Babangida, Dangote and the origin of poverty in Nigeria

Nigeria has never been a rich country by such indices as per-capita income of the Gross Domestic Product (GDP), life expectancy, universal access to education, health, water or other basic amenities but the country however, has never been so impoverished as it has been in recent years and getting worse. At the recent public presentation […]

Nigeria has never been a rich country by such indices as per-capita income of the Gross Domestic Product (GDP), life expectancy, universal access to education, health, water or other basic amenities but the country however, has never been so impoverished as it has been in recent years and getting worse.

At the recent public presentation of a book of the former president, retired General Ibrahim Babangida, Mr. Aliko Dangote donated a whopping N8 billion to the library project of the 83-year-old and also pledged to give additional N2 billion each year after every two years until the project is concluded.

Mr. Dangote’s largesse to the octogenarian former military president  might be eye-popping but given that over two hundred million Nigerians are paying nearly ten times now what they earlier paid for a liter of Premium Motor Spirit (PMS) popularly called fuel, even for the Dangote locally processed, the outlandish sum doled out to the retired general is just “a small change” to our oligarchs whose astonishing wealth grows in the same proportions as the deepening of poverty and misery among the ever growing number of Nigerians.

Mr. Aliko Dangote, ranked Africa’s wealthiest man effusively thanked the former president who opened the gate of wealth to the private sector. In his words, he said “Your Excellency, I would like to express my sincere gratitude for all you have done to Nigeria”. But without leaving anyone in doubt to the “Nigeria” he meant, he went ahead to specify, “many may not realize that you were the architect of the private sector in Nigeria. Anyone in the private sector who has achieved prominence today owes it to you as you provided us with the necessary licenses.”

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Continuing, the Africa’s richest man recalled the “day when you granted almost 30 of us banking licenses: you also instructed five Nigerians to pay one million each for oil bloc.” Further in ecstasy at the benevolent General, who opened the gate of wealth to the “special 30 + 5”, Dangote waxed intensely lyrical; “Your Excellency, I could continue to list all the reforms you introduced that liberated the private sector, which is why Nigeria has more private sector involvement than any other country in Africa. It is only in Nigeria where government contribution to GDP is mere 15% with the remainder being driven by the private sector.”

Former President Ibrahim Babangida chose only “30 plus 5”, among millions of Nigerians and offered them banking licenses and oil blocs. No public tender for interested persons with requisite qualifications and these 30 persons are ostensibly, friends of the General and those certainly in his good books. The lucky five persons who were asked to pay the N1 million would most likely secure concessional facilities, from the freshly minted banks that would have drawn from the State funds overseen by the benevolent General.

The origins and trajectories of the Nigeria’s private sector according to Mr. Dangote proceeded from deals that fed from public money and not the fruits of entrepreneurial abilities that are rewarded through the participation in a level-playing field, where the most daring, innovative and resilient comes on top. And what Mr. Dangote described and called private sector by his tales are actually state-minted cronies, whose undue access to state largesse and even protection from elementary sanctions are rather, fundamentally distortive of a free market economic framework, where the real private sectors survive and thrive.

The question Mr. Dangote did not raise or even attempted to answer, how did his private sector colleagues who go by other name of the “Captains of Industry” survive or thrive in an ecosystem of total breakdown of public utilities – power, water, basic infrastructures. How has it been possible for the exponential growth in the wealth of Dangote’s “private sector”, while the true representative of the private sector – manufacturers association, chambers of commerce and industries, small and medium scale businesses, farmers associations, independent artisans bemoan the harsh climate that is forcing most of their members to close shops.

With General Babangida’s import licenses, Nigerian textile industries, the most robust in West Africa’s sub-region, kissed the dust, sending thousands of workers to penury while the regime benefactors armed with only licenses and concessional loans offered by the banking networks created for the same purpose, smile to the banks.

Liberalizing the economy at one single swoop with only cronies at the gate and summarily gutting away strategic industries, were the foundations from which Nigeria proceeded to the current state of affairs where the exponential wealth of the few grow hand-in-hand with the excruciating impoverishment of the many, to the extent that the formerly secured middle class consisting of the majority of professionals, academics, doctors, lawyers, journalist, bankers now struggle relentlessly on the margins.

Private sector operators, consisting of small and medium size businesses, industrialists and farmers struggle to access foreign exchange to get basic inputs while the state-minted private sector players, who originated from the General Babangida “30 + 5”, according to Mr. Dangote tales, access it so effortlessly to even go and watch American football.

The prevailing condition in the country in which it is estimated that over half of the population are multi-dimensionally poor, which included not just empty pockets but lack of access to basic life sustaining facilities like hospital care, water, electricity and finance is not a mere happenstance but a process originating from a deliberate policy of exclusion of the vast majority of active and entrepreneurial Nigerians from the mainstream of the country’s economic life.

Retired General Babangida in his presidency according to Mr. Aliko Dangote casually gave out the oil blocs to the “5 persons”, an act that would have been justified if the General was dispensing his ancestral inheritances, which would not have required rules, procedures and publicly known templates.

In reality, General Ibrahim Babangida did not “liberate the private sector” as Mr. Dangote puts it but rather paved the way for state capture, in which the historically state minted private sector oversees the installations and recycling of politicians in government and manipulatively shrinking government itself to the point that the public sector occupies a meager space of just 15% of the economy. Elsewhere, the private sectors thrive along with the growth of efficiency in service deliveries, expansion and growth of domestic investments, exponential job creations and greater diversifications of the economy.

For more than twenty years of civil rule, Mr. Dangote and his colleagues in the captainship of industry have sat on the economic management team of every government since 1999 supposedly as advisory team. The result has been one in which their wealth grows phenomenally, while the fortunes of the rest of the population nose-dive in the same proportion as their wealth grows. This simply means, the wealthy ones are not generating wealth through the creation of new values but are rather unduly and disproportionally accruing to themselves the existing commonwealth through means that are neither entrepreneural nor consistent with the economic logic of capital accumulation. While public assets have been ruthlessly stripped and handed over to the private sectors such as energy, power, those strategic sectors have not delivered anything in the form of efficiency and competitive pricing and extant growth in the overall economy.

Even for public sector dominated economy like China and Vietnam, the private sector is crucial and essential part of their economic success stories. The private sector in these climes are neither pampered nor allowed inordinate manipulation of the state even as level-playing grounds are paved for them to grow and thrive. Their gateway to success is their entrepreneurial spirit of goal getting which included innovation and resilience and not any manipulative transfer of public wealth to private hands with a consequence for a more brutal and generalized poverty of the larger population.

The existing and current orientation of the Nigerian government and its relation with the type of private sector “liberated” by former military President, General Babangida must end for the real private sector to thrive, from where efficiency, domestic investments, job creations, innovations and competitive pricings would spring and flourish.

The chaos of Nigeria’s economy and the deficits in its productive capacity and the current reign of excruciating poverty among the population is not a dead sentence but a call to action through a bold policy revolution that overthrows the small capricious “private sector” whose most innovative business strategy is how to keep every government under its thumb with a generation of bankrupt politicians struggling desperately to be at their service.

Nigeria poverty and the misery of her people is man-made and caused, and it can be ended by the collective will of Nigerians to identify its origins, the culprits and policies that enable it and mount a targeted and persistent struggle to overcome it.

 

Mr Onunaiju, head of a think tank, contributed this piece from Abuja.