New Dawn Nigeria

PMB as unlikely economist

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In one of his not infrequent, characteristically expansive moments, former President Olusegun Obasanjo, in assessing the President Muhammadu Buhari administration during the first term, gave Buhari a pass mark in the war against corruption and insecurity but concluded patronizingly that PMB lacked a firm grasp either of economics or foreign policy. That was, of course, before the Ota farmer’s letter-writing knives were fully drawn and he could find nothing worthy of commendation in the lanky General from Daura. The inference could only be that OBJ believes he is a virtuoso of sorts in those areas in which he rated PMB low particularly economics. Not many will agree.

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In his first coming as military Head of State, OBJ simply adopted the massive state-led interventionist development policies that were the dominant paradigm of the time. And during his second incarnation as elected civilian President, OBJ went in a diametrically opposite direction. This time, he wholeheartedly embraced the free market, neo-liberal economic policies that had become the reigning conventional wisdom. OBJ seemed to lack any deeply held developmental philosophies of his own.

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In contrast, PMB would be the last to make claims to possessing any delusional mastery in an arcane field in which he has no rigorous theoretical grounding. Yet, he appears to hold very strong and consistent, instinctual convictions as regards the kind of policies indispensable for the economic emancipation of a poor, dependent, neo-colonial economy like Nigeria. Of PMB’s first coming as military Head of State between 1983 and 1985, noted political economist, Professor Adebayo Olukoshi, writes, “One of the factors that underlay the Buhari regime’s crisis management policies was its conviction that fraud and indiscipline were central to the economic problems of Nigeria and that all steps would have to be taken to eliminate these ills”. The Buhari military government adopted a strongly nationalistic stance in its approach to the management of the national economy.

According to Olukoshi, “While agreeing, like its predecessors, with the IMF on the need for fundamental reforms in the Nigerian economy, the Buhari regime was unwilling to accept the recommendations of the IMF for the devaluation of the naira, the across-the -board privatization of public enterprises, the liberalization of trade and the withdrawal of petroleum subsidy. In the view of the regime, these measures were inappropriate for tackling Nigeria’s economic problems”.
With the Buhari/Idiagbon regime insisting that “to abandon the economy to market forces, as the IMF recommended would merely complicate matters”, it was no surprise that the talks between the regime and the IMF soon collapsed. The western powers tightened the economic squeeze on Nigeria and the Buhari regime was soon history with the General Ibrahim Badamasi Babangida coup of August 27, 1985.

I must confess that I was one of those who jubilantly welcomed the fall of the Buhari government and the ascension to power of the gap-toothed, all smiling, IBB. While the Buhari/Idiagbon military government’s nationalistic and patriotic economic instincts were admirable, the government’s assault on fundamental human rights and the rule of law; the sheer arrogance of its functionaries and their utter insensitivity to public opinion was intolerable. However, with the benefit of hindsight, if we knew what tortuous paths the nation would traverse for the next one and a half decades, would we have celebrated Buhari’s loss of power in 1985 the way we did? It is a difficult question to answer.

Of course, the IBB regime wasted no time in taking the country into the full embrace of the IMF and its neo-liberal, so-called free market economic policies. Oh yes, there are no doubt many benefits that the country reaped from the comprehensive deregulation and liberalization of diverse sectors of the economy undertaken by the IBB regime under the philosophical guiding hand of the IMF. Yet, it is indisputable that Nigeria emerged from IBB’s Structural Adjustment Programme (SAP) poorer, more dependent, more indebted, more unequal, more de-industrialized, her people more jobless than before the undiscriminating adoption of the IMF’s neo-liberal pills.

On the massive devaluation of the Naira by the regime on Friday, 26th September, 1986, as a core component of SAP, for instance, renowned billionaire businessman and statesman, the late Chief Alfred Rewane, had written: “As my friends and I discussed the implications of the government’s announcement, I expressed the view that the devaluation of the Naira was a recipe for disaster and that within five years, the Naira would be worth less than 20 percent of its then existing value, leading to the possible collapse of the Nigerian economy. I reminded them of a standard economic argument that devaluation of the national currency is best contemplated where the nation’s economy depends largely on the export of manufactured products for its foreign exchange earnings, and where the devaluation is considered appropriate to ensure the competitiveness of its manufacturers”.

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Taking issue with the contention of IBB’s ‘Presidential Advisory Committee on Economic Affairs’, headed by the late Professor Ojetunji Aboyade, that overseas investors would be attracted by a cheaper Naira to invest in the country, Chief Rewane had retorted: “Well, that may be impressive stuff for an undergraduate class on the principles of economics, but it certainly is not so in the real world of business. There are factors more critical than cheap currency in rating the congeniality of an investment climate, and the presidential advisers should be presumed to know that”.

Even after his eventual emergence as elected President of Nigeria, in 2015, Buhari evidently still remained as reluctant to throw the country’s economy at the mercy of rampaging market forces as he was as military Head of State three decades earlier. True, the Buhari administration today operates within the context of considerably strengthened global neo-liberal market forces and has been forced to accommodate degrees of currency devaluation, fuel subsidy removal and increases in Value Added Tax ( VAT). Yet, there still appears to be reflexively ingrained in PMB’s subconscious, Professor Noam Chomsky’s cutting observation that “Those who expect to win the game can be counted on to laud the rules of “free competition” – which, however, they never fail to bend to their interests. To mention only one obvious lapse, the apostles of economic liberalism have never contemplated permitting the “free circulation of labour…from place to place,” one of the foundations of freedom of trade, as Adam Smith stressed”.

Thus, rather than abandoning the national currency to market forces as would have been dictated by the tenets of neo-liberalism, for instance, Mr. Godwin Emefiele’s Central Bank of Nigeria (CBN), certainly under the influence of PMB’s body language, has not shied away from intervening in the market to ensure sustained exchange rate stability in the interest of the national economy. And the massive injection of funds into the Buhari administration’s Social Intervention Programmes, hitherto under the purview of Vice President Yemi Osibanjo, is another feature that distinguishes economic management of the PMB administration from the preoccupation with conservative austerity measures associated with neo-liberalism or ‘financialism’.

Without being an economic theoretician, PMB has nevertheless stamped his imprimatur on the economic philosophy of his administration albeit in an understated manner. As the newly inaugurated Presidential Economic Advisory Council (PEAC) settles down to business, we can only hope that the body will add value to the progressive economic policies and poverty alleviation strategies it meets on ground and eschew narrow doctrinal and doctrinaire ideological considerations.

Despite their undoubted pedigree, members of the PEAC have, in my view, as much to give as they have to receive. Theirs should certainly not be the disposition of that member of IBB’s Presidential Advisory Committee on Economic Affairs, who had wondered in exasperation on national television, why even Awka market women felt qualified to contribute to a national debate on whether or not Nigeria should obtain an IMF loan! The economy has become too important to be left to economists.

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BY SEGUN AYOBOLU

 

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