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Planning and budgeting in fantastically corrupt countries

By Obadiah Mailafia

FORMER British Prime Minister David Cameron infamously described Nigeria as “a fantastically corrupt country”. Many of us were incensed – even scandalised – by that classic English put-down. I wasn’t. This is what to expect when a civilised nation such as Great Britain is run by immature Old Etonian boys. I know them too well – I went to college with some of them. No wonder Britain seems to be going down these days. I once asked a German friend if she had ever been to a Third World country. After careful thought she said, “No, except Britain”!

One of the most influential works in social science in the seventies and eighties was the book by Naomi Caiden and the late Aaron Wildavsky, Planning and Budgeting in Poor Countries (Wiley & Sons 1974). Their work was based on the impossibility theorem that any kind of rational scientific planning could be done in poor countries. They pointed to the fact unrelenting popular demands and pressures against a global business environment of commodity price volatility and unpredictable public finances. Caiden and Wildavsky reached the conclusion that it’s better to jettison long-term planning altogether in favour of what they termed “continuous budgeting”.

In the context of the Cold War and Western fears of anything that smacked of Stalinist Soviet planning, this advice was swallowed line hook and sinker by many of the leaders of the developing nations. Through the structural adjustment programmes that we were coerced into implementing by the Washington-based Bretton Woods institutions, we in Nigeria threw away the baby with the bathwater. Remarkably, even some of our best economists have no knowledge of the fact that economic planning in Nigeria was quite successful. Anyone in doubt should read the works of the doyen of Nigerian economics Pius Okigbo and the autobiographical work of the eminent American economist Wolfgang Stolper who became even more famous for the Stolper-Samuelson theorem in collaboration with Nobel laureate Paul Samuelson.

Paradoxically, the countries that bought the new heresy sank deeper and deeper into the mire while those who ignored them, particularly the Asia Pacific nations of South Korea, Singapore and Malaysia, prospered. They are today more affluent than struggling European countries such as Portugal, Spain and Greece. Stolper was one of the architects of our first National Development Plan 1962-1968. What may surprise a lot of people is the fact that Stolper, who kept meticulous notes during his years in Nigeria from 1959-1962 noted that Nigeria had far better prospects than Singapore, Malaysia and India. Our civil service, according to him, was unrivalled in the New Commonwealth. He was apparently incredibly impressed by our first-generation public servants such as Simeon Adebo, Ali Akilu, Pius Okigbo and Ojetunji Aboyade (“what Aboyade did not know in industrial economics was not worth knowing”). He was not an economist given to hyperbole. He prophesied that ours is a country with a manifest destiny for greatness.

Like many Nigerian intellectuals of my generation, I became irritable whenever foreigners criticised us or tried to force their ill-thought economic nostrums down our throat. Like Paul the Apostle, I have experienced a new birth on the Road to Damascus. I now believe that your enemy can counter-intuitively become your greatest helper. By attacking your person and trying to influence you in one direction, he gives you an opportunity to reassess where you stand in God’s universe. Your duty is to listen politely. Whenever the IMF visitation were in Beijing, I’m told the mandarins would entertain them lavishly. And whenever it was time for them to peddle their heresies the Chinese technocrats would feign ignorance – even confusion.

You see, the Chinese have been running a state continuously for more than two millenniums. They know that the greatest victory is to defeat an enemy without firing a shot; through the power of your mind and your soul-force. The great Obafemi Awolowo termed it the power of “mental magnitude”.  Today, China has technically overtaken America in real purchasing power parity terms, although it’s in everybody’s interest to pretend that this is not the case.

We in Nigeria should learn to talk less and act more. “Talk softly and carry a big stick” has been an ancient precept of African royal statecraft. We should go back to the traditions of rigorous economic planning, taking on board the lessons of world economics and the imperatives of national competitiveness in our twenty-first century digital industrial civilisation. The discipline of planning will help us to better allocate resources on a more rational basis. It will also impose greater discipline on the budgetary process while serving as a vehicle for nation building and national mass mobilisation.  The young people of this country, with their incredible energy and creativity, are a nuclear force waiting to be unleashed for national transformation.

With regard to the budgetary process itself, there are several critical issues we must overcome. Although we celebrated the recent finalisation of the 2017 Appropriation Bill, it is rather scandalous that we could only manage to do so in mid-June. From November last year when President Muhammadu Buhari presented the budget estimates at a joint session of the National Assembly, to the end of May, the entire process was overtaken by unseemly drama akin to a seedy downmarket Nollywood film.  Year-in-year out, we are faced with the same intrigues, blackmail and loud howls about budget padding running into hundreds of billions of naira.  Over breakfast last week, I had opportunity to engage in a lively conversation with my friend Bright Erakpowere  Okogu, former Director-General of  the Budget and currently Executive Director at the African Development Bank. He painted a rather sorry picture of the spirit of greed and grand larceny that follows the appropriation process – a rather murky business.

I honour the National Assembly as the fountain and spring of our democracy. But I fear that they have not done their own reputation any good. When the executive submitted a proposal of N7.3 trillion, they upped it to N7.4 trillion.



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