…the concept of ‘government having no business doing business’ is flawed and should be rescinded going forward. Government must do business and do it well. Government cannot abandon its economic role to private entities and just exist for politics.
With the crumbling of the Berlin wall, which signaled the re-unification of Germany and the subsequent disintegration of the Soviet Union, which inevitably resulted in the collapse of the Warsaw Pact in 1992, capitalism eventually triumphed over communism. It was a long battle, which started in the 18th century as a conflict of ideas, and thought; Adams Smith (The Wealth of Nations, 1776) and Karl Marx, Friederich Engels (Communist Manifesto, 1848) but which eventually crystallised into political economic ideologies, which found expression in governments all over the world and how they conducted their businesses. By the end of World War WW II in 1945, the two leading allied powers, communist Soviet Union and capitalist United States, occupied defeated Germany along their spheres of influence, which roughly corresponded to the east and west of the city of Berlin. The political form and economic shape of Germany was to be decided by the victorious powers. However, with both powers being poles apart ideologically, no consensus was arrived at. The division of Germany was inevitable. From the east of Berlin emerged a Soviet Union backed German Democratic Republic (East Germany) and from the west, a United States backed Federal Republic of Germany (West Germany). The Cold War had then began. Beginning from 1961, a separating wall was constructed across Berlin. Less than four decades later, in the same city, where it all began, communism succumbed to capitalism. The Cold War was over. The world has moved from a bipolar power bloc to a unipolar capitalist one ably championed by the United States, unchallenged. All the fifteen former Soviet republics, Russia inclusive, have embraced capitalism.
A resurgent neoliberal economic thinking pervaded the entire new world economic order. Government has no business doing business, it was proclaimed in triumph; and that the means of production should be transferred to private entities, away from government control. This line of economic thought was echoed and amplified by multilateral finance agencies and their allied multinational conglomerates, commonly referred to as ‘foreign investors’, and this has resonated throughout the developing countries of South-East Asia, South America and Africa. By 1999, the bug caught up with Nigeria because democracy spreads with capitalism. The ‘government has no business doing business’ mantra was the economic ideological basis of the PDP led federal government in its sixteen-year rule. This is where the problem of our economy lies. Nigeria embraced this concept without reservations and as history has shown, an excessive free market economy creates a cycle of boom, bubble and burst. The great depression of 1928, 1988 and recession of 2008 were as a result of extreme neoliberal economic practices. Nigeria’s current economic crisis is a cumulative of factors, whose foundation is the extreme neoliberal economic policies of the past administrations. Regrettably the current administration of President Muhammadu Buhari is following the same path because of its inability to think out of the box on the economy. The APC-led federal government is expected to depart radically from this path in line with its promise of change.
The reason for the existence of a modern state should be more economic than political. Modern successful nations are in reality, profitable business entities. Sadly, Nigeria exists more for political than economic reasons. As with all things politics, Nigeria is a huge resource wasting away. The primary responsibility of government is to ensure not just the physical but fiscal and monetary security of lives and properties. Therefore, the concept of ‘government having no business doing business’ is flawed and should be rescinded going forward. Government must do business and do it well. Government cannot abandon its economic role to private entities and just exist for politics. Self-serving individuals and entities relying on the inefficiencies and corruption in the public sector, have continued to propagate this narrative and their allies in government have succumbed to them.
The private sector is a product of the public sector. The policies that create and shape the private sector, including regulatory laws, are initiated and implemented by the public sector… The public sector must be made to work as efficiently as possible to bolster the private sector.
Nigeria’s economy is built on quicksand. The over reliance on the private sector for the means of production has led us significantly into the current economic crisis. The private sector is a product of the public sector. The policies that create and shape the private sector, including regulatory laws, are initiated and implemented by the public sector. The inefficiencies and corruption of the public sector is reflected in the private sector. The public sector must be made to work as efficiently as possible to bolster the private sector. The private sector is supposed to be driven by invention and innovation, which seek to improve upon what the public sector provides. Public sector must be good for private sector to be better. With a moribund public sector, the private sector is unchallenged and becomes a monstrous oligarchy, which adds little or no value to our economic development. This is why privatisation failed. A private sector, which thrives on government assets acquisition, by acting as proxies for government officials, inevitably creates a weak and unproductive economy.
The recent call for the sale of national asset to help government raise money to spend its way out of recession is unpatriotic and self-serving. This would not take us out of recession but will rather plunge us faster into depression. It is very certain that the proceeds from such a transaction will not be deployed to stimulate economic growth. The monies accrued from such sales will be shared among the tiers of government, under pressure from the notorious gang called the ‘governors’ forum’. The monies will inevitably be used to service the insatiable needs of the wasteful and corrupt political class. Rather than sell vital national asset, government should invest in their resuscitation and make them profitable ventures. If privatisation failed, outright asset sales will be a long-term economic disaster. It will amount to double loss to Nigeria and Nigerians.
Majeed Dahiru, a public affairs analyst, writes from Abuja and can be reached through firstname.lastname@example.org.