Nigeria’s weak governance structure has affected the economy —Folawewo

Abiodun Oluwole Folawewo is a professor of Economics in the Faculty of Social Sciences, University of Ibadan. He reviews Nigeria’s journey in 59 years, where the country missed it and what ought to be done to get the country back on the track of sustainable development with DARE ADEKANMBI.

NIGERIA last week celebrated its 59 years of independence. Has it been 59 years of no growth and development or a case of growth but no development?

If I am to answer your question rightly, I will tell you that in the past 59 years, Nigeria has witnessed some level of growth and development. It is not really true that the country has been growing without developing. If we have a comparative in absolute term, I will say Nigeria has been growing and developing. But when we place the country on comparative terms, then we say the growth has not been commensurate with what we expect and, of course, the level of development is not up to expectation.

In what specific areas would you say there have been growth and development?

For you to measure whether there has been progress in any country, you look at what is happening to the level of output, consumption, productivity and the rest. When you compare where we were in the early 1960s and 1970s, you would discover that Nigeria has grown in terms of output and the rest. When you look at other fundamental indices or indicators of development such as provision of amenities, Nigeria has witnessed some level of development. But looking holistically, the development has not been adequate and of course the level of growth as well has not been adequate. If we break it down into different components, some sectors of the economy have been growing, while some other sectors, instead of growing, are actually going down.

A typical example is our manufacturing sector or the industrial sector. The country has witnessed little growth. In fact, there have been fluctuations in the level of growth, to the extent that our industrial and manufacturing sectors, instead of actually experiencing rapid growth, have been going down. But when you look at services sector, especially like communication, there has been growth and has become a big employer of labour for years now compared to what we had in the early 60s and 70s. Of course, when you look at agriculture, this has also grown and of course the growth has also started shrinking because some other sectors have started springing up. But the critical sector that we need to create jobs and improve household welfare is the manufacturing industry. In this area, the country has not fared well at all.

Looking at power generation, a lot of money has been sunk into this sector without tangible results being felt by Nigerians. What really do you see as the problem here and where did the country get it wrong?

When you want to measure development, access to social overheads or infrastructure is critical. It is not just power, we talk of road network, education and health and others, which are called social overheads, and in all these areas, Nigeria has done very badly.  In terms of power, in the past we used to have plans, I mean real development plans. We had the first national development plan, the second, third and fourth. All of a sudden, we jettisoned planning and started going for ad hoc planning, all these NEEDS, SEED, Vision 20: 2020. Talking about the power sector, let me give you an example of a country in Africa, South Africa which generates about 40 per cent of its power from coal. Nigeria has coal, but gradually, we have neglected it. We now depend on a source of power that is not reliable, which is the hydro that fluctuates and the technology driving power production from hydro is currently being phased out all over the world. That is the technology we still rely on and that is why we have problem of power generation. If we go renewable source of energy, we will be able to get it right. We can borrow technology from countries like South Africa. How is South Africa managing to sustain its power? We can also generate power from wind and of course, solar and the rest.

When I said our industry and manufacturing are not growing, this is one of the reasons because when you take out power, then we have solved virtually all the problems in this sector. A company that is running on diesel and generator is incurring a huge cost on production and the resultant effect of that will be cut in employment and income generation and household welfare. When we say our GDP is growing as a country, our poverty rate is also multiplying because the critical sectors to move the economy forward are not growing. So, the issue of power is a big issue. We missed it as a country when we neglected other sources of power generation that we ought to have developed in our early development phase.

The Federal Government has said its recent closure of borders is part of efforts to strengthen the economy. Do you agree with that?

What common sense will tell anybody is that whatever you don’t produce, you can’t consume it and if you want to consume it, you will have to get it from somewhere else. The closure of the border, though a good step, is not done in the right way. For the Federal Government to close the border, there must be alternatives from our local industry. For instance, they keep talking about rice, what is the development we are doing in out rice industry as a country? Most of the development we hear about increase in local rice production is on paper. Many people can’t feel it. Just take a trip to Bodija market and count the number of bags of rice you see there. How many of them are locally produced? There must be viable alternatives before the borders are closed. When you say there are certain goods and services that can be produced locally, we must do so efficiently, meaning the cost of production is very low such that whatever is imported, the local ones can compete with the imported goods. What encourages people to go for imported goods at the expense of locally made ones is because the price of the imported is cheaper. As a country, what we need to do is to produce locally and efficiently. This comes back to the issue of power and other needed infrastructure that will aid the production of goods at competitive prices.

What role has corruption played in the level of underdevelopment we have seen in the country in the last 59 years?

I won’t call it corruption. I am going to give it a general name, which is governance. You may have the best economic structure, but if the governance structure is wrong, you will get everything wrong. The governance structure in Nigeria is very weak, inept, ineffective and inefficient. That takes me to the issue of regulatory framework. The issue of corruption is pronounced because the regulatory institutions across board, either in the financial sector, industry, agric, education industry and the rest, are weak because the institutions have been rendered ineffective by corruption. That is why I said we should call it a general name, which is weak governance. There are rules, but when the institutions to implement the rules are weak, that is when we begin to talk about corruption and the rest.

As Nigeria looks forward to celebrating 60 years next year, what is your advice to the national leadership of the country and even subnational governments?

Number one, we need to get serious with our planning. Not just these ad hoc planning of three- or four-point agenda. That is not what will move a country forward. A country will move forward based on sincere, adequate and serious planning. China, today, is talking about 2050 and, of course, the projections are already there. In the next two years, they have planned what they need to do to cumulatively help them realise their goal. Even Africa is talking about African Agenda 2053. That is how to plan, not just by words of mouth. We should look at all the sectors of the economy and evaluate the current status of each sector and project where we want each sector to be in the next three or four years. We also have to look at the needed ingredients necessary for each sector to move forward. When we do this simultaneously, we will see every sector coming up and not that we focus attention on oil at the expense of agriculture. There is what we call linkages among the economic sectors. That is how a nation develops. We also need to get our governance right. Let me say that governance is not a matter of changing political parties in governance. Governance has to do with having laid down rules and regulations and it does not matter what type of party is in power. Those already laid down rules guide the actions and activities of those in power. We should do it in such a way that change of government won’t affect the implementation and enforcement of those rules. That is how we can move forward. But when we have one party coming in with ‘transformation agenda’ and another coming in with another campaign theme, that is not the way to move the country forward, unless if their individual agenda key into the already laid down development plan. When the governance is right and the institutions are strong, the issue of corruption will go. In any country, there are tendencies to be corrupt. But when those in power know that when they are caught circumventing the rules, they are gone, there will be sanity and seriousness about governance. When the penalty to be paid for ignoring the rules is higher than the benefit to get from corrupt practice, then everybody will get serious and corruption will significantly reduce. It is just like you are driving your car in any city in Europe. The police don’t have to be there. Once the traffic lights flash red for you to stop, you refuse to stop, they will send a bill to your house. That is where rules are working and that is the way nations move forward. When we put these things in place in the country, all other fundamentals will fall into place. In the last 10 years, ask yourself how many billions of dollars and trillions of naira have been wasted on power generation and road constructions and you won’t even see many of the roads? All these have to do with the issue of governance and weak institutions. And we can’t get the governance structure right without tampering with the rules of the game, which is the 1999 Constitution. If you listened to Professor Charles Soludo, ex CBN governor, on Tuesday, everything boils down to governance, about how to get all arms of government right.