SPEAKING FOR THE PEOPLE: THE NEED TO RESTRUCTURE THE ECONOMY
HOW LONG SHALL WE ATTEMPT TO DRAW WATER FROM AN EMPTY WELL?
I stand before you today not as the national leader of the ACN or a member of the APC. I’m not here as Asiwaju, a former Senator, or a former Governor. Today, I rest these titles.
Thus, I stand before you simply as Bola Ahmed Tinubu, a Nigerian, who has dedicated most of his adult life to the progress of this nation. For this, I offer no apology. Come hell, come high water, I am a Nigerian. Come torrential rain or sunshine, drought or flood, increase or decrease, help or hindrance, I shall remain what I am, a Nigerian. Because of this, you are my people.
Whether from North, South, East or West, we are all branches of the same tree. Whether in the same or different political parties, we are members of the same national family. Whether from the same or a different religion, you are of me and I am of you. For the love for Nigeria, for the love of Africa and for the best future of our nation I co-authored this book with our African-American brother, Brian Browne.
Now permit me to tell you a bit about this intellectual journey upon which we embarked.
The most significant economic event of the past seventy years was the 2008 financial downturn.
Assessing the vast wreckage caused by this Great Recession, we concluded the downslide was not the normal churning of the business cycle. Something more sinister that posed a grave danger to Nigeria’s political economy was afoot. If we allow things to continue as they are, that political economy will become a distorted, top-heavy edifice incapable of maintaining its balance.
Increasingly small elite will grow wealthy and powerful beyond decent measure. The middle class will atrophy into nonexistence while the vast pool of our citizens will be shackled to a lifetime of misery, and sour destitution.
Gone will be the chance of broad prosperity and economic justice. Fleeing with it will be the hope of political democracy. As long as I live I will not walk silently beside her as Nigeria steers this bleak path. I will talk, shout, and even set myself down to write a book or a library of books if that is what it takes to awaken our people to the economic dangers that we have so assumed mindlessly.
The global economy had become unbalanced and it has unbalanced our national economic architecture. We are told that we live in an age of capitalism. If only that were true, things would not be so bad. We live in a time where capitalism has been consumed by a more virulent ideology. That ideology we deem as “financialism.”
Certainly, capitalism has many blemishes. Its historic imperfections have caused misery and pain across the globe. An inadequately regulated free market has on too many occasions ground poor and weak individuals and nations into dust.
Without appropriate government intervention, capitalism can become a predator devouring those it purports to enrich. Yet, capitalism must be credited as a medium that produced unprecedented, albeit unequal, levels of global wealth and prosperity. The task before us should be how to make the positive reality overcome the more negative aspects of this complex system.
However, the current challenge is far more acute and dramatic. We are compelled to do more than brighten capitalism’s image. We are left to save it from its financialist offspring intent on burying it.
What is now practiced is not capitalism. It is something meaner but less productive. Something that intensifies the gap between rich and poor. This is a worldwide phenomenon even in Britain inequality has reverted back to the level of 1920 before the welfare state came in -the situation must be even more precarious in Nigeria. Capitalism is now Something that unduly rewards those who earn their keep through the shuffling of financial paper yet unduly punishes those who earn their way through the sweat and travails of true and honest labor.
No, this is not capitalism. It is a cannibalistic offspring all too ready and willing to devour the parent that birthed it.
Under capitalism, the financial sector was adjunct to the real sector. The financial sector served as the circulatory system, efficiently allocating funds to the most productive agents within the real or manufacturing sector in order to keep that sector vibrant. Such vibrancy generates employment for the bulk of the people. High levels of employment give birth to stability and a standard of living conducive to democratic aspirations.
This complementary scenario no longer exists. The financial sector no longer is satisfied with being the branch. To a large degree, it has assumed the role of the tree and its trunk. The financial sector no longer complements the real sector. It has grown too large in comparison. Its appetite is ceaseless and grows with the eating. Instead of feeding funds to the real sector, it now chokes the real sector. Leaving many otherwise productive people and companies struggling to draw water from an empty well.
Under capitalism, the financial sector invested in production of tangible goods. Today, the financial sector specializes in financial investment. Having become insatiable, it rather invests in itself than invest in the rest of the economy so that other sectors prosper with it. Financial speculation used to be the province of a small set of risk takers. Today, it is the fad.
Cautious and prudent bankers were once sentinels of the financial sector. Things are different under financialism. Caution has been tossed to the four winds as the economy was tossed to the wolves. The banker who keeps his wits to function in the best traditions of banking is the exception. I salute those men and women who honor their professional tenets while others turned esteemed financial houses into lax casinos. However, their demonstrations of individual propriety proved insufficient to halt the systemic distortion that occurred.
Today, we have a big problem.
Making money not tangible goods that improve our standard of living has become the overriding economic objective. Funds should be used to fuel industrial production and generate employment leading to broadly shared prosperity. Instead funds are incessantly recycled within the financial sector, creating huge nominal profits for a select few. The great nominal wealth is unconnected to economic fundamentals and has little bearing on the welfare of the average person. The more attractive this nominal wealth, the more money flows to and remains within the financial sector which produced this entrapping mirage. The mirage of nominal wealth thus expands and deceives more of us while the real economy staggers about like a starving man who searches for crumbs on the floor of an empty banquet hall.
In Nigeria today, with our lack of vital infrastructure, the absence of a concrete industrial policy and with the paucity of long-term funding to fuel the real sector, we ask the economy to do the impossible. It’s like attempting to draw water from an empty well.
These points are not just topics of abstract observation. They are our real world problems. Financialism has crippled the developed economies so much so that they remain deep in serial financial crises. If a financialist modeling of the economy turns developed economies into hollow images of themselves, what shall it wrought in our economy that has never developed or industrialized?
As such, this book is an honest warning against the impending dangers of the encroaching financialism.
Yet the book does more than warn. We sought to identify a few safety exits from the burning building. The book offers important recommendations on how to reclaim our economic destiny.
For example, the accumulation of money by the federal government is a misplaced objective for these times. We have about $46 billion dollars in foreign reserves earning about one or two per cent while we have about $42 billion dollars in domestic debt which government is paying up to 16 per cent on. This makes no sense, and it crowds out private sector borrowers and investors our driving purpose must be to channel idle human and material capacity into productive streams that furnish jobs and manufacture tangible goods bettering the living conditions of every citizen.
I believe in the national government saving money if savings is for a purpose other than itself. For a government that prints its own currency, to save that currency for merely for saving’s sake is to accumulate worthless paper. Instead, our money must catalyze development enriching the broadest spectrum of people. To say we are saving money for a rainy day while everyone is already drenched and wading through flood waters makes little sense to me.
We must shun the philosophy that says “better to save money and spend the people.” I say better to spend money and save people.
We must reform our economy. To do this, we must first reform our philosophy about the economic development. What I advocate is not starry-eyed socialism. I seek clear-eyed yet progressive capitalism. Here are just a handful of key things we must do.
1. We must reform the financial sector so that it becomes an effective artery that sends funds to the heart of the real sector once again.
2. The national government must formulate a national industrial policy focuses on developing labor intensive industries. This is not textbook capitalism but we do not live in a textbook. This is how the United States developed under Alexander Hamilton’s “American System” and how modern China reached spectacular growth.
3. We must restructure our educational system to prepare our youth for the present challenges of this economy and not educate them in a manner more appropriate for another land.
4. We need to overhaul our agricultural system and put in place a price support mechanism so that those who toil the land and who feed us do not go continuously poorer the more they toil. We must establish commodity exchange boards exclusively for farmers which will go a long way to support them and provide agricultural pricing support mechanisms and consequently enhance food security.
The challenge before our nation today is how to protect millions who toil the land, ensure they make reasonable returns and boost agricultural production. Instead of stealing from our children and stealing the pension fund of the retired; this government must answer the moral call of providing one meal per day for our school children up to high school level. Feeding our children will improve nutritional intake and work better for their educational development. Ultimately, it will eliminate child abuse and take the children off our streets.
The demand for farm products to feed the pupils will be a catalyst to generate demand, create wealth, elevate production of agricultural goods and fuel associated industrial growth. The establishment of these activity and small scale agro-industries will generate significant employment in our rural areas.
5. We need to provide primary health care, taking it upon ourselves to fight malaria so that our children can develop properly and our labor force becomes more productive as it grows healthier.
In the final analysis, our development rests with us. Foreign investment is welcome but will not lead us to prosperity. Foreign investment may repair a room or two, but it can never build the mansion we seek.
We cannot blindly follow the advice of others. In thoughtless adherence to their own economic myths, the developed economies have led themselves astray in some instances. Their present counsel can do no better for us than it has done for them. Should we continue to listen to their false counsel, we will gain nothing of it because it would nothing more than attempting to draw water from the empty well.
We have the ability and knowledge to forge our own way. We must base our approach on empirical fact not subjective theory. We must examine what has worked in other places then adjust these truths to the situation at hand. We needn’t reinvent the wheel but we must be mindful not to be fooled when a stranger tells us that a round stone is the wheel we need.
Let us give our productive sector drive, purpose and vitality so that it puts the vast army of idle people and material assets to work.
In this way, we safeguard internal security because a prosperous nation is no longer a danger unto itself. In this way, we safeguard democracy because a productive work force and strong middle class are better guarantors of democracy than any military can ever be. On the other hand, a poor and idle population is a factory of inequality. In the throes of such inequality, despotism finds ample harvest.
In this manner, we give to every Nigerian whether from north or south; whether PDP or APC; Progressive or Conservative a chance for a better life. In this way, I can stand before you or anywhere else on this planet as a Nigerian without recourse to my title or position yet stand duly proud of what we have achieved and of the life we have forged for ourselves. For this solemn reason, I helped write this book. For this solemn reason, I urge that you take it upon yourselves to read it. Thank you for listening.
Asiwaju Bola Tinubu