Nigeria’s underperforming career politicians into retirement. The challenge is to find the right balance in the candidates for various offices in our democracy.

Get Your PVC

Voter apathy is the biggest enemy. There is no excuse for it. Not the imperfections and difficulties of the voter registration process. Not the excuse that past elections have presented us with poor choices. And not the rigging of elections in the past.
Just 29 million of 91 million eligible people voted in Nigeria’s last election in 2015, 15% of our entire population. That 15% determined what we learn – or don’t – in school, the food we can put on our tables, how businesses are taxed, and even what you are going to watch on TV next week.

Those that did not vote in 2015, some 62 million people, lost their chance to choose who made those decisions for us all.
62 million had a chance but stood silent.
62 million had the power but turned away.
Every decision that shapes your life as a Nigerian citizen begins with an election. Simply because everything
from road safety to childbirth is regulated by elected officials and their appointees.
Even in the most perfect of circumstances, it will require years of collective hardwork to make Nigeria begin to
truly work for every one of us. And let us face it: things are far from perfect in Nigeria. It takes years to ensure resources are allocated to deal with the problems of our here and now, and the problems of a better Nigeria, five, fifteen, and fifty years down the line.
So, our present and our future – all of it comes down to you. YOUR vote. YOUR choices.
In 2015, 15% made the choices for all of us. In 2019, be the young man, trying to feed his family who will reshape the country. Be the young business woman who will steer our nation’s course.

By making the simple choice of registering to vote and obtaining your voter’s card, you seize the opportunity to help direct our journey. It is your right and it is vital – for you, for us to rise together.
If there’s any lesson Nigerians should take away from elections that have occurred all over the world, it is that every vote is consequential. You matter, and your choices shape the world.

We are many. We MUST work together to make Nigeria a country to be proud of. You and me, together. Register to obtain your PVC.
This time 62 million must stand,
62 million cannot keep silent.
62 million must lead the charge for a better Nigeria. Let’s get to work.

Are you registered to vote in 2019? Or are you sitting around on your behind complaining into cyberspace? ...An awakening is taking place regarding youth participation in politics in Nigeria.

Nigerians do not vote!
They RIG with public funds.

Nigeria is not ripe for the younger generation to take over from the old, recycled rogues!

Try again in 20 years!

OUR CAREER POLITICIANS CAN’T SAVE NIGERIA

LET’S GET REAL. THEY CAN’T. CERTAINLY NOT THE VAST MAJORITY OF THE DOMINANT POLITICAL LEADERSHIP CLASS WE HAVE IN our country today.

Let’s just spend a little time explaining why they can’t. And then figure out as citizens, what to do to save Nigeria. Our focus, I believe, should be on the future we want and how to create that future for ourselves, the young men and women that make up our large youth population, and our children.

The past is important mainly for the lessons we should have learnt from it. As the character Sebastian says to his friend Antonio in Shakespeare’s play “The Tempest”, ‘whereof what’s past is prologue, what to come, in yours and mine discharge’.
As the 2019 elections and another round of democratic leadership selection come into view, let’s keep in mind what the real issues are: More than 30 million Nigerians are jobless or under-employed.

Nearly 15 million Nigerian children of school age are out of school. This is the highest rate in the world. Our health system is one of the worst in the world. Since health is our first, primal need in life, those who can afford it are frequently “medical tourists” abroad. The millions of Nigerians who can’t afford these expenses but are equally deserving of good healthcare are left twisting in the wind. Those who will take Nigeria into a different future are those who understand how to overcome these problems.

On top of it all, we are a divided, nay fractured, country. We need to meet the increasing demands across the country for the irreducible minimum of justice and equity. We have to stabilize an obviously failing state and get it to function best for all its citizens. The painful crises of insecurity, poverty and injustice notwithstanding, Nigeria is not beyond redemption. We need to, and can, turn it into a nation.
How? Ethnicity and religion, on which Nigeria’s political framework has been organised for the past 70 years, are powerful, sentimental forces that can easily overwhelm reason if we do not consciously guard against them. What we need to overcome this kind of small thinking, as I have argued in Vision 2, is a real worldview of transformation that is globally competitive.

This worldview is the first task that faces the next generation of political leadership in our country. It includes something called “manufacturing consent” among disparate peoples in one space. This is part of the delicate and complex art of nation-building. It requires certain key character, intellectual and attitudinal qualities that rise above the swamp of identity politics in order to overcome it and engineer a RISE as one nation.
That worldview must be one that measures the distance between where Nigeria is today and where the rapidly rising countries of Asia are. How can we turn Northern Nigeria into Dubai or Malaysia, the Southeast into Taiwan or South Korea, the South-South into Norway, and the Southwest into Germany? A Nigeria of this scenario would be a world power, the new China.

This is what should occupy the mind of any Nigerian president, every member of the National Assembly or every state governor. It all begins in the mind. The leadership that can produce the results we need must be anchored on how such leaders think. A man or woman cannot act outside of, or beyond, how s/he thinks. We know that how we think is a function of our value systems, and experts identify values as one of the seven components of a comprehensive worldview.
We know that it also is a product of a combination of formal education (very few of our underperforming politicians are functionally illiterates!) with exposure to – and assimilation of – superior ideas and experiences. Our political leaders have all been to Dubai, Washington DC and Singapore, but haven’t copied those countries.

If you have grown up participating in a political and career culture of non-performance in which dexterity in the fine arts of “political” maneuvering matter more than delivering the concrete results of good governance, you can hardly be expected to act or lead differently at the pinnacles of political power and responsibility. Ditto if you envelop yourself in an insular culture of ethnic chauvinism in which the members of your tribe are necessarily “superior”, or you must “avenge” their marginalisation if you have a leadership mandate. If that is how you think, that is how you will define “success”.

A core function of leadership is to motivate, inspire and unify citizens around core values, set goals to be
achieved, and point to the future state or condition to which a country aspires. The new Nigerian leader must build an inclusive First Eleven team, with top-notch human capital drawn from all over the country or state, and get to work. Neuroscience tells us that human beings perform at their best when their brains are conditioned to feel safe, secure and trusted. Leadership that creates this level of mutual trust with and amongst its followers always delivers the most transforming outcomes.

...we must now begin to look beyond our traditional political class for leadership. We must look for leadership to a new “leadership generation” that thinks differently and can co- educate fellow citizens...

Given all this, we can place what we need as Nigeria and as Nigerians against what our political “leaders” have delivered. Then we should ask ourselves what the chances are that they can or will give us something different in the future if we continue to place our destinies in their hands in 2019 and beyond.
Partisan politics or even what passes for governance in Nigeria is based neither on ideas nor on ideologies. Nigerian politicians have no core beliefs. Our politics are a series of transactions aimed merely to “be on the seat” of power, wield authority for its own sake and advance the causes of vested interests of all stripes, and get personally wealthy in the bargain. The purpose is not to transform our states of being as citizens.
We can’t face or build the future by relying on those whose “skill sets” lie in the past. It’s time for a different game. We need a paradigm shift in 2019. Lest we forget: we, the citizens, have been voting for these politicians. We have done so for various reasons. Maybe they gave us bags of rice or other inducements or, even worse, bought our voters cards off us.

Perhaps we have been armchair critics, complaining perennially about poor governance but failed to register to vote and actually vote. Or, we have been swayed because the politicians got the better of our sentiments in one way or another, but turned out not able to govern well. Perhaps we voted for other candidates but some others rigged the polls and “won”. Or it could be a combination of all these factors.
Whichever it is, the paradigm shift that we need is this: We must now think differently, want different things, and want different kinds of leaders to deliver those different things. This means we must now begin to look beyond our traditional political class for leadership. We must now look for leadership to a new “leadership generation” that thinks differently and can co-educate fellow citizens with the Nigerian version of the philosophical and organising principles that built progress in the United Arab Emirates, China, Singapore, South Korea and Malaysia.
We need to create inclusive economic growth that is job-led, not just jobless GDP growth. That way our economy can keep ahead of population growth. Such economic growth can only be based on productive knowledge, skills and innovation. This is the kind of knowledge that will turn the vast amounts of solid minerals in the northern and other parts of Nigeria into value-added products for export and can turn northern Nigeria into Dubai. It can turn the technological ingenuity of inventors from the Southeast and other parts of the country into home-made products on our shelves and for exports.

This wealth of nations cannot be achieved through the fixation our political leadership class has had on the price of crude oil. It can be attained only by nurturing strong, independent institutions that underpin our economy and the rule of law, free from political interference.
With clarity in our minds about what Nigeria needs, we must now subject all those seeking national or state political office to the objective standards of character, capacity, competence, and track record against the backdrop we have set out above. No one can give you what he or she doesn’t have. No one can lead you effectively if such a compatriot has no real clue about what leadership means. No one can lead you well who conflates mere longevity in Nigerian-style, winner take-all, Ghana-must-go-bag-carrying politics, or loitering on the corridors of power, with real leadership.

We must look to a new generation of younger, technocratic minds that can actually solve these problems of nation-building, joblessness, aggravated and widespread poverty, and weak institutions. Many of such minds have stayed out of politics (which includes the formal politics of the partisan sort, as well as the informal one of the civil society) until now. Because many apolitical Nigerian professionals avoid the public square, wherein is determined the quality of our lives, status quo politicians have been eating our lunch. Compatriots of the former variety, yours truly not exempted, must now step forward or forever hold their peace.
It is time for the so-called Office of the Citizen to do its patriotic duty. Apathy will no longer do. To paraphrase the immortal words of Nelson Mandela, the struggle must now become our lives.

A core function of leadership is to motivate, inspire and unify citizens around core values, set goals to be achieved, and point to the future state or condition to which a country aspires.

THE NIGERIAN DIASPORA

I HAVE BEEN ON THE OUTSIDE, LOOKING IN AT MY COUNTRY. I ALSO HAVE BEEN ON THE INSIDE, LOOKING OUT AT THE WORLD. AS A Nigerian who has lived and worked at home and abroad, I know that Nigeria cannot become a great nation unless our Diaspora play their own unique role in nation-building.

We celebrate our high-achieving compatriots in the Diaspora, so much so that it has become something of a national pastime. I suspect that we take such extreme pride in the exploits of our citizens abroad as a psychological shelter for our deep collective despair with the shambolism and poverty that is the lot of most Nigerians at home. And yet, what this phenomenon tells us is simply what is possible if only we can organise our country to take advantage of the talents of many of our 180 million people.

From young Nigerians like Ifeoma White-Thorpe, Harold Ekeh and Augusta Uwamanzu-Nna who achieved university admissions to all of America’s Ivy League universities and faced the dilemma of choosing which of these universities to attend, to the actor David Oyelowo who played the role of Martin Luther King Jr. in the biographical film “Selma” in 2014, we are enthralled by the success of our Diaspora.
The findings and academic journal article by Dr. Bennet Omalu, a Nigerian-American neuropathologist, on chronic traumatic encephalopathy (CTE) with a theory of what causes concussions in American football led to a major movie, “Concussion”, that was based on Omalu’s life. As if having a major movie based on your life made in Hollywood as an immigrant from Nigeria wasn’t enough distinction, the megastar actor Will Smith acted Omalu.

Duro Olowo became former United States First Lady Michelle Obama’s designer of flowery print dresses that became her sartorial signature. The global investment banker and private equity mogul Adebayo Ogunlesi leads Global Infrastructure Partners, the firm that bought London’s Gatwick Airport for 1.5 billion pounds sterling. He served briefly on a business advisory council appointed by US President Donald Trump, before the American leader dissolved the council in a Twitter announcement in response to a political crisis over his response to a march by white supremacist racists at the University of Virginia. Jelani Aliyu of Nigeria designed the Chevy Volt, an award- winning electric car, for General Motors. In an effort to bring home talented Nigerian professionals abroad, the government of President Muhammadu Buhari appointed Aliyu the Director-General of the National Automative Design and Development Council (NADDC) in 2016.

It is estimated that 2,000 Nigerians in Diaspora return home annually to seek opportunities in employment or business. This is an extremely low number.

Nigeria is believed to have as many as 10-15 million of its citizens living and working abroad, although this is likely an exaggerated figure. It is estimated that 2,000 Nigerians in Diaspora return home annually to seek opportunities in employment or business. This is an extremely low number. It should be no surprise, however, for there are many returnees whose experience has discouraged them and others. Many Nigerians in the Diaspora thus do not take up offers to return even when approached by governments at home. Based on anecdotal evidence, they have a right to be cautious. Diaspora engagement is yet to become truly well organised and institutionalised.

When, in 2009 I was headhunted from the Diaspora in Switzerland to serve as a deputy governor of the Central Bank of Nigeria for a five-year term, I did not immediately jump at the offer that was extended by Sanusi Lamido Sanusi, who was the Governor of the CBN at the time, on behalf of then President Umaru Yar’Adua. It took some persuasion from the head of the Bank, and my own assessment and conviction that Sanusi had a truly transformative vision for extensive reform in the financial sector that I was being offered the leadership of its execution, for me to commit and return home.
It wasn’t that I did not wish to serve my country. I had indeed nursed that desire for years earlier. It’s just that, like many Nigerian professionals abroad with a family, I had a responsibility to my family to look before I leapt, to assure myself that the experience would afford me career stability in return for the disruption my family and I were certain to go through, as well as adequate remuneration to discharge my responsibilities to my household. It was, in retrospect, a satisfying time in national service. This was largely because, rare in the Nigerian public sector, the CBN in that era was largely independent of political influence, and so one could remain a true professional in the exercise of one’s duties.
The massive wave of immigration abroad by Nigerians began in the 1980s, and picked up in the 1990s as economic conditions degenerated at home. Concentrated mostly in the United States, Europe, and Africa, these citizens contribute to the advancement of their host countries but only to the “survival” of their kith and kin at home in Nigeria. I have chosen the words “advancement” and “survival” deliberately.
Diaspora Nigerians contribute to the advancement of their host countries because they are usually highly skilled immigrants. They are medical doctors and nurses, engineers, innovators and inventors, professors, lawyers, and much more. They are entrepreneurs, their skills contribute directly to the well-being and economic growth of countries such as the United States, United Kingdom, South Africa, and Ghana.

As Professor of Practice in International Business and Public Policy at Tufts University’s Fletcher School of Law and Diplomacy in Massachusetts, USA, one of the world’s top schools of international affairs, I taught a course on “Emerging Africa in the World Economy” for two academic years to graduate students from countries as diverse as the USA, UK, Canada, France, UAE, Japan, India, Brazil, Ghana, Nigeria, Switzerland, and Zimbabwe. The backgrounds of these students, most of whom were already mid-career professionals, ranged from private equity to development aid to military intelligence. In another decade, they will all have become national or world leaders in their chosen fields.

I was the only black professor on the faculty during the two years I taught there. I was appointed a professor at Tufts University based on my prior leadership track record at the Central Bank of Nigeria and in the international civil service of the United Nations, my experience as an entrepreneur who founded a successful global consulting firm in Geneva, Switzerland, and the books I have written, in particular Emerging Africa: How the Global Economy’s Last Frontier Can Prosper and Matter. In other words, I was appointed to teach my book because Tufts University considered it an important contribution to knowledge.
Nigerians in diaspora are able to contribute to the advancement of the countries they live in because many of these countries operate a “knowledge society”. Knowledge and skills are highly valued and rewarded in these societies because such knowledge directly drives economic growth.
Our Diaspora contributes to the “survival” of our kith and kin at home because bad governance has left our citizens progressively impoverished over the past several decades. Many Nigerian families at home have come to depend on the remittances sent home to them by their family members who live and work abroad because their skills, though needed at home, are not valued, recognised, or rewarded adequately. Nigerians abroad remitted $21bn home in 2015, and topped it with remittances of $34 billion in 2016. We are the country with the highest amount of remittances in Africa and the sixth in the world.

Nigeria is believed to have as many as 10-15 million of its citizens living and working abroad, although this is likely an exaggerated figure.

The Federal Government of Nigeria issued a $300 million Diaspora Bond in 2017. The bond was over subscribed by 130 per cent, indicating the keen desire Nigerians in Diaspora have in participating in our national life. While the initiative was novel, the devil was in the execution. We need more transparency on the bondholder base and the subscription process for the bonds, as there were media reports that the process was done mainly through private banks and the subscribers may not all have been Nigerians in the Diaspora. These bonds nevertheless provide an important window of opportunity for diaspora to engage with economic governance at home by checking to ensure that the bond raised is Utilised for the purpose of capital projects that was held out as the main goal of the issuance. It is not enough simply for investors to get financial returns.
Moreover, as it is typical with governance in Nigeria, the Diaspora bond may be nothing more than an opportunistic transaction to raise money for a government that faced fiscal pressures in a depressed economy. We ought to go beyond this to a strategic engagement with our citizens abroad that could potentially transform our society in a more fundamental manner.

For Nigeria to prosper, we must truly become a knowledge society. This is why the skills and experience of our diaspora are critical to our progress. The necessary incentives, conditions, and structures must be put in place to repatriate our global talent. It is not enough for Nigerian governments to pay lip service to the importance of our diaspora and make surface appeals to the sense of patriotism of foreign-based Nigerians. Nigerian Diaspora themselves have three important incentives to collaborate with a federal or state government in Nigeria that is truly serious about their potential role in national development.

First, most Nigerians in the Diaspora want to return home given the right conditions and incentives. Although globalisation and the global mobility that goes with it has weakened this reality, with many Nigerian immigrants opting to dig in and even seek domestic leadership roles in their host communities as we have seen most remarkably in the Nigerian Diaspora in the United Kingdom, the sentiment of homesickness remains prevalent. This is largely because of the immigrants’ status as racial minorities in their adopted countries, or xenophobic tendencies in their host countries.
Second, even where a Nigerian abroad has no real desire to return to live in Nigeria, he or she wants to be proud of our country. They want the country to have the kind of leadership, governance, and economic growth that will give them reasons to hold up their heads with pride wherever they may be. The situation in an immigrant’s home country affects his or her standing in the society of his or her adopted country. This is why, in early 2018, allegations that US President Donald Trump described Haiti and African countries as “shithole countries” set off a diplomatic incident between African leaders and the Trump administration. However offensive the alleged slur is, incidents like this can only occur because the political leaders of several – but certainly not all – African countries are incompetent and ineffective and so do not command the respect of their citizens and foreign leaders.

Third, Nigerians in diaspora should want to reduce or end the remittances they send home. This can only happen if Nigeria is fundamentally repositioned with the creation of an inclusive and booming economy.
Indian diaspora (famously known as Non-Resident Indians – NRIs) as well as those of China and Israel have played transformational roles in the rise of their respective countries to greatness, mostly through a transfer of skills they acquired in Western countries. Nigerian Diaspora face steep obstacles to replicating such a scenario in our country. The first obstacle is a mental block and disconnect between Nigeria’s political leaders and their compatriots in the diaspora.

Although a few elected Nigerian state governors have had diaspora experiences, no president of Nigeria has lived and worked abroad as an immigrant professional. They have all been predominantly home-grown in their professional and social experiences and so are simply unable to connect with the aspirations and pains of the Nigerian diaspora. Unable to connect emotionally or even rationally with their diaspora compatriots, our political leaders have been unable to prioritise the potential contributions of diaspora Nigerians to national development.

The necessary incentives, conditions, and structures must be put in place to repatriate our global talent.

An important obstacle to our Diaspora returning home, especially to roles in the public sector, is that of low pay relative to the more decent remuneration they often earn abroad. Returning Nigerians in the diaspora also frequently face cultural resentment in public sector workplaces from homegrown compatriots, but have fared better as entrepreneurs. The culture problem is a double-edged sword: there have been returnees who, instead of making a positive impact in their new sphere, “go native”, falling prey to the reigning ethos of corruption and other societal vices.

The most important obstacle to diaspora return and a potentially transformative role, however, is the absence of medium to long-term strategy and institutions to do the sustained, long-term works of diaspora engagement.

My Vision of Diaspora Engagement

• The Federal Government of Nigeria should establish the National Commission on the Diaspora approved recently the National Assembly as a full-time, apolitical institution created by legislation with a mandate to handle all aspects of engagement with the Nigerian diaspora.
• The Diaspora Commission should develop a long-term strategy for Diaspora engagement and return, matching skills and interests of Diaspora Nigerians with appropriate opportunities at home in a systematic manner. To achieve this goal, the Commission should map the skill sets of Nigerians in the Diaspora and match it with the strategic needs of our country in areas such as healthcare, industrialisation, energy infrastructure, science technology and innovation. An arrangement of permanent or temporary diaspora returns should then be established with appropriate logistical support for visiting or resettling returners.
• The Diaspora Commission should serve as real point of contact between Nigerians living abroad who wish to relocate back home, and the Nigerian government for all matters of resettlement, work and reintegration beyond the traditional consular duties of Nigerian embassies and consulates abroad. An official of the Diaspora Commission should be seconded to each Nigerian embassy abroad.
• The Federal Government of Nigeria should establish a Diaspora Trust Fund with an additional tranche of Diaspora bond issues. The purpose of this fund will be to cover additional remuneration to reduce the pay gap between what Nigerians abroad earn and the comparatively low wages for similar work in Nigeria. This arrangement, however, which will operate only in the context of the public sector, and should be limited to a transitional period of five years. After this period, a returnee may opt to remain permanently at home or return abroad, but his or her skills would have been transferred, as well as the required equipment where applicable.
• All eligible Nigerians in the diaspora should be able to vote in Nigeria elections from overseas by casting their ballots at Nigerian embassies and consulates. This reform must be in place before the 2023 elections at the latest. There can be no excuse for disenfranchising Nigerians of their ability to vote simply because they live abroad. This reform will go a long way to wean off the alienation frequently felt by Nigerians in the Diaspora.

For Nigeria to prosper, we must truly become a knowledge society. This is why the skills and experience of our diaspora are critical to our progress.

RESTRUCTURING NIGERIA

Inconvenient Truths

NATION-BUILDING IS HARD, BUT IT NEED NOT BE AS DIFFICULT AS WE MAKE IT IN NIGERIA. NATION-BUILDING IS ALSO INTENTIONAL. It doesn’t happen by accident. The real test is in the leadership and the actions that create a real spirit of nationhood, and the willingness of every stakeholder to build a united, stable and cohesive nation. Fifty years after the Nigeria- Biafra civil war, we were confronted in 2017 with the imperative of defining a future for Nigeria that escapes our country’s past.

The problem in our country is that we avoid honest dialogue, which sometimes involves telling ourselves uncomfortable truths. And there, at least, two of such truths. One is that Biafra or any other secessionist breakaway from Nigeria is not the solution to Nigeria’s problems of nation-building. Nnamdi Kanu and his supporters should have argued their case through a political process by becoming a political party if they so wished. When he mounted a fundamental challenge to the sovereignty of Nigeria by asserting that there would be “no elections in Biafraland”, his goose was cooked. The rest, as the saying goes, is history. This truth is highly inconvenient to the supporters of Kanu’s Biafra movement.
But there is another inconvenient truth: The cries of marginalisation, restructuring and illegal secessionist tendencies are, at their core, a cry for justice in our country.

Some compatriots hurry to gloss over this underlying truth or, even worse, pretend that it’s just not so. Just as the horrendous massacres in communities across the country by armed herdsmen, with the killings in Benue at the end of 2017 as just one example, is inconvenient for them to confront or call it by its name. Global security experts have named the herdsmen one of the world’s worst terrorist threats. But to those our fellow Nigerians who dare not speak the truth, the herdsmen are “criminals”, but Mr. Kanu’s “Indigenous People of Biafra” (IPOB) are officially labeled terrorists.

All of this is about leadership that is based on a worldview of “us versus them”. It is therefore guaranteed to fail, and worse, deliver nothing other than conflicts across the land. No one will win. We all will be losers.

In other words, 57 years after independence, we remain stuck at the level of fundamentals. We can’t take off unless we sort them out.

Our country is currently anchored on injustice in many ways, and that arrangement simply can’t last forever. We can take that to the bank, for as Martin Luther King so elegantly put it, “the moral arm of the universe bends towards justice”. The Federal Government of Nigeria and all our countrymen and women should therefore take the increasingly potent agitations by various groups in Nigeria with the seriousness the matter deserves.

The Nigerian state must engage the agitations and address, and redress, their root causes that lie in decades of self-evident marginalisation that several groups have experienced in post-civil war Nigeria. These hurt feelings and the suspicions they breed have not just hampered the progress of nation-building in Nigeria. They are creating the foundations of certain state failure if further mishandled, as the bonds that hold our country together in an imperfect union continue to fray.
Which brings us to the question: where do we go from here? There really is no alternative to the constitutional rearrangement of the Nigerian federation. Call it “restructuring”, “reconfiguration”, “redesign” or what you will. And I mean a structure that is based on regions and not primarily on states.

Several rational arguments make a strong case for taking the bull by the horns and re-engineering Nigeria. All Nigerians should reflect and act on these arguments in our collective self-interest. Our country is not working. Many groups feel marginalised today or have felt marginalised at different stages of our national history. We can’t achieve greatness as a country without national unity, stability and cohesion. Many nations have achieved nationhood and prosperity in diversity, which is the default composition of most nations on earth. Only a few nations, like Japan and Korea, are truly homogeneous.

All that is required is that we bury the winner-take-all mentality driven by ethnic and religious irredentism and design a structure that works for us all. This is doable with real leadership, political will and commitment. Restructuring, if well done, will have a proactive effect of positioning Nigeria for real development. That’s a far better scenario than the episodic, reactive fire-brigade responses to the Yorubas after the June 12, 1993 presidential election won by M.K.O. Abiola was canceled, the Niger Delta militancy over crude oil “resource control”, the Boko Haram rebellion, and the recent neo-Biafra uprising. In other words, 57 years after independence, we remain stuck at the level of fundamentals. We can’t take off unless we sort them out.

Why Restructure?

The case for restructuring, then, is clearly four-fold. The first is the case for justice and equity. Anyone can make disingenuous arguments, but the current constitutional structure of Nigeria and concentration of power at the center in Abuja favors some parts of the country and disenfranchises others, in particular those parts of the country from which the natural resources rents support on the current structure. It disenfranchises them because they have no control over these resources (which should not be the case in a truly federal state), and also because the arrangement places excessive political power in the hands of whichever group controls power at the center.

The essence of a federation such as we had under the 1960 and 1963 constitutions, is an agreement to form it by its constituent units and an appropriate balance of powers between the constituent units and the center. A perversion of this cardinal principle has created injustice, which has created disunity. It has led to a retreat from the Nigerian- ness that I echoed in Vision 2, egged on by these valid resentments at inequity and injustice, back to primordial identities that make a mockery of our nationhood. You really do want a nation in which everyone is essentially a happy camper on the basis of collective interest, not one in which some groups feel they are held “captive”.

The problem in our country is that we avoid honest dialogue, which sometimes involves telling ourselves uncomfortable truths.

Second, restructuring is necessary because of the destabilisation that the current conditions have bred. We can either stabilise Nigeria by restructuring it, or continue to play the ostrich by insisting that our “processes”, not the structure, are the problem. Low intensity conflicts will continue in various parts of the country, with the theatres of conflict shifting to different regions at different times (South-South, Southeast, Middle Belt in the North-Central, Northeast, and so on).

This would be a dereliction of the federal government’s responsibility to protect the lives and property of the citizens of Nigeria). A derelict, vastly overstretched and over-centralised police force will not accomplish this task, nor will siege-style security governance in which our armed forces are constantly deployed to check-mate internal dissenters.

Third, restructuring is imperative in order to take care of what I call the “fundamentals”. We need a peoples’ Constitution. A constitution that was made by military dictators should not guide a democracy, if such a democracy truly is a government of the people, for the people, and by the people. We need to address the National Question, that of what makes Nigeria’s nationhood and the relationship between the nearly 400 ethnic nationalities and the Nigerian state, Here, I would recommend that, if we are to achieve real progress, we should resolve this conundrum decisively in favor of Nigerian statehood rather than ethnic nationality, but at least it must be agreed by the Nigerian people.
Fourth, restructuring also is the best path to economic transformation. A six-zone federal structure will offer economies of scale in terms of the ability of a regional government to mobilise adequate tax revenues and Utilise these resources for development. It will do the same in the areas of manufacturing as well as intra-regional, inter- regional and international trade. A restructuring based on the current 36-state structure will not work. Thirty out of 36 states in Nigeria today are fiscally unviable. Only six states outpace with internally generated revenue of what they get in handouts (Federal Allocation Account Committee allocations) from Abuja derived from oil rents. Paying salaries to state civil servants as at when due, or in arrears, has become a governance “achievement” in our country! With the reign of crude oil regressing into historical memory, the future is bleak and unsustainable, under our current fiscal structure, without a fat federal government oil purse to be distributed to dependent states.

Restructuring also is essential because it will help our democracy achieve better governance. The periodic rituals of elections have not necessarily improved governance. There are two ways this will happen. One, restructuring will bring greater accountability and transparency to governance because power and responsibility will devolve closer to the people. This will help evolve a better culture and quality of leadership, and will also foster competitive development between the regions. Nigeria today is far more integrated than it was in the 1960s, and the six-zone structure will prevent the extreme ethnic chauvinism that afflicted the First Republic. Restructuring ought as well to accomplish a reduction in the costs of governance at both the center and the regions.

The Shape of Things to Come

To work well, a restructuring exercise must make informed choices. We must choose between maintaining a unitary state (which is Nigeria today despite officially being a federation) in which the central government is very powerful, with devolution of powers as is increasingly the case in the UK, a true federation in which regions could be the federating units with the central government and the federating units being roughly equal in status as in the United States, Canada, Germany, India, Australia and Brazil, or a confederation in which the federating units are superior to the central government, with Switzerland as a prime example.

The best arrangement for Nigeria is neither the “unitary federalism” the military leaders imposed on us, nor a confederation, but a real federation with a finely calibrated balance of powers and responsibilities between the central and federating units. In this scenario, the federating units can look after themselves more effectively without the “feeding bottle” of the central government. The center becomes less powerful, but not weak, because it will retain core sovereign responsibilities such as the armed forces and security services, citizenship and immigration, foreign affairs, and the central bank. The federating units in Nigeria should be the six geopolitical zones and not the present structure of states. In my vision of a restructured Nigeria, each region will control natural resources found therein, but pay 40% of the income from those resources to the central government for the functioning of the federation. This will spur development because the regions will now take on responsibility for how they use their natural resource income, and indeed whether they choose to depend mainly on such income or build a more complex and productive economy.

The Nigerian state must engage the agitations and address, and redress, their root causes that lie in decades of self-evident marginalisation that several groups have experienced in post-civil war Nigeria.

With the importance of hydrocarbons in global strategic decline in the face of renewable energy and electric cars, the solid minerals prevalent in the northern states of Nigeria will give that region some advantages in a restructured Nigeria. But that is only if the mistakes of raw natural resource dependency are avoided from the beginning. There is no better way to assure that outcome than an insistence, as a core condition for any foreign investment, that value- addition industries are cited near the source of these natural resources, and that only value-added products will be permitted for export. Regions like the Southeast that are not rich in natural resources, will develop industrial and innovation economies in a restructured Nigeria.

There will be regional or state police, but with a constitutional provision for overriding security powers for the center, through the armed forces (on a national sovereignty basis) should there be conflict between regional and federal forces of law and order. The balance of powers between the regions and the center will be deliberately designed to give component regions developmental and policy space, but not to create an overly weak center. The central government must nevertheless be lean in personnel and not bloated.
Restructuring is opposed by two main kinds of people: those who are ignorant of what it really means, and therefore are susceptible to arguments that cast the idea falsely as a “breakup” of the country, and those who know the truth but are wedded to vested interests and self-serving agendas that have nothing to do with Nigeria’s real progress.

I believe that restructuring is necessary and inevitable. Some stakeholders may dismiss the prospect because of a fear of the loss of perceived political advantage. But no one has anything to fear in an intelligently restructured Nigeria. There can be no peace without justice. The question is not whether Nigeria will be redesigned but when, and who will lead the process of achieving that outcome in which every Nigerian, regardless of tribe, tongue and creed, could be a winner.

All that is required is that we bury the winner-take-all mentality driven by ethnic and religious irredentism and design a structure that works for us all.

INTERNAL SECURITY, LAW AND ORDER

THE POLICING OF NIGERIA’S SECURITY ENVIRONMENT PRESENTLY FALLS FAR SHORT OF WHAT IT SHOULD BE IN THE 21ST CENTURY. Law enforcement generally, and the police in particular, need reformative attention.
Nigeria has developed a National Security Strategy, derived from the National Security Policy, which was presented by the federal government in February 2015. In addition to providing direction and levels of coordination to stakeholders, it seeks to identify Nigeria’s national interests, prioritise each interest, evaluate issues, trends and challenges with respect to the interests and determine objectives. The strategy remains as yet unexecuted.

The challenges that act as destabilising forces include corruption, weak administration of justice, eroding ethical standards, inadequate infrastructural and social services delivery, and declining educational standards. This has resulted in terrorism, transnational organised crime, crude oil theft, poor border controls, communal and religious conflicts. Other consequences of the lack of operationalisation of the national security strategy include pastoral- farmer conflicts, kidnapping, illegal migration, proliferation of small arms, cyber-crimes, economic and financial crimes amongst others. This is the environment in which law enforcement is expected to operate and excel.
An Internal Security Strategy exists to allow for a safe and secure environment to enable the pursuit of peace, wellbeing, prosperity and development. How does the Nigerian Police Force fit into this strategy, and is the Force positioned to complement it?
Despite several attempts at reform, the Nigerian Police Force remains weak and simply incapable of assuring internal security, the very first function of any government.

The Nigeria Police is a federal agency, and should thus reflect its federal nature in the deployment of its staff.

Understaffed, under-trained and underfunded as it has been, we cannot build our country unless we can secure it internally by a fundamental reform of the Nigerian Police Force. Our inability to do so has led to Nigeria approaching the description of a failed state in which several non-state marauding forces bear arms and wreak havoc. Our police force is incapable of enforcing law and order.
The World Internal Security and Police Index 2016 released by the International Political Science Association ranked Nigeria’s police force the worst in the world in a survey of 127 countries. The report assessed four key areas: capacity, process, legitimacy, and outcomes. Botswana was the highest ranking African country, raking 47 overall, while Rwanda was the second highest ranked country on the continent with an overall rank of 50.

Recruitment

The Nigeria Police has three tiers of recruitment – the officer cadre, the inspectorate cadre and the rank and file. Aside from physical and academic criteria, the force must also ensure federal character. Experience suggests that, with the exception of Federal Character, the police does not adhere to these criteria. This has resulted in sub-optimal recruits that for the most part are at best suited to private security establishments from the perspective of their physical and academic qualities.

The political influence of traditional and religious leaders, political bigwigs, money bags and senior officers in the recruitment process worsens the problem, another example of how institutions in Nigeria have been corrosively weakened by partisan politics and societal indiscipline. The lower the hierarchical chain you go, the greater the potential for disaster. Most of the junior recruits in the Nigerian Police Force can barely read or write. This should be no surprise, as, with few exceptions, the pool from which the police work force is recruited generally lacks education, poise, character and pedigree. Government must find a means of attracting better persons to the force.

Training

Training of police officers at all levels is still mired as in the colonial era. The training manuals have not been revisited since the 1960s and the training methods are still crude and mostly theoretical rather than practical.
To further compound the situation, the police force personnel are trained as General Duty Personnel (conventional policemen engaged in everyday police duties). They are expected to perform all police duties irrespective of specialty.
A single police officer is expected to perform in the operations department and master skills from traffic control to crowd control, through to combating armed robbers, kidnappers and militants. The same officer is expected to investigate complaints of simple assault to theft through to major financial crimes and homicides and any and everything in between. The same officer must have administrative, research, speech writing skills; all embodied in one person.

To further complicate the training of officers, those posted to training institutions are considered to be there on ‘punishment’, and rarely, if ever, give their best. These factors neuter the ability of police officers to perform optimally. The world of modern policing has since moved on.
The police training curriculum needs a complete overhaul to be brought into the 21st century. After a probation period during which officers are assessed, recommendations should be made as to which specialty for which the officer is best suited. Only the best brains with experience should be allowed in training institutions while their remuneration and career progress should receive special and separate consideration to encourage trainers.

Deployment

The deployment of officers needs serious review. Too many personnel are deployed on the basis of favours rather than on suitability or on merit. Experience, competence, capability are rarely the criteria and as a consequence, the administration and operations of the force suffers.
The force needs to specialise. Those who show an inclination and preference for a particular specialty – investigations, operations, administration – or even an interest in a sub category of any of these should be encouraged and trained to the level of expertise in that category. Finally, the number of police officers performing non-police duties needs serious review and attention.

Database

The force does not have – till date – a database worthy of the name. Basic investigative actions – photographing, fingerprinting and the obtaining and retention of suspect’s vital information – in a manner it can be easily reproduced – simply doesn’t exist. Vehicle registration suffers the same fate.
Without a reliable data base, the force cannot hope to resolve crimes expeditiously, or to provide information, for instance on individuals seeking employment or political office.
Remuneration and Welfare
Remuneration in the Nigerian Police Force is still exceedingly poor. This is compounded by the failure to pay allowances, lack of provision of official quarters or barracks, uniforms and accoutrements, official transportation particularly for the junior ranks, and extremely long and hazardous working hours. Very few policemen enjoy their full annual leave, if at all.

Funding

Government funding is made directly to the office of the Inspector-General of Police (IGP) who dispenses it, basically, as he wishes. This is not to suggest that the accounts are not regulated and auditable, but that it is open to abuse as there is no real ‘supervision’.
Considering the command structure of the force – Divisional Police, State Command and Zonal Command – there is an argument for funding to be made direct to offices at these levels, with the offices of the IGP and his departmental heads (DIGs) in supervision and oversight. This should increase accountability, efficiency and effectiveness of the Force.

General Administration

At present, practically all decisions on any issue in the Police Force are made by the IGP. The posting and to an extent, the promotion of police officers, reside with the IGP. Investigative and operational decisions are at his behest if he wishes to be directly involved. This does not augur well for the smooth and efficient administration of the force, as officers are often second guessing themselves against the backdrop of what they perceive would be the IGP’s decision or mindset, rather than that of the law.

A lot more authority needs to be delegated in the police force, particularly to the Zonal AIGs and Command Commissioners. This should be in areas of discipline and promotions (up to a specified rank), finances and logistics. And, they should be held accountable. This should improve the response time of personnel to any complaint and generally improve on the efficacy of the service. The police force also seriously lacks a maintenance culture. The cost in waste is prohibitive.

Strength

The strength of the Nigerian Police Force is about 350,000. The force is therefore grossly undermanned, which goes to its fundamentally weak capacity to execute its mandate. The United Nations ratio of police personnel to population is given as 400:1. With the current police strength, and given that the Nigerian population is put at 180 million, this would average out at about 450,000:1.
But this does not tell the whole story. At least 10% of this strength is support staff – medical, drivers, mechanics, cobblers, tailors and others. Add to this administrative staff and police personnel on ad hoc responsibilities (government houses, agency protections, dignitary protection), and there are few precious personnel to pound the beat. This can only be resolved through increased recruitment or significantly reduced ad hoc responsibilities.

Stakeholders

There is a painful lack of cohesion and coordination between stakeholders in the law enforcement sphere. The only point and time at which some of these agencies meet is at the NSA’s office for their weekly Intelligence Community Committee (ICC) or Joint Intelligence Board (JIB) meetings. And this only exists at management level. These meetings are often characterised by directives being handed down and respective participant agencies trying to outdo one another for greater relevance. Rarely thereafter is there any forum or occasion that prompts exchange of intelligence or information, or any form of formalised joint operations. There is thus a need for greater cohesion and intelligence sharing between stakeholders.

State Police

There are two main arguments in favour of State Police. The first is that indigenes (assuming officers would revert to their states of origin) would have better knowledge of the people, locales, the respective cultures and practices and would be much less likely to engage in corrupt practices with their ‘own’ people. Policing would ultimately be more efficient, effective and community friendly.
The second is funding. At the moment, almost all state governments – to some degree – fund the Police Commands in their states. This mostly goes towards the provision of vehicles, fuel, allowances and refurbishing of quarters. In some instances, and with the permission of the federal government, it has been extended to the purchase of arms and ammunition. The argument, therefore, is if the state governments are already funding the police, the state government should have control over the police.
There are also two main arguments against state police. The first is that it could be ethnically and religiously divisive to the nation. The Nigerian Police Force is a federal agency and should, thus, reflect its federal nature in the deployment of its staff. Certain incidents – herdsmen and farmers disputes or religious crisis – could see law enforcement officers in any one state polarised to the disadvantage of fair and just law enforcement.
The second is that incumbent government would have complete control over the police to the disadvantage of the political opposition. This could lead to a particular person or political party perpetuating themselves in power and willfully ignoring the tenets of democracy.

A Vision of Internal Security

The failure of the Nigerian Police Force to maintain basic internal security in our country should worry us all because it raises the fundamental question of whether we are losing one of the most important characteristics of statehood. This challenge should be a priority issue for the federal government which, for now, is in charge of policing in Nigeria.

While the federal civil service is clearly bloated, the NPF needs at least staff strength of 1.5 million men and women. The federal government needs to make a major investment in strengthening and modernising all aspects of the police force – recruitment, training, standards, and administration. The whole concept of policing in Nigeria needs to be brought into the 21st century. With the necessary political will, this can be achieved. It will be one of the most important achievements that any government can attain.
The question of restructuring and state police, which remains essential, should not delay massive reforms of the NPF as it is currently constituted, as the reformed cadre will still be deployed to states in such a scenario.

The challenges that act as destabilizing forces include corruption, weak administration of justice, eroding ethical standards, inadequate infrastructural and social services delivery, and declining educational standards.

BEYOND THE GDP

The State of the Nigerian Economy

IN THE LAST TWO QUARTERS OF 2017, NIGERIA’S ECONOMY TECHNICALLY EXITED A MAJOR RECESSION – THE WORST IN 25 YEARS – on the back of weak growth. Economic growth of 0.55% was achieved in Q2, and the International Monetary Fund predicted that the Nigerian economy will grow by 0.8% in 2017, and 1.9% in 2018. While growth in 2017 was driven by recovering oil prices and agriculture, it was projected as likely to be supported by formal activity in both oil and non-oil sectors in 2018 and 2019. Inflation was down to 16% and forecast as likely to continue to drop in 2018.

While we keep our eyes on the GDP growth numbers, let us also consider another set of statistics. I believe that our challenge of economic growth is located far more in this second set of facts.
Nigeria’s GDP per capita, i.e. the average income per person in 2016 was $2,177 according to IMF. The GDP per capita for South Africa in 2016 was $5,273, $3,570 for Indonesia, $9,502 for Malaysia, and $8,649 for Brazil. The average GDP per capita in Nigeria over our 57years of independence is $1646. These statistics matter for two main reasons.

They matter because they situate our economic growth challenge in the context of our journey as a nation over the past 57 years. Second, they also indicate our growth challenge as a developing country relative to other developing countries that have formally become emerging markets. That challenge must also be viewed relatively to our endowments as a country and the promise that has for decades been attached to those endowments such as population, land, human capital and/or natural resources.

Other statistics that matter for how we meet the challenge of economic growth include our weak generation of 4,000 megawatts of electricity with a population of 180million people versus South Africa’s 40,000 megawatts with a population of 50million and Brazil’s 120,000 megawatts with a population of 210 million. Nigeria’s unemployment rate as of the beginning of 2018 was 19%, which means more unemployed people than the 29 million Nigerians without jobs as of Q4 2016 at 14% unemployment. If we disaggregate the job situation down to youth unemployment, we find from the statistics of the National Bureau of Statistics that the unemployment rate for youth aged 15-24 as of late 2017 was 25.2% and 15.4% for the 25-34year old age group.

Economic growth is essential for economic development, but economic growth does not necessarily result in development.

Nigeria’s poverty rate is 62%. Our national debt is increasing and we now spend more than 60% of government revenues serving the national debt. Nearly 15 million children of school age are out of school in Nigeria, the highest of such population in the world. Nigeria ranked 152nd out of 188 countries in the Human Development Index of the United Nations Development Program, and 187 out of 189 countries in the World Health Organisation rankings of national health care system. Our population growth rate of 2.7% is outstripping economic growth and 70%-90% of our budget is on recurrent expenditure.

To top it all, the future of oil, on which Nigeria depends for 80% of its total revenue and 90% of its foreign exchange earnings, is bleak. According to David Yager, a noted analyst of the global oil and gas industry, “The current discussion about the future oil is how soon will it be before petroleum becomes a sunset industry. If it isn’t already. Flat or falling demand. Carbon taxes electric cars. Renewable energy. Oil has no future ....” This sobering and imminent reality has important implications for Nigeria’s political economy.
Five countries already have served notice of target dates regarding their intention to end the sale of gasoline and diesel cars: Norway (2025), Germany and India (2030), France and the UK (2040), and the costs of renewable energy sources such as wind and solar are increasingly lower than oil, gas and coal1.

The point of all these statistics and other information is to situate clearly, based on contemporary trends over time
rather than snapshots of current or rosy projections, short-term projections of GDP growth and the real economic growth challenges that confront Nigeria.

...stay tune!

Economic Growth, Development and Transformation

To address and overcome these challenges and create a radically different economic future from our past and present, we must understand and apply this understanding to leadership, governance and public policy. The shades of meaning, differences and relationships between economic growth, economic development and economic transformation matter. These are three distinct but related concepts.
Economic growth means a rise in the quantum of goods and services produced in a country (Gross Domestic Product) and a rise in per capita income (GDP per capita). It doesn’t matter why or how the national or average individual income rises. Once it does in a given period, the country has achieved economic growth. GDP per capita is calculated from dividing a country’s GDP figure by its population, which produces the average income per head. Because the world’s economies are broadly classified according to the GDP per capita and because a great majority of countries recorded increased economic growth in the 20th century, the percentage of the world’s population living
in low-income countries has fallen quickly and markedly over the past three decades.

According to the World Bank’s classification of World Economies in 2010, low-income countries are those with
a Gross National Income (GNI) of $1,005. The GNI is basically the GDP per capita but including the goods and services and income produced by nationals both inside and outside the country, while GDP and GDP per capita measure goods, services and average incomes of nationals inside a country of $1,005. There are 35 countries in this category and they include Ethiopia, Bangladesh, Cambodia, Haiti and Tajikistan.
Lower middle-income countries are those with a GNI per capita of $1,006-3,975. There are 57 countries in this group, which include Nigeria, Senegal, Sri Lanka and Philippines. Upper middle-income countries are those with GNI per capita of $3,976-12,275. There are 54 countries in this category, including Gabon, Malaysia, Brazil, Iran and Romania. High-income countries are those with a GNI per capita of $12,275 and above. There are 70 such countries and they include Australia, France, Japan, Norway, Saudi Arabia, Singapore, Taiwan and the United States.
Economic development, on the other hand, is a much broader concept that focuses on human welfare indices such as life expectancy, access to and quality of healthcare and education and so on. The point for us in Nigeria, as in most countries in sub-Saharan Africa, is that this is where our greatest challenge lies. This reality is also quite apparent from the statistics I cited earlier.

Nigeria has witnessed periods of relatively high GDP growth, as in the period between 2006 and 2014, when GDP ranged from 4 per cent to a high 11 per cent in 2010. But the average GDP growth rate between 2010 and 2017 has been a low 1.7 per cent.
Economic growth is essential for economic development, but economic growth does not necessarily result in development. Often, as in Nigeria, this will be the case where the gains of economic growth are in the hands of a small and wealthy elite, and growth is therefore not inclusive. The economic growth and development link may also be broken or not exist where, as in Nigeria and several oil-rich countries in Africa, growth occurs from extractive industries that are not value-added, the prices of which are subject to wild fluctuations from external factors and the economy is not structurally on a sound foundation of endogenous productivity. This is the fundamental problem with the ‘Africa Rising’ narrative. The Africa Rising fad was based on a rapid rise in GDP growth rates in commodity-rich African countries during the 2000s, but this so-called rise was based on a false foundation because it was not
anchored on any structural shift or transformation3. Today, with the end of the commodity super-cycle, we know better. Countries like ours are lying prostrate.

To illustrate, during the 2000s Equatorial Guinea became famous among conventional economists as the fastest growing economy in the world with economic growth rates of up to 25%. Owing to the country’s small population, its GDP per capita rose rapidly in tandem with its crude oil fortunes. But Equatorial Guinea has not achieved any economic development, let alone economic transformation. Life expectancy in that country still stands at 50 years and less than half of its primary school-aged children are enrolled in school. In Hungary, 90 per cent of school aged children are enrolled in schools.

We now come to the matter of economic transformation. Economic transformation occurs when the economic structure of a country shifts from rural subsistence agriculture or exports of raw commodities that may provide easy income to the government, when the global market is favourable, to broad-based manufacturing or services that provides more and higher-paying jobs. This should be the ambition of Nigeria’s economic policy. This is not necessarily the same thing as the much-touted ‘diversification’ of the economy that we have heard succeeding governments and speak of for over 40 years. Diversification could also mean ‘diversifying’ away from crude oil to a new reliance on any other of the many raw solid minerals that also abound in Nigeria, or to ‘diversify’ the country’s fiscal revenue base by exporting raw cashew nuts.

Nigeria’s poverty rate is 62%. Our national debt is increasing, and we now spend more than 60% of government revenues serving the national debt.

Economic transformation is a different order of things. It is a process that is built on the back of strategic thinking and disciplined execution such as has been achieved by China and several East Asian economics whose experiences we will review shortly. It is purposed; it is not an accident or a state of achievement that can be stumbled upon. Economic transformation seeks to transfer millions of citizens from poverty into the middle-class. It is often achieved by altering the availability and deployment of factors of production such as land, capital and labour, and through the application of productive knowledge in innovation and the competitive manufacture and export of complex, value-added products. Ethiopia is one of the very few African countries that is consciously pursuing a policy of achieving economic transformation beyond GDP growth rates.

The Vision

My vision for our country is one in which its economic management comes to terms with this conceptual understanding of the difference between economic growth, development and transformation. It is only on the basis of such conceptual clarity that we can manage our economy for real progress.
What is required now is to decide the economic growth paths that will lead to development and structural transformation. These paths include job creation, innovation, industrialisation, the development of vocational and technological skills through education reform and entrepreneurship.
But first, a national philosophy and a vision based on it must be developed.

The point of all these statistics and other information is to situate clearly, based on contemporary trends over time rather than snapshots of current or rosy projections short- term projections of GDP growth, the real economic growth challenges that confront Nigeria.

A PHILOSOPHICAL FOUNDATION OF ECONOMIC GROWTH

NIGERIA HAS FAILED TO ACHIEVE HIGH-QUALITY ECONOMIC GROWTH BECAUSE THE COUNTRY’S ECONOMY IS MANAGED MOSTLY ON an ad-hoc, reactive basis. It is a ‘survival’ economy in which most governments that held political power have had no real economic vision or a strategy to execute such a vision successfully. Most damaging there is little interrogation of either received wisdom based on global economic policy ‘fashions’ or of the country’s own policy assumptions that have been long on populism and short on substance.

A National Vision of the Economy

To build a sustainable economic future, Nigeria must now address the aching need for a clear economic vision situated in a philosophical framework from which economic policies should be derived. Nigeria’s economic policy has not undertaken this kind of self-examination since General Ibrahim Babangida’s military government introduced the International Monetary Fund and World Bank – inspired Structural Adjustment Program (SAP) in 1986.

The wealth of nations always has philosophical foundations. It is these fundamental understandings and how we understand and apply them, rather managing our economy with no particular lodestar or compass, that makes the difference between growth and stagnation.
The vision thing matters because it sets out a national ambition to transform the economic structure and the lives of citizens against the canvass of both the medium and long term and a clear destination.

It matters because, if communicated effectively, a national economic vision can galvanize citizens to work towards a shared goal, which builds national cohesion and wealth. A national economic vision anchored in a discernible economic philosophy makes policies derived from it more robust by imbuing such policies with internal consistency. And clarity of vision also matters because different and competing economic visions exist and have delivered prosperity to different parts of the world.

Economic planning was a feature of economic management in pre- and post-independent Nigeria, and even in the military regime of Gen. Yakubu Gowon. This approach of development plans contributed positively to the march towards economic development. They were based on a ‘mixed economy’ vision with a strong role for the states-a developmental state of sorts. But it was subsequently abandoned after Gowon was overthrown.

The military dictator, Sani Abacha, commissioned the development of a “Vision 2010”. Democratically elected President Yar’Adua had his Vision 2020 while President Goodluck Jonathan came up with a Transformation Agenda. But these documents, while worthy efforts, lacked a foundational worldview and any grand, unifying vision. Moreover, the ‘visions’ were not embedded in the structures of governance and were not executed with consistency and discipline, with targets and milestones measured constantly against implementation.

The fundamental conundrum is that of getting right the balance between the role of the state and the market in the quest for sustainable economic growth and development. As the French poet Paul Valery once wrote, “If the state is too strong, it will crush us, if it is too weak, we shall perish”. Resolving this tension isn’t easy. Nigeria has not yet got it right. We once had an economy in which the state stood at the commanding heights. In later years, however, the economy was increasingly liberalised.

The problem we have today is not that the economy was liberalised. The problem that continues to challenge our economic development path is that, first, liberalisation happened without the necessary foundations for prosperity in a liberal capitalist economy because we moved into financial liberalisation without achieving the required minimum threshold of industrialisation – which is what drives economic transformation. As a result, finance does not play the optimal role it should in economic development in Nigeria and the three factors of production – land, capital, and labor are out of synchronisation in our economy.

The second dimension of this problem is that the state is confused about its role in the economy. In various epochs we have observed the Federal Government of Nigeria as both “business and private enterprise friendly”. The result, however, was cronyism and a ‘subordinate state’ in which economic policy was effectively controlled by private sector oligarchs in the service of vested interests.
In another scenario we have seen the federal government perceived as statist in ‘body language’, and orientation, but nevertheless corruption and cronyism have similarly thrived, but perhaps only in a smaller circle. Moreover, there exists little capacity and the knowledge base to run a capable state-driven economy.

There is no question that the state has a key role to play, but the extent to which this role is played is what differentiates several economies even in the mature industrialised countries. In the concept of the ‘night-watchman state’ governments are to allow the private sector to allocate resources and simply play a ‘watchful’ regulatory role. In the ‘developmental state’ model, government policy drives the direction in which the market allocates resources.

I believe that Nigeria should return to the model of a market-driven developmental state, not as statist as its economy was in the 1960s and 70s, but certainly not a laisser-faire extreme capitalist economy. The latter is an intellectual fallacy because even the countries that preach it have never practiced it in its pure form. The state still plays a significant role in several western economies.
The challenge Nigeria faces is that, a developmental state requires very strong leadership vision, political will, and a deep bench of intellectual and technocratic competence in economic management. This is lacking in the governance of Nigeria today.

I believe that Nigeria should return to the model of a market-driven developmental state, not as statist as its economy was in the 1960s and 70s, but certainly not a laisser-faire extreme capitalist economy.

Capitalism, Which Capitalism?

We also do not have sufficient intellectual understanding and interrogation of capitalist economics. We are attempting to achieve development with a market based-economy but have paid insufficient attention to understanding how to unleash the three requirements for successful capitalism – property rights, innovation and, of course, capital. The result, as we see in the Nigerian economy today, is a high degree of poverty for a majority and the concentration of a capitalist wealth in the hands of very few.
Nigerian economic policy also has not interrogated the different shades of capitalism – entrepreneurial capitalism, welfare capitalism, state capitalism, and crony capitalism – and made any conscious policy decisions on which one/s to adopt or adapt. In order for a country as big and populated as Nigeria to grow, this level of engagement must take place.

Capitalism is not just an economic system, in the sense that investment in, and ownership of how we produce, distribute and exchange wealth is vested in the hands of private individuals and companies, and that prices are determined in the marketplace. Capitalism is also an economic philosophy because it is based, at least in its purest form, on individual rights. This economic system and its markets have faced many criticisms, several of them valid. But it is beyond dispute, and is supported by empirical evidence, that capitalism remains the greatest creator of wealth and progress the world has seen. It has lifted billions out of poverty around the world, including some 600 million people in China, as well in India, Brazil and South Korea.

This is possible only because capitalism is an economic system that largely appeals to basic human instincts such as competitiveness, and thus to the differences in the abilities of individuals. This is why it has been so enduring, roundly defeating communism which collapsed in the Soviet Union and Eastern Europe under the weight of its own contradictions. Yes, capitalism is imperfect, and we will discuss its imperfections shortly. But it remains, to paraphrase Winston Churchill’s famous quote about democracy as a political system, the worst economic system except for all the others!

The question for Nigeria is whether capitalism can achieve for its 180 million people what it has done in the western world, Asia and parts of Latin America? As we have seen, given that trickle-down, neo-liberal market policies in Nigeria have yet to make any real dent on poverty. We cannot blithely assume that capitalism will create national wealth for Nigeria except our leaders approach it not with hostility, but from a worldview standpoint that interrogates the concept and bends it to our unique national objectives.

State Capitalism

Nigeria needs to make a clear, conscious choice between four types of capitalism or combinations from among them. These are state capitalism, welfare capitalism, crony capitalism, and entrepreneurial capitalism. State capitalism, with China as its leading light, is a variant of capitalism in which state spending heavily drives growth, and the private sector creates wealth but is not just regulated by the state, but rather is strategically directed by the government as agents of overarching state strategy. State capitalism presumes a state with high level of bureaucratic and high-level decision making and execution capacity.

Can Nigeria adopt this system of capitalism? It would not work here, certainly not in the pure Chinese form. Nigeria lacks the internal cohesion, discipline and organisational and technological skills of the Chinese society. However, despite what looks like a level of uniqueness that makes it hard to replicate in Africa, we cannot dismiss the hardiness of state capitalism, elements of which are practiced in softer forms in several countries including some that we would find surprising. It therefore remains a strategic threat, in the countries that have the state capacity to adopt and adapt it, to the liberal capitalism whose legitimacy was dealt a heavy blow by the global financial crisis of 2008.
State owned companies continue to play a surprisingly dominant role in industrialised western countries, despite the philosophical penchant for privatisation and deregulation that began in the 1980s. The French government has an 85 per cent stake in Electricite de France, the country’s main power company, Japan’s owns 50 per cent of Japan Tobacco, and the German government owns 32 per cent of Deutsche Telekom. According to the news magazine The Economist, state owned companies in the Organisation for Economic Cooperation and Development (OECD) countries had a combined value of $2 trillion and employed 6 million people as of 2012.

Some emerging markets have developed sophisticated forms of state capitalism, using the corporate form of organisation in modern corporations to drive their phenomenal growth. They have selectively reduced the direct role of the state in unproductive enterprises while retaining it in businesses with strategic significance. Having learnt lessons from the failures of communism and socialism, state capitalism in some countries takes the form Nigeria would hardly recognise when compared with the direct, heavy (and virtually always unprofitable!) hand of the state in our ‘Government parastatals’. In China, Russia, Malaysia, Thailand, Saudi Arabia and in the Arab Gulf countries, many state-owned enterprises no longer report to government ministries. The government controls them only through significant shareholdings while allowing these firms to be run on a competitive basis as ‘national champions’ that must nevertheless meet merciless efficiency and profit targets.

This is the only manner in which state capitalism could conceivably work in Nigeria. But that is only if a culture of mediocrity, ethnic irredentism, corruption and political patronage reward systems that progressively killed Nigeria’s public enterprises can possibly be overcome. This analysis is relevant most explicitly to the policy options facing the Nigerian government in the reform of the Nigerian National Petroleum Corporation (NNPC) through the commercialisation or privatisation of its refineries and other operations, as well as the removal of fuel subsidy.
State capitalism certainly brings up the need for a more original approach to economic philosophy and economic reform in Nigeria, utilising our traditional value systems and perspectives on which business and the economy can be run. And, it has implications for the commercial competitiveness of Nigerian companies because the state-owned enterprises of the Asian economies enjoy the full advantages of that strategic support while running as commercial enterprises in the core sense of the term. Nigerian companies, on the other hand, make their way in the world without similar strategic state backing, making their road rougher.

Welfare Capitalism

Welfare capitalism is an effort to balance the worst tendencies of the free market, which often create monopolies, oligopolies and exclusion as large parts of society fail to benefit from wealth creation. In welfare capitalism, businesses and the state seek to smoothen out the free market’s rough edges by creating minimum entitlements for workers in a capitalist economy. These entitlements may also be negotiated with labour unions. They may include social housing, healthcare or free education at various levels as was the case in several African countries in the 1950s and the 1960s. In European countries such as Finland and Switzerland, this has meant social security to meet the needs of workers in their retirement years as in the United States, or unemployment benefits – “welfare’ in the US, or ‘the dole’ in Britain.

The two main forms of welfare capitalism – social incentives provided by companies for their workers, which is in decline today, and those provided by governments for a wider range of citizens, which gained ascendance in the years after World War II – aim to provide social safety nets that are seen as necessary for social, economic and political stability in capitalist societies. But welfare capitalism is expensive, and therefore controversial. There are questions about how effectively it benefits the really poor. It is a huge liability on government resources, and in the Nordic countries of Europe, welfare capitalism is funded in part – and sustained – by very high levels of income taxation. It can be constrained by factors such as uncontrolled population growth and inefficient management of public finances, including the inability to effectively generate public revenue and economic growth because these are what economists call ‘exhaustive transfers’ rather than investment and corruption.

Welfare capitalism has faced difficulties even in Europe and the United States. These difficulties stem from a wide perception that welfare capitalism reduces competitiveness in today’s world economy by focusing on basic entitlements while the skills and productivity of welfare-state workers decline in the face of competitive innovation that is the real source of wealth in all industrial societies. In the United States, elements of the welfare state such as healthcare reform and social security have also become a lightning rod for bitter political divisions over the size and role of government versus free enterprise in a capitalist economy. When Americans woke up some years ago to discover that 31 per cent of government revenues was being spent on social security and only 2 per cent on education, it was clear that reform had become necessary.

Whatever form of capitalism Nigeria might choose to follow in the years ahead, a restricted element of welfare capitalism is necessary. The real question is the scope, which should be narrow, and the timing, which should be realistic. Any interpretation of capitalism that expunges an appropriate role for the government and relies solely on market forces is doomed to fail as a path to development, for development must be measured in terms of living standards and not just consumerism or economic growth statistics. Besides, the absence of a social safety net in Nigeria is part of a corresponding absence of a social contract between the state and its citizens, and is a contributing factor to the reluctance to pay taxes as well as to corruption.

Oligarchic Capitalism

Oligarchic or crony capitalism has been dominant in Nigeria since the return of democratic rule in 1999. It is the Russian model, in which a few men called oligarchs control most of the country’s economy because they obtained ownership of large portions of the wealth of the industries of the former Soviet Union by questionable means as communism went into its death throes. The economic power of the oligarchs is sustained by their connections with governments. Crony capitalism took root in Nigeria not just because of the wave of privatisations that took place in the country over the past three decades, which were broadly necessary because of the failure of state enterprises, but especially because of how several of the privatisations were undertaken.

While crony capitalist could conceivably be utilised by a very strategic government in Nigeria to create huge conglomerates that are national champions in interlocking areas of manufacturing and the real economy, it has in fact encouraged political corruption and rent-seeking behaviour by the private sector.

Entrepreneurial Capitalism

A final model of capitalism is what has been described as entrepreneurial or small-firm capitalism. Here, many small firms founded by individuals dominate the economic landscape. This is the secret behind the economic success of the United States. But entrepreneurial capitalism on its own cannot realise an economy’s full potential. As in the US, it must form part of a larger business landscape with numerous large firms. What’s more? To take an economy to its full potential, this model must be predicated on innovation.

This would be a viable model of capitalism for Nigeria’s s current stage of development, largely because it is the modern version of what could be termed the subsistence capitalism that was prevalent in pre-colonial Nigerian society, but commercialised innovation is still lacking in the continent. It would be viable because it would build on what we have on the ground at present. Approximately 90% of businesses in Nigeria are small and medium enterprises which, as a result of the weakness of essential economic structures such as taxation and inclusive financial systems and low literacy levels, mainly remain outside the formal economy and dominate a thriving informal economy. Entrepreneurial capitalism also keys into something that is unique to our society: the historical role of women in our marketplace.

The Limits of Capitalism

Inequality is inherent in free market societies and is a core aspect of capitalism. It is also the greatest threat to the legitimacy of market-based economies. While the very nature of free markets means that not everyone will, or can, be equally prosperous, a system that spawns a plutocracy of islands of wealth amidst seas of poverty may be unsustainable because it can lead to a breakdown of social order. This is where the role of public policy and regulations comes in, and is why inclusive economic growth matters.

This is why the periodic redistribution of wealth has also become a part of the fabric of capitalism, and indeed is necessary if free markets are to be saved and maintained. The Great Depression and the New Deal that followed that period in the US; the recent global financial crisis and the bailouts that sought to prevent social upheaval by saving major global corporations such as General Motors; and the bail out of banking systems in much of the Western world (and in Nigeria!) after extreme greed led many banks to ruin (a classic privatisation of profit and a socialisation of losses) are all pointers to why Nigeria should give deeper thought to the rise of the free market even as it remains the path to wealth creation in our country. Understanding and determining the limits of markets is important for Nigeria, and this is a worldview and public policy question that we must confront. As former US President Bill Clinton once asked, “How do we change course, to merge social and economic progress?” Then there is the major matter of a supposed ‘invisible hand’ that, according to the capitalist economic philosopher Adam Smith, regulates markets and imbues them with efficiency. This is a central tenet of laissez-faire capitalism and has been used to demonstrate the appeal and superiority of free markets and to resist regulation. If this were true, periodic cycles of boom and bust, which has been a major feature of capitalism, would not exist. The great Austrian-American economist Joseph Schumpeter called this process ‘creative destruction’, and predicted that it would lead to capitalism’s demise.

The problem with the invisible hand is that there is, in fact, nothing of the sort. This does not detract from the position that, despite its imperfections, capitalism remains a superior form of economic organisation. As the economist Jagdish Baghwati and other scholars have been quick to observe, all economic systems known to man rely on morally questionable foundations. Capitalism relies on the instincts of selfishness, greed and vanity, and communism on coercion. The absence of the presumed invisible hand is a problem that is in fact part of the very fabric of free markets and has been demonstrated by various studies and scholars. A study by the US academics Hendrik Van den Berg and Mathew Van den Berg found that the percentage of human economic interactions that take place in truly competitive markets is less than 20 per cent. “The invisible hand”, the study concluded, “is a myth; there are not enough markets”.

Our worldview task as the Nigerian nation is to create the fundamentals that comprise these three elements before we can reap the real benefits of a market economy.

All of this is a pointer to the centrality of regulation and the role of the government in managing the free market, determining what type of markets should exist within the domain of its political authority, the purpose for which those markets exist, and setting the limits of acceptable behaviour. This approach is what makes capitalism worthwhile. In other words, markets, whatever the type, must serve societal priorities and not the reverse. In order to do so, a capitalist system should be able to evolve and adapt to changing conditions.

How Capitalism Creates Wealth

Although we have embraced free markets since the SAP, this embrace is unlikely to lead to transformative growth if the fundamentals of how capitalism creates wealth are not addressed as a matter of public policy. As the Peruvian scholar Hernando de Soto has noted, these first principles, without which no nation can truly prosper, are innovation, which we have discussed earlier, property rights, and finance and financial markets. None of these fundamental factors is present to any significant extent in Nigeria. Innovation is neither systematised nor commercialised. Property rights are weak, with land ultimately belonging to the state and trapping a key resource that needs to be put to work to create wealth. And capital is still not present in the quantity, and more importantly, forms and cost at which it can foster a truly productive economy. Our worldview task as the Nigerian nation is to create the fundamentals that comprise these three elements before we can reap the real benefits of a market economy.

Other fundamental obstacles to the success of Nigeria’s capitalist economy include deficits of infrastructure, a difficult environment for doing business in terms of cumbersome processes and formalities, as well as governance and regulatory reforms. Nigeria has made real progress in regulatory reform since 1999. Effective regulation is vital for a truly functioning free market because, as Raghuram Rajan and Luigi Zingales have argued in their book Saving Capitalism from the Capitalists, ‘incumbent industrialists’ have historically sought to protect their wealth, power and other advantages by rigging the supposedly ‘free market’. This challenge remains with us.

Raging corruption is another aspect of weak governance of business environments. Whether a businessman or woman must pay a bribe to obtain a permit or secure a government contract, corruption distorts the business environment by creating unfair advantage and making the business space truly uncompetitive. This is a global phenomenon and so is by no means limited to Nigeria. But it poses a fundamental problem for our country because corruption has prevented the real take-off, let alone development of free markets. A major part of the problem is the role of the government as the main source of business. Government in Nigeria must combine building strong regulatory capacity with supervising their own exit from several areas of the economy, while creating a level-playing field for private sector players and maximising the State’s revenue generation from private sector-led economic activity.

The Strategic Bottom Line

Nigeria needs to undertake careful study and introspection backed by effective public policy, in order to arrive at models of capitalism that will work for it. Such models must encompass an appropriate role for the State in terms of enabling policy environments, regulation, and a balance between free enterprise and wider societal objectives.

Most importantly, it must ask what the ultimate objectivesoutpace our demographics. In that case, it seems logical that of all the variants of capitalism discussed above, entrepreneurial capitalism would be best for Nigeria. This appears to fit most into the prevailing historical and cultural mode of production and commerce in our country. Since that model will give more people direct opportunity for expansion and inclusion, the logic points in its direction as the one that will create the most jobs and spread the wealth around, assuring longer-term societal stability.

The Nigerian government’s role in what should be a modified developmental state is to create appropriate incentives for transformational economic activities in areas such as manufacturing and entrepreneurship through venture capital, direct engagement of labour for public infrastructure for works and sanitation, all of which create jobs. But the government cannot, and should not, replace the role of the marketplace.

The Vision

My vision for Nigeria’s economy is one in which the government creates the right conditions for economic development, but does not attempt to perform the function of markets in a market economy. For this to happen, economic philosophy and its application to Nigeria’s political economy must be the foundational basis of economic policy. This means electing leaders with the right skill sets in these areas, which when combined with the authority of political leadership, can guide the management of Nigeria’s economy in a more strategic fashion. Beyond this, certain specific actions must be taken to set Nigeria’s economy free from the vice-grip of the incompetent and meddlesome state:
The Land Use Act should be abolished. Doing so will help improve access to capital in the economic system because freehold land ownership will provide additional levels of collateral for bank or other forms of borrowing to start businesses. The law has outlived its usefulness and creates bureaucratic bottlenecks in the economy, especially in the area of investment.

From 2019, the Federal Government of Nigeria should establish a concrete economic diversification plan with a concrete path to a post-oil future for Nigeria, based on emerging global trends. This plan, akin to the Saudi Arabian government’s economic diversification plan, should include a clear strategy with interlinked policies – trade, industrial, fiscal – and include partial privatisation of the Nigerian National Petroleum Corporation (with share listed on the Nigerian stock exchange for purchase by ordinary Nigerians and not by government-related cronies). In doing so, the interests of local communities in oil-producing regions must be protected – for example, by ensuring a set- aside in private ownership of the NNPC by members of the communities in the oil-producing regions.

of economic policy are. Is it double-digit growth, which by far has not tackled widespread poverty? Or is to ensure that growth is not pursued merely for its own sake, but rather ought to be based on stronger fundamentals such as job creation? If that is the case, the strategy to be adopted in developing Nigeria’s private sector is the one (or the ones) that ultimately creates jobs and growth that outpace our demographics. In that case, it seems logical that of all the variants of capitalism discussed above, entrepreneurial capitalism would be best for Nigeria. This appears to fit most into the prevailing historical and cultural mode of production and commerce in our country. Since that model will give more people direct opportunity for expansion and inclusion, the logic points in its direction as the one that will create the most jobs and spread the wealth around, assuring longer-term societal stability.

The Nigerian government’s role in what should be a modified developmental state is to create appropriate incentives for transformational economic activities in areas such as manufacturing and entrepreneurship through venture capital, direct engagement of labour for public infrastructure for works and sanitation, all of which create jobs. But the government cannot, and should not, replace the role of the marketplace.

The Vision

My vision for Nigeria’s economy is one in which the government creates the right conditions for economic development, but does not attempt to perform the function of markets in a market economy. For this to happen, economic philosophy and its application to Nigeria’s political economy must be the foundational basis of economic policy. This means electing leaders with the right skill sets in these areas, which when combined with the authority of political leadership, can guide the management of Nigeria’s economy in a more strategic fashion. Beyond this, certain specific actions must be taken to set Nigeria’s economy free from the vice-grip of the incompetent and meddlesome state:
The Land Use Act should be abolished. Doing so will help improve access to capital in the economic system because freehold land ownership will provide additional levels of collateral for bank or other forms of borrowing to start businesses. The law has outlived its usefulness and creates bureaucratic bottlenecks in the economy, especially in the area of investment
From 2019, the Federal Government of Nigeria should establish a concrete economic diversification plan with a concrete path to a post-oil future for Nigeria, based on emerging global trends. This plan, akin to the Saudi Arabian government’s economic diversification plan, should include a clear strategy with interlinked policies – trade, industrial, fiscal – and include partial privatisation of the Nigerian National Petroleum Corporation (with share listed on the Nigerian stock exchange for purchase by ordinary Nigerians and not by government-related cronies). In doing so, the interests of local communities in oil-producing regions must be protected – for example, by ensuring a set- aside in private ownership of the NNPC by members of the communities in the oil-producing regions.

The question for Nigeria is whether capitalism can achieve for its 180 million people what it has done in the Western world, Asia and parts of Latin America.

Not done reading, but I am not surprised there are no comments. This is not a political message to support any agenda, but we should try and read more so we understand and can better articulate Nigeria's problems.

novakk:
Not done reading, but I am not surprised there are no comments. This is not a political message to support any agenda, but we should try and read more so we understand and can better articulate Nigeria's problems.

thx bros!

ASIAN LESSONS

MUCH HAS BEEN WRITTEN AND SAID OF THE ‘EAST ASIAN ECONOMIC MIRACLE’. WHILE NO TWO SITUATIONS ARE EVER IDENTICAL, the ability of several Asian countries to achieve economic development and transformation in a relatively short span of three to four decades holds important lessons for Nigeria. These lessons reinforce the point made earlier about the importance of a conceptually clear and rigorous approach to economic growth and development.

The role of the state and public policy and its interaction with the private sector in these countries was remarkable. Here it is important to identify two sets of East Asian countries based on their respective approaches to economic growth and the outcomes in terms of performance. The first set of countries, which generally performed better, were Japan, Korea, Taiwan, and China. The second set is the Southeast countries of Indonesia, Thailand, and Malaysia. Of the latter three countries, Malaysia is furthest ahead in terms of development, but all three are nevertheless well ahead of Nigeria in their economic performance.

In the countries of Northeast Asia, the state correctly played the necessary policy roles that provided the foundation for their eventual economic growth, transformation, and global economic dominance. This happened through three critical interventions. The first intervention was in agriculture, the second was in manufacturing, and the third was in the area of finance.

In Japan, Korea, Taiwan, and China after World War II, agriculture was restructured as highly intensive household farming, accompanied by a radical redistribution of agricultural land. As Joe Studwell explains1, this made use of all the available labour in the economy and pushed up yields and output to a very high level. The second intervention was to direct investment and entrepreneurs to manufacturing. This was effectively the second stage of the East Asian transformation because manufacturing best absorbs the skills of any developing country when workers begin to move away from agriculture as the latter becomes more industrialised, as opposed to mere farming or “gardening”.
In particular, the Northeast Asian governments promoted the improvement of manufacturing technology by providing subsidies to manufacturers. But these subsidies could only be obtained by manufacturers that met specific export targets! This ‘export discipline’ was the key to the East Asian miracle because, 1) it prevented an abuse of subsidies, and 2) it drove East Asian firms to global competitiveness and even dominance.

In Nigeria, in comparison, governments subsidise consumption (fuel subsidies, fixed exchange rates) instead of production. Moreover, companies that enjoy any form of state support (even tax holidays) are not held to standards of performance and accountability.
The third intervention was in the area of finance, which was directed to support small-scale agriculture and manufacturing. In order to achieve high yields from small-scale farming and promote the acquisition of manufacturing technology skills. In Japan, Korea, Taiwan, and China, financial systems were kept under close supervision and international capital flows were controlled until these economies reached an appropriate level of advancement. The lesson here, then, is not that liberalisation is necessarily bad. It is the timing of its policy execution and the prior foundations that were laid that is the point.

In the countries under review here, only manufacturing companies that could prove they had secured export orders were able to obtain credit from the banking system, and the lending banks viewed export performance as an indication of the creditworthiness of borrowing firms. In order to cover the subsidies to agriculture and manufacturing, banks paid interest on bank deposits that were below market rates. This was possible partly because East Asian people tend to have high savings rates.

In contrast, the countries of Southeast Asia made some policy errors in the role of the state in their process of development. Thus, while they are today well ahead of Nigeria in their development trajectory, they nevertheless lagged behind the ‘first wave’ of the East Asian miracle symbolised by Northeast Asian countries of Japan, Korea, Taiwan, and China. This is one of the reasons why the Asian financial crisis in the late 1990s hit Thailand, Indonesia, and Malaysia particularly hard, with massive currency depreciation, inflation, and slowed growth.

While the Northeast Asian countries essentially bulletproofed their economies with the reforms and strategies in agriculture, manufacturing and finance indicated above, thus permanently transitioning out of poverty, Southeast Asia did not fundamentally reform agricultural and land policy, failed to create globally competitive manufacturing firms, and liberalised their financial systems prematurely.

As Studwell states in his book:

Southeast Asia states then made their developmental prospects even worse by following rich-country advice to deregulate banking, to open up financial markets, and to lift capital controls. The same advice had been proffered to Japan, Korea, Taiwan, and China in the early stages of their development but they sensibly resisted for as long as possible. Premature financial deregulation in South-east Asia led to a proliferation of family-controlled banks which did nothing to support export-oriented manufacturing and which indulged in vast amounts of illegal related-party lending. It was a story of banks being captured by narrow, private sector interest whose aims were completely unaligned with those of national economic development...This analysis can be transposed 100% to Nigeria’s banking sector, at least at a certain stage in its development.

We should be careful not to draw the wrong lessons from the East Asian experience I recounted above. That experience occurred at a point in the evolution of the global economic environment that is very different from today. I do not suggest that having perhaps liberalised our financial and economic systems prematurely under the policy influence of the Washington Consensus, Nigeria should therefore return to state control of banking. In any case, the Structural Adjustment Program became inevitable because we relied heavily on one commodity, crude oil, and had not attained a sufficient stage in industrialisation before the collapse in the oil price in the early 1980s made the system of a mixed economy unsustainable. It also is open to debate whether the problems associated with the SAP, such as its impact of deindustrialisation in favor of financialisation, arose from its internal conceptual weaknesses in assuming that the laissez-faire theories favoured by the Bretton Woods institutions were applicable in every situation, or because we did not have the political will and discipline to go far enough in the reforms and thus ultimately succumbed to economic populism.

We should be careful not to draw the wrong lessons from the East Asian experience I recounted above. That experience occurred at a point in the evolution of the global economic environment that is very different from today.

The whole point of the Asian development experience is to understand that even in a capitalist context, the state has a very important role to play in economic growth, development, and transformation in terms of its directional strategy and policy. What the specifics of those strategies and policies are will depend on the national context. Whatever the case may be, the guiding hand of the state must be at the wheel.

This means that political leaders and the governments they lead must have the vision, combined with intellectual and public policy, and the political will to drive economic growth. Although Malaysia was initially a laggard in East Asia, between the 1908s and the first decade of this millennium, the country nevertheless made remarkable progress under the vision and leadership of Dr. Mahathir Mohammed, its Prime Minister from 1981 to 2003. His eclectic engagement with globalisation, not rejecting the phenomenon outright but pushing ahead with a nationalistic vision of development enabled his country to recover faster from the Asian financial crisis of 1997 than other Southeast Asian countries.

Indonesia and Thailand have made significant strides. Indonesia has the largest economy in Southeast Asia with a nominal GDP of $932, 448 billion in 2016. But, just like Nigeria, it has a relatively low nominal GDP per capita with average income per person of $3,604 in 2016. This is below the global average. Unlike Nigeria, however, Indonesia has achieved a relatively more consistent economic growth over the past three decades, with reduced output volatility and relatively stable inflation.

The Southeast Asian giant’s progress has been due mainly to competent government policy, a young and growing labor force, and a sustained effective process of diversification away from natural resources (chiefly crude oil)2. The country has followed a consistent path to industrialisation over the past 50 years unlike Nigeria, following oil price shocks of the 1970s and the 1980s. Agriculture’s shares of exports declined steadily between 1971 and the 1990s, and manufacturing exports increased from a low share of 2% of total exports in 1980 to 46% in 1993.
Unlike most of its comparative nations in Southeast Asia, however, the growth of manufacturing in Indonesia has been based mainly on agriculture – food, tobacco, and textiles – rather than on more complex products. In this there is a parallel of a similar, equally less ambitious opportunity for Nigeria to transition from subsistence agriculture into agriculture-based industrialisation, given the attributes of Nigeria’s economy in which agriculture accounts for 33% of its GDP. Indonesia and Nigeria also have large population sizes, with 261 million people in Indonesia and 181 million people in Nigeria.

Overall, Indonesia’s economic growth outlook remains positive. With GDP growth of 5% in 2016, it was the highest growing large emerging market according to the IMF. The country has continued with important economic reforms, most important of which are reducing the layers of government regulation, opening new areas of the economy to private investment, expanding investment in public infrastructure and expanding tax collection and broadening the tax base3.
Like Nigeria, Indonesia’s youthful workforce can be one of the country’s most powerful drivers of economic growth if productivity can be strengthened through the creation of a more skilled workforce.

An interesting lesson from Indonesia is the role of an influential group of economic technocrats nicknamed the ‘Berkeley Mafia’. These Indonesian economists were trained at the Faculty of Economics of the University of Indonesia and earned graduate degrees at the University of California at Berkeley. Under the reign of General Suharto as military President of Indonesia from 1968, Suharto gave prominent economic cabinet posts, in the late 1960s and 1980s, to these economists, who pursued liberal economic reforms that successfully stabilised the Indonesian economy. The country’s inflation rate, for example, fell from 650% in 1966 to 13% in 1969. Despite their success, the Berkley Mafia encountered fierce political opposition from economic nationalists in the 1970s in the wake of the oil boom, and again in the 1980s after their reforms revived Indonesia’s economy after the oil prices dropped. President Suharto’s decision on both occasions to side with the economic nationalists after seeking out and bringing in the Berkley Mafia led to the decline of the group’s influence and to their removal from the Indonesian government during Indonesia’s economic collapse induced by the Southeast Asian financial crisis in 1997.

The Southeast Asian giant’s progress has been due mainly to competent government policy, a young and growing labor force, and a sustained effective process of diversification away from natural resources (chiefly crude oil)

INCLUSIVE GROWTH (W1TH JOBS)

THE GREATEST POLICY CHALLENGE TO QUALITATIVE ECONOMIC GROWTH IN NIGERIA IS HOW TO ENSURE INCLUSIVE GROWTH, WHICH includes creating jobs for the 30 million unemployed Nigerians and the estimated 3 million people who enter the Nigerian job market every year. We will first discuss how to achieve inclusive growth more broadly, then how to create jobs, followed by a discussion of innovation and human capital as a path to economic growth.

Inclusive Growth

The term ‘inclusive growth’ has become a buzz word of development economics and political economy. As the UNDP so pithily puts it, “when you ask five economists to define the subject, you will likely end up with six answers”. But it is clear that inclusive growth is growth that is broad-based across different segments of the society and sectors of the economy. It will include a large part of the country’s labour force and create productive employment. Inclusive economic growth emphasises equality of opportunity in terms of access to markets, employment, resources, and a regulatory environment that provides a level playing field. While it is one in which the poor are not left out or left behind, it seeks that outcome by creating productive employment and a steady increase in the productivity of labour, which is what creates wealth, in raising the income levels of excluded groups. This is different from direct income redistribution.

Inclusive growth is Nigeria’s central economic challenge. Market-led economic growth is the dominant paradigm of economies in the world today, and rightly so because it has been the most effective path to reducing poverty, creating wealth, and achieving transformation. But its Achilles heel is always this nagging question of growth that excludes large numbers who do not have access to the opportunity for productive employment and entrepreneurship.

This matters for two reasons. First, non-inclusive growth, especially in countries such as ours that have not even taken off on a trajectory of production-driven growth, cannot achieve real development and transformation. Western countries can grapple with the 1 per cent problem, but their economies have long been structurally sound. These economies are based on innovation, industrial production, and the exports of competitive goods; and thus create jobs. Second, non-inclusive growth builds up a bottleneck of exclusion that, long term, destabilises the security and sustainability of the social order. Again, this is why, despite the importance of social safety nets in every society, exhaustive transfers to the unemployed, and rather than creating jobs for them, cannot solve the problem. Without creating a broad-based pattern of growth based on productive employment that grows both the GDP and the GDP per capita, exhaustive transfers may have populist appeal but will not be sustainable.

How can we create inclusive growth in Nigeria? The answer lies in a combination of approaches that includes (a) conceptual clarity as a point of departure, (b) rural-based economic growth, (c) infrastructure provision, (d) creating a social contract, (e) the role of business, (f) human capital development, (g) economic diversification, (h) financial inclusion, and (i) effective political leadership. We have already dealt with conceptual clarity. Orthodox definitions of economic transformation emphasize urban-based economic production, creating an “urban bias” in classical economic thinking. But, especially in a populous country such as ours, we need to begin to develop rural based economies. Cities such as Lagos, Kano, Aba and Onitsha are choked. Economic activity is trapped in these cities, but 53 per cent of our population live in rural areas. Decentralized economic growth, especially based on value-added agriculture and industrial manufacturing, will create more jobs and boost inclusion.

Inclusive growth is Nigeria’s central economic challenge. Market-led economic growth is the dominant paradigm of economies in the world today, and rightly so because it has been the most effective path to reducing poverty, creating wealth, and achieving transformation.

The role of infrastructure in creating inclusive growth is obvious. This is what creates equality of access to markets and productive opportunities, and it will also create a ‘pull’ factor for decentralized economic activity. Developing human capital through educational policy that is geared to innovation and technical skills is necessary to increase the productivity of labor, which is the critical component of inclusive growth.

Inclusive growth will not be achieved by merely diversifying into low-productivity agriculture in the 21st century or mining and exporting raw solid minerals. The latter will simply create another channel of commodity dependency, and is not the model on which the true wealth of nations is based. Real diversification means a value chain of industrialisation and value addition in a number of industries, whether based initially on agricultural or mineral resources, or, additionally, beyond natural resources to create other competitive goods for export. This means, in the area of solid minerals, that we need to be far-sighted and require value-addition (beneficiation) to any solid mineral mined in Nigeria before its export prior to granting mining licenses to investors. That is what creates jobs. True diversification of economies across sectors requires a strategy to achieve economic complexity. Achieving inclusive growth in this manner also requires political will to overcome the corruption and patronage systems that are frequently linked to natural resources.

Nigeria needs to create a social contract between the state and its citizens. This involves, primarily, the obligations of citizens (such as paying taxes) in exchange for the protection of life and limb, civil liberties and its limits, as well as the sustainable provision of basic infrastructure and social safety nets by the state. This gives citizens a sense of belonging, with mutual accountabilities between the government and the governed. One way to achieve this is to bring the millions in Nigeria’s informal economy into the formal sector, including making innovative use of the ubiquitous mobile telephones that are owned by 140 million Nigerians.

This is linked to financial inclusion. Inadequate access to finance plagues Nigeria’s small and medium enterprises, resulting in the oxymoron of capitalism without capital. It is not enough to strengthen the role of development banks, though that is essential. Beyond this, more private sector regional banks in geopolitical zones should be encouraged as a matter of policy, so that finance is located closer to rural and semi-rural populations as well as the urban small businesses. It is shocking that, as a recent report of the Nigerian Bureau of Statistics revealed, 77% of bank credit in Nigeria in 2015 went to Lagos alone. That’s just one of the 36 states, and only 10% of Nigeria’s population. This is extreme financial exclusion, a model that cannot build or sustain an inclusive growth economy. The role of the private sector more broadly is similarly critical. Business will play a driving role in inclusive growth if the power of competition, privatisation and deregulation is unleashed in a manner that avoids abusive crony capitalism.

Finally, Nigeria will not achieve real inclusive growth without inclusive governance. We will continue to suffer instability and be distracted from strategic economic transformation if the foundational elements of political inclusion for Nigeria’s diverse citizenry are not addressed sincerely and effectively. The federal government today came to office in an election in which the opposition defeated an incumbent president. It had a unique opportunity to begin to truly heal Nigeria’s wounds. Clearly, that opportunity was frittered away. A political re-engineering of our nationhood and our economy by revisiting a constitutional structure that traps us in a vicious circle of underdevelopment will provide the foundation for real economic transformation.

Nice one YPP

Jobs! Jobs! Jobs!

Roughly 200 million persons in the world are jobless and most of them are young men and women in developing countries such as Nigeria. That 30 million out of these 200 million people are in Nigeria – roughly 15% of the world’s jobless population – is a staggering fact with important consequences for Nigeria’s future. When we consider that Nigeria’s population is projected to double by 2050, the implications of millions of young people entering the job market without a radical success in job creation in Nigeria becomes clearer.
The first insight is to understand that government by themselves do not create jobs in today’s world dominated by private sector-led economic activities. The private sector does. Government creates the conditions for job growth through sound economic policy.

The second insight is that, for a country like Nigeria, job-creation cannot be addressed in isolation of the wider macroeconomic environment which is a product of economic policy. The key to creating jobs is to ensure the constant increase in productivity across broad areas of the economy. Some aspects of the economy, such as manufacturing and agriculture, as well as entrepreneurship, and the IT industry, can by their nature create more jobs than others such as the petroleum exploration industry, for example. Other important constraints to job growth are limited access to finance, especially among small and medium enterprises, inadequate farming and skills among
workers and entrepreneurs, and weak infrastructure – especially power and transport infrastructure1.

The critical path to job-creation in Nigeria must run through self-employment and entrepreneurship, with an emphasis on agriculture, agro-industry and small firms in the informal sector, and in the IT and services industry. The Federal Government of Nigeria and state government must utilise policy to stimulate the growth of these industries.

The number one policy response must be access to capital, in particular private equity and venture capital.
Evidence across economic jurisdictions in Africa, the United States, and Europe makes clear that private equity and venture capital investments in small firms create more jobs than the formal corporate sector. What this means is that Nigerian economic policy should encourage far more investments, local and foreign, in private equity and venture capital. The market for such investments is obvious when we consider that access to finance has been identified as the biggest obstacle to the business – and therefore job creation – growth of SMEs and microenterprises in Nigeria.

Nigeria will not achieve real inclusive growth without inclusive governance. We will continue to suffer instability and be distracted from strategic economic transformation

Economic policy in Nigeria must also encourage the growth of businesses and job creation in rural areas in order to reduce the urban migration pressures that contribute to the high unemployment in Nigeria. This has been the case in Asia. Japan’s economic growth was driven by expansion of rural enterprises with 74 of the Japanese workforce employed by SMEs. Regrettably, Nigerian economic policy is focused far more on the formal corporate firms that have access to political leaders rather than to SMEs that make up 90% of businesses in Nigeria or the informal sector that produces 65% of the country’s GDP. China created 101 million jobs between 1985 and 1991, with 70% of these
jobs in ‘townships and village enterprises’ and nearly half of them privately owned.

It is important for the government in Nigeria to focus on a holistic strategy to expand small business and employment opportunities in Nigeria’s rural areas, especially in the IT sector where opportunities exist with rural dwellers increasingly seeking connectivity with the world through internet or other IT services and where mobile telephone penetration is already high. Specific tax incentives could be created for the establishment of businesses in rural communities.

Nigeria’s Informal Economy

Nigeria’s informal economy, which is 65% of its GDP according to the IMF, needs to be brought in from the sun. This reason is of fundamental importance to our economic growth: informal economies are a strong characteristic of low-income economies and the prevalence of the informal economy is one reason why Nigeria’s GDP per capita has remained at a low average $1,646 since 1960. Second, and related to this, countries characterised by an abundance of informal businesses experience low aggregate productivity.

When people switch from informal sector to the formal sector jobs they increase employment in skilled occupations that pay higher even when those jobs are down the ladder of the hierarchies of jobs in formal sector enterprises, e.g. masons, carpenters, welders and so on. The consequence of such switches is upward job mobility3. The problem with formalising the informal sector is that it is difficult to achieve when the larger macroeconomic environment is out of kilter as it is in Nigeria, and the formal industrial sector is relatively weak. Moreover, this specific challenge of economic growth does not appear to be a preoccupation of Nigerian economic policymakers. If we are to achieve economic development and transformation, it needs to become an important focus of economic policy.

Nigeria needs to create a social contract between the state and its citizens. This involves, primarily, the obligations of citizens (such as paying taxes) in exchange for the protection of life and limb, civil liberties and its limits, as well as the sustainable provision of basic infrastructure and social safety nets by the state.