A Toddler At 49

The journey from independence took off on a very promising note. Even the Western powers that granted us independence were worried that the Dark Continent was at last incubating a powerful nation. Finland’s ambassador to Nigeria conceded that much recently. She contended that the growth potential of the Nigerian economy was so seemingly unassailable that Western aid was only considered as a

temporary measure for getting the toddler off its feet. The economic indicators were very encouraging. The industrial base was pretty feeble but agriculture, which was the bedrock of the economy, was receiving adequate attention.

Each of the three regions had its own cash crop which served as the cash cow of the economy. The groundnut pyramids in the North were so intimidating that farmers gained more respect in the land than contractors and white-collar workers. Oil-palm produce was the bedrock of the economy of the East while that of the West was anchored on cocoa. There was such a delicate balance in the economic contributions of each of the regions to the national purse that there was mutual respect among the three. No one could bluff the other for feeding from resources derived from its soil because everyone toiled and contributed almost equally to the baking of the now derisive national cake.

Suddenly the whole thing crumbled like a bouncing child that was suddenly struck down by polio. Political economists often trace the polio syndrome of the Nigerian economy to the discovery of oil which they term the Dutch disease.

The groundnut pyramids in the North suddenly disappeared as farmers headed South for juicy contracts that were financed from the proceeds of crude oil which had suddenly replaced cocoa, groundnut and palm produce as the nation’s cash cow. The allure of petrodollars was almost irresistible. As the oil embargo that followed the 1973 war between Israel and the Arabs escalated the cost of crude oil to record heights, the federal government’s income surged so tremendously that former military dictator Yakubu Gowon could boast that money was not Nigeria’s problem but how to spend it.

Those who dismissed Gowon’s innocent confession as the ranting of an inexperienced military dictator would be stunned that, 36 years down the road, Nigeria’s problem remains that of how to spend its oil windfall. In 2007, the federal government earned $55 billion from crude oil exports alone. In the last 10 years Nigeria has earned well over $300 billion from crude oil exports. Ironically, it has been a classic case of ‘the more you earn the poorer you become’. Four refineries were built in the mid-1970s with a total refining capacity of 450,000 barrels per day. That was when Nigeria needed less than five million litres of premium motor spirit (PMS) to fire the economy. In the last 10 years, what the federal government has spent on the turnaround maintenance of the four refineries could build three new ones, each with the combined capacity of the four. The country now depends totally on imported refined products which, last year alone, gulped well over N2 trillion. In fact, the cost of petroleum products imports is a top secret of the federal government because of its enormity and the embarrassment it could cause.

Two months ago, the minister of petroleum resources was confronted with the question of how much Nigeria spends on fuel imports. He bluntly told the inquisitive energy reporters that the total cost of fuel imports was classified information for obvious reasons.

While at 49 Nigeria, as the largest crude oil exporter in the Dark Continent, is fully dependent on imported petroleum products, it has failed woefully to solve its embarrassing electricity problems through the same means. The country is in near-total darkness. The total failure of the nation’s public power monopoly, the Power Holding Company of Nigeria (PHCN), is at the root of the de-industrialisation process the country is now slipping into. Statistics from the National Electricity Regulatory Commission (NERC) claim that Nigerians spend N796.4 billion annually to fuel their power generators. That is a mere N300 million less than the federal government’s capital budget for this year. The two tyre manufacturing companies in the country have closed shops. Michelin, the French tyre giant, now imports finished products to fill the vacuum left by its idle production lines. Dunlop closed shop early in the year and might relocate either to South Africa or Ghana for obvious reasons. Coca-Cola has shut down its key raw material processing plant in Nigeria and might equally relocate to Ghana. In all, the country does not produce a pin unaided. A near pin silence now envelops the once bustling textile industry that used to provide jobs for 500,000 people.

There are more manufacturing firms in the land today than at independence. However, the industrial base of the nation may, in reality, be more precarious today than in 1960. The Central Bank of Nigeria (CBN) claims that the nation’s crippled manufacturing sector guzzles close to 10 per cent of the total credit doled out by the 24 banks in the country, but ironically contributes less than a scant two per cent to the gross domestic product (GDP). The reason is not far-fetched. An odd combination of corruption, epileptic power supply, double taxation and decaying infrastructure has raised the cost of doing business to unfriendly proportions.

Nigeria’s major problem today is corruption. The country has remained in the top 10 of Transparency International’s (TI) corruption list for several years. Even as some more ambitious treasury looters in some Third World countries failed and failing states push Nigeria down the rung of the corruption ladder, the scene remains even murkier as a recent probe of the money and capital markets tends to suggest that the private sector may beat the public sector for the graft medal.

The capital market, which used to be the toast of foreign portfolio investors, has collapsed from the crushing weight of criminal insider trading and share price manipulation. The market has shrunk by N7 trillion in the last 18 months. The banking system, which is just four years from an excruciating reform that raised minimum capital base to N25 billion, is writhing in pain due to trillions of naira in non-performing, dubious insider loans and non-collaterised credits doled out in utter defiance of laid-down lending rules.

Though Nigeria remains either a toddler or a crippled economic polio victim, the last 49 years is not all about collapsing infrastructure, endemic corruption and deindustrialisation. A timely deregulation has given the country the fastest growing telecommunications industry in the developing world. From less than 600, 000 clumsy landlines in 2001, the country now flaunts an impressive 65 million telephone lines. Call rates may be profiteeringly high, while overstretched networks suffering from low investments have escalated call drops. The truth, however, is that people no longer queue up to bribe officials of the comatose state telecoms monopoly, NITEL, to restore lines deliberately tossed to arm-twist subscribers.

Competition has also restored some semblance of sanity to the aviation industry. The skies over Nigeria may not be the safest by international aviation standards. But the days when air travellers used to push and shove for seats in the fleet of the defunct state aviation monopoly, Nigeria Airways, may be gone forever.

Nigeria’s backwardness is corruption-induced. Corruption is responsible for everything from decaying infrastructure to the smeared image of the country in the international community.

The campaign to take the sleeping giant to its rightful place in the comity of nations must begin with a ferocious battle against corruption. The refineries have refused to churn out fuel because the money voted for their turnaround maintenance almost always ends up in the pockets of government officials. The same vice is at the root of the dense darkness that now envelops the land.

The federal government collects less than 30 per cent of the import duties accruing to it. The rest is shared among customs officers and importers. Nigeria is a primitive economy because it depends on primary commodities for 90 per cent of its revenue. Developed economies depend on tax revenue from industries that add value to primary products and sell them at 500 per cent the cost of the raw material. We can only get there if we fight for a steep climb down in the TI rung of corruption ladder