A Political Economy of Nigeria’s Capitalist System
Dr Tunde Oseni, Department of Political Science, Lead City University, Ibadan E:
[email protected] Nigeria, not a nation: This is a Country! At a conference like this (aimed at waking in us all a nationalist call for hope), it important and necessary that one says it as it is: Nigeria is not a single nation; rather Nigeria is a multinational state; a country. This does not mean that we cannot or should not attempt to build a nation out of the multiple nations amalgamated one hundred years ago by the British; in fact as patriotic citizens we should all make conscious and conscientious efforts towards nation-building. So, the import of this point is that whereas, as Obafemi Awolowo posited in 1947, Nigeria is not a nation but a ‘mere geographical expression’, there is nothing inherently wrong in colloquially describing Nigeria as ‘a nation’, even when we are all fully aware that it is practically ‘a country’.
Furthermore, as a post-colonial state, with multiple tribes and tongues, building a nation remains a big task. It is doable anyway. But the past and the present have mixed in a way that leadership challenges have impeded the prospect. In Nigeria; the more things change, the more they remain the same: from colonial to civilian to military back to civilian regime. As can be observed, political leadership has not been firm enough in fighting corruption, in promoting transparency and in installing accountability. So, in most of the cases, the country’s political economy, so-called capitalist in nature and practice, has remained meaningless to the common man and woman on the street. Not to sound pessimistic, the country has potential to become a global competitor but of what value is a potential to achieve 12 per cent GDP while only 6 per cent GDP is what a country can achieve in at not less than 16 years of unbroken civil rule. Truth be emphasized; Nigeria’s political economy is still underdeveloped if ‘a country or society having few industries and a low standard of living’ (Oxford Dictionary, 6th edition, 2005).
Precepts of Capitalism in Nigeria Historically, capitalism is the social formation that began to replace feudalism in the parts of Western Europe between 1400 and 1800; with industrial Revolution which started in Britain became the dominant social formation in the world. In the case of Nigeria, Capitalism in Nigeria is both a product of imperial and colonial extractive economy as well as post-colonial rentseeking and politicking. From the years of the Royal Niger Company to the times of Shell and Chevron; investment and divestment, oil exploration, prospecting and allocation of oil wells, capitalism has remained a cog in the wheel of economic progress, development and prosperity, at least for the majority of the Nigerian people. To be sure, Capitalism is ‘free market economy’ system with minimal state control; but the intertwined relationship between capitalism and its twin sister mercantilism has made the Nigerian practice of capitalist system a more or less misfit. Not without its own few inherent pluses, the practice of capitalist economy has reduced its potential over time. By the way, what is mercantilism? It is a system of commerce with the sole interest of promoting local production and maintaining a positive balance of trade. It is otherwise known as protectionism. The major purpose is to ensure a higher level of exportation viz a viz a lower level of importation. Like capitalism, mercantilism is at the core of the international trade since countries try to balance their trade in a way to gain from the global economic system.
More seriously speaking therefore, mercantilism is a chief driver of capitalism since it leads to accumulation of capital by the producing economies and capital flight in the consuming countries. As a matter of fact, Nigeria nay Africa is at the receiving end of the mercantile system because we produce what we don’t consume and consume what we don’t produce: crude oil in lieu of petrol, diesel, and kerosene; rice from Thailand, tooth pick from China and recently a budget of 9.2 billion naira to import stoves from South Africa. Yes, other countries import but they export finished products too. It must be then clear that Mercantilism is pseudo-capitalism in which the state protects its own companies. It remains to be seen however the extent to which mercantilism in the metropole (developed countries) going to lead to the economic development and growth in the periphery (developing countries). This then must provoke the
debate about the question of politics behind the economy. Can a country’s economic progress be sounder than its political choices? Doubtful!
Politics behind the Economy Contrary to the expectations of Nigerians, especially since the independence in 1960, governance has remained critically ill, failing to bring about even development and growth across the country. In 1970, Nigeria (under the Gowon regime), Nigeria adopted 5 national goals of development, namely: a united, strong and self-reliant nation; a great and dynamic economy; a just and egalitarian society; a land of bright and full opportunity for all citizens; and a free and democratic society. These goals, explicitly stated in the country’s Second Development Plan (1970-74) and re-packaged in the Third National Development Plan (1975-1980) are yet to be fully realized. Similarly, neither the Structural Adjustment (SAP)inspired policies under the Babangida government nor Abacha’s Vision 2010 nor the Obasanjo’s NEEDS nor Yar'Adua’s Vision 2020 nor Jonathan’s Transformation Agenda have made capitalism a formidable option for economic development in Nigeria. It is economy; yet it is politics, that counts.
Why and how has politics failed economy in Nigeria? Masquerading as the only alternative in town, capitalism, the Nigerian version, has not been clothed with well-planned and wellexecuted political governance. Corporate measures taken so far have not taken the people as the sole target of benefit. Problems of the 1960s still exist. First and foremost, Nigeria has opted for unbridled capitalism, which is usually equal to helplessness and joblessness on the part of the majority. If at least 5.3 million youths are jobless, going by the official figures as released by the Minister of Finance (in 2014), and there is a growing social inequality (widening gaps in social classes: upper/middle/lower classes) with about 100 million Nigerians living in destitution (World Bank 2014) and not less than 75% of Nigerians living on less than 2 dollars per day (DFID), then it is certain that unbridled capitalist policies cannot help the polity. Secondly, there is a dearth of socially empowering policies. As pointed above, the federal government recently budgeted 9.2 billion naira to purchase/import stoves for rural women: how empowering? There seems to be a disconnection between the people and the government. Thirdly, there is the perpetual issue of external influence (IMF; World Bank etc with the
accompanying neo-liberal ideas of deregulation, commercialization, privatization, dollarization, leading to external reserves depletion, Loans and Debts accumulation; naira devaluation and depreciation in the roles of the state in social welfare policy formulation). Not less important is the growing trend of what we call ‘bourgeoisie mercantilism’: rather than promoting economic nationalism; Nigeria’s capitalism is favouring the rich few at the detriment of the poor many. So, Nigeria remains one of the perfect examples of countries where the rich get richer and the poor poorer. This is evident both in terms of the allocation of oil wells and importation of oil products. It takes a warped importation policy to allow for the gargantuan level of reported scams in the fuel subsidy policy in the country. Why are the refineries not working at optimal level? And why are public utilities privatized without due process? The devil, as they say, is in the detail. Notwithstanding its dark sides in Nigeria, capitalism bodes certain prospects for the country. If well planned and given the right political impetus, Capitalism can serve as the engine room for industrial development; which can be equated with sustained economic growth. It is of interest that some local companies, including indigenous car assembly plants and sugar refineries, are already springing up. If well-nurtured, a free economy approach means the promotion of innovation and entrepreneurship. Similarly, international capital flow particularly into and within Africa (now termed in certain quarters as ‘Africapitalism’) has made the country the largest economy in terms of GDP in Africa. This is a cheering news but the country must ‘proceed with caution’ (PWC). This is because being ‘large’ is not the same as being ‘strong’: GDP is a measure of aggregate wealth in specific sectors of the economy. That is why other diverse sectors such as telecommunication, production (manufacturing), agriculture, mining, tourism, and SMES, among others should be explored. Conclusion and Recommendations •
Now is the time for the Diversification of the economy: international capital for monocultural economies such as oil-dependent like Nigeria is no longer sustainable: recent devaluation of naira from N156 to N181 to dollar because of fall in the price of crude oil is enough a lesson (shale as in America oil is also a threat to oil economy). In particular, agriculture and tourism may be two crucial areas to focus, along with the dwindling oil revenue
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Infrastructural Revolution is needed. Capitalism without a functional infrastructural base is hardly possible, plausible or sustainable: compare Nigeria’s 3, 000 megawatts of electricity for 167 million people with South Africa’s 45, 000 megawatts for 50 million people. So, for Nigeria’s capitalist system to function there must be stable power, good roads, affordable housing, pipe-borne water and other modern facilities.
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There is a need for a National mercantilism: no economy is truly free, especially in the International Political Economy (IPE); Nigeria should protect its infant industries, its emerging entrepreneurs, and of course its international trade interests, with nationalistic means for nationalistic ends: this is the true spirit of capitalism (we need economic nationalists and nationalist economists, for in them lies the possibility of social welfarism!)
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We must promote Effective Leadership, disdain for corruption, and ethical ideals both in words and actions. To paraphrase the National Merit Award winner, Prof. Niyi Osundare, ‘if Nigeria does not kill corruption, corruption will kill Nigeria’. Leaders are needed to fast-track plans and policies for a more secure and prosperous country. As Nigeria celebrates its centenary as an amalgamated entity, it is now and not later that all hands must be on the deck for socio- economic justice, development and a capitalist system with a human face.
Dr Oseni teaches in the Politics & International Relations department of Lead City University, Ibadan . This paper is a synopsis of his contribution at the Hindsight Leadership Conference held at the Afe Babalola Auditorium, University of Lagos on 9 December, 2014
