President Bola Tinubu and Economic Darwinism in Nigeria

President Bola Tinubu’s reform agenda is still the contestation in town. Its protagonists insist it is the master stroke of a policy approach. Critics deride it as a killer pill. It seems only time will issue a more sustainable verdict. But what of the space between now and when time issues its verdict? Wouldn’t economic Darwinism have exerted too heavy a toll on the populace by then if there is no special presidential package by May 29^th, 2024? Interestingly, this question is coming from the author of June 12 Election: Campaign for Democracy and the Implosion of the Nigerian Left and the author of this piece as well

By Chiemeke Onyeisi Esq

If there is a war the Tinubu administration has won, it is the propaganda war that his economic policies are geared towards creating a new hope and new possibilities for the average Nigerian. But, as with all things propaganda, it is a form of darkness that pretends at illumination. This is because, beyond the clapping and clattering in the media, the economy is sinking deeper and deeper into irredeemable disaster and it shows on the table of an average Nigerian. Nobody has any difficulty in seeing this because, beyond the mysticism created around economics by the so called “market ideology”, economics as a subject has a quality that makes it simple. That quality is the fact that it is a behavioral science which is relatable on day to day basis in the average person’s struggle for survival.

Yes, we could concede to the economists that the area of econometrics may be strange to non-economists but the fundamental fact remains that econometrics is not the foundation of the subject of economics. The foundations of economics are the determinable variables of choice and opportunity cost in the subject of want and human satisfaction. It is such that a housewife in the current economic situation of Nigeria does not need a professor of economics to educate her on the choice and the restricting or constraining variables in making those choices. Simply put, propaganda cannot be converted to food on the table.

First of all, let us concede so that we may not be misled into a belief that there is a magic that the Tinubu government will perform to alter the paradigm of the economic agenda that has been in place in the governance of Nigeria since 1985. All that has happened, at each point in time, is for the new salesman to give the impression of a change. The reason why this is so is because the vision of all leaders of the ruling class that have governed Nigeria since 1985 has been built on the principle of the Washington Consensus: “the restructuring of the public sector with widespread decentralization and privatization of parastatal enterprises,… and strengthening of the regulatory framework; modernization of labour legislation, including the creation of pension funds and the restructuring of the social security system.” Maybe the previous leaders have been a little bit timid that they could not go full throttle in effectuating the Washington Consensus which has the explicit aim of creating an absolute monied class. This has been evidenced in the exponential increase in the income gap between the rich and the poor since the late 70s into the new millennium.

The Bola Tinubu government seemed to have invariably immersed itself like a child for baptism in this river, and is now hearing the voice of the Washington Consensus clearly and beginning to execute economic policies that seek ultimately to transfer the wealth of the Nigerian society into the hands of the few in a vicious stride. The belief is that by some miracle, the overweighed rich will, in the spirit of trickledown theory, affect positively the life of the poor. This is mindless of the poet’s words that ‘pity will be no more if we do not make somebody poor’. For instance, aided by clever propaganda, the Bola Tinubu’s administration contends that it has removed the payment of subsidy on premium motor spirit (PMS). If we look at the previous argument of the Nigerian National Petroleum Corporation (NNPC) and petroleum marketers, it is to the effect that the cost of PMS is subject to Naira-Dollar exchange and that once the Naira is devalued, the landing cost invariably increases and as such, there ought to be a jack up in the price of petroleum product. And immediately President Tinubu stopped the payment of subsidy, the price of fuel embarked on a rollercoaster drive in line with the argument of NNPC and petroleum marketers. But even with a further fall in the exchange rate of the Naira to the dollar at N1,900 before its current stabilization at N1,450, the price of PMS has not gone above the sum of N700 only. The only reasonable answer to fathom is that the government has found a way of paying subsidy from the back door, thereby enriching the rich and leaving the poor to carry the burden that has arisen from the removal of subsidy on PMS. A classical example of this point is the recent news that Dangote refineries have reduced the cost of diesel in the market by supplying to the Nigerian market at a cheaper rate.

Furthermore, anybody with any knowledge of the situation of the Dangote refinery at the Free Trade Zone (FTZ) knows that the Dangote refinery, by the rules covering FTZ, is not obligated to sell to the Nigerian government at a cheaper rate without getting a form of promissory note for such concession. This is because, if for example, Dangote refinery is to import its crude from the international market at a dollarized rate, what will induce the said refinery to become a father Christmas, if not the promissory note of a subvention in one form or the other? It is not difficult to see that Nigeria National Petroleum Corporation Limited (NNPCL) may have bartered Nigerian crude at a discounted rate. This is simple, as a component of crude oil, subjected to fractional distillation processes, produces multiple resources of energy.

Aliko Dangote, the only exception to Chief Obasanjo’s concept of ‘baby capitalists’ as the nomenclature for Nigerian capitalists?

This will lead us to briefly comment on the much-abused ‘Ways and Means’. Because of the way former Central Bank of Nigeria governor, Godwin Emefiele, mismanaged the currency, it becomes easy to succumb to the lazy reasoning by Godwin Obaseki, the Edo State governor that the sole meaning of ways and means is the printing of currency. Obaseki’s argument is the one the Tinubu orchestra has latched on to create its own confusion. But ways and means extends beyond that to include barter concessions and tax concessions that, if not well articulated and managed, could result in the same effect as in currency printing. And this has led us, according to Tinubu’s economic managers, to the pathway of inflation.

A simple study of the Nigeria economy in the past 15 years will show that the economy has been on a steep rise, inflation wise. Arising from the above is the fact that nobody has been honest enough to look at the other economic variables that is fueling inflation within the Nigerian economy. A simple study of the Nigeria economy in the past 15 years will show that inflation has been on a steep rise all the time. Arising from the above is the fact that nobody has been honest enough to look at the other economic variables fueling inflation within the Nigerian economy. Core to it the orientation of government policy on inflation in favour of the Washington Consensus. And the current economic managers have been the guiltiest because they seem to have copied their economics notebook wrongly and been unable to understand the basic dynamics of the economy. The idea that inflation means too much money chasing few goods is outdated. It is on the strength of this outdated principle that the Bola Tinubu government is trying to manage inflation in Nigeria. And because of the adoption of the former, the government has been groping like a blind person trying to make a sense of the elephant.

For instance, how can the government curb inflation when the minimum interest rate is 25.5%? A key item about inflation is the cost push. It befuddles that the economic managers do not understand the fact that an increase or higher interest rate adds to cost push inflation and the attendant disorder it will achieve is to depress production and effective demand. What anybody who is serious about economic management ought to be doing is to incentivize the possibility of production by removing those constraints, such as cost of money.

It is obvious that the Bola Tinubu government is not interested in production, no matter how much lip service it pays to that effect. Again, this is in line with the belief of the Washington Consensus that capital needs no boundary to grow. It is wrong to assume, and this is a fact the Bola Tinubu government agrees with, that it is not in all circumstances of history that the national elite wants to produce wealth for the national economy. This is correct, because wealth is in forms. Once a national elite can create profit, the idea of national wealth or production becomes fundamentally irrelevant. For instance in the past 12months, Femi Otedola has made more than N20bn as profit by taking his money to First Bank Plc. and Transcorp in somewhat hostile takeover bids. In each of the takeover bids as majority shareholder, those he tried to outbid have fought back and, in a bubble, the prices of those two companies went up. He and his associates pulled away but with billions in their pockets. In consequence, if a billionaire’s rollcall were to be drawn up, will anybody exclude him because he is not producing something as common as toothpick?

President Bola Tinubu understood this because we must concede that he was a businessman before he became president. It is clear that his trajectory is not in any ways different from that of Femi Otedola. That is why, if we look at the 31-member Presidential Economic Coordination Council, only 2 of the 13 members from the so called organized private sector (OPS) can be said to engage in any form of production, meaning the remaining 11 are all Broad Street entrepreneurs carrying briefcases up and down without capacity at manufacturing anything. The reason he chose them is because they fit into his own prism of mercantilism. With such mindset, it is easy to see why the economy has been set on the Darwinian principle of the survival of the fittest.

Those who do not survive the economic hardship or the Tinubu’s trickledown economic philosophy will undergo various forms of death. This death may range from hunger, lack of education; good healthcare, poor housing. It has reached where people would seek the opportunity to be fed from outside the gates of the rich. I saw it on the April 25^th, 2024 at the Church of Assumption, Falomo in Lagos where the starved and raged were waiting behind the fence as the church officials distributed bread and cooked rice, possibly from the kitchen of the rich to save the poor from dying from hunger. This will worsen because Tinubu’s economic philosophy is disempowering families in terms of economic capacity, and the consequence of that as the old saying goes is that; when poverty knocks at the door, love flies out of the window. In truth, nobody is in disagreement that the more this economic situation stiffens, the more an average Nigerian family is alienated from each other. The worst example of this state of human alienation can be found in western capitals but what will make the Nigerian experiment much more tragic is the fact that the government does not have provisions for the social or mental infrastructure to push people down the fast lane of poverty, with the hope that if they survive, the rich will keep them floating. Implicit in the point we are making above is the fact that the Nigerian rich dwell best in frivolities. For example, they will rather promote and advertise Big Brother Nigeria than investing in researches that will promote economic development.