Abel Abel

Nigeria: Experimenting With Democratic Socialism?

By Magnus Onyibe

President Muhamadu Buhari, PMB is reluctant to discontinue the payment of an economically debilitating fuel subsidy to importers, a practice he inherited from Ebele Jonathan,GEJ’s regime and which some analysts believe sets Nigeria back financially to the tune of at least a quarter of a trillion naira annually. Instead of relieving govt (tax payers?) of the burden of deploying such huge sums, which is a significant portion of 2015 national budget of about N4.6t to conspicuous, avoidable and unbridled consumption as opposed to investing the scarce funds in badly needed infrastructure (electricity,roads,railway,hospitals, sea/airports and schools) the PMB regime is poised to add on more financial burden of providing a meal a day for school children nationwide plus payment of the sum of five thousand naira,N5,000 monthly stipend to the unemployed and aged Nigerians.

These welfarist/socialist initiatives catalogued above are some of the pledges that PMB and his party, APC made to Nigerians during their electioneering campaigns last year and which they are determined to deliver, willy nilly and of which some Nigerians are cynical.

In the view of critics,the income to finance such costly initiatives are just not there especially in the light of the over 50% crash in international oil price which constitutes about 75% of Nigeria’s gross income.

Their argument is hinged on the fact that,it is the ballooning of fuel subsidy costs and the arbitrary and sudden increase in the salary of public servants under GEJ’s watch that brought the economy to the sorry state whereby a whooping 80% is allocated to recurrent expenditures with only a miserly 20% left for capital projects. This in their opinion is responsible for the dearth of infrastructure and stunted growth of Nigerian economy and therefore the idea of pilling up another subsidy-like free meals for school children and payment of stipends to the unemployed,a sort of social security,will further drag the economy down the path of recession.

Undaunted by skeptics,PMB and his team have chosen not to be as pessimistic over dwindling income, so they do not share the sentiments that the nation’s current lean resources can’t sustain their quasi-socialist policies. Rather than being de-spirited, mr president and his team seem to have perfected strategies on how to plug the leakages that have characterized Nigeria’s financial management via introduction of new revenue leakage plugging strategies, one of which is the Treasury Single Account, TSA aimed at sealing the holes by consolidating all federal govt revenues in the Central Bank of Nigeria, CBN vaults.

Hitherto, govt revenues were spread across hundreds of bank accounts by over six hundred Ministries, Departments and Agencies, MDAs of govt ( according to Oronsaye committee on rationalization of govt organs) in the twenty three ,23 Deposit Money Banks, DMBs in Nigeria and it is believed that such proliferation of accounts rendered govt revenue susceptible to the risk of pilferage.

The other financially prudent measure aimed at optimizing the application of the revenue saved from application of TSA for maximum benefits through value for money contracts is the concept of Zero Based Budgeting, ZBB which is expected to offer better yield than the current Bureau of Public Procurement, BPP functions of scrutinizing contracts by MDAs before they are awarded. ZBB which is also known as performance based budgeting is expected to, on implementation,secure for Nigeria the best value for every naira budgeted based on a thorough cost benefit analysis and prioritization of projects to be executed as opposed to spreading funds across several,sometimes frivolous historical budget subheads.

Keep in mind that in addition to the policies earlier highlighted, at the inception of this administration, PMB had ordered the CBN and the Debt Management Office,DMO to grant soft loans and reschedule the debts of state govts that were owing public/civil servants backlog of salaries-about one trillion naira in cash and bond-to lighten the financial burden on workers and reflate local economies at the states level.

Given the foregoing initial policies and actions so far introduced, which have welfarist and if you like, socialist colorations, it needs no emphasis that PMB is poised to run a govt of the people,by the people and for the people which is actually the primary and functional definition of democracy.

Seen through the prism of Nigeria’s recent history of gluttony, the frugality of the current regime is tending towards socialism, but that is not sufficient enough to conclude that PMB’s govt may have descended into socialism, as this is indeed a democratic govt because the leadership was freely and transparently elected by Nigerians. However ,because the regime’s policies have socialist trappings,it is undoubtedly tending towards democratic socialism. The nomenclature is derived from the fact that the current governance system in Nigeria appears to be a hybrid:harmonizing Capitalism- a byproduct of democracy that caters for the rich, side by side Socialism, which is synonymous with the poor.

Put succinctly,Democratic Socialism,which a sideways look at the current PMB’s approach to leadership depicts, is actually not such a bad thing. In my view , PMB appears to be balancing between upholding the capitalist free market principles of democracy and at the same time operating the economy in a way that enables him take the welfare of the masses into consideration . According to a recent New York Times, NYT article entitled ‘Guess Who Else Is A Socialist’ by Timothy Egan “Once you label something socialist, it brings to mind dour Soviet types trotting out dreary worker clothing for spring fashion line.Or, here at home,those sufferable parlor room Marxists who think it would be utopia if only we naturalized every Starbucks.In that sense, the worst thing about socialism is the socialist”

The NYT article was inspired by the recent U.S. Democratic Party presidential candidates TV debate, where Bernie Sanders, a front runner is promoting socialists tenets and his message is resonating with many Americans hence, of all the five candidates, he is the only one giving Hilary Clinton,who is comfortably ahead of the pack, a bit of scare. Although,most American voters may be romanticizing with the idea of socialism, but in practice, it is an anathema to the U.S.which is the leader of the democratic world and the citadel of capitalism.

Even then,Capitalism is not doing any better in terms of popularity. A Harvard Business Review report of 2012 reinforced that belief when it argued that “While the global financial meltdown and the after shocks have unleashed a flood of indignation, condemnation,and protests upon Wall Street,the crisis has exposed a deeper distrust and implacable resentment of capitalism itself”

Curiously, even Jesus Christ was a socialist and so also was prophet Muhammad (Peace Be Unto Him) a socialist because they both shunned accumulation of wealth by a few which capitalism is all about and preached the doctrines of caring for your fellow man and public ownership of resources and assets which socialism is all about.

Given the scenario above, is anybody still wondering why PMB is reluctant to end fuel subsidy without finding solution to the havoc the discontinuation of the policy could wreak on the poor and he is also unwilling to further sell off govt utilities like the refineries as being clamored for in some quarters until he is convinced that long suffering Nigerian masses will be secured without public ownership of such infrastructure? Wonder no more because by all indications,PMB is frugal and pro-poor. At least his assets declaration form suggests he does not engage in primitive acquisition -considering the high profile public offices he has occupied and what’s more,PMB is a big fan of late Aminu Kano , the pre-eminent leader of the talakawas-the poor in northern Nigeria . And one more thing: Vice President, Yemi Osinbajo is also a protege of late Obafemi Awolowo, acclaimed for his frugal lifestyle-he married Awo’s daughter, Tokunbo-so both PMB and Osinbajo are, so to speak,cut from the same cloth of frugality and austere lifestyle . Another innocuous and quaint evidence of this regime’s preference for simplicity as opposed to opulence is the fact that, upon resumption of office,PMB reportedly rejected the purchase of five new armored Mercedes Benz S-600 (V222) cars at the cost of four hundred (N400m)million naira for his official use.

Incidentally, the duo of PMB and Osinbajo are not lone travelers on the route of Spartan governance as frugality is proving to be the new fad across the world both in the public and private spheres.
The assertion above is supported by a report contained in the University of Cambridge,UK Research Bulletin of October 16,2015 tilted ‘ A Touch Of Genius’ where it was observed that a “gutsy” Indian approach to innovation is being echoed world wide by multinational companies adopting “frugal ” approaches that help them do business faster , better and cheaper. That Indian approach goes by the name of JUGAAD which means finding practical solutions, being enterprising with resources, and learning from the principles of flexibility and frugality.

Amongst early
private sector JUGAAD adopters are Tata,GE Healthcare,American Express,Marks&Spenser,Siemens and Ford Motors. Countries such as India, China , Brazil and Kenya are some of the emerging economies also experimenting with the JUGAAD philosophy.

As the authors of the fascinating book, ‘JUGAAD Innovation:How to do Better with Less’, Navi Radjou,Jaideep Prabhu and Simone Ahuja contended “Ultimately, frugal innovations is about people. It is human ingenuity that drives innovation-seeking opportunity in adversity, doing more with less, being flexible and simple, and following your heart”.

In my judgement,practical solutions to governance through less costs approach is simply what the PMB administration is so far applying in the management of Nigeria’s economy. In plain language, that means right sizing or down sizing govt operations.That makes this regime look like a potential inductee of JUGAAD ideology which is welcome.

The only challenge now and which is the reason for this intervention, is that the PMB administration seem not to have put this regime’s policies in a framework for easy understanding and perhaps assimilation by Nigerians and particularly foreign investors who seem to be scratching their heads as they try to make sense of the socioeconomic direction of govt.Without branding or packaging of a country’s economic policy, most investors are often at a loss on what to make of the economy and how to get involved.

The U.S.Ambassador, James Enstwistle, said that much when he visited lagos state governor recently and informed him that the U.S govt is waiting to see the policy direction of PMB to determine how the biggest economy in the world can get involved.

Although Nigerians should not yet chant eureka because they feel their current leaders seem to be taking them to the proverbial promised land, (as there are still many rivers to cross)
but it appears, we are headed for an Eldorado if JUGAAD type policies are consistently and diligently pursued by Nigeria’s new leadership for positive outcome .

According to professor Jaideep Prabhu, who is the Jawaharlal Nehru professor of Indian Business at Cambridge Judge Business School, “JUGAAD innovation is the one reason why despite a scarcity of food, water and energy and limited healthcare and education, India has been one of the fastest growing economies in the world “.

Against the backdrop of the professor’s enthusiasm and optimism,you can decide, wether the envisaged transition from doom and gloom, (that Nigerians have become so accustomed) compared to the bright development outlook currently beckoning on the horizon, is not the CHANGE Nigerians were seeking when they voted for PMB as president and APC as governing party, back in February.

Magnus Onyibe, a development strategist,futurologist and former commissioner in delta state govt and alumnus of Fletcher School of Law and Diplomacy,Tufts University, Medford Massachusetts, USA sent this piece from Abuja.