Amalgamation Day in Lagos, 1914

Amalgamation Day in Lagos, 1914

28 September, 2010

Movement on AMCON

The president's nominees for executives and directorial positions at the Asset Management Company of Nigeria (AMCON) are being submitted to the federal legislature.

Won't comment on the candidates since I do not know much about them so far. Given the nature and quality of reportage by our own media and by the global media, odds are we are not going to learn anything about the nominees that will give us any indication of how suitable they are for the job, particularly in a country with problematic, unethical and sometimes criminal connections between the political elite and the business elite. I have supported the creation of AMCON based on my hope that it rescues the Nigerian banking industry from its self-created toxic assets problem ... so I hope AMCON doesn't turn into a means for politicians to rescue themselves (most politicians are also "businessmen"), their business associates, and their supporters donors in the private sector ... at the expense of the public (who are going to have to foot the bill for the eventually multi-billion dollar loss AMCON will take on the distressed and "toxic" assets it will "buy" off the banks' books).

There has to be a thorough cleansing of banking, equity and finance in the federal republic. Not just new laws and regulations, but real enforcement of old and new regulations.

It looks like Ndi Okereke-Onyiuke will have serious questions to answer once the dust settles, but the crash in banking stocks and concommitant (not to mention precipitous) 33% fall in the capitalization of the Nigerian Stock Exchange a couple of years ago is bigger than one scapegoat. Adding those banking executives stripped of their jobs by Sanusi and/or prosecuted (like Erastus Akingbola) doesn't even begin to scratch the surface of the rot.

And this is my fear.

Nigerian politicians, all of them, are entirely averse to true reform. They have a knee-jerk reaction against cleaning up any sector of the economy, polity or society. They benefit from the loopholes in the system, and are able to empower (politically) and enrich (economically) themselves in large part because of our systemic and institutional deficiencies.

I just don't see them doing what needs to be done to fix our banks. If anything, federal, state and local governments need the banks to continue to be pliable funders of the ever-growing budget deficits at all three tiers of government, never mind that this symbiotic relationship crowds out capital for entrepreneurs and young people who could otherwise employ themselves rather than see the continued spectacle of a million young applicants fighting for each announced formal sector job opening.

I have supported strong action by Nigeria to tackle the toxic asset problem, and as such I remain a supporter of the AMCON concept. Whatever AMCON turns out to be in reality may or may not be the same as the concept we have been promised.

We wait to see.

20 September, 2010

NEXT Op-Ed on cholera outbreak.

I share the author's despair at the apathetic reaction to a needless, totally avoidable tragedy.

I was still a child when I first began to wonder why recurrent, yearly meningitis outbreaks seemed to catch us unprepared year after year. Each year it was as if we did not know it was coming, as if we were caught unawares by something that happened every damn year.

The op-ed essay was written by Chikwe Ihekweazu.

17 September, 2010

Investing pension funds ....

Central Bank Governor Sanusi Lamido Sanusi has revealed plans to revise regulations covering pension funds, to allow pension fund managers to invest up to 20% of their portfolios in infrastructure projects, particularly electricity.

Of course, this is done all over the world. Pension funds are responsible for much long-term investment in the so-called "mature" markets. And in a potentiall high-growth area like electricity, not just in Nigeria but in West and Central Africa (nothing stops us producing enought to export in bulk), our pensioners would be in a more secure position financially if managers can grow the portfolio via long-term infrastructure investment.

Unfortunately, as of 2010 the Nigerian Federal Government has not done anything to give me any sense of security viz-a-viz proper regulations, proper application/interpretation of regulations, and proper enforcement of regulations. Heck, if you are in the right political camp, the powers-that-be will leave you alone no matter what you do. Imagine Chris Uba walks the streets a free man, in spite of what he did in full view of the entire world.

You don't play around with pensions.

If they are going to do this, they need to start with fundamentally reforming government.

Please don't say I am being naive or unrealistic .... because you are the same people who will criticize worse than anything I have ever done if this plan results in substantial losses for our pension funds.

Every year since I can remember, the federal government announces or launches some new plan to fix electricity. Billions get spent, yet our output of electricity only ever drops.

Lets start from Square One, and not try to jump in mid-stream.

I like Sanusi Lamido Sanusi. I do.

But he is still clearing up the mess in our banking system, a process that will cost the public treasury around $10 billion in direct transfers to the banking industry. Much of this (though not all of it) is attributable to the ephemeral nature of regulation in Nigeria. Sanusi is in a better position than I to realize that we have to fix the fundamentals ...

... and we have to do it quickly, because we do need pension funds invested long-term in infrastructure.

The thing that bothers me is there is no political party or political movement that represents reform, restructuring and transformative change. There is no candidate or party for whom to cast a vote in 2011, even if our votes actually decided the race, and even if one were to opt for pressurizing the political class from outside the (un)democratic process, there is no organization marshaling the resources and time of citizens interested in wide-ranging substantive reform. I'd like to donate money and time to the cause, but there is no cause. I'd like us to frighten the powers that be into making concrete changes, but they know and I know that they are under no pressure to change anything. And I'd like to be able to hold them accountable, to have early-warning structures and outlets for whistleblowers, so the moment the government started reneging on a promise the citizenry at large can be mobilized to hit the streets to scare them back in line.

Without anything we can grasp as a lever for the promotion and protection of reform, we are left as usual to just watch things happen. And because things in Nigeria are neither institutionalized or systemic, it will all depend on specific personalities. Charles Soludo issued a rule blocking foreign ownership of Nigerian banks; Sanusi encourages foreign ownership of Nigerian banks -- who knows what the next CBN Governor will do, or the next President.

It is weird to be optimistic about something ... and yet have a sense of foreboding.

The powers-that-be will ease the regulations on pension funds ... we will find out what happens next only with the passage of time.

15 September, 2010

Cholera stalks the land

This editorial from NEXT expresses frustration with the "Millennium Development Goals" project, and with our government's tendency to overstate its achievements and understate the scope of the problems it does not even appear to be thinking about much less doing something about.

The northeast of the federal republic has been particularly hard-hit. Bauchi and Borno were suffering as far back as mid-August, and the scourge eventually spread to Adamawa.

14 September, 2010

New face, Old tactics

At the end of George Orwell's Animal Farm, no one can tell the difference between the humans (who used to rule the farm) and the pigs (who overthrew the humans at the head of what was supposed to be a revolutionary movement to secure the rights of the animals). In other words, the new regime turned out to be the same as the old regime.

In the simplest language of all ... the more things change, the more they stay the same. I have forgotten most of the French I once learned, but I think it translates to something like plus ca change, plus c'est la meme chose.

The Olusegun Obasanjo II administration used the EFCC in 2003 to punish and/or strong-arm and/or extort politicians and political machines deemed loyal to the government's political enemies or hostile to the government.

It didn't start out that way.

I mean, lets be honest, corruption is the very life's blood of politics in Nigeria, so you would have to be naive or stupid to believe that the political system was capable of sanitizing itself. The EFCC was always going to be a symbolic entity that engaged in a few symbolic, scapegoat-type prosecutions, but the political system at large was never going to change. You might as well ask lions to be in charge of imposing vegetarianism.

So the EFCC under Nuhu Ribadu was never as "effective" as the fawning, hagiographic coverage in the Nigerian media suggested. I am not an old man, but I stopped being a child a long time ago, and frankly this is not the first, second, third or even hundredth time the Nigerian intelligentsia has hyped something or someone as the solution even though in retrospect it becomes clear the person never did anything worthy of the hype. It is one reason I tend to make sarcastic jabs at "intellectuals"; they have this unfortunate tendency of guiding the broader public into placing all its confidence in things that will never work, not in the real world, not ever. Taken to an extreme, "intellectuals" are actually more responsible for history's disasters than the paramount political leaders; like palm oil and pounded yam, the smooth words of intelligentsia convince millions of people to give devoted support to men and groups that ultimately lead them to disaster.

Coming back to the point, I believe that an independent investigation would show the first 8 years of the Fourth Republic (1999-2007) competing with the Oil Boom 1970s for the title of most corrupt period in post-colonial history. Notice both periods (the 1970s and 1999-2007) coincide with upward spikes in the barrel price of crude oil. The Nigerian intelligentsia likes to say corruption in Nigeria started with Babangida. It didn't, but that is not the point. The Babangida Era was every bit as corrupt as the other leading epochs of corruption, however, our economy was not doing quite as well in those days, so while theft and graft were widespread, there was less available to steal (and in the context of a military regime, fewer hands grasping to steal it).

The EFCC was not "effective" in any substantive sense of the word, but it was not at first a tool of overt politicking either .... not until the failure of the Third Term gambit.

While Obasanjo still thought he could engineer a constitutional amendment to give himself a Third Term, he played "nice" with all the political machines. But he forgot that this is Nigeria, where even military dictators are not allowed to self-perpetuate in in office; Gowon was thrown out after 9 years once it became clear he had no intention of stepping down as agreed, Babangida was "persuaded" (probably at the risk of his life) to leave after eight once his fake transition programme ground to a definite halt, and no one will ever know how Abacha really died during the fake "Five Fingers" self-perpetuation transition programme.

We are not a democratic country, and we never have been .... but we differ from much of the rest of Africa in that Nigerians do not tolerate Life Presidency. Even the corrupt politicians, the kleptocrats, the constitution-shredding militicians, the venal plutocrats, yes, even they have a line of principle they do not cross: No Life Presidency.

Nigeria is probably the only country in Africa where a Third Term bid was "constitutionally" defeated. Elsewhere, the attempts either succeeded or were stopped (in one case) only after a coup-de-tat (which brought its own problems).

The defeat of the Third Term bid also marked a change in the functioning of the EFCC. Under Ribadu's enthusiastic leadership, the EFCC became a personal political tool for the Obasanjo presidency, to blackmail, extort, strong-arm and/or punish anyone foolish enough to stand in the way of Plan B -- the imposition of a hand-picked, weak candidate whom Obasanjo could control (or thought he could control), so as to create a Third Term by proxy (as Putin did in Russia, and as Nestor Kirchner did in Argentina).

And this was what Ribadu did, with gusto.

As I said earlier, "corruption" (a broad term encompassing several things) is the life's blood of Nigerian politics, so you do not need to lie or otherwise frame anyone if you want to bring charges against them. Almost everyone in politics is guilty; you need only threaten to do your job and prosecute them, and they are instantly under pressure to cut a deal with you.

Even so, there was a certain "law of the jungle" aspect to it, as "survival of the fittest" dynamic where men who totally controlled states as though the states were private property, men like Orji Uzor Kalu (Abia) and Bola Ahmed Tinubu (Lagos), remained beyond the reach of Ribadu.

Then again, it should be understood that the PDP as an entity, and Obasanjo as an individual, had long since given up any hope of dislodging the political machines loyal to Kalu and Tinubu in Abia and Lagos. What I am saying is they didn't bother trying to break these men because they didn't have the "infrastructure" to manipulate elections in these states even if the Big Bosses were in jail.

I digress.

The federal republic is now presided over by President Goodluck Ebele Jonathan, one of ex-President Obasanjo's godsons. Or at least he was. It is hard to tell with Jonathan. He was an acolyte and protege of Diepriye Alamieyeseigha, ex-Governor of Bayelsa.

Jonathan was Alamieyeseigha's deputy-governor and heir. He was a quiet, unknown fellow, who didn't rebel against his boss like other deputy-governors were doing. I find it interesting that Alamieyeseigha alone was charged with economic and financial crime; if he was guilty, there had to be a lot of people aiding and abetting. Knowing Nigerian politics, I know that everyone in the Bayelsa hierarchy, from bottom to top, was feeding off the Big Man's criminal table, but even if you pretend someone in the hierarchy refused to join and chop (and mind you such a person would have been summarily sacked), they would be guilty of knowing high crimes were taking place and doing nothing about it. What could they do about it, you might ask. After all the high-ranking police officials were probably eating off the governor's table too (and note I said high-ranking police officials; the lower ranked are underpaid and poorly-treated; still the high-ranking officers are nice enough to give the low-ranking officers permission to extort "kola" from motorists, provided they give their superiors a cut of the "kola").

I digress.

Bayelsa State is the biggest receiver of "oil derivation" funds, some 13% of revenue accruing from crude oil pumped from Bayelsa. If "power" is measured by the size of the budget you control, oil derivation make the occupant of the Bayelsa State governor's mansion one of the most powerful of our 36 governors. Our statistics are generally unreliable, and in an environment of corruption and wuruwuru the key players have a vested interest in the public never really being sure how much money is where at any given time, but the Governor of Lagos may quite possibly be the only governor with a bigger budget.

In a country where State Governors treat the State Treasury as though it were a personal, privately-owned piggy bank, control of Bayelsa and neighbouring Rivers State is a huge prize for local politicians (and for the kleptocrat-infested Peoples Democratic Party on a national scale). The international NGO Human Rights Watch only restated what Nigerians already knew when they reported the origins of the Niger-Delta "militants" lay in private armies used by PDP (and ANPP) politicians to displace rivals from disputed political turf and to compel 93% winning vote totals.

Lagos State, the richest state in the federal republic, is the private fiefdom of Bola Ahmed Tinubu, a territory in which political matchines allied to the PDP have been weakened, co-opted or destroyed. As such the Peoples Democratic Party have left nothing to chance in terms of controlling the oil-rich states of the Niger-Delta: Bayelsa, Rivers, Delta, Akwa Ibom and Cross-River. If it wasn't so tragic, you'd laugh at the sight of current Bayelsa Governor Timipre Sylva "winning" the 2007 rerun election with 93% of the vote.

By removing Alamieyeseigha, the Obasanjo regime kept the Bayelsa budget in the hands of the PDP, but replaced an Atiku Abubakar loyalist with someone (Goodluck Jonathan) they thought they could control. It is amusing to see sections of the media that were overly critical of the late Umaru Yar'Adua seemingly warm up to Jonathan; both men were chosen, not for their suitability for the presidency, but because certain political machines thought of them (rightly or wrongly) as being weak and easily manipulated.

And just to make sure new-Governor Goodluck Jonathan knew his place, ahead of the do-or-die 2007 Elections, the EFCC seized $13.5 million from him in 2006. Ostensibly the money was taken from his wife, but no one said where his wife got the money. More importantly, his wife was not prosecuted, and the incident has since been covered up and forgotten, even by the media.

It was a message to then-Governor Jonathan. As I said earlier, corruption is the life's blood of Nigerian politics, so there is always evidence of crime if you were serious about prosecuting; on Obasanjo's behalf, Goodluck Jonathan was being reminded that the same people who made him could break him.

He seems to have learned, and learned well.

Today, a report from the Daily Trust about the Jonathan administration deploying the EFCC to harass state governors opposed to his plan to run for the presidency in 2011.

No one important has been touched, but there is a message that is being sent.

"You are guilty, and we can prosecute you if we want. You can scream discrimination, partiality and selective prosecution, but we will prosecute you anyway. Be warned."

Plus ca change, plus c'est la meme chose.

13 September, 2010

Atomization and the "new" constitution

Today comes news that the Gwagwalada Area Council in Abuja has created 5 "new" districts and 14 "new" villages.

The number of states is not the only thing subject to inflation; we inflate the numbers of LGAs, towns and villages too. I have mentioned before on this blog that my hometown was split into one "old" town and a new "autonomous" town during the Second Republic.

Like inflation of the monetary kind, each "new", smaller, more atomnized unit is worth much less than what preceding it. My hometown was not an economic juggernaut before being atomized for the purposes of venal politics. As we keep dividing and dividing, we will eventually reach a point where the new inflated units become effectively worthless.

But lets be honest, we the people are part of the problem, part of the engine of atomization. We are the fuel and the fire that keeps the worthless game going. We keep thinking that if we split ourselves from each other, we will have disassociated ourselves from our problems. There is a widespread belief, supported by formal and informal commentators, "leaders", even alleged intellectuals, a belief that all of our problems (as in whatever socio-cultural group we belong to) are caused by all the people in the other socio-cultural groups (ethnic, regional, religious, etc). And so we insist on splitting, believing our lot will be better in the newer, smaller entity.

It never is.

So we insist on splitting all over again.

At some point, each compound will be a state, and we will still be faced with the same core problems we have refused to face for decades.

I will not take any proposed constitution seriously, unless it restructures Nigeria into 6 second-tier entities (call them "states" or "regions") and 75 third-tier entities (call them "districts" or "provinces"). The 6-and-75 structure would replace the current, bankrupt 37-and-774 format.

Unfortunately, this will not happen.

There are many reasons why the "new" constitution will prove as short-lived (and as useless and irrelevant) as the many "old" constitutions. I could write a book on why we keep ending up with irrelevant documents in the name of "constitution". But rather than waste your time with voluminous polemics, I can just stick to this one point:

The "new" constitution will not restructure Nigeria by reducing the number of second-tier and third-tier federating units.

It just won't.

The constitution-making process is in the hands of the politicians, and the requirement that it be approved by the state legislatures means it is specifically in the hands of the state governors and their minions in the state legislatures. These men are not going to approve of the abolishment of their jobs, their near-imperial powers, and their mostly unconstitutional privileges.

It simply won't happen.

And that one fact renders any so-called "new" constitution effectively useless to the people of Nigeria. If it cannot do this one simple, foundational thing .... this one thing without which everything else becomes unnecessarily complicated to the point of dysfunctionality .... if it cannot do this, then what is the point of the inevitable long-winded blah-blah-blah grammar about stuff that no politician or militician has ever obeyed, secure in the knowledge that there are no consequences for unconstitutional behaviour?

Again, we the people are a part of the problem.

It is difficult to rally people together to work to fix the system ... because people don't want the system fixed until after they or their brother or their kinsman has had a chance to exploit the broken system first.. Even people who have no chance at ever being in a position to exploit the system nevertheless dream of the day some miracle would put them in such a position.

No one wants the perceived golden goose of a broken system to die before they get their chance to grab a few illegitimate and unearned eggs.

And if there is one thing that truly angers me, it is those people who suddenly become born-again believers in an improved Nigeria after they leave office with enough wealth to last two lifetimes. Except they then run into opposition from people who haven't had a chance to "chop" yet.

07 September, 2010

Distorted markets and government guarantees

Individuals and firms engage in constant decision-making, weighing the potential benefits of actions against the potential costs of those actions.

All over the world, those individuals and firms lobby governments (through fair means and foul) to distort the markets so as to lower their risks and guaranteee their benefits. If the government does this for everybody, then by definition it has done it for nobody, so a scenario is created where risks are passed on to individuals and groups with less influence (in the immediate, ultra-short-term moment when a government interested in survival and self-perpetuation makes a decision) and where guaranteed benefits are created by sucking welfare from said less-influential groups and giving it on a silver platter to those with the requisite influence. The most popular governments are usually those who are able to externalize the negatives of distortion to individuals/groups outside their country (i.e. to foreigners), while keeping the benefits of distortion within their countries' borders.

It happens everywhere in the world.

The African variant is particularly insidious though.

There is a lot of talk about how "Africa" is "poor".

The thing is, the African economies do what they are supposed to do ... what they were designed to do. Its just that what they were designed to do has nothing to do with the overall economic progress of entire societies.

African economies are very good at producing the commodities the global market needs from Africa. Unfortunately those same economies are rubbish at producing commodities needed in the African internal market. If the world market needs flash-frozen, cut flowers (or tobacco or coffee or tea), agricultural producers in Kenya (for example) will churn the product out by the tonne .... even as people in the Eastern African sub-region starve and seek international "aid" because food production is insufficient.

Mind you, I don't have a problem with trade, except the commodities we trade are not valuable enough to bring back enough money to pay for food imports. Simple opportunity cost would suggest we direct our investment and production decisions elsewhere ....

.... except the people in charge of economic and political decision-making (some of whom are African, some of whom are not) make very big personal, corporate and other economic profits out of the system as it current exists, so they are under no particular economic pressure to change anything about the structure of our economies.

Some of the world's biggest rates of return on investment are earned in Africa, "the world's poorest continent". People and firms are making money. Lots of it. They control the political and economic levers, and from their perspective, there is nothing wrong with what is happening. Seriously, who wants to compete in a rational economic environment when you make money hand-over-fist in an irrational one?

The people who suffer the negative outcomes of Africa's economic structure are the people with the least power to influence economic decision-making and political policy-making. Frankly, foreign governments, foreign corporations, foreign media giants, foreign "experts" and foreign "multilateral agencies" have far more influence on policy-making and investment decisions in Africa than most actual Africans. And I am not talking about the organic, mutual influence that comes from interaction in a global system of trade; professional lobbyists only dream of the kind of influence on policy-making wielded over African governments by their foreign "development partners".

Within our countries, the Big Men and Women, captains of the commanding heights, lords and ladies of power and property, are more keen to work hand-in-hand with their foreign "development partners". They want good foreign publicity. They want to be seen as good friends by the world's superpowers and middle powers.

And they make profits too. "Poor" Africa has its fair share of wealthy plutocrats, many of whom have specialized in economic activities that are only relevant in an Africa with a dysfunctional economy and irrational patterns of production and trade. Change frightens them. "Stability" is their watchword.

Mind you, I don't blame any of them (local or foreign) and I am not angry at them. If we choose to sit down and watch while everyone makes decisions over our heads, then they are going to take advantage of free ride we are giving them.

Most of our countries are not "democratic" in any substantive sense; and if a democracy is a de facto one-party state, like South Africa and Botswana, where a ruling party (like the African National Congress or the Botswana Democratic Party) can never lose an election, the country becomes an oligarchy, where an elite within the ruling party make all the decisions and the people's only role is to robotically indicate their acquiescence every so often. There is no choice; just the continuation of yesterday into today and today into tomorrow, no anticipation, no expectation, no innovation and no rejuvenation of ideas. I don't care how good you think you are; eventually every light bulb goes out.

But all that is a long conversation we will save for another day.

Let me say though that I am always very wary of announcements of "incentives" for "investors". Nigeria (and Africa) have been giving these incentives for decades, and all we have managed to do is cement the dysfunctionality of our production and trading patterns. Our political leaders and economic plutocrats nevertheless welcome such deals; it adds more pie filling to their crust. Our foreign trading partners insist on these incentives too, sometimes directly, sometimes through the IMF and World Bank, and sometimes we hear it from the "intellectuals" and "academics" whose advice over the decades has spawned a new branch of scholastic inquiry viz: "What is wrong with Africa?" It never seems to occur to anyone that perhaps the "wise" advice they give Africa is the source of the "problem with Africa".

Before we start giving out fat incentives for people to do things, why don't we first come to some kind of conclusion as to what we want to (or have to) encourage, what we can (or should) do without. And I mean this in the sense of completely revamping and restructuring patterns of production and trade within in Africa first and foremost before then answering the question of how this transformed Africa will trade with the rest of the world.

The United States introduced a policy called the African Growth and Opportunity Act. To take advantage of the AGOA, Namibia and Uganda offered massive incentives (relative to their respective budgets) to foreign firms to produce textiles in their countries. The truth is, so long as Africa remained Africa (particularly in terms of infrastructure, but in other ways as well), while China remained China (complete with subsidies, undervalued currency, etc) these incentives were never going to change an underlying economic truth -- a truth that has seen Africa's own indigenous textile industry crushed under the weight of second-hand clothing from the West and cheap imports from China. Both countries lost enormous amounts of money they couldn't afford.

As for AGOA, like every other trade agreement African countries have ever signed, it simply facilitated the export of the same commodities that the global market would have bought from Africa even without AGOA. Indeed, the number one African export under AGOA has been crude oil, and the two biggest "beneficiaries" have been Nigeria and Angola. These agreements and deals never alter the fundamentally irrational nature of African production systems and trading patterns, and it would be stupid of us to continue to abdicate our own responsibilities while deceiving ourselves into thinking the rest of the world will somehow lead us out of the dark if we cede all decision-making power to local Big Men and their foreign "development partners".

While I am on the subject, do you realize that if we were actually in a position to take real advantage of the European Union's "Everything But Arms" initiative, they never would have offered the initiative? It is easy to make such magnanimous offers to people who are in no position to do anything except continue the old pseudo-colonial patterns of trade. In the meantime, China, the United States, Japan, Germany, Brazil and others continue to dominate the European markets that were supposedly opened to us by the initiative.

Understand this: The breakthrough African countries need is in their trade with each other! This trade should breakdown irrational systems of production and consumption, and replace them with something economically logical. These internal changes are what will affect and change our external trading patterns in the long-run.

I am not saying our many incentive programmes don't work. On the contrary, they mostly work very well, except "success" in this case generally means sustaining the irrational economy of the continent and stymieing the chances of transformational economic investment. You've heard that government crowds out the private sector? Well an irrational private sector crowds out rationality. Indeed, as long as Nigerian banks prefer cheap, unproductive ways of making quick money, the Nigerian economy will be unable to count on its financial sector to be as worthwhile a foundation as it can be.

You still think I exaggerate? Blame that on acculturation. There are still millions of Nigerians who think it was wise to give out a lump sum of $12 billion in exchange for "debt cancellation", rather than use that $12 billion to add 12,000 megawatts of electricity to the national grid. Actually, speaking of "incentives", with $12 billion in public funds you could leverage private sector funding to raise the overal electricity pot as much as $24 billion (50% government ownership) to $36 billion (33%) in total.

Electricity is not the only productive investment we could have made with that capital, nor would we have had to pump the entire $12 billion into a single infrastructural investment. You could use $6 billion to leverage $12 billion total for electricity, and use the other $6 billion to leverage investment in .... well, you make the call.

The gains of such investment to the economy, would more than offset the measly $1 billion in annual interest payments we supposedly saved ... supposedly because our public debt is back up again, and our interest payments have commensurately risen to wipe out the so-called "savings". Add to this the fact that the mini-Oil-Boom of the 2000s has dissipated, and that our three tiers of government are running deficits and running up debts, and that the Central Bank under Soludo first and then Sanusi have had to expend our foreign reserves to defend the Nigeria and bail out ailing banks, and the fact that ....

.... well, lets just say that the days of having a spare $12 billion which we could use for electricity (or some other productive endeavor) or choose to waste are now gone.

And we still have no conception of what an undistorted African economy would look like, no intellectual foundation from which to start to build the new economy, no framework to guide our decision-making so we know what are priorities and what are things we need to give up.

05 September, 2010

Lies, damn lies .... and statistics

I've never trusted the "official" statistics about Nigeria. It goes beyond the usual knee-jerk distrust of the census.

Bluntly put, our officials, at all three tiers, political and civil-service alike, have a tendency to look us in the face and lie to us. They don't even work hard to make their lies believable, because they know there is accountability and they face no consequences ... even if it were proven beyond a reasonable doubt that they lied.

Nigerian journalists and academics are no better. Far from being sources of information that they (media and universities) independently verified, they either rely on the questionable figures presented by officialdom, or help disseminate the rumours, myths and guesswork of biased "sources" or so-called "witnesses" who did not actually witness any of the things they recount.

And then you have international agencies, foreign governments and assorted external actors. They tend to say whatever sounds like it supports their position. If an NGO wants to raise money, it says everybody in a particular African country will die in the next 10 seconds if money is not raised. If the IMF and World Bank want to convince people that their programmes are successful, they tell you that the programme produced growth of 1,000%, even if none of the people in the specific region/country has seen a shred of evidence to support this claim.

Everyone has an agenda, and everyone quotes numbers, seemingly drawn from the sky, that support their particular bias.

I had two conversations in the space of a few months, many years ago, that illustrate my point. At the time, the "official" figure for Nigeria's population was 120 million. I happened to engage in a conversation with an Igbo classmate, who argued that the Hausa-Fulani had inflated their numbers, and that the Igbo had been under-counted; he told me, with no trace of irony, that there were really 60 million Igbos. Not too long afterward, I happened to be in a conversation with a Yoruba acquaintance, who also believed the Hausa-Fulani had bee over-counted, and also believed that the Yoruba had been under-counted, and insisted to me, again without irony that there were really 60 million Yoruba.

Like I said, the "official" figure for Nigeria's population at that time was 120 million ... so if those two former acquaintances of mine were both correct, then half of Nigeria (60 million) was Igbo, and the other half of Nigeria (60 million) was Yoruba, and there were no other ethnic groups in Nigeria, not even Hausa-Fulani.

Mind you, these rumour-generating machines have a simple explanation for the discrepancy: They look you square in the face and tell you that Nigeria's real population is closer to 200 million, or 250 million or 300 million. They just make up a number that sounds like it will accommodate their outlandish guesstimate about the population of their own subsection of Nigerians.

The fact is, every ethnic group, region and religion in Nigeria thinks they are under-counted and everyone else is over-counted. The reality is .... nobody knows.

I suspect all of the "official" population figures for every part of Nigeria are inflated. We are probably the most populous in Africa, but our population is most likely not as high as 140 million. Not that it matters; our population structure is like a pyramid, with more citizens in the lower age ranges and fewer citizens in the higher age ranges -- eventually all of those youngsters will get married and have children, and unless we lower our average family size, we will explode to 140 million and beyond soon enough. And I should know, as I am one of those young(ish) Nigerians who haven't started adding new Nigerians to the world as of yet.

Mind you, I suspect the population figures of every country in Africa are inflated too. With few exceptions (in Southern Africa and North Africa ... but not Egypt, as they, like Nigeria, have far too many people, living in too unplanned a manner, to keep track of), most African countries don't really have the capacity to make empirical declarations about their population. And while the foreign organizations like to act as if they are more "expert" on Africa than the Africans, the blunt fact is they are even less informed about African issues than the African governments whose "administrative capacity" they constantly bemoan.

What prompted this outburst of cynicism (more like realism, but why argue the point)?

A report in the excellent Daily Nation, that's what. Apparently, Kibera, the "largest slum in Africa" is not even 10% as large as its hype. Variously estimated to contain between one million and two million people, Kibera is actually home to "only" about 170,070 people.

There are lots of people, in Kenya and (more importantly in my view) outside it with vested financial interests in maintaining the myth that Kibera is a slum of gigantic, monumental, epic, earth-shattering proportions. But forget that for a moment.

It has always baffled me that so many "reputable" people and "credible" entities bandy about numbers, figures and statistics about "Africa" as if there was some kind of empirical basis to their numbers. The thing is, I know for a fact that most countries in Africa have no idea how many of their citizens are living with HIV/AIDS (to use an important example), and if those countries' governments don't know, the foreign agencies, foreign governments, foreign other-entities, academics, "researchers" (yeah, right), journalists, etc, etc do not know either.

Yet, somewhere, a number emerges and everyone latches on to this number, and purport to make important, consequential decisions based on this number.

Like I said, at a certain level it doesn't matter.

Nigeria will reach 140 million sometime this century, so it is okay if we make economic/political/social plans based on this number. Unfortunately, we don't really make any plans, or rather we repeatedly make lots of plans (that don't make sense) and then repeatedly fail to execute any of the plans.

Likewise, if one million people are going to starve, but you deftly raise funds sufficient to feed ten million, then (in theory) there is nine million person's worth of reserves in place for the next crisis. Unfortunately, people enjoy making grandiose pledges, even when they know they intend from the start to pay only a small (and insufficient) fraction of what they pledged. More to the point, only Jah knows what the agencies do with the money and food that they receive; not to sound petty and "ungrateful" but NGO workers in Africa live First World lifestyles while surrounded by people living Tenth World lifestyles, who have been living Tenth World lifestyles, and who will continue to live Tenth World lifestyles for the foreseeable future (even as the NGO workers take time off from their First World lifestyles to lament the fact that "billions" in aid over decades have not had an effect).

And as for HIV/AIDS and every other disease affecting my continent and my people, in the absence of empirical statistics, it is ideal in fact to make decisions based on assuming the problems are worse than they really are. By contrast, it would be very, very dangerous to assume the problem is not as bad than is (as former President Thabo Mbeki of South Africa did).

The thing is though, it still doesn't work out well for we the people, because we have no control over the decision-making or the resource-allocation. Whether it be our own government or the foreign entities that are supposedly "helping" us, the tendency is to make decisions over our heads, with no democratic input from us, and no accountability to us for bad planning or execution.

We are objects on which other people act.

But I digress.

If you are wondering why I treat the Kenyan census figures for Kibera as more credible than the guesstimates that have been thrown around for years .... it is because the number sounds a lot closer to reality.

Take the controversy in Nigeria over whether Lagos State or Kano State is the most populous in the country. As I said before, I think the overall population of Nigeria is overstated. By definition, if I am right, the populations of each state have been overstated too. So, continuing along that line of thought, Kano's population is probably overstated. But having said that, the numbers put out by the Lagos State government as the "real" population of Lagos are simply unrealistic.

It is that word, the word "unrealistic".

I do not know what the true, empirical numbers are. No one knows.

But I do know what is realistic and what is not.

Everyone has this stereotypical image of "grinding African poverty" in their minds, but do you realize what life for the residents would really be like if there were really one or two million people squeezed into the tiny confines of Kibera?

As John McEnroe famously said, you cannot be serious.