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The Genius of Okonjo-Iweala's Economics

By Chuks Isiugo

What is the purpose of governance in Nigeria? That is one
question, simple as it seems, that is key to diagnosing Nigeria's
worsening ailments. Perhaps it's not being addressed because
everyone knows what the answer is: plunder! By some suppressive
mechanism, this truth is never allowed to rise to the surface of our
national consciousness. And we've had successions of governments
going around peddling the bare-faced lie that government is about
   Yes, indeed, governance once was about development. When the
first human communities were built it wasn't difficult for them to see
that individuals needed to cede some of their personal interests,
freedoms, to a collective, a sovereign that became the common
interest, that worked for the interest of all, with equity and fairness,
to avoid a life that was brutish and short. They could see that then,
it's now that they don't.
   Well, of course, megalomaniacs always tried to seize that
collective power for their personal aggrandizement. History is replete
with the many revolutions fought to tame such huge egos and
humble them. But when they assumed the nationalist garb, they
became justifications for imperialist plunder and fascist atrocities.
   Thus was Nigeria born: a contraption designed to plunder and
rape more than 250 ethnic and language groups, making up a fifth
of the population of Africa. At least its creators had a purpose and
brought their efficiency to bear. Roads and rails were built to
wherever they needed to evacuate resources. Schools were built
where they needed to train manpower. Courts were established
where they needed to impose order right after the gunboats had
passed through. They had a purpose.
   But when they handed over the contraption they had built to the
newly trained Nigerian operators, there was a problem. The
contraption needed to be re-purposed so that it was no longer a tool
for plunder but one for development. That never happened for the
leaders could find no better use for the machinery they inherited and
couldn't turn swords into ploughshares.
   So, to ask the question again: what is the purpose of governance
in Nigeria? Answer: plunder! That explains why a census is not  a
headcount in aid of management planning but the deliberate
inflation of numbers in order to lay claim to a bigger share of the
commonweal; that is why people agitate for more states and local
governments, not as cohesive units of administration and social
organization but as sharing centers for the national cake; that is why
David Mark as Minister of Communication confidently declared that
the telephone is not for the poor man at the same time the
technology to democratize it was far advanced; that is why politics is
a do or die affair because you get a chance to be a sharer, dishing
out pieces of the national cake however caught one's fancy; that is
why more money is spent on defense and national security than
education and health, because those who have made it to the round
table at the very top need to be protected - and we don't need
surplus humanity, so why give them health and education?
    Things have gone so bad with perhaps the most self-destructive
political elite in the world that the more revenue that accrues to the
government, the worse things have become for their people. Since
1999 Nigeria has earned more money from crude oil exports than all
previous years put together, with states such as Delta and Akwa
Ibom earning more than accrued to the national coffers at the time
General Yakubu Gowon declared that he didn't know what to do with
money in 1975. Yet there was no visible impact on basic services
and public works.
   It's all too clear now what James Ibori did with Delta's money and
Diepreye Alamieyeseigha with Bayelsa's: they stole them. More than
300 billion naira was budgeted to build a major highway linking
important economic regions, it remained a death trap for the
duration of a regime that made the award - even a successor
minister wept over it - and yet no work was done. The man who
presided over this got even bigger roles in successive governments.
Even the very road to the seaport in Lagos through which they
import their luxury goods decayed without eliciting any urgency in
them to mend it.
   By the time of Ngozi Okonjo-Iweala's second coming as finance
minister, now serving Goodluck Jonathan, 75-77 percent of the
national budget was going to recurrent expenditure, - to pay
salaries, allowances, run the office - with the rest invested on capital
projects, such as new roads, railways, schools, hospitals. That is,
7.7 naira out of every 10 naira the government spent went to cater
for public servants that are not up to two million people, less than 2
percent of Nigeria's 170 million people. Then 2.3 out of every 10
naira went for the rest of the say 168 million people. Can you beat
such insanity! In recent years government officials took caprice even
further by refusing to dispense capital budgets and sharing the
money among themselves at the end of the financial year rather
than return it to the treasury. It's been established that our
lawmakers are the best paid in the world, our president's kitchen
among the best stocked and his aircraft fleet of the most wide
ranging brands.
   Okonjo-Iweala was quick to seize on the disparity between capital
and recurrent spending, how it was outrageous and needed to be
reversed if we should aspire to development, when she took office.
She was amply supported by the Central Bank Governor Lamido
Lanusi, who questioned why we needed so many states, so many
lawmakers, so many ministers (for plunder of course). It was as if he
had forgotten the purpose of the Nigerian state; he promptly got
chided by the lawmakers, who also initiated a law to whittle down the
powers of the central bank governor. (For an example of why the
size of the capital budget matters, Lagos state under Babatunde
Fashola has consistently spent an average of 65 percent of its
budget on capital projects and the impact is clear for allto see;
translate the scale to Nigeria and you'll get the big picture).
   Negotiations with stakeholders in the three arms of government
for a medium-term economic plan initiated under Okonjo-Iweala
could only secure a concession to reduce recurrent from 75 percent
to 68 percent over three years from 2012 to 2015. Anything more
would have rocked the machinery of plunder badly, putting its
passengers at great risk. It was best to proceed delicately. At that
point it seemed to me that Okonjo-Iweala had failed in her bid to
transform a reprobate.
   What has since emerged instead is indeed evidence of her
genius. Loans, loans, loans of variuos kinds have been arranged
from mostly the Chinese and other multilateral lenders to finance
infrastructure projects without tampering with the recurrent funds
available to public officials. In fact they may even get more. Chinese
funds will now build us four brand new airport terminals, build us new
railway lines and power stations, help us develop our economy
without the rigour of financial discipline. Hopefully we will emerge
from it a diversified, flourishing modern economy, one of the top 20
globally by 2020. A win-win situation, as they say. A looter continua!
And there lies the genius of Okonjo-Iweala!     

Culled from