We reform for gains, but many end up as losers

The current reforms being implemented in Nigeria bear all the attributes of such programmes. Reforms promise benefits to the citizens, but the distribution of such gains is always contentious. The reforms are couched in all glowing and wonderful designs, yet their ultimate benefits and their distribution depend on factors more deep-rooted, more entrenched, and the […]

The current reforms being implemented in Nigeria bear all the attributes of such programmes. Reforms promise benefits to the citizens, but the distribution of such gains is always contentious. The reforms are couched in all glowing and wonderful designs, yet their ultimate benefits and their distribution depend on factors more deep-rooted, more entrenched, and the power of interest groups.

Nigeria is neck-deep into reform programmes designed to reposition the economy, strengthen its performance and leave all citizens better off. Reforms are necessary pills that nations and their citizens must swallow at one point or the other if they hope to leap forward.  There is nothing wrong about it.

Yet, the real benefits of such reforms go beyond the expressions of intent. While the aim is to lift all citizens out of the economic doldrums, yet in the end some gain, while others end up losing. Some are lifted out of poverty; others fall deeper into misery.

Indeed, some people gain, while others lose. The timing of the benefits also matters. This explains the reasons behind the discontent and disillusion that often arise against reforms as expectations wane and benefits fail to trickle down as promised by the political class or those in charge of the reform process.

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There are indeed various reasons why reforms fail or perform sub-optimally. Principally, the content and the format of reforms play key roles in determining whether and how much they succeed. They also determine how effective and efficient a reform can be.

Sometimes, where the prevailing conditions call for gradual changes to realign an economy, the drivers of reforms could approach such a change with drastic measures that often leave the people weary within a short time.

A gradualist approach to reforms stands a better chance of being acceptable to the people. If the designers and implementers of these reforms see them as innovations, they would give room for such new ways of life to permeate the social and economic fabric and stand a better chance of being imbibed.

The impact of such a mismatch is often more pronounced when the programme is ill-timed, in the sense that the reforming entity or country has not taken time to clean out its balance sheet before undertaking draconian, measures. This is further compounded when economic decisions of this magnitude are based on incomplete information. This arises because the assumptions on which the reforms rest lack depth, and relevance and fail to establish appropriate linkages in the economy.

This is where the economic reform must meet and align with the political dimension of the system. All economic reforms, like political campaign promises, are presented as gateways to a prosperous life for the citizens of a reforming nation. They are presented as necessary foundations for a wobbling economy to stand on a sound footing and be able to discharge its functions to the citizens. Whether this works out, how fast and deep, will be a function of the political dimension of such a programme.

The political dimension is crucial to the success of a reform. Reforms work best when the political component is fully aligned with the economic objectives of the programme. Such a political content of reforms predisposes them to serve the general purpose of all concerned, irrespective of their political connectedness in the system. This is different from one that is hijacked by the political class, who see the benefits of government programmes as being first for its members, and then the people, if anything remains.

A neutral political frame is more likely to ensure that the tide of the reform is available for all to be lifted uniformly. This depends on the political commitment of the leaders. Related to the above point is what could be termed the harmony of reform objectives. Sometimes a reform programme announced by the government is a mere assemblage of divergent objectives represented by different measures some of which are in conflict. In such a situation the various departments of the government could be working without much in common in terms of the objectives of a programme. Rather, each person could be seen to be pursuing his or her objective, rather than such measures being coalesced into a common public objective.

Nigeria’s reforms, for instance, have aimed at realigning the pricing structure across the various sectors of the economy. So far, the reforms have made verifiable efforts at addressing the pricing system that gave some operators an unfair advantage over others.

But without the strident efforts to dismantle the structures that supported such pricing distortions, the expected benefits of reforms could become a mirage, or at best available to just a few. This is the evidence in the Nigerian oil industry right now. Why, for instance, is it that after more than a year of reforms in the sector, the product is not available, despite the pronouncements by the government?

What structural defect is still hindering the smooth functioning of Nigeria’s oil industry? Why can’t Nigerians enjoy a smooth supply of petrol and other refined products for two months at a stretch? How is it that even with the high post-deregulation price of petrol, Nigerians still cannot see the product to buy now? When will Nigerians just drive in and drive out of petrol stations with the product in their tanks?

Yet some groups are benefiting disproportionately from this “reformed” system.