In this first of a three-part article, my aim is to get President Muhammadu Buhari to re-evaluate his obvious discomfort with the workings of a market economy and change; so that he can effectively lead the CHANGE agenda that he promised Nigerians.
The engine of wealth creation and poverty reduction is the private sector when enabled and not when crippled. Although the President currently invests enormous air miles and time in chasing the proverbial foreign direct investment, it is easy to observe the antipathy that he has with choosing the right sets of instruments to support the intrinsic capacity of the private sector to drive economic growth. Nothing gives away so much in terms of how the President considers business as his forex policy stance.
In my career, I have had the privilege of interacting closely with newly elected leaders of countries. Generally, most of these leaders start their presidency with a desire to quickly deliver on campaign promises. The problem, however, is that the complexity of managing economies, especially troubled ones, often diverges terribly from the easier rhetoric of campaign promises. In no other continent is this more prevalent than Africa. This is, of course, due to many reasons that include the absence of data-anchored-issues-based campaigns and the poor interest or even lack of capacity of the electorate to push for such.
Many presidents assume office with good intentions but faulty ideological notions of what it takes for economies to grow and improve the lives of citizens. The more entrenched the ideologies and doctrines that leaders hold on to, the harder it is for them to embrace economic pragmatism. Meanwhile, pragmatism has loyalty only to empirical and analytical evidence which show that a particular economic solution will deliver the right results for the overall good of the citizens. An evidence based policy method helps in shaping the pragmatic leader’s mind since their overriding vision is to produce good development results for country and citizens. Therefore, the foundation on which a leader’s policy thought rests can be a useful indicator of whether he/she would succeed or fail with economic management.
Let me start by telling the story of one of the leaders of a country in Africa that subsequently became a champion of economic pragmatism. We met him within the first month of his inauguration to discuss his economic policy priorities. He had come to power after what was a very bloody presidential election to turn around a severely damaged economy where the citizens had become perniciously impoverished by successive regimes of bad governance. The new leader had campaigned on an agenda of taking on his country’s destructive elite class by tackling grand corruption and improving the lot of the poor. The expectation of his poorer citizens was therefore extremely high. At that first meeting, we made him to understand that he had a Herculean task, which would require him to constantly make tough economic policy choices.
He was however still caught up in the euphoria of his mandate and the strong socialist ideology that he had championed in his exuberant years in opposition politics. He assumed, as he lectured us at our meeting, that he had the power to will anything that he wanted into existence for his people. He tore at the fundamentals of our counsel that economic management is always constrained by scarce resources, that his country’s case was very severe and so would require restraint on his part in the design of a serious economic stabilisation programme. Faced with serious balance of payment and crippling fiscal crisis, the leader was nonetheless determined to take all the ideological command and control actions that would exacerbate the situation.
While we advised economic pragmatism based on analytical and empirically driven policy options, he consistently rebutted with well-worn ideological stance on monetary, fiscal and financial policy and structural reforms. When he spoke about his proposal, the scale of his priority spending and the fiat with which he wished to see the national currency “bounce back”, I knew that the well-meaning leader we were listening to on that day had a steep learning curve that had to be flattened.
Convinced that his country needed him, I felt that what he had to do was to learn quickly that it is sound economic policies and not wishful nationalist aspirations that enable a leader achieve good intentions for the poor. It took less than four months for him to realize that the more he applied the wrong ideological solutions, the worse the economy became and the noisier the groans of his citizens. At a point, he realized that if he did not structurally adjust his thinking for the benefit of the economy, he would imperil not just his own vision for governance but would ironically harm the poor to whom he had promised a better life. The good thing is that the President was open to learning and did in fact learn so fast that he went on to become a counsellor/mentor on “economic pragmatism” to other elected leaders within his sub-region.
That President was elected to a second term, despite the strong fight put up by the opposition party. The poor to whom he made promises that he mostly kept during his first term by running an economy that had started marginally improving their erstwhile stagnated condition, returned him to office to continue with sensible, pragmatic economic management. And so, although it took enormous work and plenty of shouting matches between us, that President finally eschewed outdated, harmful, needless ideology and embraced sound economic principles that grew his economy and began turning things around for his people.
Whenever I tell the story of that President, the audience asks me when his turning happened. The answer is once he accepted the need to unlearn his dogmas and became open to learning new things. He unlearned stifling ideology and instead learned how to accept and use the principles of the market to solve his country development problems as often as relevant. He learned how to deploy the enormous powers of a president more appropriately to the things that the market cannot solve. He learned that his policy leadership role, providing basic services for citizens and critical infrastructure/quality skills for business depended on how much analytical evidence guides his decisions. All that learning transformed and retooled him to lead for results. The experience of that leader proved to us that “The best politics is good economics”.
PUNCH
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