Thankfully, there is still just about enough time and space for some of the reforms that the economy needs. The fear is that protestations to the contrary aside, we still suffer a severe shortage of the cojones needed to see these reforms through.
The incumbent Federal Government is wont to make a song and dance of its reform credentials. Of late, it has been all about how smitten the international community is by these reforms – never mind that a growing domestic cohort chafes at them. Most other times, government’s spokespersons advert attention to how brave the Tinubu administration was to roll back the subsidy schemes in both the foreign exchange and domestic petrol markets. Against the backdrop of the pussyfooting by its predecessors around both these reforms, the Tinubu government’s shills make a persuasive case.
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History, however, has more than one way of being explained. Its consequences, not so. In the case of the Tinubu government’s storytelling around its two most important market-based reforms, one indubitable consequence of the failure of previous governments to deal with financial leakages in the foreign exchange and downstream oil and gas sectors of the economy was that the exchequer had haemorrhaged to the point of severe anaemia when this government came into power.
It is doubtful if the Tinubu administration could have carried on business as usual in these sectors without beaching the ship of state. Did the government, then, act from the courage of its convictions? No. More like captives of circumstances would. This reading is reinforced by the government’s subsequent reform failures. Assume, for the sake of argument, that the recourse to market-based reforms was in recognition of the need to properly price domestic transactions as part of the effort to ensure the efficient use of domestic resources. Is there a more necessary requirement for meeting this objective than reforms that improve the efficiency of the state?
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Unlikely. But the incumbent Federal Government has done nothing to address a state that is generally acknowledged to be too bloated, both for its own good and for the benefit of the economy that it is there to serve. The Oronsaye Report may no longer be as easily applicable as a reform initiative as when it was first released. But this is only because the Tinubu government has increased the state’s capacity, without notably making it more efficient. In administration, as in philosophy, the simplification of entities is a far more compelling case for the efficient generation, deployment, and use of increasingly scarce resources than their multiplication.
No less important, the state’s capacity to properly regulate the private sector is still in doubt. This is as much a case of regulatory capture as it is a worry about competence. Capture is worrisome, especially when private entities compromise a regulator. But its effects are no less harmful when industry is influenced and controlled by the arm of the state set up to regulate it. Either way, economic vibrancy is lost.
If the administration then fails in its own reasoning, in so far as reforms to the organisation of the state is concerned, it can hardly be described as bold in its execution, either. Nowhere is this latter failing more glaring than in our administration of criminal justice. If the Nigeria Police Force daily fails the test of public opprobrium, the judiciary scarcely paints itself in glowing colours either. Yet, both are critical for an efficient market economy. The Americans still use cheques for their financial transactions. We cannot. And this is not because we have a far more sophisticated financial services space. True, settlements of banking transactions take place faster, here. True, we also have statutes against the issuance of dud cheques. But enforcement of any law, rule or regulation is a nightmare, here. Banks struggle to recover collaterals pledged for loans. Small wonder that we do not have a thriving mortgage space? The trust deficit has far-reaching implications, unfortunately. With it, contracts cannot be freely entered into. And yet, we are still to see reforms to our criminal justice system from our bold advocates.
No less important, the state’s capacity to properly regulate the private sector is still in doubt. This is as much a case of regulatory capture as it is a worry about competence. Capture is worrisome, especially when private entities compromise a regulator. But its effects are no less harmful when industry is influenced and controlled by the arm of the state set up to regulate it. Either way, economic vibrancy is lost. And with it all prospects of attracting investments – whether of a local or foreign variety.
Thankfully, there is still just about enough time and space for some of the reforms that the economy needs. The fear is that protestations to the contrary aside, we still suffer a severe shortage of the cojones needed to see these reforms through.
Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.
