Now that the Buhari administration has a cabinet, we may begin the discussion around what the tasks are proper to his administration. Back out the six months spent preparing to govern, and the 12 months ahead of the next round of national elections, when the president enters “lame duck” mode, and we have less than 3 years in which to implement the needed changes.
There are few low hanging fruits to be picked off ― a rotting system rarely has enough of those anyway. More pressing are the alterations to the organisation of this space, which help boost long-term productivity gains.
In no specific order, I would vote for the following.
Reform of the criminal justice system. “Trust” is an essential requirement for the proper functioning of a market economy. It is the ingredient that makes contract of all sorts easier to negotiate and conclude. Unfortunately, the nature of the trusts involved is not of the kind that micro-finance schemes have been structured round. And it is doubtful whether we can continue trying to build a modern economy on the moral infrastructure of pre-agrarian communities.
Instead, we are challenged by the process of “modernisation” (and I use this concept advisedly) to look to the design and deployment of structures and processes that make it easier to enforce contracts — a better police force, and courts. Better law enforcement, in other words. Can we continue to have about a third of our police personnel deployed in providing security for private persons? Could we gain by beefing up the police’s forensic competences? So that they dust for fingerprints and DNA traces at crime scenes instead of trampling material evidence under their jackboots? How may the police better use the flood of biometric data currently available on every Nigerian above the age of 18?
In the end, a better police force is just as much about improving the efficacy of the law courts. And the courts matter, if our commitment to “free enterprise” is to mean anything. In the three decades since 1985, we have paid too much lip service to this phrase. Our verbal coinages around it have been no less creative. At a point, for our today, some years back, some of our leaders dedicated their yesterday. Waste, both ways? Alas.
We have also argued free enterprise in terms of the private sector being the domestic economy’s growth engine. But today, the clear need, given the state of the economy, and its unhealthy dependence on hydrocarbon exports, is to let go of the refineries. I have had arguments to the effect that no serious investor would want to put money into these institutions in the shape they are currently in. Nonetheless, there are few bad arguments for throwing good money after bad, than to then ask that government rehabilitate the refineries preparatory to their sale. If we must free investment into the oil and gas sector, then the first order of duty is to make processes transparent there, so that investors can see a clear path from their investments to the repatriation of the returns on it. It would be important for this process that we take government’s dead hand off fuel importation (so, it becomes an all comers’ affair) with the Department of Petroleum Resources (DPR) there to ensure compliance with standards, of course.
This means that we then drop the subsidy of domestic fuel completely, and we all are witnesses to the hoopla that travels with this notion. But a recognition of prices as a means of allocating resources is a sine qua non for the reforms we need. The national penchant for investing price with mythic value is strongest when discussions centre round the naira’s exchange rate. Even the current leadership of the central bank fails to see the naira’s exchange rate as a price ― the result of changes in the demand and supply of the currency relative to others. The naira is not a national totem, like the flag or the coat of arms, which we must defend with all our might.
It is a price that gets stronger the more people want the currency relative to other such currencies. And which weakens the more we prefer other currencies to it. We may pass laws defending the naira’s exchange rate, or like the central bank has done, force an artificial reduction in the domestic demand for competing stores of value. But we are not likely, thus, to superintend an appreciation in the currency’s exchange rate. Freer domestic markets are a better bet. So we may both abandon the central bank’s new autarchic bent, and stop the waivers that have helped create Africa’s richest parvenus.
The strongest case for the removal of subsidies of all kind, is that we then free money for investment in our key infrastructure needs. Useful, though, this argument is, no government in Nigeria is likely soon to be able to pay for our national infrastructure needs. Private sector support would be important. While we may be able to impose on domestic entities to cough up their share of the required investment, we must immediately recognise that even that would be barely adequate. Foreign funds would matter; and only if the domestic environment conduces to foreigners holding domestic assets. Incidentally, an important codicil need be attached to this portion. And this is that whereas concern with infrastructure used to be all about roads, power, railways, ports, schools, hospitals, etc., there is an equally strong case to be made today for prioritising broadband access — especially in our schools.
Finally, constitutional reform. A key part of this would include such reforms as separating the office of attorney general from that of minister/commissioner of justice. But by far the biggest change needed to our constitution is that we cannot continue to run spendthrift fiscal policies, sharing all that we earn.