Public-private balance (I): the proposed national carrier and its opponents

Weeks before the last elections I was telling some of my friends (Bashir Gwandu, Umar Kuki, Wole Olaoye and others) that Candidate Buhari’s real battles would be fought within the APC because of the ideological mismatch between his economics and that of the many leading gurus of the party. Even after the PDP-backed rebellion of […]

Weeks before the last elections I was telling some of my friends (Bashir Gwandu, Umar Kuki, Wole Olaoye and others) that Candidate Buhari’s real battles would be fought within the APC because of the ideological mismatch between his economics and that of the many leading gurus of the party. Even after the PDP-backed rebellion of Senator Bukola Saraki and his co-travellers, I still felt the big fight is yet to come. With the struggle over how NNPC is to be reformed, and President Buhari’s recent directives on reintroducing a national carrier, the fight appears about to start in earnest.
The real problem concerns the role of government in an economy. While the dominant belief within the Nigerian business and professional elite, exemplified by the ascendency of Nigerian Economic Summit and the main recommendations of both Vision 2010, and Vision 20-2020, are that “Government has no business in business” and should limit itself to providing security, ensuring the rule of law and creating an enabling environment for business to flourish, the vast majority of those who voted for Buhari, along with the man himself, believe the state should do much more. Simply put, the state has every business in making sure that the economy is run in the best interest of the majority even if it has to be more active in actually running things. The elite knew that, but they still believe they can use Buhari to calm a restive citizenry and turn him into a believer in market forces supremacy. To them, there is no alternative to the neoliberal agenda espoused by World Bank, IMF and the WTO, often called “The Washington Consensus”.
The Chatham House announcement that he intends to revive Nigeria Airways was the first wakeup call. Not long after that, the Ahmed Joda-led Transition Committee recommended, according to reports, a return to the Nigeria Airways model. PMB also, thankfully, refused to be rushed into selling off the refineries and our shares of the oil ventures. He seems, to our great relief, convinced that the state has a pivotal role to play in launching, managing and sustaining economic and social development.
The ideological honeymoon is now almost over. Sam Omatseye, writing on the ‘Back Page’ of The Nation newspaper of 29th July shouted “Blood in the sky” in reference to the call for a Nigeria Airways model as if the pre-liberalisation model was not the safest we ever witnessed. He implied that all existing airlines would be forced to merge into a single national carrier, something I have not seen proposed anywhere. And of course the generation-card came up; Joda belongs to the old guard. According to the columnist “The world has leapt past the range of the man (Joda) and his recommendations of merger may be a reflection of his ancient train of thought”.
Yet others much younger than Joda (or PMB), and who are aviation industry insiders, had argued for precisely such a policy.
In an interview with the Vanguard in March 10, 2013, Nick Fadugba, a publisher of one most authoritative aviation magazines, and a consultant to the industry, had doubts regarding the capability of the private sector in Nigeria to provide us with the national carrier that we need. He said, and I quote, “My experience with Nigerian airlines is that they are reluctant to work together, and yet, individually, they cannot succeed to the level that we require. And, therefore, the Nigerian government has to encourage the airlines to work together…I don’t question the integrity of the airlines in Nigeria, I question whether they have the capacity to build an airline that Nigeria needs; that is why I say government should support a private-public partnership in which government cooperates with the private sector to form a national airline that we can be proud of and which will perform the functions that are necessary of a national airline… many airlines in Nigeria lack the financial means, fleet, training and resources to really get up to the level required to compete with the international airlines. It will take them many, many years…I will like to implore the Federal Government of Nigeria to ensure that Nigeria has an airline that we can all be proud of, and that drives economic development, whether we bring all the existing or some of the existing airlines together”.
On whether Joda’s suggestions would lead to “blood in the skies”, statistics actually show that our air travels were much safer with Nigeria Airways. It was not until the late 80s and 90s that the crash surged began due to the liberalisation of the sector and lax regulations, and then ADCs, the AESs, the Okadas, the Sosolisos, the Bellviews and later the Danas, started falling down with alarming regularity. The need for a public, or public-private, owned national carrier, which can compete with others in the industry, can also not be overstated. Public ownership is not the problem, and competition is good. Neither should we ignore the suggestions that small operators must be helped to merge so as to achieve economies of scale. Still, even if we succeed in dismissing objections to any idea because of the age of its proponent, or avoid selective recollections, we must also concede that there were problems that led to the collapse of the Nigerian Airways which needs to be addressed.
As Christopher Odetunde argued back in 2007, while making a compelling case for reconstituting a national flight carrier, we still need answers to the following questions: “Was the collapse (of Nigeria Airways) caused by mismanagement, greed, lack of maintenance culture, inexperience engineers and pilots, or can the answer be in placing a politician to manage the industry instead of having an oversight function of the aviation industry?”  He was emphatic that “Whatever the reason or combination of reasons, it is time to … attempt to resuscitate the national carrier”.
Mismanagement, corruption, abuse of office, looting by political masters, and substitution of substandard parts, lack of maintenance have all been blamed for the demise of Nigeria Airways but few really grasp where the major blame lies; faulty economics. In other words structural adjustment policies wrongly and hastily put in place. As my long-time friend, Samuel Akinyele Caulcrick, the present Rector of the Nigerian College of Aviation Technology, Zaria, recently pointed out, the airline’s management was suddenly told that they were no longer going to be given any more subventions without a profit prospect, and were to be on their own. They were also told not to raise fares for a period of three years. But the government kept on devaluing the naira. So, while in dollar terms the revenues were collapsing, yet they were expected to pay for repairs, spare parts, foreign fees, charges and levies as well as aviation fuel, insurance and what not, with a devalued naira. Of course they could not cope. It was as if some people wanted to cripple the company in order to buy it off cheaply.
Clearly our industries were crippled: from NEPA to NITEL, oil refineries to airlines, not just due to corruption and mismanagement but also due to misguided and non sustainable, neoliberal policies. Now, every time there is an attempt to revive them we are told, by the same elite that looted these places, and who are now rich enough to buy them off, that public institutions cannot work; that everything must be privatised, and then we are told that it is the trend worldwide. Is this neoliberal model the ultimate future of all public policy?