There has been a lot of destruction of oil-related infrastructure and facilities in the Niger-Delta over the last decade-and-half. There has also been an incredible amount of oil theft, so-called bunkering, with billions of dollars effectively stolen from the public purse by a variety of groups.
There has also been a recurrently violent response from the Nigerian Armed Forces and Nigerian Police Force, with a variety of communities bearing the brunt in a sort of "collective punishment" of the innocent and guilty alike.
Oddly enough, there are people who insist the destruction of infrastructure and theft of billions is a political statement, a protest against neglect of the Delta and against the lack of "resource control".
And on the other side, there are those who defend the federal response, repeating all of the usual cliches sovereign governments use to defend their right to crush citizens who rebel.
But there is something more important than this specific event, and the specific choices and decisions being made, the actions taken and the reactions in response.
Why does it always boil down to choosing between one bad thing and another bad thing?
And why is it, when presented with a problem, we respond, not by solving the problem, but by creating another problem and then insisting that one problem will be defeated by the other problem? And there are always opposition groups that protest at the problem being created to solve the first problem, except that their own alternatives are often worse than the first two problems.
At the end of the day, whichever options wins, loses or draws, the federal republic is stuck with ... a problem (or more).
It happens all the time, like a knee-jerk reaction to any stimuli.
The most annoying thing about it is people start to refer to stuff like "the Nigerian Factor" as if there is some special reason we have not resolved what are otherwise simple and straightforward issues.
I honestly believe that the citizens of Nigeria, if presented with better options and possibilities, would choose those options over the pointless pendulum we have right now. But at this point it would be difficult for anyone to present those new options because we have had at least three generations, since before freedom regained in 1960, that have been deeply inculcated in a particular set of "explanations" for every issue. These citizens are actually acting rationally based on the information available to them, making decisions on the basis of what they believe to be truths from trusted sources, and the outcome of the decisions is a continuous cycle of unnecessary problems.
No country is problem free of course, but we need to progress to the more advanced and complicated problems, instead of being stuck at stage one trying to figure out stuff everyone else figured out decades and centuries ago. Haba, we are still trying to figure out electricity.
But again, notice the explosion in cell phone use, once the barriers were brought down? Or the explosion in our video film industry, once entrepreneurs realized there was money to be made there?
Give Nigerians an opening, an opportunity and we will use it.
Give the citizenry a better set of options, a better set of choices, and you will be surprised at how quickly the federal republic will rise.
In the coming weeks I hope to find time to talk about some of these "choices" we are forced to make, and perhaps even present a few of the "better choices" we could make (and could have made in years past).
Amalgamation Day in Lagos, 1914
30 May, 2009
More on the Naira exchange rate
For many years now there has been a divergence between the Naira's official exchange rate, and the parallel market rate. The "parallel market" for Naira has been called the "black market", but it is so ubiquitous and openly patronized that "unofficial market" or better yet "unregulated market" might be a better description.
The Naira is always weaker on the parrallel market and stronger on the official market, and over the years there has been controversy over the issue of arbitrage (i.e. banks, individuals and firms buying dollars at the official rate, and selling those same dollars on the parralel market). Through this arbitrage, operators exploited an artificially-created market distortion, making profits without sweat, work, entrepreneurship, production of output or employment of any factor of production. Indeed, before CBN Governor Charles Soludo changed the capital requirments of banks, forcing the recent "consolidation" in the banking sector, many of Nigeria's banks did nothing other than buy dollars on the official market and sell them on the unofficial market.
But I've always had a more fundamental question when I have thought of the dichotomy: What is the true value of the Naira as expressed in foreign currency?
For as long as I have thought about the issue of economic growth and (especially) foreign trade, I have wondered what rate to use as the basis of analysis. I mean, how do you know if the Naira is over-valued or under-valued if you do not know what the value is? And don't say the differences in the two rates are small, because in trade such small differences matter more than you think (and for that matter, arbitrage is not a uniquely Nigerian phenomenon).
Everyone assumes the unofficial rate is the "free market" rate, but what if the unofficial rate exists as it does purely because of the deliberate distortion to the market? Prices in distorted markets like monopolies, monopsonies and duopolies are not "free market" rates, and I have always thought participants in the unofficial market in Nigeria were acting in response to the (distorted) official market and not to any "free market" equilibrium. As such, I always wondered if the true value of the Naira in foreign exchange was (a) somewhere in between the two rates; (b) nearer the official rate; (c) nearer the unofficial rate; (d) somewhere higher or lower than the limits of the set bounded by the two rates.
Imagine then my interest in this Bloomberg article. The Naira appreciated 12% on the unofficial market in response to an easing of the restrictions (i.e. distortions) on the Nigerian foreign exchange market. Mind you, restrictions have been eased, not removed. It would be more accurate to say the Central Bank of Nigeria has redefined restrictions, and has been criticized by small-scale bureau-de-change operators, who believe the redefinition favours large-scale dealers, erasing the competition of small-timers by fiat.
According to one small-scale BDC operator quoted in the article, only 50 of 1,000 BDCs in Nigeria have qualified for the CBN's new exemption. One gets the impression he believes this is just another distortion, designed (as are all such distortions in Nigeria) to benefit influential players in business and politics by using regulation to give them competitive advantages. This gentleman insists that the dollar would fall more dramatically against the Naira if the foreign exchange market were thrown open to anyone because (his words): "Nobody would be interested in keeping the dollar, when everyone has.” In the context of the article, it seems to me he was suggesting that some parties who buy on the official market hoard their dollars so as to heighten the scarcity on the unofficial market.
Still, perhaps we could do with some consolidation in the sector? I would advise the small-scale operator to think perhaps of forming a cooperative with other small-scale operators, or even of establishing a separate corporate entity with the smaller operators allocating a certain proportion of shares to themselves and selling the rest on the stock market to raise additional capital. Mind you, the man has a point (more than one), and I am still uncertain that this easing of restrictions would lead to us finally knowing what the true exchange rate of the Naira is.
The Naira has indeed appreciated against the dollar on the unofficial market, bringing it closer to the official market rate. The two had diverged by as much as =N=34.00, but as of the moment Bloomberg published their article, the divergence was down to =N=12.00.
This brings me back to the thing I've wondered about all these years.
Does this mean the real Naira rate is or has been somewhere between the two rates? If all distortion was removed, would the official rate weaken and climb up to meet the now stronger unofficial rate?
What if BOTH rates are reflective of a distorted market and the true rate of the Naira is somewhere we don't even know?
This is important. I know this is not an issue that people talk about (aside from complaining about round-tripping arbitrage). You see, no matter how hard you try to bury the basic realities of the economy, they come back to bite you in the end. If we base all of our economic planning on assumptions that have no basis in the truths about our economy, then we are building ice castles in the Sahara
We cannot fix the fuel crisis or the electricity crisis if we keep pretending the price is something it is not. And we cannot figure out how to restore productivity in our industrial sector, how to maximize employment and capacity utilization, if we are operating a weird economy in which it is easier to import than it is to build the infrastructure and superstructure of productivity growth and development.
Okay, let me use an easier example. Those pre-consolidation banks that did nothing more than arbitrage were acting rationally, because it made more sense in the context of our economy to round-trip than it did to support long-term capital investment. I don't know what the true value of the Naira is, but if it reflects our true economic realities, it will probably be something that exposes the economic and competitive disadvantages of so many of the decisions we make, highlight advantages to changing our prevailing circumstances, and thus compel us to change decision-making that is rational only when supported by distortion (and oil windfalls).
The Naira is always weaker on the parrallel market and stronger on the official market, and over the years there has been controversy over the issue of arbitrage (i.e. banks, individuals and firms buying dollars at the official rate, and selling those same dollars on the parralel market). Through this arbitrage, operators exploited an artificially-created market distortion, making profits without sweat, work, entrepreneurship, production of output or employment of any factor of production. Indeed, before CBN Governor Charles Soludo changed the capital requirments of banks, forcing the recent "consolidation" in the banking sector, many of Nigeria's banks did nothing other than buy dollars on the official market and sell them on the unofficial market.
But I've always had a more fundamental question when I have thought of the dichotomy: What is the true value of the Naira as expressed in foreign currency?
For as long as I have thought about the issue of economic growth and (especially) foreign trade, I have wondered what rate to use as the basis of analysis. I mean, how do you know if the Naira is over-valued or under-valued if you do not know what the value is? And don't say the differences in the two rates are small, because in trade such small differences matter more than you think (and for that matter, arbitrage is not a uniquely Nigerian phenomenon).
Everyone assumes the unofficial rate is the "free market" rate, but what if the unofficial rate exists as it does purely because of the deliberate distortion to the market? Prices in distorted markets like monopolies, monopsonies and duopolies are not "free market" rates, and I have always thought participants in the unofficial market in Nigeria were acting in response to the (distorted) official market and not to any "free market" equilibrium. As such, I always wondered if the true value of the Naira in foreign exchange was (a) somewhere in between the two rates; (b) nearer the official rate; (c) nearer the unofficial rate; (d) somewhere higher or lower than the limits of the set bounded by the two rates.
Imagine then my interest in this Bloomberg article. The Naira appreciated 12% on the unofficial market in response to an easing of the restrictions (i.e. distortions) on the Nigerian foreign exchange market. Mind you, restrictions have been eased, not removed. It would be more accurate to say the Central Bank of Nigeria has redefined restrictions, and has been criticized by small-scale bureau-de-change operators, who believe the redefinition favours large-scale dealers, erasing the competition of small-timers by fiat.
According to one small-scale BDC operator quoted in the article, only 50 of 1,000 BDCs in Nigeria have qualified for the CBN's new exemption. One gets the impression he believes this is just another distortion, designed (as are all such distortions in Nigeria) to benefit influential players in business and politics by using regulation to give them competitive advantages. This gentleman insists that the dollar would fall more dramatically against the Naira if the foreign exchange market were thrown open to anyone because (his words): "Nobody would be interested in keeping the dollar, when everyone has.” In the context of the article, it seems to me he was suggesting that some parties who buy on the official market hoard their dollars so as to heighten the scarcity on the unofficial market.
Still, perhaps we could do with some consolidation in the sector? I would advise the small-scale operator to think perhaps of forming a cooperative with other small-scale operators, or even of establishing a separate corporate entity with the smaller operators allocating a certain proportion of shares to themselves and selling the rest on the stock market to raise additional capital. Mind you, the man has a point (more than one), and I am still uncertain that this easing of restrictions would lead to us finally knowing what the true exchange rate of the Naira is.
The Naira has indeed appreciated against the dollar on the unofficial market, bringing it closer to the official market rate. The two had diverged by as much as =N=34.00, but as of the moment Bloomberg published their article, the divergence was down to =N=12.00.
This brings me back to the thing I've wondered about all these years.
Does this mean the real Naira rate is or has been somewhere between the two rates? If all distortion was removed, would the official rate weaken and climb up to meet the now stronger unofficial rate?
What if BOTH rates are reflective of a distorted market and the true rate of the Naira is somewhere we don't even know?
This is important. I know this is not an issue that people talk about (aside from complaining about round-tripping arbitrage). You see, no matter how hard you try to bury the basic realities of the economy, they come back to bite you in the end. If we base all of our economic planning on assumptions that have no basis in the truths about our economy, then we are building ice castles in the Sahara
We cannot fix the fuel crisis or the electricity crisis if we keep pretending the price is something it is not. And we cannot figure out how to restore productivity in our industrial sector, how to maximize employment and capacity utilization, if we are operating a weird economy in which it is easier to import than it is to build the infrastructure and superstructure of productivity growth and development.
Okay, let me use an easier example. Those pre-consolidation banks that did nothing more than arbitrage were acting rationally, because it made more sense in the context of our economy to round-trip than it did to support long-term capital investment. I don't know what the true value of the Naira is, but if it reflects our true economic realities, it will probably be something that exposes the economic and competitive disadvantages of so many of the decisions we make, highlight advantages to changing our prevailing circumstances, and thus compel us to change decision-making that is rational only when supported by distortion (and oil windfalls).
29 May, 2009
CBN Rumours
I am sure by now you've all heard/read the rumours that Sanusi Lamido Sanusi will be appointed to succeed Charles Soludo as Governor of the Central Bank of Nigeria.
The interesting thing about Sanusi is he has written a wealth of articles and essays (and given several speeches) on a variety of social, political and cultural issues in Nigeria. Many of these essays are available on the web.
Over the years, I have read a number of his write-ups. I will NOT say whether I agree or disagree with some or all of what he has had to say. I WILL say that he is the first Nigerian to be appointed, elected (i.e. rigged) or coup-de-tat-ed into a major office for whom I can say that I have some idea of what he really thinks on a few of the key issues facing Nigeria.
People in leadership positions in Nigeria are usually blank canvases, on which various people project their own biases, prejudices, insecurities and fears. We end up supporting people and opposing people based on rationales that have nothing to do with reality, or with the person we are supporting or opposing. Too often the "leaders" themselves have nothing substantive to add to national discourse, no sense of what we need to do, where we need to go, and how we are going to get there, and are quick to resort to the bland, meaningless, popular cliches we have been hearing since before Independence, albeit changing the name slightly so as to claim it to be a new initiative. At worst they exploit our prejudices and biases to keep us arguing with ourselves while they enjoy office without having to justify why we should assent to their holding office. And then there are the intellectuals, who seem intent on reminding everyone that they have PhDs, constantly using unnecessary big grammar and complicated syntax to say the simplest of things -- and never quite managing to write or say anything that inspires or mobilizes the mass of the Nigerian public into collectively creating an atmosphere where true reform and transformation are even possible and feasible, much less actually happening.
Sanusi has spoken his mind on a lot of issues. Having perused his comments over the years, I know more about his line of thinking than I do that of most of the governors, ministers, parastatal heads, etc. Regardless of agreeing or disagreeing, that gives me more confidence in him as a potential appointee to high office than any of them, weird as that may sound.
Actually it is not so weird.
In a true, substantive democracy, individual citizens have to deal with the fact that their preferred party is not always going to be the one in power. One of the things that gives those citizens confidence, even if an opposition party (from their perspective) is in office is the fact that they KNOW what that opposition party stands for. They know it, and they know that while it is not necessarily their own opinion, it is an opinion they can live with.
If the Sanusi appointment is factual, then I support it.
There is a lot of side controversy over the fact that Soludo will be stepping down. In actuality, his tenure is up, and the issue is its non-renewal. Actually when you look at the list of Central Bank Governors from 1958 till to today, it seems Nigeria (rightly or wrongly) rarely gives a CBN head more than 5 or 6 years in the job. It has only happened twice.
Interestingly, I have heard from a source connected to the head of the Independent National Electoral Commission that Mr. Soludo WANTS to step down because he wants to contest the Anambra State Governorship next year in 2010. I have reasons to trust this source (reasons enough that I won't name him), and as such I cracked a smile when I read this article about Governor Peter Obi of Anambra calling on the government to retain Soludo.
With the feuding Uba brothers, APGA's Obi, Emeka Offor in the background and Soludo possibly tossing his hat in the ring, the Anambra elections will be interesting even if they are ultimately "manipulated".
The interesting thing about Sanusi is he has written a wealth of articles and essays (and given several speeches) on a variety of social, political and cultural issues in Nigeria. Many of these essays are available on the web.
Over the years, I have read a number of his write-ups. I will NOT say whether I agree or disagree with some or all of what he has had to say. I WILL say that he is the first Nigerian to be appointed, elected (i.e. rigged) or coup-de-tat-ed into a major office for whom I can say that I have some idea of what he really thinks on a few of the key issues facing Nigeria.
People in leadership positions in Nigeria are usually blank canvases, on which various people project their own biases, prejudices, insecurities and fears. We end up supporting people and opposing people based on rationales that have nothing to do with reality, or with the person we are supporting or opposing. Too often the "leaders" themselves have nothing substantive to add to national discourse, no sense of what we need to do, where we need to go, and how we are going to get there, and are quick to resort to the bland, meaningless, popular cliches we have been hearing since before Independence, albeit changing the name slightly so as to claim it to be a new initiative. At worst they exploit our prejudices and biases to keep us arguing with ourselves while they enjoy office without having to justify why we should assent to their holding office. And then there are the intellectuals, who seem intent on reminding everyone that they have PhDs, constantly using unnecessary big grammar and complicated syntax to say the simplest of things -- and never quite managing to write or say anything that inspires or mobilizes the mass of the Nigerian public into collectively creating an atmosphere where true reform and transformation are even possible and feasible, much less actually happening.
Sanusi has spoken his mind on a lot of issues. Having perused his comments over the years, I know more about his line of thinking than I do that of most of the governors, ministers, parastatal heads, etc. Regardless of agreeing or disagreeing, that gives me more confidence in him as a potential appointee to high office than any of them, weird as that may sound.
Actually it is not so weird.
In a true, substantive democracy, individual citizens have to deal with the fact that their preferred party is not always going to be the one in power. One of the things that gives those citizens confidence, even if an opposition party (from their perspective) is in office is the fact that they KNOW what that opposition party stands for. They know it, and they know that while it is not necessarily their own opinion, it is an opinion they can live with.
If the Sanusi appointment is factual, then I support it.
There is a lot of side controversy over the fact that Soludo will be stepping down. In actuality, his tenure is up, and the issue is its non-renewal. Actually when you look at the list of Central Bank Governors from 1958 till to today, it seems Nigeria (rightly or wrongly) rarely gives a CBN head more than 5 or 6 years in the job. It has only happened twice.
Interestingly, I have heard from a source connected to the head of the Independent National Electoral Commission that Mr. Soludo WANTS to step down because he wants to contest the Anambra State Governorship next year in 2010. I have reasons to trust this source (reasons enough that I won't name him), and as such I cracked a smile when I read this article about Governor Peter Obi of Anambra calling on the government to retain Soludo.
With the feuding Uba brothers, APGA's Obi, Emeka Offor in the background and Soludo possibly tossing his hat in the ring, the Anambra elections will be interesting even if they are ultimately "manipulated".
25 May, 2009
A 2003 Essay and a conflict in the Delta
Lagos has its problems, many of them, but the Nigerian mega-city is nowhere near as bad as the worst negative stereotypes bandied around about it. In this respect, Lagos is a metaphor for Nigeria. The federal republic has problems, serious problems, but critique sometimes ventures into the realm of hyperbole.
The majority of the people of Nigeria live normal, regular lives; life is difficult for the majority of citizens, yes, but life is notheless basically normal. In fact the major reason there has never been a revolution or popular revolt in Nigeria is we the people have adapted to the situation, including adaptations to deal with the difficulties. We are a country where citizens carve out their own roads, generate their own electricity, pump their own water, provide their own security, create their own credit networks -- we do it all.
When I think back to my childhood and early youth, things were not "easy" by any stretch of the imagination, but we managed. And while truly terrible things do happen in Nigeria, things like "religious" riots, such things happen in particular places and at particular times. It is not like the entire country erupts in violence, nor is violence something that happens every day. And we are not unique in suffering these problems; for all our hyperbole to the contrary, everything we think of as a uniquely Nigerian problem exists in fact all over the world. As I argued in an earlier blog, there are certain things that differentiate succesfful countries from unsuccessful ones, and the propensity to corruption is not one such thing. However the likelihood of prosecution for corruption is, as is the question of whether or not the corrupt behaviour surrounds decision-making processes that tend toward increasing societal wealth or decision-making processes that don't; for example the political climate surrounding road construction in Japan is as dubious as road construction in Nigeria, but the decision-making processes (particularly in the immediate post-war decades) ensure that public servants in Japan administer an economy that is still the world's second-richest, despite the local and global changes of the last two decades.
The Federal Republic of Nigeria is a wonderful country, a beautiful country with a kaleidoscope of cultures, and a warm, generous hospitable populace. We should be consolidating the good things in our country, then expanding those good things so we eventually stamp stamp out the problem issues. We should then move forward with the project of reform and transformation.
Unfortunately, we thus far seem to prefer brinkmanship, choosing to keep ourselves and our country constantly on the edge rather than move it deep into safe territory. We the people blame our "leaders" for this, but our "leaders" are creatures of our society, and until society changes the characteristics of its leadership will not change either.
I suppose you are wondering what brought on this burst of angst?
I have been reading media articles on the on-going battle between the Nigerian Armed Forces' Joint Task Force, and the various militia groups in the Niger-Delta. It makes for depressing reading.
And it was all too predictable.
When I say predictable, I am not talking about the poverty in the Niger-Delta. There is poverty all over Nigeria (I daresay the north-east of the country is the poorest region of the country, much poorer than the Delta). And no, I am not talking about government neglect; that too is national in its scope. And I am not talking about the lack of enforcement of environmental, electoral and other laws; yes, you guessed it, it is no better in the rest of the country outside the region abutting the mouth of the Niger River.
No, the violence was predictable. Violence in Nigeria is ALWAYS predictable. Communal violence, religious riots, ethnic strife ... we see it coming, and just watch it approach. Eventually it washes over us, the survivors pick up their lives as best they can, and we begin the slow progress towards the next violent incident.
What is happening in the Niger-Delta right now (article, article, article, article, article) got me to thinking about an exchange I had with a fellow Nigerian some six years ago.
In 2003, I wrote a piece expressing worry at the proliferation of armed militias in Nigeria. Some of these militia had an ethnic or religious basis, while others (the local "vigilance" groups in particular) were drawn from a specific village or town. All of these groups were made up of "youths", a term that has a lot of meanings in Nigeria; indeed "youths" is the most frequent description of individuals involved in outbreaks of communal violence nationwide.
Anyone with a shred of sense would have been concerned at the sudden expansion in organized groups of armed youths. The concern was heightened by the realization that Nigeria was suffering an upsurge in the smuggling of heavy weaponry into the country. Our borders are porous, and private armies easily stockpiled the sort of weaponry that is only meant to be used by soldiers on warfronts. Illegal imports of heavy weaponry continues today.
When I wrote that essay in 2003, Nigeria had been amidst another upsurge, this one of communal and political violence. The rise in violence began after General Abdulsalami Abubakar (rtd.) handed the presidency to General Olusegun Obasanjo (rtd), ushering in the Fourth Republic in 1999. There are NO RELIABLE STATISTICS on violence in Nigeria, but at the time the (possibly sensationalistic) media estimates put the numbers of victims of all the outbreaks combined in the thousands. In a lengthy document published in 2007, Human Rights Watch estimated 11,000 dead (and quoted the Nigerian National Commission on Refugees' figure of 3 million displaced) in 481 outbreaks between 1999 and 2006 (a rate of 1 outbreak every 5 days).
So I wrote this essay in 2003, warning of the dangers of allowing the situation to get out of hand. It was not alarmism, but pragmatic caution.
Most African countries that became failed or semi-failed states went through a period where armed groups arose and weapons smuggling got out of hand. Most of these countries appeared to be normal (or at least normal by African standards) until the moment they just seemed to suddenly collapsed. I say "seemed" because in every case the causes of the ultimate collapse were visible and observable for decades, but the citizenry did nothing to force change.
And before someone starts to tell me that Nigeria shows no signs of trouble, please think about Cote d'Ivoire. The Ivoirien republic, was not just "normal by African standards", but was held by most Africans and non-Africans to be the West African answer to Botswana. Cote d'Ivoire is not exactly "failed", but none of their cheerleaders foresaw, predicted or expected the West African miracle would suffer ten years (and rising) of political instability, coups, war and near-breakup. All those years that commentators yabbed Nigeria and hailed Cote d'Ivoire, and here we are in 2009, and we are more politically stable than they are, despite the current violence in the Niger-Delta; the federal government is not about to fall, Nigeria is not about to split in two, and we are under no danger of having French troops pour in to establish a ceasefire line.
But that does not mean the situation in Nigeria is "good" or "safe".
In years past, I was obliged (don't ask why) to intensely study Felix Houphouet Boigny's Cote d'Ivoire with an honest, unbiased eye. Anyone who did the same would have seen all of the weaknesses that came to bear after Boigny's death. At a vital and fundamental level, the "wealthy" and "stable" Cote d'Ivoire of Boigny was not as different from the "poor" and "unstable" Zaire of Mobutu as you were led to believe. In both cases, the death of the autocratic strongman exposed the absence of a "state" beyond that individual.
But neither of those cases is as annoying to me as Liberia. The issues that gave rise to Liberia's quarter-century of chaos (starting with the Samuel Doe coup, and continuing to the end of the Civil War) were visible for more than 100 years. People need to take advantage of stability to reform and transform, rather than exploiting the short-term absence of consequence to make hay while the sun shines.
When I wrote that article in 2003, I was trying to warn that it was better to deal with certain things when they are small, instead of doing nothing and waiting until the problems metastasize and become major problems.
That 2003 essay attracted a response from a fellow Nigerian who declared that I was an alarmist. He came just short of politely saying I was full of crap. All was well, he insisted, nothing was wrong, and I and everyone else should rejoice that we were democratic, or something along those lines.
He was not alone in his complacency.
A lot of Nigerians welcomed these militia groups. Not all of us, but many of us. The Odua Peoples Congress, the Bakassi Boys and the Hisbah were particularly popular in some circles. Allegedly, the OPC and the Bakassi Boys were fighting armed robbery, and supposedly the Hisbah were waging war on the every sinful decadence of society.
I guess many of us were frustrated with the ineffective police and the absence of law enforcement and security. Heck, I have been surprised to find there are people who support lynchings! Not everyone, and probably most people don't, but opposition to lynching is not 100%, which is what I hoped it would be. When the newspapers report that "a suspected armed robber" was lynched, there are people who say "it serves him right" without first asking themselves if he was guilty.
It is frustration that causes this, frustration with government, law enforcement and the judiciary, the kind of frustration that makes people hero-worship flawed figures like Nuhu Ribadu.
But what if that was me or you facing the wrath of a lynch mob? What if you or I were wrongly accused? What if it was one of our brothers, fathers or sons? If the police are rubbish at investigation and the judiciary is rubbish at sorting out the guilty from the innocent, shouldn't we focus our energy on forcing transformation of the police and judiciary, rather than supporting random groups of citizens who lynch in the name of justice?
And do you realize EVERY act of communal and religious violence involves groups of "youths" who set out to lynch on the basis of rumours, innuendo, gossip and accusations that ascribe guilt of "something" to their victims? When you live in a country where that sort of behaviour is tolerated in certain contexts, don't be surprised when it occurs in other contexts too. We are telling youths that it is okay to lynch fellow citizens when they (the youths) decide these citizens are guilty of "something".
We do not even have a single national definition of what this "something" is. Pick-pockets have been lynched, as well as people accused (but never convicted) of desecrating Holy books.
But I digress. I am talking about the armed militia, and my 2003 essay.
The OPC, Bakassi Boys and Hisbah were only the most famous of the militia, a fame derived probably from their close association to the old politico-regional, ethno-political and politico-religious tripod of Yoruba, Igbo, and Hausa respectively. This alone should have worried people, but if it did, the worry did not show, and life continued as usual.
The crime wave was also the excuse for some state governors to create state-run pseudo-police. None of these entities was exactly called "state police" but all acted as though that was what they were. Some of the pseudo-police were off-shoots of the earlier "vigilance" militia, and some were "new". Among the citizenry were those who thought it appropriate in a federation for states to have their own police forces, even if the disliked 1999 constitution did not allow it. Quietly, all citizens acknowledged these pseudo-police (and in many cases the "real" police too) performed like private political enforcers for the respective state governors.
Some of these militia, political enforcers for PDP and ANPP politicians in the Niger-Delta, grew dissatisfied with their lot. The regional governors (and deputy-governors, wink, wink) were getting rich off of oil derivation money, and were not sharing it as generously as the enforcers had hoped. So the erstwhile enforcers found new work, as the "Niger-Delta militants", armed groups whose "militancy" extended only to getting rich by stealing and selling crude oil.
To survive, they need the cooperation of powerful political figures and the acquiescence of Niger-Delta communities among which they hide; to the former they give a share of the bunkering wealth, and for the latter they pretend to be stealing and enriching themselves in the name of protesting marginalization. But significantly, these groups started out as private militia in the employ of politicians, and were most notable (pre-bunkering) for helping to rig elections in favour of the very PDP politicians they now profess to oppose.
Nigeria lost $23 billion last year, from a combination of theft (a.k.a bunkering) and the sabotage of oil-related infrastructure. With the current offensive by the JTF against the "militants", Bloomberg.com estimates our output to have fallen to 50% of installed capacity.
The Nigerian Armed Forces are often accused of being overly harsh, and of causing more-than-excessive collateral damage to citizens and to communitiess in which they are deployed. The problem with these critics is they all seem to think the Army is being particularly wicked or malevolent towards these peoples and communities. In fact, they are not. The sad, depressingly, pathetically hopeless truth is this is the only way they have been trained to fight. Our armed forces have used these exact same "tactics" in every conflict, large and small, since their existence. The Armed Forces do not have the capacity for precision warfare. And mind you, even so-called precision warfare creates too much collateral damage, but we don't even have the fig-leaf of appearing at least to be trying to be precise. Some years back I read the memoir of a journalist who traveled through NPFL/RUF territory during the wars in Sierra Leone and Liberia, and he mentioned an incident when a Nigerian alpha jet missed its intended target (an enemy headquarters building) and instead killed a civilian who was still in the streets after everyone else had run for cover. The alpha jet pilot did not intend the outcome, in fact what struck me about the story is the pilot did not have laser-guided weaponry or smart bombs; he flew over the target a couple of times, trying to manually calculate the best moment to manually drop his bombs; it was like something out of the 1940s, and like most of the bombers of that era, it was more likely the bomb would miss than actually hit the target.
This is the only way our military knows how to fight, so it is either they do this, or they do nothing. And sometimes (for example when communal violence breaks out, or when NPFL/RUF are cutting off people's arms and ears and burning them alive in their homes) it is impossible for the military to avoid being sent into combat. Frankly, it is long past time for the Armed Forces to be reformed and transformed, including dramatic improvements in TRAINING, TACTICS and EQUIPMENT. But that is a story for another blog, and is also yet another thing that we have known about for decades but done nothing about.
It should never have come to this. This low-intensity conflict in the Niger-Delta is the sort of thing I was warning of way back in 2003. We did not have to leave it to fester this long, leave it to metastasize, leave it to the point where low-intensity battles are necessary, with the attendant suffering of the civilian population.
I expect the JTF will prevail .... sort of. They will win some kind of victory, but the victory will not be the end of risk in the Delta or of risk in the broader sense.
The Federal Republic is in serious need of reform and transformation, and the longer we put it off, the more the long-term risk.
The majority of the people of Nigeria live normal, regular lives; life is difficult for the majority of citizens, yes, but life is notheless basically normal. In fact the major reason there has never been a revolution or popular revolt in Nigeria is we the people have adapted to the situation, including adaptations to deal with the difficulties. We are a country where citizens carve out their own roads, generate their own electricity, pump their own water, provide their own security, create their own credit networks -- we do it all.
When I think back to my childhood and early youth, things were not "easy" by any stretch of the imagination, but we managed. And while truly terrible things do happen in Nigeria, things like "religious" riots, such things happen in particular places and at particular times. It is not like the entire country erupts in violence, nor is violence something that happens every day. And we are not unique in suffering these problems; for all our hyperbole to the contrary, everything we think of as a uniquely Nigerian problem exists in fact all over the world. As I argued in an earlier blog, there are certain things that differentiate succesfful countries from unsuccessful ones, and the propensity to corruption is not one such thing. However the likelihood of prosecution for corruption is, as is the question of whether or not the corrupt behaviour surrounds decision-making processes that tend toward increasing societal wealth or decision-making processes that don't; for example the political climate surrounding road construction in Japan is as dubious as road construction in Nigeria, but the decision-making processes (particularly in the immediate post-war decades) ensure that public servants in Japan administer an economy that is still the world's second-richest, despite the local and global changes of the last two decades.
The Federal Republic of Nigeria is a wonderful country, a beautiful country with a kaleidoscope of cultures, and a warm, generous hospitable populace. We should be consolidating the good things in our country, then expanding those good things so we eventually stamp stamp out the problem issues. We should then move forward with the project of reform and transformation.
Unfortunately, we thus far seem to prefer brinkmanship, choosing to keep ourselves and our country constantly on the edge rather than move it deep into safe territory. We the people blame our "leaders" for this, but our "leaders" are creatures of our society, and until society changes the characteristics of its leadership will not change either.
I suppose you are wondering what brought on this burst of angst?
I have been reading media articles on the on-going battle between the Nigerian Armed Forces' Joint Task Force, and the various militia groups in the Niger-Delta. It makes for depressing reading.
And it was all too predictable.
When I say predictable, I am not talking about the poverty in the Niger-Delta. There is poverty all over Nigeria (I daresay the north-east of the country is the poorest region of the country, much poorer than the Delta). And no, I am not talking about government neglect; that too is national in its scope. And I am not talking about the lack of enforcement of environmental, electoral and other laws; yes, you guessed it, it is no better in the rest of the country outside the region abutting the mouth of the Niger River.
No, the violence was predictable. Violence in Nigeria is ALWAYS predictable. Communal violence, religious riots, ethnic strife ... we see it coming, and just watch it approach. Eventually it washes over us, the survivors pick up their lives as best they can, and we begin the slow progress towards the next violent incident.
What is happening in the Niger-Delta right now (article, article, article, article, article) got me to thinking about an exchange I had with a fellow Nigerian some six years ago.
In 2003, I wrote a piece expressing worry at the proliferation of armed militias in Nigeria. Some of these militia had an ethnic or religious basis, while others (the local "vigilance" groups in particular) were drawn from a specific village or town. All of these groups were made up of "youths", a term that has a lot of meanings in Nigeria; indeed "youths" is the most frequent description of individuals involved in outbreaks of communal violence nationwide.
Anyone with a shred of sense would have been concerned at the sudden expansion in organized groups of armed youths. The concern was heightened by the realization that Nigeria was suffering an upsurge in the smuggling of heavy weaponry into the country. Our borders are porous, and private armies easily stockpiled the sort of weaponry that is only meant to be used by soldiers on warfronts. Illegal imports of heavy weaponry continues today.
When I wrote that essay in 2003, Nigeria had been amidst another upsurge, this one of communal and political violence. The rise in violence began after General Abdulsalami Abubakar (rtd.) handed the presidency to General Olusegun Obasanjo (rtd), ushering in the Fourth Republic in 1999. There are NO RELIABLE STATISTICS on violence in Nigeria, but at the time the (possibly sensationalistic) media estimates put the numbers of victims of all the outbreaks combined in the thousands. In a lengthy document published in 2007, Human Rights Watch estimated 11,000 dead (and quoted the Nigerian National Commission on Refugees' figure of 3 million displaced) in 481 outbreaks between 1999 and 2006 (a rate of 1 outbreak every 5 days).
So I wrote this essay in 2003, warning of the dangers of allowing the situation to get out of hand. It was not alarmism, but pragmatic caution.
Most African countries that became failed or semi-failed states went through a period where armed groups arose and weapons smuggling got out of hand. Most of these countries appeared to be normal (or at least normal by African standards) until the moment they just seemed to suddenly collapsed. I say "seemed" because in every case the causes of the ultimate collapse were visible and observable for decades, but the citizenry did nothing to force change.
And before someone starts to tell me that Nigeria shows no signs of trouble, please think about Cote d'Ivoire. The Ivoirien republic, was not just "normal by African standards", but was held by most Africans and non-Africans to be the West African answer to Botswana. Cote d'Ivoire is not exactly "failed", but none of their cheerleaders foresaw, predicted or expected the West African miracle would suffer ten years (and rising) of political instability, coups, war and near-breakup. All those years that commentators yabbed Nigeria and hailed Cote d'Ivoire, and here we are in 2009, and we are more politically stable than they are, despite the current violence in the Niger-Delta; the federal government is not about to fall, Nigeria is not about to split in two, and we are under no danger of having French troops pour in to establish a ceasefire line.
But that does not mean the situation in Nigeria is "good" or "safe".
In years past, I was obliged (don't ask why) to intensely study Felix Houphouet Boigny's Cote d'Ivoire with an honest, unbiased eye. Anyone who did the same would have seen all of the weaknesses that came to bear after Boigny's death. At a vital and fundamental level, the "wealthy" and "stable" Cote d'Ivoire of Boigny was not as different from the "poor" and "unstable" Zaire of Mobutu as you were led to believe. In both cases, the death of the autocratic strongman exposed the absence of a "state" beyond that individual.
But neither of those cases is as annoying to me as Liberia. The issues that gave rise to Liberia's quarter-century of chaos (starting with the Samuel Doe coup, and continuing to the end of the Civil War) were visible for more than 100 years. People need to take advantage of stability to reform and transform, rather than exploiting the short-term absence of consequence to make hay while the sun shines.
When I wrote that article in 2003, I was trying to warn that it was better to deal with certain things when they are small, instead of doing nothing and waiting until the problems metastasize and become major problems.
That 2003 essay attracted a response from a fellow Nigerian who declared that I was an alarmist. He came just short of politely saying I was full of crap. All was well, he insisted, nothing was wrong, and I and everyone else should rejoice that we were democratic, or something along those lines.
He was not alone in his complacency.
A lot of Nigerians welcomed these militia groups. Not all of us, but many of us. The Odua Peoples Congress, the Bakassi Boys and the Hisbah were particularly popular in some circles. Allegedly, the OPC and the Bakassi Boys were fighting armed robbery, and supposedly the Hisbah were waging war on the every sinful decadence of society.
I guess many of us were frustrated with the ineffective police and the absence of law enforcement and security. Heck, I have been surprised to find there are people who support lynchings! Not everyone, and probably most people don't, but opposition to lynching is not 100%, which is what I hoped it would be. When the newspapers report that "a suspected armed robber" was lynched, there are people who say "it serves him right" without first asking themselves if he was guilty.
It is frustration that causes this, frustration with government, law enforcement and the judiciary, the kind of frustration that makes people hero-worship flawed figures like Nuhu Ribadu.
But what if that was me or you facing the wrath of a lynch mob? What if you or I were wrongly accused? What if it was one of our brothers, fathers or sons? If the police are rubbish at investigation and the judiciary is rubbish at sorting out the guilty from the innocent, shouldn't we focus our energy on forcing transformation of the police and judiciary, rather than supporting random groups of citizens who lynch in the name of justice?
And do you realize EVERY act of communal and religious violence involves groups of "youths" who set out to lynch on the basis of rumours, innuendo, gossip and accusations that ascribe guilt of "something" to their victims? When you live in a country where that sort of behaviour is tolerated in certain contexts, don't be surprised when it occurs in other contexts too. We are telling youths that it is okay to lynch fellow citizens when they (the youths) decide these citizens are guilty of "something".
We do not even have a single national definition of what this "something" is. Pick-pockets have been lynched, as well as people accused (but never convicted) of desecrating Holy books.
But I digress. I am talking about the armed militia, and my 2003 essay.
The OPC, Bakassi Boys and Hisbah were only the most famous of the militia, a fame derived probably from their close association to the old politico-regional, ethno-political and politico-religious tripod of Yoruba, Igbo, and Hausa respectively. This alone should have worried people, but if it did, the worry did not show, and life continued as usual.
The crime wave was also the excuse for some state governors to create state-run pseudo-police. None of these entities was exactly called "state police" but all acted as though that was what they were. Some of the pseudo-police were off-shoots of the earlier "vigilance" militia, and some were "new". Among the citizenry were those who thought it appropriate in a federation for states to have their own police forces, even if the disliked 1999 constitution did not allow it. Quietly, all citizens acknowledged these pseudo-police (and in many cases the "real" police too) performed like private political enforcers for the respective state governors.
Some of these militia, political enforcers for PDP and ANPP politicians in the Niger-Delta, grew dissatisfied with their lot. The regional governors (and deputy-governors, wink, wink) were getting rich off of oil derivation money, and were not sharing it as generously as the enforcers had hoped. So the erstwhile enforcers found new work, as the "Niger-Delta militants", armed groups whose "militancy" extended only to getting rich by stealing and selling crude oil.
To survive, they need the cooperation of powerful political figures and the acquiescence of Niger-Delta communities among which they hide; to the former they give a share of the bunkering wealth, and for the latter they pretend to be stealing and enriching themselves in the name of protesting marginalization. But significantly, these groups started out as private militia in the employ of politicians, and were most notable (pre-bunkering) for helping to rig elections in favour of the very PDP politicians they now profess to oppose.
Nigeria lost $23 billion last year, from a combination of theft (a.k.a bunkering) and the sabotage of oil-related infrastructure. With the current offensive by the JTF against the "militants", Bloomberg.com estimates our output to have fallen to 50% of installed capacity.
The Nigerian Armed Forces are often accused of being overly harsh, and of causing more-than-excessive collateral damage to citizens and to communitiess in which they are deployed. The problem with these critics is they all seem to think the Army is being particularly wicked or malevolent towards these peoples and communities. In fact, they are not. The sad, depressingly, pathetically hopeless truth is this is the only way they have been trained to fight. Our armed forces have used these exact same "tactics" in every conflict, large and small, since their existence. The Armed Forces do not have the capacity for precision warfare. And mind you, even so-called precision warfare creates too much collateral damage, but we don't even have the fig-leaf of appearing at least to be trying to be precise. Some years back I read the memoir of a journalist who traveled through NPFL/RUF territory during the wars in Sierra Leone and Liberia, and he mentioned an incident when a Nigerian alpha jet missed its intended target (an enemy headquarters building) and instead killed a civilian who was still in the streets after everyone else had run for cover. The alpha jet pilot did not intend the outcome, in fact what struck me about the story is the pilot did not have laser-guided weaponry or smart bombs; he flew over the target a couple of times, trying to manually calculate the best moment to manually drop his bombs; it was like something out of the 1940s, and like most of the bombers of that era, it was more likely the bomb would miss than actually hit the target.
This is the only way our military knows how to fight, so it is either they do this, or they do nothing. And sometimes (for example when communal violence breaks out, or when NPFL/RUF are cutting off people's arms and ears and burning them alive in their homes) it is impossible for the military to avoid being sent into combat. Frankly, it is long past time for the Armed Forces to be reformed and transformed, including dramatic improvements in TRAINING, TACTICS and EQUIPMENT. But that is a story for another blog, and is also yet another thing that we have known about for decades but done nothing about.
It should never have come to this. This low-intensity conflict in the Niger-Delta is the sort of thing I was warning of way back in 2003. We did not have to leave it to fester this long, leave it to metastasize, leave it to the point where low-intensity battles are necessary, with the attendant suffering of the civilian population.
I expect the JTF will prevail .... sort of. They will win some kind of victory, but the victory will not be the end of risk in the Delta or of risk in the broader sense.
The Federal Republic is in serious need of reform and transformation, and the longer we put it off, the more the long-term risk.
18 May, 2009
On democracy and coups in Africa
It has been a while since I have commented on politics in Africa beyond the borders of the federal republic. In the early days of this blog, I did make a couple of comments on Madagascar and one on Angola.
I was tempted to comment after the initial reaction of African governments and the African Union to the overthrow of Madagascar's Ravalomanana administration and its replacement with the Rajoelina adminitration, but decided not to. Too many interesting things happening in Nigeria.
But this article in The East African reminded me once more of something I have wanted to say for a while now. The article discusses efforts by Uganda, to get the United Nations Security Council to condemn "the resurgence of coups in Africa". Uganda is seemingly one of three African non-permament members on the Security Council, and their push for this resolution against coups was backed by the two other African non-permanent UNSC members, Libya and Burkina Faso.
Look at that list.
Uganda, Libya and Burkina Faso.
Three countries where the ruling political forces REFUSE to allow anyone else to DEMOCRATICALLY challenge for power. Three countries where the political leadership will use the power of the state as well as the blunt force of thuggery, violence and intimidation to crush any attempt at DEMOCRATIC CHANGE OF GOVERNMENT. They refuse to let democracy happen. Refuse to let the people choose the leadership. Impose themselves on their countries whether the citizens want them or not.
And then complain about coups.
Are you kidding me?
For the record ..... I DO NOT SUPPORT COUPS. In Africa, coups are no different from rigged elections. The winners and losers are exactly the same, govern the same way, and pursue the same policies. The quarrel among themselves, sometimes kill themselves and other times get we the people to kill each other on their behalf, but either way the outcomes of coups and "elections" are to replace one man with another man where both men are the same (except for their names, faces and sometimes ethnicities) and where the polital, social and economic system remains unchanged.
But that is not the point.
Take Madagascar for example. There was a lot of criticism of the Andriy Rajoelina regime from the African Union, and from some of those powerful governments outside Africa that call themselves "the international community". They all said that Rajoelina's putsch was a blow to Madagascar democracy. But what "democracy" are they talking about? The man they are trying to restore to office, Marc Ravalomanana came into office EXACTLY THE SAME WAY AS RAJOELINA.
Marc Ravalomanana was the Mayor of Antananarivo, and a man of relatively great personal wealth (in a poor country like Madagascar) and he led street protests in the capital city that eventually toppled the Didier Ratsiraka administration, after Ratsiraka refused to allow for the possibility of democratic change of government. A few years later, the coin flipped, and it was Andriy Rajelina, also Mayor of Antananarivo, also a man of relatively great wealth (in a poor country like Madagascar) who led street protests that brought down Ravalomanana! This is how they change governments in Madagascar, abi?
In Guinea, soldiers seized control of the government after the death of erstwhile President Lansana Conte. Again there were cries of democracy being harmed by a coup, and again I ask, what democracy? There was no democracy under Sekou Toure, and none under Lansana Conte, either. Supposedly the constitution called for power to transfer to the head of the Guinean National Assembly, but this man (and the rest of the Assembly) are the same people responsible for the lack of democracy to begin with, so why would anyone expect them to reform the system?
Guinea is in the trap Cote d'Ivoire has been struggling to escape ever since the death of Le Vieux, Felix Houphouet-Boigny. There was no democracy under Boigny, who (whatever else they say about him) was an authoritarian autocrat. Frankly, he was a dictator, albeit pursuing policies that raised the national income. The problem after his death, was ALL of his potential successors were men-of-the-system (much like the politicians in Guinea), who wanted the system to continue, except with themselves enjoying the unchecked, unquestioned power that Boigny had wielded. And I am NOT saying Guinea's soldiers are the solution to the dilemma, because their Ivoirien military counterparts (most notably the late General Robert Guei, but others as well) were just as keen on continuing the system, but with themselves atop it.
Which brings me to the point I want to make. What we need in Africa is a fight FOR DEMOCRACY. That is all we need. Until we have democracy, real and substantive, all other considerations are unimportant. There is no point to taking a position on unconstitutional changes of government if there is no democracy to defend.
If you declare coups to be unacceptable in countries where coup is the only way to change the government, then you are effectively declaring your support for life-Presidents -- like Uganda's Museveni, Burkina Faso's Campaore, and Libya's Ghadhafi.
On the other hand, if you declare coups to be appropriate in countries that have no democracy, you are effectively declaring your support for life-Presidents -- like Museveni, Campaore and Ghadhafi, who all came to power through coups.
If there is no democracy, then there is nothing to fight for or to fight against. I would go so far as to argue that citizens of African countries NEVER rise up to defend a sitting government against a coup, because they never wanted that sitting government in the first place. Mind you, they don't want the new government either, so they just adopt a hands-off apathy toward the outgowing and incoming administrations, which in and of itself is a problem, because no government's policies (no matter how wise and sensible) will succeed if the people are basically uninvolved, disinterested and apathetic.
To make a long story short, if these African presidents are so opposed to coups, maybe they should deliver some real democracy first.
I was tempted to comment after the initial reaction of African governments and the African Union to the overthrow of Madagascar's Ravalomanana administration and its replacement with the Rajoelina adminitration, but decided not to. Too many interesting things happening in Nigeria.
But this article in The East African reminded me once more of something I have wanted to say for a while now. The article discusses efforts by Uganda, to get the United Nations Security Council to condemn "the resurgence of coups in Africa". Uganda is seemingly one of three African non-permament members on the Security Council, and their push for this resolution against coups was backed by the two other African non-permanent UNSC members, Libya and Burkina Faso.
Look at that list.
Uganda, Libya and Burkina Faso.
Three countries where the ruling political forces REFUSE to allow anyone else to DEMOCRATICALLY challenge for power. Three countries where the political leadership will use the power of the state as well as the blunt force of thuggery, violence and intimidation to crush any attempt at DEMOCRATIC CHANGE OF GOVERNMENT. They refuse to let democracy happen. Refuse to let the people choose the leadership. Impose themselves on their countries whether the citizens want them or not.
And then complain about coups.
Are you kidding me?
For the record ..... I DO NOT SUPPORT COUPS. In Africa, coups are no different from rigged elections. The winners and losers are exactly the same, govern the same way, and pursue the same policies. The quarrel among themselves, sometimes kill themselves and other times get we the people to kill each other on their behalf, but either way the outcomes of coups and "elections" are to replace one man with another man where both men are the same (except for their names, faces and sometimes ethnicities) and where the polital, social and economic system remains unchanged.
But that is not the point.
Take Madagascar for example. There was a lot of criticism of the Andriy Rajoelina regime from the African Union, and from some of those powerful governments outside Africa that call themselves "the international community". They all said that Rajoelina's putsch was a blow to Madagascar democracy. But what "democracy" are they talking about? The man they are trying to restore to office, Marc Ravalomanana came into office EXACTLY THE SAME WAY AS RAJOELINA.
Marc Ravalomanana was the Mayor of Antananarivo, and a man of relatively great personal wealth (in a poor country like Madagascar) and he led street protests in the capital city that eventually toppled the Didier Ratsiraka administration, after Ratsiraka refused to allow for the possibility of democratic change of government. A few years later, the coin flipped, and it was Andriy Rajelina, also Mayor of Antananarivo, also a man of relatively great wealth (in a poor country like Madagascar) who led street protests that brought down Ravalomanana! This is how they change governments in Madagascar, abi?
In Guinea, soldiers seized control of the government after the death of erstwhile President Lansana Conte. Again there were cries of democracy being harmed by a coup, and again I ask, what democracy? There was no democracy under Sekou Toure, and none under Lansana Conte, either. Supposedly the constitution called for power to transfer to the head of the Guinean National Assembly, but this man (and the rest of the Assembly) are the same people responsible for the lack of democracy to begin with, so why would anyone expect them to reform the system?
Guinea is in the trap Cote d'Ivoire has been struggling to escape ever since the death of Le Vieux, Felix Houphouet-Boigny. There was no democracy under Boigny, who (whatever else they say about him) was an authoritarian autocrat. Frankly, he was a dictator, albeit pursuing policies that raised the national income. The problem after his death, was ALL of his potential successors were men-of-the-system (much like the politicians in Guinea), who wanted the system to continue, except with themselves enjoying the unchecked, unquestioned power that Boigny had wielded. And I am NOT saying Guinea's soldiers are the solution to the dilemma, because their Ivoirien military counterparts (most notably the late General Robert Guei, but others as well) were just as keen on continuing the system, but with themselves atop it.
Which brings me to the point I want to make. What we need in Africa is a fight FOR DEMOCRACY. That is all we need. Until we have democracy, real and substantive, all other considerations are unimportant. There is no point to taking a position on unconstitutional changes of government if there is no democracy to defend.
If you declare coups to be unacceptable in countries where coup is the only way to change the government, then you are effectively declaring your support for life-Presidents -- like Uganda's Museveni, Burkina Faso's Campaore, and Libya's Ghadhafi.
On the other hand, if you declare coups to be appropriate in countries that have no democracy, you are effectively declaring your support for life-Presidents -- like Museveni, Campaore and Ghadhafi, who all came to power through coups.
If there is no democracy, then there is nothing to fight for or to fight against. I would go so far as to argue that citizens of African countries NEVER rise up to defend a sitting government against a coup, because they never wanted that sitting government in the first place. Mind you, they don't want the new government either, so they just adopt a hands-off apathy toward the outgowing and incoming administrations, which in and of itself is a problem, because no government's policies (no matter how wise and sensible) will succeed if the people are basically uninvolved, disinterested and apathetic.
To make a long story short, if these African presidents are so opposed to coups, maybe they should deliver some real democracy first.
12 May, 2009
An Oil Spill in the Niger-Delta
I pondered in this blog post, the difficulties in fighting crime when the people who are supposed to enforce the law are too often in league with the people who are breaking the law.
Quietly over the last few years, the Nigerian Armed Forces have been repairing their existing hardware and purchasing new hardware. Perhaps the mini-Oil-Boom of the 2000s played a role in providing the financing.
When I saw a BBC report titled Oil theft barge sunk in Nigeria , I initially assumed one of the Navy's new patrol boats and/or patrol helicopters had attacked and sunk an oil bunkering vessel. I was going to come here, praise them for stopping the criminals, but advise that in the future we try to capture (and impound) the ship rather than sink it.
And then I read the article.
Apparently, the Joint Task Force was in fact going to go after this particular bunkering barge.
Apparently, someone warned the crew of the barge that a JTF raid was imminent.
And apparently, the crew of the barge scuttled their own vessel (i.e. the crew sank their own ship), then swam ashore to "safety" and escape.
The end result? 2,000 tonnes of crude oil spilled into the coastal waters .... no arrests .... and no word yet on who tipped off the criminals.
Quietly over the last few years, the Nigerian Armed Forces have been repairing their existing hardware and purchasing new hardware. Perhaps the mini-Oil-Boom of the 2000s played a role in providing the financing.
When I saw a BBC report titled Oil theft barge sunk in Nigeria , I initially assumed one of the Navy's new patrol boats and/or patrol helicopters had attacked and sunk an oil bunkering vessel. I was going to come here, praise them for stopping the criminals, but advise that in the future we try to capture (and impound) the ship rather than sink it.
And then I read the article.
Apparently, the Joint Task Force was in fact going to go after this particular bunkering barge.
Apparently, someone warned the crew of the barge that a JTF raid was imminent.
And apparently, the crew of the barge scuttled their own vessel (i.e. the crew sank their own ship), then swam ashore to "safety" and escape.
The end result? 2,000 tonnes of crude oil spilled into the coastal waters .... no arrests .... and no word yet on who tipped off the criminals.
Still on the Naira exchange rate
This is a follow-up to this blog post.
This report in NEXT says the Naira has fallen to =N=184.00 to $1.00 in the (so-called) parrallel market. The official rate today according to the financial website I check is =N=147.25 to $1.00
First of all, it is long past time for the two rates to converge .... but that is another issue to talk about another day.
What is interesting about the NEXT report is they cite dealers who believe the Central Bank of Nigeria is concerned that defending the Naira's value is leading to a quick depletion of our external reserves. These dealers think the Central Bank is lowering the amount of dollars it injects into the markets ... which they believe is the source of the drop in the Naira value on the parrallel markets (supply is down, demand is constant, price goes up).
Much more interesting .... this article repeats something reported earlier in Business Day; apparently the status of our reserves is now classified information. The CBN website used to have public information on the reserves, but that was taken off after February, and the CBN has issued no public report on the state of the reserves since then.
This is a strange "democracy" where we the people have no influence (not even indirecly via credible elections) on the expenditure of money that constitutionally belongs to us.
This report in NEXT says the Naira has fallen to =N=184.00 to $1.00 in the (so-called) parrallel market. The official rate today according to the financial website I check is =N=147.25 to $1.00
First of all, it is long past time for the two rates to converge .... but that is another issue to talk about another day.
What is interesting about the NEXT report is they cite dealers who believe the Central Bank of Nigeria is concerned that defending the Naira's value is leading to a quick depletion of our external reserves. These dealers think the Central Bank is lowering the amount of dollars it injects into the markets ... which they believe is the source of the drop in the Naira value on the parrallel markets (supply is down, demand is constant, price goes up).
Much more interesting .... this article repeats something reported earlier in Business Day; apparently the status of our reserves is now classified information. The CBN website used to have public information on the reserves, but that was taken off after February, and the CBN has issued no public report on the state of the reserves since then.
This is a strange "democracy" where we the people have no influence (not even indirecly via credible elections) on the expenditure of money that constitutionally belongs to us.
11 May, 2009
Auditor-General's report
NEXT claims they have obtained a copy of the previously suppressed 2006Auditor-General's report that is currently before the National Assembly. Excerpts of the depressing details can be found here and here.
To put this in perspective, the last proper audit of the federation accounts to be released was the 2001 report produced by Vincent Azie, then the acting Auditor-General ("acting" because the Senate had three times refused to confirm him). The Azie report famously indicted the federal government for corruption and waste, citing specific examples (some of which are mentioned in these 2008 Vanguard reports (here and here), written to complain about the fact that there had been no audit since "1999" (sic.).
The response of the sitting Olusegun Obasanjo administration to the 2001 Auditor-General's report, was to sack Vincent Azie! If you were an ambitious fellow, seeking to move up in the world of politics, government and public administration, you learned from this that you were supposed to talk about the so-called War-On-Corruption, but were not supposed to actually act as if it was real. Indeed, after several years of the Nuhu Ribadu-led EFCC and its supposed campaign against corruption, the now-released 2006 A-G report confirms that nothing of substance had changed in our governance since the Azie report. And then there was Charles Soludo, who was consolidating banks (granted, a good thing) while seemingly oblivious of the fact that his home state, Anambra, was being wrecked by the Uba brothers and their mentor then-President Olusegun Obasanjo.
People sometimes lament that things don't work out they way they should in Nigeria (e.g. "turn around maintenance" that never results in "maintained" refineries), but this is the source of it; for every gesture in the public eye that looks like a good idea, there are several realities no one talks about that defeat the stated purpose of the publicly-viewed gesture. It is one step forward, two and a half steps back -- thus eight years of noise about "reforms" followed by the most ridiculous election in Nigerian history.
Cherry-picking easy targets, scapegoats, opponents of the government and politicians who have fallen out of favour is no way to wage a systemic war on systemic problems like corruption, mismanagement and waste. Helping to manipulate the 2007 elections makes you ineligible for my sympathy when the "winner" of those elections sacks you. The first rule of Nigerian politics is godsons always turn on their godfathers after "winning" office, and move to put their own loyalists into powerful positions as a hedge against that godfather. It isn't just a "civilian" matter, as most of our military heads of state of Nigeria started out as the godson (or godfather) of the person they overthrew.
Why was Ribadu surprised? Erstwhile Vice-President Atiku Abubakar was one of Obasanjo's many godfathers, and Ribadu was the field marshal on the frontlines of stopping the Atiku political machine when Obasanjo turned on Atiku. Ribadu knew the Obasanjo regime was as dirty as any other, and knew the 2007 was being rigged. Why is he pretending that all was well before 2007, and that Yar'Adua is responsible for there beiing no "War on Corruption"? There was never a war on corruption! And I bet if Yar'Adua had kept him in office, he would have been singing the man's praises the same way he does Obasanjo's even till this day.
I am NOT blaming Ribadu or Obasanjo for the issue of waste, theft, mismanagement, corruption and patronage. They did not create these scourges, but then neither did Yar'Adua, or Abacha for that matter. The Uba brothers were not the first to wreck Anambra for political (and financial) ambition's sake; Emeka Offor and Chimaroke Mbadinuju were already at it before them. If there is one thing I like about the late Lamidi Adedibu, the late Wada Nas, and the still-with-us Arthur Nzeribe, it is that every once in a while they were very honest about how Nigeria is actually governed. But even they are not to blame for functioning in the way our federal republic requires us to function.
Ultimately there is a way our society, economy and politics function, and all of these individuals (and the decisions and actions they make and take) are but a reflection of that, a creation of all of us Nigerians and of the decisions we all make and the actions we all take. The Federal Republic of Nigeria as presently functions is the sum total of all of us, and until we take responsibility as individual citizens, and band together to force reform and transformation, nothing will change. When WE change, our leadership will change, because ambitious people (and there will always be many of those) will know they have to act differently if they are to have any hope of power and wealth within the formal and informal rules we the citizenry set.
In any case, we are now faced with a repeat of previous events. The Azie report came out in 2001, two years after Obasanjo was "elected" into office in 1999. This 2006 report, released by the current A-G, Robert Ejenavi, has come out in 2009, two years after Umaru Yar'Adua was similarly "elected" into office.
What will the reaction be this time? Will Yar'Adua follow suit and fire Ejenavi? Or will he keep Ejenavi in office, but allow the report to gather dust, like all such reports/plans/policies/promises/intentions for the last 50 years?
I don't think it is possible to fight corruption under the present circumstances. Getting the current Nigerian political system to fight corruption is like trying to convince a pride of lions to become vegetarians. Before we can see change, we will have to replace the lions, not with sheep, but with intelligent omnivores, who know how to eat a balanced diet.
And a balanced diet is the best we can get from government. I have said before on this blog that corruption, waste, mismanagement and outright thefty exist in EVERY country in the world, in EVERY government. However, in the more successful countries, the crooked system is nevertheless geared toward producing outcomes that raise societal wealth and welfare to a degree that the citizens come to accept a little wuruwuru in government as par for the course. In countries like Nigeria, we obsess over corruption in large part because our system makes us poorer than we need be, and hinders our progress rather than promote it.
It is great to have Auditors-General who are not afraid to speak the truth. But their work will be for naught until we radically reform and transform our federal republic. The best we can hope for from the Yar'Adua government is a series of spectacular nothings, much like we got from Ribadu's EFCC, events that appear to be dramatic and shocking, but which in the end turn out to be empty and ineffectual.
To put this in perspective, the last proper audit of the federation accounts to be released was the 2001 report produced by Vincent Azie, then the acting Auditor-General ("acting" because the Senate had three times refused to confirm him). The Azie report famously indicted the federal government for corruption and waste, citing specific examples (some of which are mentioned in these 2008 Vanguard reports (here and here), written to complain about the fact that there had been no audit since "1999" (sic.).
The response of the sitting Olusegun Obasanjo administration to the 2001 Auditor-General's report, was to sack Vincent Azie! If you were an ambitious fellow, seeking to move up in the world of politics, government and public administration, you learned from this that you were supposed to talk about the so-called War-On-Corruption, but were not supposed to actually act as if it was real. Indeed, after several years of the Nuhu Ribadu-led EFCC and its supposed campaign against corruption, the now-released 2006 A-G report confirms that nothing of substance had changed in our governance since the Azie report. And then there was Charles Soludo, who was consolidating banks (granted, a good thing) while seemingly oblivious of the fact that his home state, Anambra, was being wrecked by the Uba brothers and their mentor then-President Olusegun Obasanjo.
People sometimes lament that things don't work out they way they should in Nigeria (e.g. "turn around maintenance" that never results in "maintained" refineries), but this is the source of it; for every gesture in the public eye that looks like a good idea, there are several realities no one talks about that defeat the stated purpose of the publicly-viewed gesture. It is one step forward, two and a half steps back -- thus eight years of noise about "reforms" followed by the most ridiculous election in Nigerian history.
Cherry-picking easy targets, scapegoats, opponents of the government and politicians who have fallen out of favour is no way to wage a systemic war on systemic problems like corruption, mismanagement and waste. Helping to manipulate the 2007 elections makes you ineligible for my sympathy when the "winner" of those elections sacks you. The first rule of Nigerian politics is godsons always turn on their godfathers after "winning" office, and move to put their own loyalists into powerful positions as a hedge against that godfather. It isn't just a "civilian" matter, as most of our military heads of state of Nigeria started out as the godson (or godfather) of the person they overthrew.
Why was Ribadu surprised? Erstwhile Vice-President Atiku Abubakar was one of Obasanjo's many godfathers, and Ribadu was the field marshal on the frontlines of stopping the Atiku political machine when Obasanjo turned on Atiku. Ribadu knew the Obasanjo regime was as dirty as any other, and knew the 2007 was being rigged. Why is he pretending that all was well before 2007, and that Yar'Adua is responsible for there beiing no "War on Corruption"? There was never a war on corruption! And I bet if Yar'Adua had kept him in office, he would have been singing the man's praises the same way he does Obasanjo's even till this day.
I am NOT blaming Ribadu or Obasanjo for the issue of waste, theft, mismanagement, corruption and patronage. They did not create these scourges, but then neither did Yar'Adua, or Abacha for that matter. The Uba brothers were not the first to wreck Anambra for political (and financial) ambition's sake; Emeka Offor and Chimaroke Mbadinuju were already at it before them. If there is one thing I like about the late Lamidi Adedibu, the late Wada Nas, and the still-with-us Arthur Nzeribe, it is that every once in a while they were very honest about how Nigeria is actually governed. But even they are not to blame for functioning in the way our federal republic requires us to function.
Ultimately there is a way our society, economy and politics function, and all of these individuals (and the decisions and actions they make and take) are but a reflection of that, a creation of all of us Nigerians and of the decisions we all make and the actions we all take. The Federal Republic of Nigeria as presently functions is the sum total of all of us, and until we take responsibility as individual citizens, and band together to force reform and transformation, nothing will change. When WE change, our leadership will change, because ambitious people (and there will always be many of those) will know they have to act differently if they are to have any hope of power and wealth within the formal and informal rules we the citizenry set.
In any case, we are now faced with a repeat of previous events. The Azie report came out in 2001, two years after Obasanjo was "elected" into office in 1999. This 2006 report, released by the current A-G, Robert Ejenavi, has come out in 2009, two years after Umaru Yar'Adua was similarly "elected" into office.
What will the reaction be this time? Will Yar'Adua follow suit and fire Ejenavi? Or will he keep Ejenavi in office, but allow the report to gather dust, like all such reports/plans/policies/promises/intentions for the last 50 years?
I don't think it is possible to fight corruption under the present circumstances. Getting the current Nigerian political system to fight corruption is like trying to convince a pride of lions to become vegetarians. Before we can see change, we will have to replace the lions, not with sheep, but with intelligent omnivores, who know how to eat a balanced diet.
And a balanced diet is the best we can get from government. I have said before on this blog that corruption, waste, mismanagement and outright thefty exist in EVERY country in the world, in EVERY government. However, in the more successful countries, the crooked system is nevertheless geared toward producing outcomes that raise societal wealth and welfare to a degree that the citizens come to accept a little wuruwuru in government as par for the course. In countries like Nigeria, we obsess over corruption in large part because our system makes us poorer than we need be, and hinders our progress rather than promote it.
It is great to have Auditors-General who are not afraid to speak the truth. But their work will be for naught until we radically reform and transform our federal republic. The best we can hope for from the Yar'Adua government is a series of spectacular nothings, much like we got from Ribadu's EFCC, events that appear to be dramatic and shocking, but which in the end turn out to be empty and ineffectual.
10 May, 2009
On Infrastructure and the Naira exchange rate
It is difficult to get a grasp of the facts. Our federal government, like governments all over the world, has a tendency of trying to "manage" the information flow, otherwise known as "spin", previously known as "lie". The Nigerian media occasionally breaks investigative news, but their factual information only goes so far and is too often supplemented with rumour and conjecture.
What to make of this article in one of my favourite publications, Business Day. According to the article the Central Bank of Nigeria has spent $14 billion to prop up the value of the Naira between 1st October 2008 and 30th April 2009. The article links this defence of the Naira to the drop in our external reserves from $60 billion in September of 2008 to about $47 billion at the end of March 2009. Business Day adds the usual dash of journalistic alarmism, by pointing out that at this rate (about $2 billion a month) it would take two years to wipe out the rest of our reserves.
The exchange rate today is =N=147.50 to $1.00, and Business Day implies the rate would be weaker had the CBN not intervened.
Many things caused the drop in the Naira's value from =N=118 to $1 to the current rate, most important of which has been the fall in the price of crude oil consequent on the global recession. The author of the Business Day article believes the rate has stabilized somewhat recently in part because the price of crude oil has stabilized at around $50.00/barrel.
Another part of the pressure on the Naira comes from the fact that even as export revnues dropped, imports remained inelastic so demand for dollars remained strong even as supply of dollars dropped. It is this second issue that I want to talk about.
In theory, as the value of the Naira dropped, we would import less and export more, as import prices became relatively higher for us and export prices relatively lower for our trading partners. This is not happening for a variety of reasons. Our major export is crude oil, and it is not priced in Naira to begin with. Even if it were, crude is sensitive to the strength of the world economy, so demand drops when the world is in economic trouble. And even if we were a major, industrial exporting country like Germany, Japan or China, the global economic problems would only put us in the same difficulties as Germany and Japan (China has the massive reserves to stimulate internal consumption).
Every country in the world imports, and there is nothing wrong with importation (indeed TRADE is a wonderful thing), but there is an OPTIMAL balance of import and export, an equilibrium position when an economy is operating as it naturally should. I firmly believe Africa's biggest problem (and I stress AFRICA, not Nigeria specifically) is the fact that our economies are abnormal, unnatural and heavily distorted. There is really no way to achieve continental wealth when we are striving to milk as much as we can from an economic structure that makes no rational or logical sense. The first thing we have to figure out about Nigeria is where we fit into a natural, optimal African economy; what would be our role in restructured and functional intra-continental chains of production and consumption? From there the natural rules of the market would dictate what we import/export from/to the rest of Africa, and what we import/export from/to the rest of the world.
As it stands, Nigeria consumes too much imports relative to domestic production and productivity (much like the USA before the credit crunch), and Nigeria is too dependent on using oil revenues to finance this import consumption (much like the USA relied on uneconomic credit).
The only way to keep the economy healthy (and to protect the foreign reserves) is for imports to drop in tandem with the drop in crude oil revenues. Luxuries are not a problem, but we are reliant on imports for staples and capital goods as well.
Still, what is the best way to defend the Naira? Our currency will always be under pressure, because of the excess importation. Americans and others who hold dollars have no particular reason to chase Naira; indeed the one thing they buy from us in large magnitude is priced in dollars. On the converse end, we are structurally locked into demanding huge amounts of dollars for imports. With crude oil as the chief source of foreign exchange, the Naira value will weaken as ever-more Naira desperately chases an ever smaller pot of dollars.
If we produced more of our needs domestically, and produced more of the needs of the West and Central African sub-regions domestically .... and if we imported more of our input and finished-product requirements from the West and Central African sub-regions, it would diminish the amount of Naira chasing dollars (or Euros or Yen or whatever), which would raise the exchange rate (and establish more of a market in goods, services and currency between us and our neighbours).
This is NOT protectionism. For it to be proctectionism, we would be trying to defend industries and firms that do not meet the market's tests for survival, trying to create industries and firms that should not exist. On the contrary, in Nigeria (and elsewhere in Africa) the problem is the opposite, the fact that so many industries that SHOULD EXIST (for example, electricity generating plants) do not exist. The absence of things that should exist if our markets and economies were normal, drives decision-making and outcomes (including the value of the Naira) that are irrational, and unreflective of optimality.
The economic difficulties we are facing in 2009 (in part because of our distorted, irrational economic structure) should have been a good opportunity for us to start to slowly move ourselves closer to optimality.
Which brings me back to the question .... should we have spent $14 billion to defend the Naira's exchange rate? I know that depreciation would make life difficult for us, but only because so much of our lives are linked to dollarized imports. If the exchange rate fell to a point where dollarized importation was no longer attractive as an escape-hatch from our own lack of production/productivity, we might be forced to defend our standards of living ..... BY PRODUCING MORE NON-OIL OUTPUT.
Yes, there are bottlenecks, not least of which is the absence of vital infrastructure. I wrote an article years ago, in an online economic journal, where I argued that investing $12 billion in proper infrastructure would have been a better use for our oil windfall than buying the cancellation of our $35 billion debt. I know the debt was a burden, but my argument was that instead of negotiating with the Paris Club for debt cancellation, we should have been negotiating for a grace period of 15-to-20 years in which our interest payments would be dropped from $3 billion/annum to $1 billion/annum. It would be a good deal for them, because they would still get full payment of their (odious and exploitative) $35 billion of debt, and it would be a good deal for us because $1 billion/annum was what we could afford on annual recurrent revenue (the debt was ballooning because the balance of $2 billion we could not afford was being capitalized). But instead of having $12 billion to leverage into so much more on infrastructure, we were $12 billion less on reserves with $1 billion/annum in practical, real saved revenue -- money we were bound to start spending to service new debt, and which we have in fact begun using to service new debt.
I am left wondering the same thing about the $14 billion spent propping up the Naira. Could we have leveraged this into a much larger sum to lower the costs of production for entrepreneurs and industrialists, enabling them to take advantage of a shift away from dollarized imports when the Naira drops to a level where such imports are uneconomical? In fact, depending on HOW we chose to carry out such investment, the effect would have been an injection of $14 billion into the markets .... which would have found its way directly to capital imports or to the foreign exchange market .... which might have had the same effect as directly (and unproductively) buying Naira off the foreign exchange market.
Yes, rising prices for imports will have (hopefully temporary) effects on our standard of living, but I would argue unemployment, under-employment, and generally low incomes are a bigger cause of social, economic and political malaise in Nigeria. We talk often of under-utilization of capacity, but even if we used all of the "capaciy" we currently have, it is not enough. We desperately need to EXPAND our capacity, and use all of that expanded capacity .... and investment is the way forward, not playing games with the Naira so we can continue to import at uneconomic rates. An increase in investment necessitates a decrease in consumption, though the medium- and long-term GDP gains from investment out-strip any temporary adjustments that would be necessary.
Of course I do not have access to the government's numbers or to the Central Bank's numbers. Maybe I am wrong.
What to make of this article in one of my favourite publications, Business Day. According to the article the Central Bank of Nigeria has spent $14 billion to prop up the value of the Naira between 1st October 2008 and 30th April 2009. The article links this defence of the Naira to the drop in our external reserves from $60 billion in September of 2008 to about $47 billion at the end of March 2009. Business Day adds the usual dash of journalistic alarmism, by pointing out that at this rate (about $2 billion a month) it would take two years to wipe out the rest of our reserves.
The exchange rate today is =N=147.50 to $1.00, and Business Day implies the rate would be weaker had the CBN not intervened.
Many things caused the drop in the Naira's value from =N=118 to $1 to the current rate, most important of which has been the fall in the price of crude oil consequent on the global recession. The author of the Business Day article believes the rate has stabilized somewhat recently in part because the price of crude oil has stabilized at around $50.00/barrel.
Another part of the pressure on the Naira comes from the fact that even as export revnues dropped, imports remained inelastic so demand for dollars remained strong even as supply of dollars dropped. It is this second issue that I want to talk about.
In theory, as the value of the Naira dropped, we would import less and export more, as import prices became relatively higher for us and export prices relatively lower for our trading partners. This is not happening for a variety of reasons. Our major export is crude oil, and it is not priced in Naira to begin with. Even if it were, crude is sensitive to the strength of the world economy, so demand drops when the world is in economic trouble. And even if we were a major, industrial exporting country like Germany, Japan or China, the global economic problems would only put us in the same difficulties as Germany and Japan (China has the massive reserves to stimulate internal consumption).
Every country in the world imports, and there is nothing wrong with importation (indeed TRADE is a wonderful thing), but there is an OPTIMAL balance of import and export, an equilibrium position when an economy is operating as it naturally should. I firmly believe Africa's biggest problem (and I stress AFRICA, not Nigeria specifically) is the fact that our economies are abnormal, unnatural and heavily distorted. There is really no way to achieve continental wealth when we are striving to milk as much as we can from an economic structure that makes no rational or logical sense. The first thing we have to figure out about Nigeria is where we fit into a natural, optimal African economy; what would be our role in restructured and functional intra-continental chains of production and consumption? From there the natural rules of the market would dictate what we import/export from/to the rest of Africa, and what we import/export from/to the rest of the world.
As it stands, Nigeria consumes too much imports relative to domestic production and productivity (much like the USA before the credit crunch), and Nigeria is too dependent on using oil revenues to finance this import consumption (much like the USA relied on uneconomic credit).
The only way to keep the economy healthy (and to protect the foreign reserves) is for imports to drop in tandem with the drop in crude oil revenues. Luxuries are not a problem, but we are reliant on imports for staples and capital goods as well.
Still, what is the best way to defend the Naira? Our currency will always be under pressure, because of the excess importation. Americans and others who hold dollars have no particular reason to chase Naira; indeed the one thing they buy from us in large magnitude is priced in dollars. On the converse end, we are structurally locked into demanding huge amounts of dollars for imports. With crude oil as the chief source of foreign exchange, the Naira value will weaken as ever-more Naira desperately chases an ever smaller pot of dollars.
If we produced more of our needs domestically, and produced more of the needs of the West and Central African sub-regions domestically .... and if we imported more of our input and finished-product requirements from the West and Central African sub-regions, it would diminish the amount of Naira chasing dollars (or Euros or Yen or whatever), which would raise the exchange rate (and establish more of a market in goods, services and currency between us and our neighbours).
This is NOT protectionism. For it to be proctectionism, we would be trying to defend industries and firms that do not meet the market's tests for survival, trying to create industries and firms that should not exist. On the contrary, in Nigeria (and elsewhere in Africa) the problem is the opposite, the fact that so many industries that SHOULD EXIST (for example, electricity generating plants) do not exist. The absence of things that should exist if our markets and economies were normal, drives decision-making and outcomes (including the value of the Naira) that are irrational, and unreflective of optimality.
The economic difficulties we are facing in 2009 (in part because of our distorted, irrational economic structure) should have been a good opportunity for us to start to slowly move ourselves closer to optimality.
Which brings me back to the question .... should we have spent $14 billion to defend the Naira's exchange rate? I know that depreciation would make life difficult for us, but only because so much of our lives are linked to dollarized imports. If the exchange rate fell to a point where dollarized importation was no longer attractive as an escape-hatch from our own lack of production/productivity, we might be forced to defend our standards of living ..... BY PRODUCING MORE NON-OIL OUTPUT.
Yes, there are bottlenecks, not least of which is the absence of vital infrastructure. I wrote an article years ago, in an online economic journal, where I argued that investing $12 billion in proper infrastructure would have been a better use for our oil windfall than buying the cancellation of our $35 billion debt. I know the debt was a burden, but my argument was that instead of negotiating with the Paris Club for debt cancellation, we should have been negotiating for a grace period of 15-to-20 years in which our interest payments would be dropped from $3 billion/annum to $1 billion/annum. It would be a good deal for them, because they would still get full payment of their (odious and exploitative) $35 billion of debt, and it would be a good deal for us because $1 billion/annum was what we could afford on annual recurrent revenue (the debt was ballooning because the balance of $2 billion we could not afford was being capitalized). But instead of having $12 billion to leverage into so much more on infrastructure, we were $12 billion less on reserves with $1 billion/annum in practical, real saved revenue -- money we were bound to start spending to service new debt, and which we have in fact begun using to service new debt.
I am left wondering the same thing about the $14 billion spent propping up the Naira. Could we have leveraged this into a much larger sum to lower the costs of production for entrepreneurs and industrialists, enabling them to take advantage of a shift away from dollarized imports when the Naira drops to a level where such imports are uneconomical? In fact, depending on HOW we chose to carry out such investment, the effect would have been an injection of $14 billion into the markets .... which would have found its way directly to capital imports or to the foreign exchange market .... which might have had the same effect as directly (and unproductively) buying Naira off the foreign exchange market.
Yes, rising prices for imports will have (hopefully temporary) effects on our standard of living, but I would argue unemployment, under-employment, and generally low incomes are a bigger cause of social, economic and political malaise in Nigeria. We talk often of under-utilization of capacity, but even if we used all of the "capaciy" we currently have, it is not enough. We desperately need to EXPAND our capacity, and use all of that expanded capacity .... and investment is the way forward, not playing games with the Naira so we can continue to import at uneconomic rates. An increase in investment necessitates a decrease in consumption, though the medium- and long-term GDP gains from investment out-strip any temporary adjustments that would be necessary.
Of course I do not have access to the government's numbers or to the Central Bank's numbers. Maybe I am wrong.
06 May, 2009
Bailout 2
A follow-up to this blog post.
So I have done a litte research (not much, I've got work to do), and come up with a bunch of articles and essays, the most interesting which was this very brief piece from Bloomberg.
It quotes CBN supremo Charles Soludo as saying Nigeria cannot afford a bank bailout or a stimulus. It goes without saying that we cannot afford a stimulus, but this leaves me wondering about NEXT's report that the CBN has in fact already done a bailout (particularly since we could definitely -- in theory anyway -- afford to come up with some sort of plan to deal with $10 billion in toxic assets).
By the way, as much as I keep mentioning our ability to deal with the problem, I want to repeat once more that I do not necessarily advocate (or oppose) using federal funds or reserves to do so. My view is that if the problem assets are in fact $10 billion or so as has been estimated (and by the way, they need to quantify this amount and be transparent about it .... it is not that bad), we should come up with a forthright way of dealing with it, instead of this smoke-and-mirrors shadowy situation where the stock market is falling, and the banks seem to have issues, but the key figures just fiddle about making assurances no one really believes.
A few analysts have a suggestion for dealing with the bad assets, as noted in this report by Punch. Read it for yourself, see what you think. It boils down to selling bad assets at a steep discount .... and some other stuff. Interesting point in the last paragraph, where the speaker noted that some of the biggest corporations with huge impact on the GDP are not in fact listed on the Nigerian Stock Exchange.
So I have done a litte research (not much, I've got work to do), and come up with a bunch of articles and essays, the most interesting which was this very brief piece from Bloomberg.
It quotes CBN supremo Charles Soludo as saying Nigeria cannot afford a bank bailout or a stimulus. It goes without saying that we cannot afford a stimulus, but this leaves me wondering about NEXT's report that the CBN has in fact already done a bailout (particularly since we could definitely -- in theory anyway -- afford to come up with some sort of plan to deal with $10 billion in toxic assets).
By the way, as much as I keep mentioning our ability to deal with the problem, I want to repeat once more that I do not necessarily advocate (or oppose) using federal funds or reserves to do so. My view is that if the problem assets are in fact $10 billion or so as has been estimated (and by the way, they need to quantify this amount and be transparent about it .... it is not that bad), we should come up with a forthright way of dealing with it, instead of this smoke-and-mirrors shadowy situation where the stock market is falling, and the banks seem to have issues, but the key figures just fiddle about making assurances no one really believes.
A few analysts have a suggestion for dealing with the bad assets, as noted in this report by Punch. Read it for yourself, see what you think. It boils down to selling bad assets at a steep discount .... and some other stuff. Interesting point in the last paragraph, where the speaker noted that some of the biggest corporations with huge impact on the GDP are not in fact listed on the Nigerian Stock Exchange.
Bailout
According to this article in NEXT
That would be $6.7 billion at rates current as of today (=N=149.25 to $1.00).
I post this for information purposes. I do not know enough about what was done or how the money was spent to form an opinion as of now. Inasmuch as I think NEXT is one of the better media establishments (and one of the few who do credible investigative reporting), I have not seen mention of this anywhere else. Maybe I am looking in the wrong places.
That is certainly a lot of money, presumably sufficient to deal with toxic assets estimated at $10 billion. I wonder if this
Does this mean our banks are now in the clear? Or did the purported bailout fail to solve the problems in the sector?
I hope the banks are in the clear, so we can move forward. The stock market was always going to go through a correction, and citizen investors will be more careful going forward. Still, I have to do some more research to find out when, what and how (and whether) this bailout money was spent. Life would be so much simpler if important issues like these were dealt with transparently. It is OUR money at the end of the day, isn't it?
I am not comfortable with the suggestion that the Central Bank did this without the authorization of the National Assembly or Presidency. I am not sure what the statutes say regarding the "independence" of the Central Bank (I am sure there are many things the CBN is allowed to do without approval from the government), but our external reserves have been falling for months now, and if a substantial portion of what is (was?) left is going to be used for anything, I would like us all as citizens to hear what it is, and to perhaps express an opinion. With all due respect to the top technocrats and their soaring self-belief, in Nigeria bad policy usually results from small, closed groups of people who are accountable to no one making decisions on how to spend billions.
Postscript: The NEXT article is less about the bailout, and more about Professor Soludo himself. I shall have to think about some of the information NEXT put out there, and perhaps comment on it. Some things raise eyebrows directly, and some by implication. I have never liked the idea of selling government cars and government houses to the politicians who were meant to use these facilities briefly and then hand them over to the next group. It bothered me when the government began to sell houses in the Apo legilsative village to ex-senators and ex-representative who should really have just packed up their bags and vacated the premises for the next occupants. As the article puts it, selling the official Central Bank Governor's house to Prof. Soludo simply because he is the sitting CBN governor is like selling Aso Rock villa to Alhaji Yar'Adua.
Early this year, the Central Bank spent nearly N1 trillion to bail out ailing banks, without authorisation from either the National Assembly or the Presidency.
That would be $6.7 billion at rates current as of today (=N=149.25 to $1.00).
I post this for information purposes. I do not know enough about what was done or how the money was spent to form an opinion as of now. Inasmuch as I think NEXT is one of the better media establishments (and one of the few who do credible investigative reporting), I have not seen mention of this anywhere else. Maybe I am looking in the wrong places.
That is certainly a lot of money, presumably sufficient to deal with toxic assets estimated at $10 billion. I wonder if this
Does this mean our banks are now in the clear? Or did the purported bailout fail to solve the problems in the sector?
I hope the banks are in the clear, so we can move forward. The stock market was always going to go through a correction, and citizen investors will be more careful going forward. Still, I have to do some more research to find out when, what and how (and whether) this bailout money was spent. Life would be so much simpler if important issues like these were dealt with transparently. It is OUR money at the end of the day, isn't it?
I am not comfortable with the suggestion that the Central Bank did this without the authorization of the National Assembly or Presidency. I am not sure what the statutes say regarding the "independence" of the Central Bank (I am sure there are many things the CBN is allowed to do without approval from the government), but our external reserves have been falling for months now, and if a substantial portion of what is (was?) left is going to be used for anything, I would like us all as citizens to hear what it is, and to perhaps express an opinion. With all due respect to the top technocrats and their soaring self-belief, in Nigeria bad policy usually results from small, closed groups of people who are accountable to no one making decisions on how to spend billions.
Postscript: The NEXT article is less about the bailout, and more about Professor Soludo himself. I shall have to think about some of the information NEXT put out there, and perhaps comment on it. Some things raise eyebrows directly, and some by implication. I have never liked the idea of selling government cars and government houses to the politicians who were meant to use these facilities briefly and then hand them over to the next group. It bothered me when the government began to sell houses in the Apo legilsative village to ex-senators and ex-representative who should really have just packed up their bags and vacated the premises for the next occupants. As the article puts it, selling the official Central Bank Governor's house to Prof. Soludo simply because he is the sitting CBN governor is like selling Aso Rock villa to Alhaji Yar'Adua.
04 May, 2009
Bankole: =N=1.28 trillion for Police reform
According to this report from the impressive new media outlet NEXT, the Speaker of the House of Representatives, Dimeji Bankole announced =N=1.28 trillion will be spent over four years to reform the Nigerian Police Force. At today's exchange rate, (=N=147.25 to $1.00) it would be about $8.7 billion over four years; for simplicity lets say $2.2 billion a year for the next four years.
Politicians all over the world usually make these sorts of declarations with only vague allusions as to where the money will come from. Speaker Bankole kept with global practice, saying only that the Federal, State and Local Governments will jointly fund the initiative. No word on what cuts will be made to spending on other line items to free up the funds to increase spending on the police. No word on how the fall in federal revenues caused by the global credit crunch (and the consequent drop in the price for crude) will affect the budgeting for the police reform initiative. And nothing was said about whether the state and local governments had agreed to this plan, or if they even knew the Speaker planned to commit their allocation to this project.
Don't misunderstand me. I am all for police reform. But money is not the core problem with the Nigerian Police Force, and if we do not address the core issue first, then money spent on "reform" will go down the drain with no substantive return on investment .... other than new vehicles and new guns operated by the same old ineffective police -- something we have seen repeatedly in the past.
It is simple, really, not at all complex. We Nigerians pretend our "problems" (as such) are somehow unique, special, magical or different from the human norm. We talk of "the Nigerian factor" as if there is something about us that is different. The truth is, there is an underlying "normality" to our problems, which, if acknowledged, would set us on the path toward fixing what are really straightforward issues.
The problems of the Nigerian Police Force (and the armed forces) arise from the interplay between rational self-interest (or "vested" interests), and the unchecked, unaccountable exercise of governmental power. Basically, the way the unreformed police force functions suits the strategic interests of those with the most ability to reform it. Conversely, those with the most to gain from reforming the police force (i.e. the majority of the citizenry) have the least ability to push for it.
It goes back to the past, when the "modern" Nigerian police were founded during the colonial era. The colonial police (and army) were not created to protect the people against crime or unlawful government actions. The purpose of the colonial police (and army) was to protect an illegitimate system of government against the people, and to enforce said government's decisions on the people. The allowed the colonial administration to rule without caring about whether the citizens approved of what it was doing or not. If the imperial regime wanted forced labour, or to impose a tax that the citizens did not approve of, they sent their police to intimidate citizens into compliance; and sent in the army if disobedience became excessive.
Fast forward to the half-century of the Indepeendence Era, and the police force (and the armed forces) have not really been reformed and restructured for a very simple reason -- in their current forms, they are useful to whomever happens to be in government at any given moment, useful in much the same way as they were to the colonial government.
I could go through a long historical narrative, starting with the First Republic and the use of the regional police forces by the post-Independence political parties, but it would be so much shorter if I direct your attention to Fourth Republic godfathers like Chris Uba and the late Lamidi Adedibu. First of all, their activities would be impossible if we had an effective police force, as much of what they do is against the law. But more importantly, the police serve as a tool for these political bosses, not as a hindrance.
Chris Uba, who had no de jure constitutional/legal authority over the police, nevertheless ordered a State Police Commissioner to kidnap a sitting State Governor, as part of a sequence of crime and conspiracy that included fraud, bribery, theft, kidnapping, extortion, racketeering and Heaven knows how many other felonies. The late Lamidi Adedibu had state police block "disloyal" state assemblymen from entering the State Assembly building, and ensured that the police stood by and watched while his thugs beat up unionists peacefully protesting agains the uneccesary political wahala in their state. On the national level, the disgrace that was the 2007 elections would have been near impossible if the police force were effective; and again the police (and lets face it, the Economic and Financial Crimes Commission) were used to facilitate the electoral manipulations rather than to stop it.
The unreformed police force is useful to both civilian-led administrations, and to diarchies led by generals. In either case, there is an opposition that protests against the misuse and mismanagement of the police, but when that opposition gets into office, they too find it beneficial to misuse and mismanage the police. Olusegun Obasanjo is a case in point; whenever he is not in government, he is the standard-bearer for good governance (and was a victim of the late Sani Abacha's misuse of the criminal justice system), but when he was in government in the 1970s and 2000s, he exploited the broken system to the hilt and did nothing of note to reform it.
We the people are the ones who need an effective police force, but since we have NEVER had proper democracy (and with it the ability to set the course of government policy, albeit indirectly), there has been no interest in police reform. Speaker Bankole is not the first senior politician to make a fancy speech about reforming the police force, but he is a senior member of the Peoples Democratic Party, a party with much to lose if Nigeria ever acquired a functional criminal justice system. The Fourth Republic has been a story of assassinations, disregard and breach of the constitution, fraudulent elections, corrupt practices, violation of citizen rights, anti-democratic "godfather" politics, and so many other illegalities. If the politicians reformed the police, the result would be the arrest of many of the politicians!
Reform runs contrary to the political interests of the dominant force in Nigerian politics, so at best money will be appropriated in quantity, spent in quantity, but deliberately spent in such a way as to achieve little substantive effect. At which point the politicians, intellectuals and commentators will start talking as if there is something special about Nigeria that makes good plans fail .... when there was no good plan to begin with, just a scheme to distract people while nothing was done.
Indeed, when citizens begin to get angry about rising crime and vice, our leaders are quick to do everything except reform the police. Under diarchies led by generals, the governments just created task forces with silly names like "Operation Sweep"; since the task forces were drawn from the unreformed police force, they operated in the same ineffective way. In the Fourth Republic, led by civilians, a new sort of distraction emerged, the creation of variations of external quasi-police-like entities that are politically loyal to the person of the sitting governor. Entities like the Hisbah, the Bakassi Boys, the Odua Peoples Congress were marketed as being our last, best hope in the war on crime and vice, but we the citizens had (and have) no demoocratic control over these entities -- with predictable consequences. I would love to see an independent tribunal investigate these quasi-police, but that will never happen because the men with the power to constitute such a probe have a vested interest in making sure no such probe ever happens. We do know that in the Niger-Delta region, the pseudo-police funded by the various governors metamorphosed into a fusion between criminal syndicate and low intensity insurgency that still has mysterious and shadowy ties with senior political figures in the Niger-Delta and far away in Abuja.
The sad thing is these distractions are effective, and gain the praise of a cross section of citizens. And when enough time passes that we move into the medium-term (not even the long-term) and citizens realize that not much has really changed, some start to think there is something specifically wrong with Nigeria .... or that a succeeding regime has failed to continue the "reforms" of the prior regime. Look beneath the surface people! Ask yourself, when have we ever really sat down and reformed the police? Never. We never have. That is why the status quo persists.
As long as it remains in the vested interest of the political classes (be they politician or militician), there will be no substantive reform of the police. It does not mater how much money they profess to spend; our governments are masters at spending large sums of money without actually "doing" anything.
Change will only come when we have elections that actually reflect what the people want, and that actually choose the type of leadership the people want. The latest fiasco in Ekiti is proof that nothing has changed since 2007, or frankly since 1960, when it comes to substantive democracy.
We the people are the ones with a vested interest in proper law enforcement. Unlike the rich and powerful, we cannot afford private security forces and vicious dogs. And we lack the ability to pick up the phone to call a Police Commissioner to take care of our problems. Frankly, we are scared of the police, as they have a tendency to shoot "stray bullets" at innopportune moments, leading to our deaths. We fear arrest, because we would be detained in inhumane conditions and subject to harsh treatment even if we have actually committed no crime.
Oddly enough, the Nigerian Police Force, unreformed as it may be, is still a vital part of our polity and society. When communal violence breaks out, citizens seek refuge in police and army barracks. We look to these men in uniform to protect us, and to a certain extent they do. But inherent in the example I just gave (i.e. citizens seeking sanctuary during communal violence) is a reminder of how things are not quite "normal" in Nigeria. With reform and transformation, we would not have inter-communal violence to begin with .... and the police and army would independently, professionally and effectively fulfill the roles we the citizens have wanted for them since before independence.
I believe that deep down in their hearts and souls, the majority of the officers and men of the Nigerian Police Force (and the armed forces) want the same things for Nigeria that the rest of us civilians want. Afterall, they are citizens just like us, and want our federal republic to soar as do we all. But this is not going to happen until we fix our policy-making and decision-making infrastructure, regardless of whatever phantom funds Speaker Bankole claims will be spent on police reform.
Politicians all over the world usually make these sorts of declarations with only vague allusions as to where the money will come from. Speaker Bankole kept with global practice, saying only that the Federal, State and Local Governments will jointly fund the initiative. No word on what cuts will be made to spending on other line items to free up the funds to increase spending on the police. No word on how the fall in federal revenues caused by the global credit crunch (and the consequent drop in the price for crude) will affect the budgeting for the police reform initiative. And nothing was said about whether the state and local governments had agreed to this plan, or if they even knew the Speaker planned to commit their allocation to this project.
Don't misunderstand me. I am all for police reform. But money is not the core problem with the Nigerian Police Force, and if we do not address the core issue first, then money spent on "reform" will go down the drain with no substantive return on investment .... other than new vehicles and new guns operated by the same old ineffective police -- something we have seen repeatedly in the past.
It is simple, really, not at all complex. We Nigerians pretend our "problems" (as such) are somehow unique, special, magical or different from the human norm. We talk of "the Nigerian factor" as if there is something about us that is different. The truth is, there is an underlying "normality" to our problems, which, if acknowledged, would set us on the path toward fixing what are really straightforward issues.
The problems of the Nigerian Police Force (and the armed forces) arise from the interplay between rational self-interest (or "vested" interests), and the unchecked, unaccountable exercise of governmental power. Basically, the way the unreformed police force functions suits the strategic interests of those with the most ability to reform it. Conversely, those with the most to gain from reforming the police force (i.e. the majority of the citizenry) have the least ability to push for it.
It goes back to the past, when the "modern" Nigerian police were founded during the colonial era. The colonial police (and army) were not created to protect the people against crime or unlawful government actions. The purpose of the colonial police (and army) was to protect an illegitimate system of government against the people, and to enforce said government's decisions on the people. The allowed the colonial administration to rule without caring about whether the citizens approved of what it was doing or not. If the imperial regime wanted forced labour, or to impose a tax that the citizens did not approve of, they sent their police to intimidate citizens into compliance; and sent in the army if disobedience became excessive.
Fast forward to the half-century of the Indepeendence Era, and the police force (and the armed forces) have not really been reformed and restructured for a very simple reason -- in their current forms, they are useful to whomever happens to be in government at any given moment, useful in much the same way as they were to the colonial government.
I could go through a long historical narrative, starting with the First Republic and the use of the regional police forces by the post-Independence political parties, but it would be so much shorter if I direct your attention to Fourth Republic godfathers like Chris Uba and the late Lamidi Adedibu. First of all, their activities would be impossible if we had an effective police force, as much of what they do is against the law. But more importantly, the police serve as a tool for these political bosses, not as a hindrance.
Chris Uba, who had no de jure constitutional/legal authority over the police, nevertheless ordered a State Police Commissioner to kidnap a sitting State Governor, as part of a sequence of crime and conspiracy that included fraud, bribery, theft, kidnapping, extortion, racketeering and Heaven knows how many other felonies. The late Lamidi Adedibu had state police block "disloyal" state assemblymen from entering the State Assembly building, and ensured that the police stood by and watched while his thugs beat up unionists peacefully protesting agains the uneccesary political wahala in their state. On the national level, the disgrace that was the 2007 elections would have been near impossible if the police force were effective; and again the police (and lets face it, the Economic and Financial Crimes Commission) were used to facilitate the electoral manipulations rather than to stop it.
The unreformed police force is useful to both civilian-led administrations, and to diarchies led by generals. In either case, there is an opposition that protests against the misuse and mismanagement of the police, but when that opposition gets into office, they too find it beneficial to misuse and mismanage the police. Olusegun Obasanjo is a case in point; whenever he is not in government, he is the standard-bearer for good governance (and was a victim of the late Sani Abacha's misuse of the criminal justice system), but when he was in government in the 1970s and 2000s, he exploited the broken system to the hilt and did nothing of note to reform it.
We the people are the ones who need an effective police force, but since we have NEVER had proper democracy (and with it the ability to set the course of government policy, albeit indirectly), there has been no interest in police reform. Speaker Bankole is not the first senior politician to make a fancy speech about reforming the police force, but he is a senior member of the Peoples Democratic Party, a party with much to lose if Nigeria ever acquired a functional criminal justice system. The Fourth Republic has been a story of assassinations, disregard and breach of the constitution, fraudulent elections, corrupt practices, violation of citizen rights, anti-democratic "godfather" politics, and so many other illegalities. If the politicians reformed the police, the result would be the arrest of many of the politicians!
Reform runs contrary to the political interests of the dominant force in Nigerian politics, so at best money will be appropriated in quantity, spent in quantity, but deliberately spent in such a way as to achieve little substantive effect. At which point the politicians, intellectuals and commentators will start talking as if there is something special about Nigeria that makes good plans fail .... when there was no good plan to begin with, just a scheme to distract people while nothing was done.
Indeed, when citizens begin to get angry about rising crime and vice, our leaders are quick to do everything except reform the police. Under diarchies led by generals, the governments just created task forces with silly names like "Operation Sweep"; since the task forces were drawn from the unreformed police force, they operated in the same ineffective way. In the Fourth Republic, led by civilians, a new sort of distraction emerged, the creation of variations of external quasi-police-like entities that are politically loyal to the person of the sitting governor. Entities like the Hisbah, the Bakassi Boys, the Odua Peoples Congress were marketed as being our last, best hope in the war on crime and vice, but we the citizens had (and have) no demoocratic control over these entities -- with predictable consequences. I would love to see an independent tribunal investigate these quasi-police, but that will never happen because the men with the power to constitute such a probe have a vested interest in making sure no such probe ever happens. We do know that in the Niger-Delta region, the pseudo-police funded by the various governors metamorphosed into a fusion between criminal syndicate and low intensity insurgency that still has mysterious and shadowy ties with senior political figures in the Niger-Delta and far away in Abuja.
The sad thing is these distractions are effective, and gain the praise of a cross section of citizens. And when enough time passes that we move into the medium-term (not even the long-term) and citizens realize that not much has really changed, some start to think there is something specifically wrong with Nigeria .... or that a succeeding regime has failed to continue the "reforms" of the prior regime. Look beneath the surface people! Ask yourself, when have we ever really sat down and reformed the police? Never. We never have. That is why the status quo persists.
As long as it remains in the vested interest of the political classes (be they politician or militician), there will be no substantive reform of the police. It does not mater how much money they profess to spend; our governments are masters at spending large sums of money without actually "doing" anything.
Change will only come when we have elections that actually reflect what the people want, and that actually choose the type of leadership the people want. The latest fiasco in Ekiti is proof that nothing has changed since 2007, or frankly since 1960, when it comes to substantive democracy.
We the people are the ones with a vested interest in proper law enforcement. Unlike the rich and powerful, we cannot afford private security forces and vicious dogs. And we lack the ability to pick up the phone to call a Police Commissioner to take care of our problems. Frankly, we are scared of the police, as they have a tendency to shoot "stray bullets" at innopportune moments, leading to our deaths. We fear arrest, because we would be detained in inhumane conditions and subject to harsh treatment even if we have actually committed no crime.
Oddly enough, the Nigerian Police Force, unreformed as it may be, is still a vital part of our polity and society. When communal violence breaks out, citizens seek refuge in police and army barracks. We look to these men in uniform to protect us, and to a certain extent they do. But inherent in the example I just gave (i.e. citizens seeking sanctuary during communal violence) is a reminder of how things are not quite "normal" in Nigeria. With reform and transformation, we would not have inter-communal violence to begin with .... and the police and army would independently, professionally and effectively fulfill the roles we the citizens have wanted for them since before independence.
I believe that deep down in their hearts and souls, the majority of the officers and men of the Nigerian Police Force (and the armed forces) want the same things for Nigeria that the rest of us civilians want. Afterall, they are citizens just like us, and want our federal republic to soar as do we all. But this is not going to happen until we fix our policy-making and decision-making infrastructure, regardless of whatever phantom funds Speaker Bankole claims will be spent on police reform.
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