Social Welfare Improves With Economic Growth

The federal character "zoning" formula, and the fragmented multiplicity of states, guarantee a bloated federal cabinet. There must be one minister or minister-of-state from each of the 36 states and from the FCT, as well as one minister or minister-of-state from each of the six so-called "geo-political zones". So the cabinet must have 43 ministers. They say they do it so we the people can have proper representation at the high table, but in fact these 43 "federal character" delegates are chosen to represent powerful factions within the political class; in a sense they are providing for "federal character" (i.e. the absence of ethno-regional advantage)within the context of the political factions' ever-shifting balance-of-power arrangements, but do not in any way, shape or form constitute representation for the actual people in whose name they ostensibly claim a place at the table. If federal character is supposed to ensure we all have a voice, then it should include the voices of the 99% of Nigerians who are currently unheard around the federal cabinet table.

In any case, if a minister resigns from cabinet or is dropped in a cabinet reshuffle, a replacement minister from that person's home state or "geo-political zone" will be added to the cabinet.

In 2006, a year before the (rigged) 2007 "elections", the designated minister from Gombe State was the Minister of Commerce, Ambassador Adamu Waziri. He is married to Mrs Farida Waziri, who is currently the head of the Economic and Financial Crimes Commission, and who has served both the Yar'Adua and Jonathan administrations in that role. This too is a characteristic of the Fourth Republic, this practice of appointing to high office the daughters, sons, wives, husbands and in-laws of crucial Big Men and Big Women. The Fourth Republic is also noteworthy for the political wars between godfathers and godsons; I suppose picking a family-member to be your designated proxy in the federal cabinet government is a more secure proposition than anointing one of your godsons who may turn on you as soon as he feels secure enough in his new position to allow his ambition to be a godfather in his own right to run free.

Adamu Waziri resigned from the Obasanjo II cabinet in 2006 as part of an administration policy that any ministers seeking electoral office in the 2007 polls step down from their cabinet positions and focus on their electoral race. President Obasanjo chose Mrs Amina Ibrahim to replace Waziri in Gombe State's spot on the federal cabinet, but Mrs Ibrahim asked to have her name withdrawn. Obasanjo obliged her.

I had never heard of a Nigerian turning down a chance to be a federal minister, so the "man bites dog" nature of the news brought Mrs. Amina Ibrahim to my attention. Interestingly, and I don't know entirely know why, she asked that the media and the public stop referring to her as Mrs Amina Ibrahim. She is now known, at her own request, as Hajia Amina Az Zubair. This doesn't make too much of a practical difference, except if you are going to do research to find out more about her, understand that half of the internet-accessible material about her come under the name "Amina Ibrahim" and the other half are under the name "Amina Az Zubair".

Hajiya Amina Az Zubair is a fixture of the Fourth Republic, having served the Obasanjo II, Yar'Adua and Jonathan Administrations in a succession of social welfare positions. She entered government as the National Coordinator of Education for All (EFA) at the Federal Ministry of Education, having been one of the leaders of "civil society" efforts to get the Obasanjo II administration to set up an EFA programme. Sh then became successively the Presidential Adviser, Special Assistant and Senior Special Assistant for Education, Poverty Alleviation and the Millennium Development Goals. In the mid-1990s, as founder of a firm called Afri-Projects, she was involved in setting up the Petroleum Trust Fund. Before that, she worked for 11 years with a private sector engineering firm.

Hajia Az Zubair seems to belong to a specific part of the so-called "progressive" tendency in Nigerian politics.

First some clarification, for any non-Nigerian reader of this blog. The word "progressive" in the context of Nigerian politics means something very different from whatever it means in your country or your part of the world.

If taken at her word, and in full consideration of her actions, Hajia Az Zubair seems to be of that part of the so-called "progressive" tendency who believe in working within the system to implement their "progressive" ideas. They tend to have deep connections with the powerful political factions, tend to serve in governments dominated by the interests of those factions, and tend to present a "human face" and positive, moral rhetoric to the public (even as the governments they serve continue "business as usual"). Ultimately, they do not achieve the lofty goals they promised from their alliance with the powerful political factions. Some leave government with their reputations and popularity intent, while others metamorphose and become denizens of those factions themselves, acting as the "intellectual" wing of the inter-locking machines that maintains the status quo.

Hajiya Az Zubair sounds like she genuinely believes in what she says. On the other hand, she has been a loyal part of three Fourth Republic administrations that have not prioritized those important things she says she believes in. She has defended and still defends all three administrations' records and achievements in terms of those social welfare/development goals that are ostensibly her brief.

All things considered, she seems to be more of a diplomat than an administrator, travelling the globe to attend international conferences on various aspects of socio-economic development and public welfare, representing Nigeria and making wonderful speeches about what the world should do, and what Nigeria (she claims) is doing. She is a member of several international fora, like the Program Advisory Panel of the Global Development Program of the Bill and Melinda Gates FoundationGates Foundation, and the Board of the International Development Research Centre.
,


To the extent that the federal republic is trying to "rebrand" itself, in terms of international perceptions of Nigeria,, I wonder if Hajia Az Zubair wouldn't have been more effective as the rebranding efforts lead spokesperson than she has been at making social welfare a central to government policy at all three tiers. I daresay diplomacy and relations with external partners are a better fit for her, because the way she talks about all three Fourth Republic administrations in her interviews, you wouldn't think things like this or this or (more importantly) this were the "normal" everyday consequences of ineffectual governance, and an aversion to reform, restructuring and transformation across all three tiers of the federal republic.

Like I said earlier, she seems to believe what she says. Maybe she really does. Or maybe I too am affected by the same qualities that I suspect would make her an excellent diplomat.

Take this interview with Economic Confidential, where she talks about her work on the MDG project (and very briefly speaks on the minsterial offer she turned down) is a case in point. Very deftly, she says many things without saying anything. It is almost like she (politician and diplomat to fore) set out to praise all of the political stakeholders, to give the reporter (and we the readers) the best possible image of the MDG project, and to (importantly) stoke hope and optimism in the heart of anyone who truly loves Nigeria. If she said anything else, she would lose her job.

In other contexts however, Hajia Az Zubair indirectly admits to economic and political reasons that success in social welfare promotion will elude her. In this December, 2009 interview with This Day, she said Nigeria needed =N=25.557 trillion (or US$170.38 billion) to fully achieve the Millenium Development Goals over a period of six years (2009 to 2015). That is something like =4.259 trillion (or US$28.4 billion) annually.

We don't have that kind of money.

Besides, much of the spending at all three tiers of government is tied up in recurrent expenses (mainly salaries for bloated civil service payrolls), and on payments to banks for ballooning loans that were borrowed (at all three tiers) and spent with little or no oversight, planning or empirical projections. What little is left in the budgets after this is tied up in grand prestige projects (that provide plenty of scope for waste, rentier activity, patron-client redistribution, graft and outright theft).

Hajia Az Zubair's core budget is supposed to be $1 billion a year, which is meant to reflect the amount of annual debt service payments we saved by paying a $12 billion lump sum on a $30 billion debt in exchange for our creditors writing off the $18 billion balance.

For one thing, as she essentially admitted in the This Day interview, $1 billion/annum is nothing in the context of a country with over 100 million people, a high poverty rate, insufficient infrastructure and questionable governance. For another, much of (if not all of) the $1 billion a year in debt service savings on the old, now-cancelled debt has been eroded by new debt service commitments on new debts. All three tiers of government have been borrowing assiduously and issuing bonds.

The size of our external debts was never the problem. The richest countries in the world all have public debts bigger than ours was before "debt cancellation". Their debts are bigger in absolute magnitude, as a proporition of national GDP and in per capita terms.

The real problem of the Nigerian federal republic was and remains the size of our economy. Like every other country in the world, our government absorbs and then spends a percentage of our GDP. If the government's percentage of the Nigerian GDP remained the same, but the Nigerian GDP doubled, the government's revenue would double. This, simplistic as it may sound, is the true route towards not only social welfare improvement. It would not only cause the general improvement that comes with rising incomes across the economy, but would also specifically empower the government (since it would have so much more in funds to redistribute) to have more of an effect on fighting poverty and achieving the Millennium Development Goals. Crucially, a bigger budget would also allow the government to pay its debt service obligations, which were hardly among the most onerous in the world if looked at only as an absolute numbers, detached from considerations of our then-and-now insufficient federal budget.

Our debt was not too big. It was (and is) our economy that was (and is) too small.

Now some people would admit that an extra $1 billion/annum in freed spending in the budget is not much, considering our massive population, but would then insist that it is better to have that drop in the bucket spent on Nigerian social welfare programmes than having that drop in the bucket leave the country in interest payments. They would also point out that our debt service payments were meant to be around $3 billion, but since we could only afford to pay $1 billion, something like $2 billion/annum (probably less) was being capitalized, which is why the debt kept growing.

In the absence of a substantively democratic system, a properly adversarial structure of policy debate, and rigorous academic critique, there are a few things no one mentions.

We paid $12 billion, all at once, in a lump sum, to achieve this "cancellation". The opportunity cost of using these resources as investment capital to drive economic growth exceeds the utility of using these funds to buy debt forgiveness. Our economy is hobbled by a lack of electricity, a lack of a functional pan-federal network of railroads, by a lack of so much infrastructure. Compare what you could do to fight these deficiences by leveraging $12 billion as a foundation to attract billions more in investment, in a sort of Big Bang expansion of infrastructure federation-wide, against what you could do with a mere $1 billion/annum which is (quite rightly) being used for recurrent expenditure on social welfare because it sure as heck cannot be used as a fund for infrastructure development.

We can always generate $1 billion a year to make payments as we were doing before cancellation, and the key to taking care of our domestic and international debts always lay in expanding the GDP as rapidly and steeply as possible, which would require massive improvements in electricity, rail, education and other infrastructure. But in the light of impact on the Nigerian economy of local and global events in 2008-2010, our governments at all three tiers are running deficits, drawing down the Excess Crude Account, and the Soludo-led Central Bank depleted the external reserve from $61 billion to $47 billion in a matter of months to defen the Naira. We are in no position to generate $12 billion in surpluses for infrastructure or anything else. The moment was lost, and we are left to praise ourselves for being able to spend $1 billion/annum recurrently, with even this being cancelled out by new debt service payments on new debts. It is also painful to realize we lost $23.7 billion in 9 months to attacks and theft by "militants" in the Niger-Delta.

Note also that in 2005-2006, we were told that the debt cancellation deal would save us $20 billion over 20 years. In actuality, the $12 billion lump sum we paid out in 2005-2006 had a future value (if invested in relatively modest instruments, and allowed to earn compounded interest) of $20 billion over 20 years. So we paid in one lump sum, the same amount we would have paid out over 20 years. Initially when Dr. Ngozi Okonjo-Iweala had pleaded for full debt cancellation, the creditors had refused; when she returned after a couple of years with the $12 billion payment for $18 billion cancelled offer, I am not surprised they accepted the offer.

Successive Nigerian governments have had a vested interest in keeping Nigerians misinformed about revenues and expenses, and the Paris Club understands the public relations difficulties inherent in de facto promotion of capital flight from poverty-striken nations; the exact numbers are clouded by some degree of fog, but figures I read a long time ago suggest the cumulative principal borrowed by Nigeria was $19 billion, the cumulative payments made by Nigeria were $42 billion, yet we ended up owing about $33 billion! This was due to penalties for missed payments and capitalization of the balance after under-payment. Nevertheless, if (a) you have already received twice as much as you lent; (b) you are now being offered a present-value lump sum of what you would expect to receive in future value over the next 20 years; and (c) you stand to gain tremendous goodwill and positive publicity from announcing you have charitably cancelled the debts of a poor African country ...

... why wouldn't you take the deal?

Reading through much of what Hajia Az Zubair has said in interviews, I get the impression the $1 billion is not even a discrete, distinct amount specifically handed over to her agency to be spent. I get the impression the three tiers of government just budget funds in the normal way, and a portion of what they normally spend in the budget for healthcare, education, etc is designated as the portion they are spending for Millennium Development Goals. Hajia Az Zubair has also said that so-called "constituency projects" are also counted as part of what has been spent for MDGs. "Constituency projects" are a fiscally wasteful concept through which federal, state and local budgets allocate funds legislators at all three tiers for use (at the legislator's discretion) in community development projects in the legislators' constiuency. It boils down to legislators' raiding the public treasury to buy themselves support ahead of the next election, a way to be seen to have brought Abuja money to your constituency, a way to be praised as the man (or woman) who can dribble a few crumbs to poverty-stricken constituency residents. No one can seriously think "constituency projects" have a lasting effect on poverty-reduction, can they?

All things considered, as controversial as this may sound to some of you, I do not think Nigeria should fight poverty by "fighting poverty". We should fight poverty by focusing on rapid, sustainable, broad and deep economic growth. Everything we do should be driven by the desire for economic growth.

We should stop getting bogged down in semantics. Because "debt" is bad, we put all of our attention on defeating "debt", even if defeating it did nothing for economic growth. Seriously, everybody owes debt. Debt is ubiquitous. There will never come a time that we do not owe debt, so why focus so much on defeating "debt" that we forget our greater need for growth?

In like fashion, I tire of these "Wars on Corruption" that do not address the fundamental fact that the very structure of the political system makes corruption inevitable. If you have no interest in substantively reforming, restructuring and transforming politics, the economy and society, don't waste our time singing the praises of a "War" you are not serious about -- a war that frankly does not exist and never existed.

As for Hajia Az Zubair's "Millenium Development Goals" ... there is a reason I am frustrated with so-called progressives in government. They never admit to themselves, much less anyone else, that they can never achieve their "progressive" goals by working within the system. It is impossible to know if Hajia Az Zubair truly believes in the potential of the system to change Nigeria. Take the "constituency projects" for example; even if she knew they were a waste of scarce budget funds, there is no way she could stop the National Assembly from budgeting money for them. Perhaps she has decided that if she cannot beat them, she can at least influence how they spend their unjust budget allocations. I guess a drop of water is better than nothing, but it betrays a serious lack of ambition if all we do is try to lick the morning dew off the leaves, when a substantial investment in irrigation could do so much more for us.