At a filling station, Sunday morning — I was on the queue for the better part of two hours, having woken up at first light to avoid the pandemonium that is a filling station these days — it was easy to understand how perverse incentives could reinforce the anti-social behaviour patterns that lie at the heart of the crisis of our state. Queues (and the shortages that they advertise) anywhere, are an invitation to game the system — to waste fewer man-hours in idle chatter, to appropriate, as it were, unearned benefits. Standing guard, those who would not suffer such expropriation lightly, then express themselves (in speech and “body language”) in ways that lesser primates would find disturbing to their social organisations.
Of course, only a limited cohort of participants at such gatherings have insurance of any form. Yet the high-strung throng by the fuel pumps is a disaster waiting to happen. These days, I see fewer metal containers at the pump station. And, for good measure, the composite materials with which modern vehicles are made do not lend themselves to flammable sparks when unavoidably they make contact with each other. Still, I wonder how many insurers would willingly accept to provide cover for vehicles that spend so much time in such combustible settings. Higher premiums? Maybe.
That would however not surprise much. For across the economy, costs have risen exponentially, as the risk of failure mounts in every sector. In a sense, after the Jonathan government and its incredibly maladroit husbandry of the economy, we were always going to reach that point where it was going to be all pain and no gain. Largely, this realisation explained the seductive powers of the APC’s “change” campaign mantra. Even the legendary man on main street knew that we had to do things differently from how we have done them over the past 7 years, if we are not to head over a social, political and economic precipice.
As push came to shove, though, we, however, failed to factor in a key variable into our expectations of the next 4 years ― the All People Congress (APC) party’s populist streak. Unwilling (or unable) to inflict the changes that the economy needs, fearing that the pains to the “people” would outweigh the gains, the Buhari administration has dithered. True, it has shown a stronger moral backbone than Nerō Claudius Caesar Augustus Germanicus (Roman Emperor from 54 AD to 68 AD) did — at least it is actively pursuing past cases of corruption in the media (and now and again, through the courts).
But the changes to the structure of the economy. The very thing that is required if we are to extricate the economy from the hole that it is in, and even if the oil outlook were to improve dramatically today, if we are not to find ourselves back here again at the end of the next cycle. This has not happened.
Instead, at two important levels ― the downstream sector of the oil and gas industry, and the foreign exchange markets ― this government persists with familiar solutions to time-worn difficulties. Little wonder that we then are faced with the same outcomes that we have had to deal with since 1972.
Yet, the solutions to our current basket of woes are not as arcane, as successive governments’ inaction suggest. How difficult is it to understand that a commitment to private sector-led growth means that the market must allocate resources? As an aside, more often than not, our governments’ pledge to return the private sector to the fore and centre of domestic economic activity has ended up, on the back of a cat’s cradle of higher tariff barriers and waivers, supporting monopolies and cartels in those sectors to which our policy wonks have adverted their kindly gaze. Nonetheless, the defunct Union of Soviet Socialist Republics (USSR) offers us the most important example of how administered prices do not sit well with enterprise, innovation, and efforts to reduce income inequality.
I do concede that the market is often impersonal, and that properly administered it is no cure to all economic ills. But this is not the current government’s worry. For, at least, it seems to understand the notion of “social security” as a cushion for those that economic growth and development may leave behind.
Instead, it is to China that we need look for insight into the Buhari government’s anti-market instinct. And there we find a “communist” government in a death struggle with market forces that it unleashed itself. From contemplating the Chinese example, we then confront the question: “Are the authoritarian instincts of our new leadership simply unable to countenance the loss of power to impersonal market forces?” What does this possibility mean for the next 3 years? Whatever the answers are to these posers, it is clear as day that government can only maintain the kind of control that it currently seeks over the economy at the expense of its continued growth.