The neoliberals are here again!

Following the recent spectacle that played out at the national assembly regarding the privatisation process from 1999, I put down my thoughts on our national development policy and where privatisation fits within this context.

When the privatisation process was initiated over two decades ago, starting from the Babangida era, the main argument was that it would lead to efficiency, better management of the affected enterprises, create new jobs and ultimately reduce poverty. But these claims have been disproved by the flagrant under-performance and failure of many of the privatised companies. Like it was in post Soviet Russia, asset stripping appears to be more lucrative than investing in revitalising these companies. The examples are everywhere: Ajaokuta, NITEL, NAFCON, you can add to the list.

In the face of these evidence, it is baffling to see how the federal government continues to insist on privatising NITEL and recently PHCN. Underperformance of government owned businesses is not just a result of unlimited capital and government patronage, although this is undoubtedly one of them. It is also a result of corruption from top to bottom and poor institutional framework. Why not confront these problems rather than chicken out? It’s like chickening out and retreating from a war front rather than confronting the enemy. There are countries like Russia and China which are faced with similar challenges but have managed to sustain state owned companies which are waxing stronger and opening up in emerging markets, what can we learn from them?

Why can’t we achieve a similar feat? We admire China, we buy cheap Chinese products and we perceive Chinese products as alternative to Western products. But we fail to learn from her ability to confront corruption head-on. We have failed to learn from their ability to invest in science, technology, research and development (STR&D).

Privatisation is not the only concern, there is a whole gamut which together constitute the so-called ‘Washington Consensus’. These policies caused significant problems for developing countries in Africa and elsewhere between the 80s and 90s including the financial crisis that hit Asia and parts of Latin America in the 1990s. Truth be said, we have failed to learn as a country. We all blame General Babangida for the woes of Nigeria mainly because he adopted Washington style policies but we still adopt same policies. However, at the climax of the Obasanjo administration we adopted the national economic empowerment and development strategy (NEEDS), which mainly adhered to Washington style policies: liberalisation, privatisation, foreign direct investment, etc (not that these are all bad policies strictly speaking), but the social aspects like improving education, health care and access to water and sanitation received little attention.

In the long run, not much has changed from the 1980s. The senate screenings of Ministerial appointees in July showed us how we have failed to learn. Olusegun Aganga and Okonjo Iweala seem to all tow the same lines around Washington style policies. This is despite the emergence of the post Washington consensus which offers a more viable, although not necessarily uncontested, alternative. It recommends better government investment and regulation of the private sector, incentives for the effective functioning of the public sector and better civil society participation in developing planning, among others. The lessons from developed countries’ response to the recent global financial crisis underscores the fact that governments cannot leave the market to falter and correct itself, what can we learn from that?

Perhaps we need to step back a little and reflect on what the viable alternatives to privatisation are. Tackling corruption in the public sector would be a good starting point. But are we really ready? Meles Zenawi (not my favourite head of state though) said and I quote ‘Africa is the only continent where we do things the same way over and over again and expect different results’ obviously this is not possible. But why do we continue to reinvent the same strategies that have continued to fail us over the years? Does it mean we as a people cannot innovate and think up new ideas that will improve our lives? Is it that we cannot reinterpret and adapt the ‘text book’ economics to fit out context? Or are some people are just here to receive the applause of their developed country bosses, using our country as experimental scapegoat?

To put it succinctly as Joseph Stiglitz would say, ‘the Washington consensus is dead,’ the neoliberal orthodoxy will do us no good. Either we accept it and do ourselves some good by retracing our steps or we continue to head for doom. The choice is ours.

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