On the 16th of September, 2019, Nigerians woke up to the news about the appointment of an Economic Advisory Council by the President which is to replace the hitherto Economic Management Team (EMT) headed by the Vice President, Prof. Yemi Osibanjo. Like other Nigerians, I was particularly elated by the cheery news, not just because of the prospect of reviving our ailing economy but because of the calibre of the personage named in the new economic team, with the a priori expectation that the Federal Executive Council will adhere to the advice that will be proffered by the new advisory council. The appointment of the new economic think-tank though belated was hailed by concerned stakeholders as a step in the right direction since it seems to indicate the desire by the authorities to do away with the current command and control measures that has not improved the fortunes of the economy and key into a more vibrant policy initiatives.
Although, I was initially disinclined to vouchsafe any input for the new economic team in view of the pedigree of the members but after going through the volume of advice by some concerned stakeholders, some of who seem to centre their interest on fiscal policy and need for growth, I felt the compelling urge to make my contribution too.
I understand the concern of many for growth because of its assumed pervasive effect on the economy. But in reality, for an underdeveloped economy like ours, growth may not necessarily translate to economic progress because of some hard-core underdevelopment features that act as inhibitions. Thus, attention to growth without strengthening out the inherent inhibitions could be misleading. It will amount to “growth without development” syndrome. Therefore, the economic advisory team should not be distracted by the issue of just economic growth. In planning for growth, the council should not neglect “a range of internal” issues as stipulated in their mandate. In reality, growth without development is nominal and ineffectual. Growth is only effective when it is sustainable and accompanied by a significant reduction in the symptoms of underdevelopment—poverty, poor infrastructure, poor technology, dualism, income inequality, dependence on external influence etc—and substantial improvement in Human Development Indicators.
It is a fact that the economy is going through enormous stress at present and the temptation is to look at the symptoms rather than the causal factors. We should understand the embedded problem of our economy for it is always the case that when you do not do proper diagnosis, the result almost always will be that of wrong prescription and that definitely may either be of no effect or compound the already existing problems. Yes, there are motley challenges facing the economy but clearly, they are all symptoms of an economy desiccated by underutilization and misuse of economic resources, politicization of economic policies, policy mismatch, past wrong policies, steps not properly taken etc.
Admittedly, the economy has enormous potentials for advancement in terms of resource endowment but “real growth” is impeded due to the inability or unwillingness of the policy-makers and economic managers to fully optimize the use of the abundant resources. There is unemployment, declining government revenue occasioned by stochastic interruptions in the international oil market on which the economy precariously depends, low capacity-utilisation, abject poverty as more than half of population is living below the poverty line, heavy debt burden, unfavourable Balance Of Payment problems, price instability among other challenges. Thus, the desired effect of the monetary and fiscal policy may not trickle down a priori because of the inherent underdevelopment features—distortions, blockages and leakages, weak institutions among others.
Indeed, our economic problem is primarily developmental in nature. Our primary concern then should be on how to optimize the use of our abundant and under-utilized natural endowment for the greater good of the greater majority. And when that is done, the desired growth and development will be the natural accompaniment. Genuine development is never accidental. It is always planned. First, we must identify and set our priorities. When we have realistically determined where we are now, we need plans that will bridge the gap between our present position and our desired future position. Employment would come naturally when the conducive environment is created for genuine economic activities to thrive. Thus, in view of our status as an underdeveloped economy, our priority focus should be on development issues.
And, since the President has deemed it necessary to assemble a “substantive” economic team, it may not be an indication of an admittance of failure but an intention to move away from the outmoded policy measures to an earnest desire to leave a lasting legacy and the economic advisory team should take advantage of it and act accordingly. The team should brainstorm and take a cue from the experiences of the Asian Tigers to rejig and reposition the economy for greater performance through constructive engagement, thorough impact analysis of previous policies, dispassionate analysis of our current position, proactive scenario analysis…As an economic think-tank, they should consult widely and productively and design an economic blue print for the nation. Although they were appointed in this regime but they must think beyond this regime; the revival of the economy and the interest of the nation should be their overriding consideration.
Essentially, economic diversification is a prime necessity to broaden the productive base of the economy. The country should prepare for an economy without oil in view of the current realities—declining oil revenue occasioned by instability in oil prices, less emphasis on fossil-fuel globally, developments in Bio-technology and more emphasis on renewable energy, environmental issues—and redirect her attention to Agriculture, knowledge-economy, solid minerals, entertainment…Another thing that should concern the country and our economic crack team is the country’s infrastructure deficit.
Our focus should be on provision of critical infrastructure to support economic activities and improve the quality of life of the citizenry. Our infrastructure gap according to AfDB is in excess of $350 billion. Our new economic think tank should develop a workable model to attract investments in our critical infrastructure and bridge this yawning gap.
Ordinarily, the mandate of the Economic Advisory Council should also include planning which is fundamental for strategic action. And in doing that, they must avoid the planning pitfalls of the past. Our development planning practice which is a carryover of the colonial flawed process is based on the antiquated centre-periphery model: a faulty pattern that created sectoral and spatial imbalances in our political economy. Poor planning model has actually exacerbated the intractable problem of rural-urban drift and its concomitant problems of excessive urbanization, undue pressure on urban facilities, urban renewal, slum clearance, and neglect of rural areas, unemployment and other sociopathic issues. Balanced development strategy is the most realistic option for the country in view of the variegated nature of our political economy.
Thus, any plan or policy framework that did not put the structure and problems of Nigerian economy into consideration is fundamentally faulty. Often times, there is a marked difference between actual and expected result of a policy when the critical success variables are not factored into the design process. I believe that for the new economic crack team, the characteristics and the potentials of the economy should be given prime consideration.
Furthermore, the new economic team should go beyond rhetoric or technicalities to produce strategies to operationalize and monitor the implementation of their plans and the effects on the economy. No doubt, in doing this onerous task of designing a new economic pathway for the nation, they may have to contend with the overweening tendencies of politicians whose interest may run counter to our development needs but they should not be deterred. They should not be swayed by populist or ephemeral cosmetic programmes. They must look deep to the superstructure and their trump should be to lay a solid foundation for sustainable economic development for the nation.
In all these, there is high public expectation from the newly constituted council. Nigerians expect coherent, consistent and holistic policy framework needed to revamp the already battered economy. So, It is expected that our economic advisory council should articulate good policy framework required to pull the country out of economic morass.
Irogboli writes from Lagos