Okonjo-Iweala- The romance and the reality (2)

By Tonye Princewill
What I am really driving at is this: Okonjo-Iweala’s success or failure will depend much more on how much she has learned from her previous experiences in Nigeria, and how well she understands present realities, than her academic credentials or anything she may have achieved at the World Bank.

Like I’ve said, this background could turn out to be more of a hindrance than a help, unless she is astute enough to make reasonable judgments about what will work here and what won’t and to avoid trying to impose fiscal measures on Nigeria to please pundits in the industrialised nations.

An unindustrialised economy, like ours, simply doesn’t fit easily into the fiscal models of Harvard and MIT theory—and certainly not the often irrelevant and insensitive “conditionalities” of the World Bank. We have the lingering aftermath of the Structural Adjustment Programme, SAP, to remind us of this. Besides look at the world’s finances and ask the question. What do they really know?

I am throwing in this caveat because, according to some reports I’ve read, “structural adjustment” is definitely on the Finance Minister’s policy agenda. Those among us, who remember the ravages of SAP, will obviously be sitting with our fingers crossed until her plans are laid out in detail.

Most other items on her policy menu are also fare in which the World Bank would delight. At the top of the list, of course, is the N79.70 per litre petroleum subsidy—which, at a daily consumption rate of 32 million litres nationally, compels the Federal Government to pay motorists N2.6 billion every 24 hours!

This obviously cannot continue. But the trick, politically, is to liberate government from fiscal serfdom without, at the same time, relegating the ordinary Nigerian to economic peonage, via spiralling transport, housing and provision prices—a prospect that has made the subsidy a very volatile issue.

Less treacherous, but certainly no less important, are tasks such as reducing the domestic debt, increasing capital expenditure, diversifying away from reliance on oil revenue, the restoration of Nigeria’s international rating, the pairing down of recurrent outlay and instilling fiscal discipline in government.

Happily, manufacturing is also on her agenda. But at this juncture, it is not quite clear where this sector ranks in the Minister’s order of priorities. So far, she has given it little more than an honourable mention—listing the sector among her concerns more, it seems, out of courtesy than commitment.

Yet without a vibrant manufacturing sector, fiscal policy—no matter how well-conceived—is not likely to have any appreciable long term impact. Real sustaining power, especially for our populous nation, has to come mainly from industry; and manufacturing is the sine qua non of industrial activity. We need jobs.

Heavy industry, in particular, needs a massive infusion of capital. In fact, my fervent entreaty is that the steel industry be rescued from its present status as a fiscal orphan, fit only for foreigners to embrace, and elevated to its proper place at the top of the nation’s hierarchy of investment priorities.

I will have a lot more to say about steel in future columns. But for the time being, suffice it to offer that the position of heavy industry, including steel, in Okonjo-Iweala’s pecking order of investment is a crucial litmus test of her fiscal policy.

The question in my mind though, and that of many other Nigerians, is whether or not the Finance Minister and her team possess the political courage—and the will— to venture out of the fiscal ambit of the World Bank.

Among other things, as Osita Okechukwu observed in The Daily Trust, she will have to modify her views on the need for government to invest oil revenue in refineries, railways, steel plants, power and other strategic enterprises.

It is patently unwise to leave all of our vital economic, industrial and strategic assets completely in private, not to mention foreign, hands. This flies in the face of a worse-case scenario, in which our national interests are somehow at odds with those of collaborating countries.

What is more, the Nigerian middle and upper classes simply aren’t financially strong enough to carry the burden of industrialisation. Government must take the lead in heavy industry while, at the same time, giving free rein to the creativity and dynamism of private enterprise. I am a believer in collaboration, but I always like to know who is boss.

Mr President and “Madam Prime Minister”, stretch out your hands, grab on to the progressive elements in this country and drag Nigeria into the 21st century. We are waiting for it and the world is waiting for us too. How will the reality of this romance end?

Concluded