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Monday, October 15, 2018 06:15AM / OpEd By Feyi
Fawehinmi / @DoubleEph
Elections 2019 should, in the main, present an opportunity to
glean how Nigeria wants to resolve the dilemma of corruption & poverty and
productivity & growth. For a country not able to present an unambiguous
definition of its core governance ideology and institutional focus; the upcoming
elections offers an opportunity to delineate the direction, policy anchors and
philosophy of governance (or at least shape it).
Feyi Fawehinmi, a financial analyst, kick started the
conversation yesterday via a short thread on the subject. See below.
Below
is a short extract from a random obituary. But if you engage your inner eye and
read it deeply, you will understand what the 2019 elections is *really*
about...
Not
long ago, this was totally normal in Nigeria - Government involved in any and
every type of business including a catering company providing food for
airlines. But in 1999, something started to change - Obasanjo, who started
Government expansion in 1970s had changed his mind.
The
process of removing Government from vast areas of the economy began here.
Think
of the GSM revolution that has touched the lives of practically every Nigerian.
How much did it cost the Government? Zero. Effectively, the govt collected ~
$1bn in licence fees to *stand aside* from telecoms.
How
much did pension reforms cost govt? Again, zero. The Government simply provided
regulation and stood aside. Result – a move from zero to N8trn+ in assets in 14
years, not including all the money that has been paid out already.
The
Indian Parallel
Nigeria’s story is quite similar to India’s. In 1991, Manmohan
Singh, as finance minister, delivered a transformational budget that ended the
Licence Raj (short vid (link:
https://www.youtube.com/watch?v=cbg96_K2rwY) youtube.com/watch?v=cbg96_…) and article ((link: https://www.quora.com/What-was-in-the-1991-budget-by-Dr-Manmohan-Singh)
quora.com/What-was-in-th…)
Dr. Singh’s budget cut tariffs and opened up various sectors that had been held in the grip of government. It worked. But just like Nigeria, something happened next - massive corruption.
Dr.
Singh became prime minister in 2004 and lasted till 2014 when his Congress
party lost to BJP. Again, just like Nigeria, the election that brought Modi
into power in 2014 was dominated by the theme of corruption.
The
same Congress party that launched reforms to liberalise the economy had lost
its mojo - crony capitalism, telecoms licences handed out on a dodgy
basis and so on
Source:
Before
the liberalisation, people in India used to leave their landlines in their will
for their children because they were so valuable. The same party that
transformed and freed India from that had now been enmeshed in corruption. But
that’s where the similarity with India ends.
Difference
In Outcomes
When
Indians voted for BJP, they voted against corruption because Modi was perceived
to be a clean guy. But they also voted for his economic record in Gujarat -
real or imagined, he had a record of liberalising and attracting investing when
he led that state
In
2015 Nigerians also voted against the corruption and venality of PDP and GEJ. But
did people *really* vote for a transformation of the economy to REVERSE the
ideas of the last 20yrs? With Buhari (and Abba Kyari), that’s what you’re
getting.
When
I say this Government hates the private sector, it is exactly that. They do not
like what has happened in the last 20yrs and ‘corruption’ is a good cover for
the expansion of Government that has happened in the last 3+yrs.
They
want a return to a time when Government was completely dominant in all parts of
the economy. Buhari ‘ordered’ grains to be released (from empty reserves) to
feed the people. Government is doing fertiliser business. CBN has expanded to
any and everything.
But
beyond that, the real clue is in what they *do not* do. No reforms that might
benefit the private sector. The Vice President hails the tech community in
every speech - ask him to ‘shake body and drop’ $5m for them. Crickets!
A sector that was showing so much promise was handed to Min. Bayo Shittu.
They
say they are completing stuff left behind by PDP. Ask them about what the law
says about electricity tariffs in NBET. Straight into Voicemail. Why? Because
it is something that will benefit the private sector by creating a functional
market - that’s the last leg of power reform left.
Instead
what have we heard? Murmurings about reversing the electricity privatisation.
The
current mess in the power sector has a solution. But they do not like it -
again, they ‘hate’ the private sector. They want Government expansion and
dominance.
Even
the foolish subsidy that previously had ‘private sector’, is now 100% NNPC.
Nobody knows what is going on there anymore. NNPC is even ‘reviving’
refineries. All their achievements are about Government expansion.
They
hound MTN while FIRS is using all sorts of extra-judiciary powers to intimidate
the private sector in the name of collecting taxes. They hate the private
sector. The vision is to turn as many Nigerians as possible into Government
clients and reverse the last 20yrs.
For
me APC is an intellectually fraudulent party.
Did
people vote in 2015 against corruption? Absolutely 100%.
But
did they vote to undo the 20yr trajectory of the economy?
Voting
Buhari next year is a perfectly valid choice.
But
this is what it’s about.
/end
About Feyi Fawehinmi
Feyi
Fawehinmi is an accountant and has worked in the UK’s financial services for
the past 10 years. His experience covers investment banking, private equity,
asset management and insurance. He blogs regularly on Nigeria and economic
policies on www.aguntasolo.com
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