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
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
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.
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