God’s Experiment
“Nigeria is God’s experiment in the impossible … the only source of hope is that the president is determined to make SFEM work … but if it fails, the problem for the government is that its leaders will be stoned on the street.”
Paul Samuelson is an American economist who received the Nobel Prize for Economics. Milton Friedman is an American economist who received the Nobel Prize for Economics. There the similarity ends. The first is a liberal economist, a humane-vision economist. The other is a conservative economist, a believer in the supply-side theory of economics: his philosophy, worn like a garb by Ronald Reagan, has no room for the humane vision: Let the market take care of that. And if the examples sound so far away, come home and see for yourself. During the debate on the IMF, those who spoke loudest were economists, and they couldn’t agree. Some said: take it. Others said: don’t take it. Since the government of Ibrahim Babangida couldn’t get any wisdom from the intellectual arguments from both camps, it was left with the shouting of the populace who were speaking from their heart. Even if economics were no more than a subject in which the practitioners can’t agree on what it says on any problem, it would be nicer for a government to arrive at an answer through reason and not through emotional noise made by the populace. That’s what happened. Because economists couldn’t agree on a solution to the issue of whether or not the nation should take the IMF loan, the government found itself rejecting the loan which it is now busy looking for a way to accept without losing face.
That’s what SFEM is. It is a round-about way of doing what you said you would not do in the first place: handing over the nation’s economy to the IMF.And the point to be made quickly is: it may not make sense to leave the question to economists who will reduce the whole issue to an intellectual argument that all of them failed to resolve before leaving school. And since everybody in Nigeria has learned something from the IMF debate – that you don’t put your heart where your head should be – maybe all Nigerians should show more interest in SFEM. One cannot see any other way of looking at the matter since it concerns everybody directly. Everybody would just have to understand what is involved in it. One can see the problem with that: nobody, not even the economists and the government, seems to understand what SFEM is. The banks have been sending their officers to other countries to learn the mysterious ways of the new system, meaning they, too, don’t quite understand what it means. The government, more or less, has submitted itself to the whizz kids from the IMF and the World Bank, meaning the government itself doesn’t understand it. The new system is reported to have failed to work in countries where the IMF and the World Bank encouraged it, meaning that the IMF and the World Bank are uncertain what effect the system will have on an economy like Nigeria’s.
The truth is that no country in the world is like Nigeria. The country is God’s experiment in the impossible. That way, maybeSFEM will work in Nigeria. The operative word is making it work it work. The economists and the bankers argue that for the SFEM to work here, the government should not introduce any controls into the system. The IMF AND THE World Bank agree with them. But Nigeria is like no other country, so why apply the orthodox view to the Nigerian situation? The fear of the economists and the bankers is that those in the government who may be put in charge of policing the controls put in SFEM system will soon find ways to subvert the market to their advantage. They argue that the typical civil servant in Nigeria is a man who doesn’t think twice about killing his country to enrich himself. True. A good example just presented itself. According to The Guardian of Sunday, August 3, a lowly official of the Central Bank on a paltry salary of N600 a month succeded in stashing away N8 million in his bank account through criminals in defrauding Nigeria by sending questionable remittances abroad. Of course, a man who has N8 million in his Nigerian bank account here in Nigeria will have at least one million pounds in his accounts in some foreign banks. And he may have assisted thieves in cheating Nigeria out of an amount in the region of one billion naira. So, to avoid more of such opponenets of controls argu, remove the avenues through which such people will make money at the expense of the long-suffering people of Nigeria. Good argument. But what can the government do to prevent the SFEM from being abused? How can the government stop some rich Nigerians and their Asian friends from buying up to available funds thrown in to start the SFEM? These are the questions.
Nigeria got in this jam because fraudulent businessmen stole the country dry. For every import licence issued, Nigeria lost at least 30 percent of the face value of the licence to capital flight. Some 20 percent on the average disappears through over-invoicing, and at least another 10 percent disappears through offering Nigerian importers uncompetitive prices. A man eager to negotiate a 20 percent commission for himself forgets about shopping around for the best price. The hope is that because is now playing the last card, the Nigeria will for once worry about the country. But things don’t work that way in the country that is God’s experiment in the impossible. And those in government realize this. Whether they have the determination and the moral authority to do something about it is another matter. Someone high up says he is scared to hell by SFEM that is, if it should fail. But the president, says the fellow is confident that the SFEM will work. The source of hope, therefore, is that Babangida is determined to make SFEM work. That, to say the least, should be reassuring. Nigeria has no choice, as far as life goes other than SFEM. If it fails, everybody, and not only the government as Yakubu Mohammed said is in trouble. The only problem for the government is that all its leaders will be stoned on the street if the SFEM fails; and everybody will be hungry and things will be like in Ethiopia. Which is why SFEM should not be left to economists to turn into an intellectual exercise.
©Newswatch, August 25, 1986
(Pp.282-284)
