I am impressed with the multimedia news outlet NEXT.
There are other Nigerian newspapers that provide quality service online (too numerous to mention, though The Guardian is excellent, and if you want to escape the Lagos-bubble, check out Daily Trust). And I do appreciate the fact that I can listen to Radio Nigeria's Kapital FM (Abuja) on my computer (though they are frequently off the air) and Brila FM (though they only seem to be talking about the English Premiership when I tune in).
But NEXT is making a conscious effort (in my opinion) to be World-class, as opposed to Naija-class or Africa-class. Come to think of it, most Nigeria web outlets lag behind the leading sites from South Africa, Kenya (I particularly enjoy The East African) and the Maghreb in terms of getting the full experience of current affairs, analysis, audio-visual media and interactive features.
I believe very strongly in the potential of the Nigerian media, and I would not critique it so if I did not care about it. I want them to figure out ways to make money from the worldwide web; while newspapers in the United States and Europe claim to be suffering, the internet gives Nigerian news media a chance to tap into the dollars, euros, and riyals of the Nigerian Diaspora.
I rely on the media for information, and I want the best product I can get. NEXT is not doing anything "new" or "revolutionary", and there are any number of news media sites around the world that do much more. But they seem to be working hard to change the way media sites are run within that sub-set of the world media that is the Nigerian media. Hopefully others catch up and compete; I still like Kickoff Nigeria, but they have not become the one-stop shop for the best in Nigerian football news that I had been hoping (I dare say they provide less information now than they did before.
It is not easy. Soup wey sweet, na money do am, and at some level the sites have to figure out ways of making money to pay for improved information-gathering and investigative journalism.
Good luck to them.
Here are two examples of the audio-visual product from NEXT. Granted they do seem to ask their anchors to blow phonetics on the main news broadcasts (an example below), but they do a weekly news round-up/discussion in Pidgin as well (second below). Perhaps the phonetics evince a desire to attract an "international" audience, as opposed to a strictly Naijan audience.
Amalgamation Day in Lagos, 1914
22 July, 2009
13 July, 2009
Insurgents strike Lagos jetty
Two days ago I wrote this.
Today comes news that MEND attacked the Atlas Cove jetty in Lagos, their first attack on infrastructure outside of the Niger-Delta. Reports on the incident are still developing, and there is only so much that is known right now, but it would appear there have been at least five casualties. Whoever the dead men are, I am sure they are not responsible for creating any of the issues for which they have lost their lives.
Just so you know, when I criticize uncontrolled militancy and extremism, I am not just talking about the Niger-Delta. I include relgious extremists and ethnic separatists, not to mention the community leaders who spur youths into land-related communal violence.
The moderate majority of Nigerians can come together to (finally) start pushing for reform and transformation, or we can continue to eye each other with suspicion while the forces that support the status quo which we don't like continue to engage in sporadic battles with extremists, militants and radicals who will never win, but will cause a lot of deaths and infrastructure destruction along the way.
When we, the common citizen, concede the political ground, choosing not to get involved or to campaign collectively for antying while hoping and praying for the best, we end up suffering the consequences of decisions we took no part in making. Take "communal violence" for example. When "youths" violently riot, some of us non-aligned, innocent citizens will die. And when the soldiers swoop in to scatter everything in sight (in the name of quelling the violence) more of us die. And at the end of it all, our shared public infrastructure and the meagre private property it took us years to acquire, will be no more than burnt-out smoky wrecks.
Haba, this has to stop. We have to shake off the lethargy, the apathy and the fatalism. We have to get involved. It doesn't matter your language, religion or region. We want the same things. We will not get those things until we get involved.
EDIT: Reported death toll from Atlas Cove attack rises to nine.
Today comes news that MEND attacked the Atlas Cove jetty in Lagos, their first attack on infrastructure outside of the Niger-Delta. Reports on the incident are still developing, and there is only so much that is known right now, but it would appear there have been at least five casualties. Whoever the dead men are, I am sure they are not responsible for creating any of the issues for which they have lost their lives.
Just so you know, when I criticize uncontrolled militancy and extremism, I am not just talking about the Niger-Delta. I include relgious extremists and ethnic separatists, not to mention the community leaders who spur youths into land-related communal violence.
The moderate majority of Nigerians can come together to (finally) start pushing for reform and transformation, or we can continue to eye each other with suspicion while the forces that support the status quo which we don't like continue to engage in sporadic battles with extremists, militants and radicals who will never win, but will cause a lot of deaths and infrastructure destruction along the way.
When we, the common citizen, concede the political ground, choosing not to get involved or to campaign collectively for antying while hoping and praying for the best, we end up suffering the consequences of decisions we took no part in making. Take "communal violence" for example. When "youths" violently riot, some of us non-aligned, innocent citizens will die. And when the soldiers swoop in to scatter everything in sight (in the name of quelling the violence) more of us die. And at the end of it all, our shared public infrastructure and the meagre private property it took us years to acquire, will be no more than burnt-out smoky wrecks.
Haba, this has to stop. We have to shake off the lethargy, the apathy and the fatalism. We have to get involved. It doesn't matter your language, religion or region. We want the same things. We will not get those things until we get involved.
EDIT: Reported death toll from Atlas Cove attack rises to nine.
Shillings and Pence
Permit me to digress a moment from Nigeria to talk a bit about our African neighbourhood.
If I was a citizen of Kenya, Uganda or Tanzania, and someone asked me about political reforms, I would tell them about:
(a) the need for consolidation of sub-national governing units, of which there are too many in Kenya and Uganda; and the need for federalism in Tanzania and (at the very least) semi-federalism in Kenya and Uganda, with proper devolution of powers to the sub-national governing units.
(b) the need for substantive systemic reforms in domestic politics (less tribalism in Kenya would be a good start), economics, law enforcement (human beings are equally corrupt; what differentiates societies is the likelihood and degree of punishment) and socio-cultural dynamics (the input of decision-making by the citizenry at large must change if the output of decision-making is to change).
What you would NOT hear me say is "we need an expensive new layer of government on top of all the other layers we already have, because even though we cannot pay for our current layers of government (all three countries need foreign aid to cover their basic budgetary commitments), the solution to our problems is to create another layer of expense to pay for. Indeed, the fact that our parliaments are not really democratic, are not really representative or effective, and are terribly expensive shows us the necessity of creating an altogether new parliament which will ultimately be no different from the existing ones, because no one is interested in systemically reforming the root causes of the current parliamentary weaknesses."
I think East African economic integration is a good thing. I am glad they intend to open their markets up to each other. I am glad Rwanda and Burundi will have access to the markets of the three bigger members, and in the fullness of time (and with peace in the Great Lakes) I expect Rwanda and Burundi to have just as much access to the Democratic Republic of Congo's markets (and I am not talking about Rwandan military and commercial interests plundering Congolese resources as has been going on for a while).
The thing is, much of what they have been doing has revolved around creating new jobs for politicians, technocrats and bureaucrats. This is a "human" problem not an East African problem; all over the world, but particularly in international affairs/relations/trade/diplomacy, it seems the "solution" to any problem is the creation of a new agency with new jobs for politiicians, technocrats and bureaucrats. When it fails to solve the issue, we just create another agency. After a while there are five or ten or fifteen agencies, all ostensibly committed to solving a single problem ..... a problem which never actually gets solved.
The politiicians, technocrats and bureaucrats usually claim the failure is due to the fact that they were not given enough POWER. At which point, one of two things happens. Either (a) they are not given any additional power, and the complaints of powerelessness take on the appearance of a permanent, recurrently uttered, excuse for failure; or (b) they are given additional power, which marks the start of a long process of ever-greater power being demanded and transferred even as the core reason given for the initial transfers either lapses into irrelevance or remains unresolved despite ever-more power being held centrally.
But I digress.
In my view, East African economic integration requires two vital and indispensable pillars:
(a) Monetary unification under a single EAST AFRICAN SHILLING, rather than the current reality of three separate, independent shillings in Kenya, Uganda and Tanzania. They don't even have to worry about the politics of creating a new East African Central Bank; all they need do is transform the three independent Banks into branches of a single, merged institution. Of course it is not as easy as all that, but you get the drift, don't you?
(b) Upgrades to the transportation and communications networks. Rail, roads, electrical grids, telecommunications, it all needs billions in new investment, in upgrades, repairs and maintenance. In fact, given that all these countries have fiscal difficulties at the governmental level (needing aid to cover basic budget functions), small economies, and scarce supplies of capital, it would have made sense for them to both rationalize (and federalize) their domestic governance rather than opting instead for creating expensive and unnecessary new "East African" governmental entities. Every spare shilling they can scrounge up needs to be committed to transportation and communication upgrades, and not to new jobs for politicians, bureaucrats and technocrats; indeed, the numbers of jobs and broader economic activity that would be generated directly and as a future consequence of these upgrades dwarfs the number of "white collar" jobs created in new bureaucracies.
For the record, I am calling for a single shilling, but I am not necessarily supportive of the single currency plans for an "Afro" (Africa-wide) or an "Eco" (West-Africa-wide). There is such a thing as an optimal monetary territory, and many economic theories discussing and debating what that optimum actually is. Do not automatically assume that the euro-zone or the USA are optimum zones; there is much done (for example fiscal transfers) which quietly forces disparate economic zones of the USA into a single monetary whole. Sticking to the fiscal transfers example, I do not think Africa as a broader whole, or wealthier African countries as a specific group, have the financial resources to pay for that kind of thing. I think there is a certain efficiency to optimality, and to allow the different equilibria to adjust depending on the real economic circumstances of a place.
But that is a discussion for another time.
If I was a citizen of Kenya, Uganda or Tanzania, and someone asked me about political reforms, I would tell them about:
(a) the need for consolidation of sub-national governing units, of which there are too many in Kenya and Uganda; and the need for federalism in Tanzania and (at the very least) semi-federalism in Kenya and Uganda, with proper devolution of powers to the sub-national governing units.
(b) the need for substantive systemic reforms in domestic politics (less tribalism in Kenya would be a good start), economics, law enforcement (human beings are equally corrupt; what differentiates societies is the likelihood and degree of punishment) and socio-cultural dynamics (the input of decision-making by the citizenry at large must change if the output of decision-making is to change).
What you would NOT hear me say is "we need an expensive new layer of government on top of all the other layers we already have, because even though we cannot pay for our current layers of government (all three countries need foreign aid to cover their basic budgetary commitments), the solution to our problems is to create another layer of expense to pay for. Indeed, the fact that our parliaments are not really democratic, are not really representative or effective, and are terribly expensive shows us the necessity of creating an altogether new parliament which will ultimately be no different from the existing ones, because no one is interested in systemically reforming the root causes of the current parliamentary weaknesses."
I think East African economic integration is a good thing. I am glad they intend to open their markets up to each other. I am glad Rwanda and Burundi will have access to the markets of the three bigger members, and in the fullness of time (and with peace in the Great Lakes) I expect Rwanda and Burundi to have just as much access to the Democratic Republic of Congo's markets (and I am not talking about Rwandan military and commercial interests plundering Congolese resources as has been going on for a while).
The thing is, much of what they have been doing has revolved around creating new jobs for politicians, technocrats and bureaucrats. This is a "human" problem not an East African problem; all over the world, but particularly in international affairs/relations/trade/diplomacy, it seems the "solution" to any problem is the creation of a new agency with new jobs for politiicians, technocrats and bureaucrats. When it fails to solve the issue, we just create another agency. After a while there are five or ten or fifteen agencies, all ostensibly committed to solving a single problem ..... a problem which never actually gets solved.
The politiicians, technocrats and bureaucrats usually claim the failure is due to the fact that they were not given enough POWER. At which point, one of two things happens. Either (a) they are not given any additional power, and the complaints of powerelessness take on the appearance of a permanent, recurrently uttered, excuse for failure; or (b) they are given additional power, which marks the start of a long process of ever-greater power being demanded and transferred even as the core reason given for the initial transfers either lapses into irrelevance or remains unresolved despite ever-more power being held centrally.
But I digress.
In my view, East African economic integration requires two vital and indispensable pillars:
(a) Monetary unification under a single EAST AFRICAN SHILLING, rather than the current reality of three separate, independent shillings in Kenya, Uganda and Tanzania. They don't even have to worry about the politics of creating a new East African Central Bank; all they need do is transform the three independent Banks into branches of a single, merged institution. Of course it is not as easy as all that, but you get the drift, don't you?
(b) Upgrades to the transportation and communications networks. Rail, roads, electrical grids, telecommunications, it all needs billions in new investment, in upgrades, repairs and maintenance. In fact, given that all these countries have fiscal difficulties at the governmental level (needing aid to cover basic budget functions), small economies, and scarce supplies of capital, it would have made sense for them to both rationalize (and federalize) their domestic governance rather than opting instead for creating expensive and unnecessary new "East African" governmental entities. Every spare shilling they can scrounge up needs to be committed to transportation and communication upgrades, and not to new jobs for politicians, bureaucrats and technocrats; indeed, the numbers of jobs and broader economic activity that would be generated directly and as a future consequence of these upgrades dwarfs the number of "white collar" jobs created in new bureaucracies.
For the record, I am calling for a single shilling, but I am not necessarily supportive of the single currency plans for an "Afro" (Africa-wide) or an "Eco" (West-Africa-wide). There is such a thing as an optimal monetary territory, and many economic theories discussing and debating what that optimum actually is. Do not automatically assume that the euro-zone or the USA are optimum zones; there is much done (for example fiscal transfers) which quietly forces disparate economic zones of the USA into a single monetary whole. Sticking to the fiscal transfers example, I do not think Africa as a broader whole, or wealthier African countries as a specific group, have the financial resources to pay for that kind of thing. I think there is a certain efficiency to optimality, and to allow the different equilibria to adjust depending on the real economic circumstances of a place.
But that is a discussion for another time.
11 July, 2009
Militancy - Unstable present, Unpredictable future
I have written to some degree on this blog about the need for transformative reform in the Nigerian Armed Forces. I am sure I will write more in the future, because the Armed Forces are a vital institution of the federal republic -- a vital institution that has been, and is now, dysfunctional.
As I have said elsewhere, I do NOT hate the Army. Besides, castigating 100,000 men based on the proven actions of only a few of their number is about as bad as blaming entire ethnic groups for decisions made by a multi-ethnic micro-minority. Which is sort of the point, as Army detachments are too frequently guilty of acting on the old colonial principle of "collective punishment" -- exacting revenge (if you can call it that) on entire villages or socio-cultural groups for the crimes of a relative handful of members of the group. If they were honest with themselves, the good officers and enlisted men of the Armed services would admit their organization is not what it should be.
Whatever I write in the future about the Armed Forces will not be new. Nigerians know what our Army is, and know what we all wish our Army was. I would not be telling you anything you didn't already know.
So I will aim this post at something different, at militant groups and the people who support them.
Nigerian citizens are frustrated. All of us are. We all have a certain vision of what we want our country (and our lives) to be, and the reality we are compelled to live with is nothing like the dream.
A journey of a thousand kilometres begins with the first step, however you need to have a sense of where you are going and how to get there, otherwise you will take a thousand steps in the wrong direction. This is a core issue in Nigeria, because every argument or debate about why we are not where we want to be invariably ends up sprinting in the wrong direction. And the actions we take, based on these misdirected thoughts, become a sort of self-fulfilling loop -- we ourselves create the very thing that we thought our actions were correcting, and then we use the existence of what we in fact created as proof that what we did was necessary.
Complicated? Maybe. Not really.
Ideally, Nigeria should have a strong and effective police force (civil force), and a strong and effective defence force (military force). Ideally the federal republic's citizens should be bound to each other by a social contract, and by our shared culture and spiritual faith (underneath exterior "differences" driven more by geography than anything else, our core ways of life and moral codes are the same).
We do not really have these things. But rather than work on building these things, people seem to lend their verbal (and sometimes active) support to things they perceive to be viable alternatives, or to radical/extremist/militant voices they perceive to be fighting to change things for the better.
As a consequences there is never any energy behind the battle for natural, organic, dare I say centrist/moderate reform, so it does not happen. We instead pour all of our energy into efforts that (at best) will predictably fall short of the goal, or (at worst) lead to minor and major (e.g. the civil war) catastrophes.
Some of the most cherished, most loved, most dedicatedly-supported men and movements of years past are in fact guilty of pointing our journey-of-a-thousand-steps in the wrong direction. A lot of these popular champions believed themselves to be doing the right thing, but if they had individually and collectively done things differently, Nigeria would be a different place today. I mean, we all complain that the 2007 elections were a disgrace, but it was no less so than the elections of the 1960s. The events that ultimately led to the Nigerian Civil War started in the 1950s, when the approach of Independence reoriented us away from a shared opposition to colonial rule, and towards a deep distrust of each other. In the 10+ year run up to war, the "elections" of the 1960s, federal and regional, can only be considered part of the causative chain. Nigeria started off heading in the wrong direction (towards war), and we are even now in 2009 still dealing with the aftermath of that major conflict (and the many, many minor conflicts), talkless of trying to chart a new, more proper course for the federal republic. People are more interested in pointing the finger of blame for those events, too busy looking at the trees to notice that that entire forest was problematic; much like our current socio-politics, there was almost zero possibility of optimality emerging from the "forest" that was the socio-politics of the 1950s and 1960s. ALL of the chief decision-makers made their decisions in a context in which they were unlikely, perhaps even unable, to make the decisions that would take us where we needed to go. The same holds today.
I am starting to digress.
This bit of reflective thought was sparked by something specific, by a fellow I sort of know (indirectly). A fellow who passionately supports MEND.
Now I am the first person to tell you that there is much about our federal republic that needs to be drastically changed. And the Niger-Delta, like every other region of the country, has indeed suffered neglect. There is and has always been much injustice surrounding our drilling and exporting of crude oil. And there is nothing in the contemporary politics of Nigeria to suggest that we are on a path to transformative reform, not just for the Delta but for all of us.
But is supporting a group like MEND the right way forward?
History is littered with examples of armed movements of one kind or another, that began with a holy-sounding rationale, as well as the support and adulation of the respective mass citizenry and of certain sections of the intellectual classes. Many of these entities eventually turn to organized crime, brigandage, terror against all civilians regardless of political inclination. The rest, the ones who do seize power, tend to recreate the very system they were allegedly fighting against, the only difference being the erstwhile militants take the place of the people who used to run the system before.
More often than not, the mass of citizenry who initially supported these armed movements come to regret it. As for the intellectuals, well, many of them just keep making excuses and offering explanations for why the movement is nothing like it was advertized. Some serve in the governments these former militants set up, continuing to insist that steady progress towards change is occuring, even as nothing of real substance changes at all.
This has happened all over the world. Actually, some of the biggest and best known criminal organizations on Earth started out as freedom fighters, or as militants opposing an unjust system. In a particularly unfortunate African variant, successful anti-colonial movements more or less continued the colonial system of governance, with black faces replacing white ones.
I thought about the fellow who passionately backs MEND recently, when reading about the resurfacing of information connecting Liberian President Ellen Johnson Sirleaf to Charles Taylor's National Patriotic Front of Liberia (NPFL). Madame President Sirleaf wholeheartedly supported Charles Taylor's National Patriotic Front of Liberia in the beginning, providing money and supplies, believing it to be a force capable of freeing Liberia from the violent tyranny of the late Samuel Kanyon Doe. Alas, Taylor turned out to be worse than Doe, and Mrs Sirleaf switched sides to back LURD, a militia dedicated to overthrowing Taylor. I do not blame her really; Samuel Doe was a violent tyrant and who would not be tempted to support the only force willing to force him out? Still, what must she think of the fact that she helped bring about the regime that will forever be remembered for the "long sleave or short sleave" mutilation of Sierra Leonians via their Revolutionary United Front proxies?
This is a problem, maybe THE problem for citizens who think about bringing about reform, transformation and change. To use a simple example, I am glad the late Julius Nyerere sent in Tanzanian troops to depose the late despot Idi Amin. On the other hand, I am not so glad that the purpose of the intervention was to restore his friend, the late dictator Milton Obote. One thing led to another, and Yoweri Museveni's Patriotic Front came to power .... installing another dictatorship, albeit one marked by rigged elections.
I am not a pacifist. One of the most unfortunate truths about life on Earth is that there often (too often) comes a time when people have to fight. If there is nothing in the world that you are willing to fight for, you will end up a society of serfs, villeins, slaves and subjects. It is your willingness to stand up for your rights, violently if necessary, that enables you to have rights in the first place. It is good for leaders to be just a little bit scared of the led, to fear loss of office would follow upon any act publicly perceived as unconstitutional or tyrannic. (Of course, leaders can opt for Macchiavelian deceptions and Orwellian New Speak rather than direct coercion, but that is another story).
While I am not a pacifist, there is something to be said for the Martin Luther Kings and Mahatma Ghandis of the past, present and future. They sought to slowly and patiently build political majorities in support of their goals, rather than engage in violent campaigns. The thing with violent campaigns, small and large, is you are in control of starting it, but once it starts you are no longer in control of where it is going to go. Even so, it is hard enough to keep control of even peaceful change! What was once India would ultimately split in three on religious lines despite Ghandi's wishes; and he was assasinated because of his opposition to the split. And there is much that happened in African-American communities over the 40 years between 1968 and today that would have dismayed Dr King.
He who fails to learn from history is doomed to repeat it. The thing that worries me most about people who opt instead to support extremists and rebel militia is they do not seem to remember (or care) that the road to "failed state" designation in Africa usually passes through a critical stretch when militia of one kind or another rise up, and the official army and police lose control of swathes of territory. That is not to say that the official army and police are "good", but to say that what replaces them (the violent rule of warlords and militia) usually makes the bland stagnation of the years prior look like paradise by comparison.
It is so much easier to try to change something that is at rest, and so much more difficult to change something that is in violent, stochastic flux. And once violence crosses a threshold, the people start to prefer a restoration of Big Man rule (albeit under newly-minted, Western-powers-approved Big Men) which is usually achieved as a by-product of the peace treaties and "elections" that mark the end of the militia-consequent wars.
Positive change in Nigeria is most likely to occur if we are not in the middle of fighting each other. And the route to change lies with building a movement that patiently campaigns to build (from scratch, sadly) a large enough majority (cutting across ethnic, regional, religious and military/civilian lines) for transformative reform and change. I have spent my adult life (and to be honest, my teenage years and my latter childhood before then) hoping some sort of movement would emerge to campaign peaceably for a pro-transformation majority.
It would actually be much better if there were more than one such movement; when there is only one movement it tends to lead to a one-party state (de jure or de facto) once the old system is overthrown. Of course if there is going to be more than one movement, each would optimally be built around a particular vision of what this transformation should be or mean, as opposed to built on ethno-regional/religious pillars. As it stands, our federal republic is a place where ultra-conservative Christians and ultra-conservative Moslems agree on 95% of the issues, but would not be caught together in a single movement, an attitude that exists among all such other groups of Nigerians who should (in theory) be on the same side of any discussion about what and how to transform in Nigeria. It is part of what makes it difficult to build effective and active pan-Nigerian majorities to aggresively support anything other than the national football teams.
But I digress again.
I guess this is part of the reason I started this blog. As I said in my first blog post months ago, it doesn't matter if you agree with me on any particular issue or on any issue at all, provided we have a more substantive discussion of the issues than is usual in Nigerian political discourse. It is only in such arguments and debates that we start to discover people who share our beliefs, people who are willing to join us in fighting for particular ends.
Like Martin Luther King and Mahatma Ghandi, we have to then mobilize enough of these disparate and otherwise competing movements to rally together into a majority large enough to force change. And then these movements will have to respect each other and the citizenry enough to put their different ideas of transformation to the test in free-and-fair elections, not one "election" but a sequence of them over a critical 20-year period in which the Nigeria of today becomes the federal republic that our children and grand-children will cherish.
As I have said elsewhere, I do NOT hate the Army. Besides, castigating 100,000 men based on the proven actions of only a few of their number is about as bad as blaming entire ethnic groups for decisions made by a multi-ethnic micro-minority. Which is sort of the point, as Army detachments are too frequently guilty of acting on the old colonial principle of "collective punishment" -- exacting revenge (if you can call it that) on entire villages or socio-cultural groups for the crimes of a relative handful of members of the group. If they were honest with themselves, the good officers and enlisted men of the Armed services would admit their organization is not what it should be.
Whatever I write in the future about the Armed Forces will not be new. Nigerians know what our Army is, and know what we all wish our Army was. I would not be telling you anything you didn't already know.
So I will aim this post at something different, at militant groups and the people who support them.
Nigerian citizens are frustrated. All of us are. We all have a certain vision of what we want our country (and our lives) to be, and the reality we are compelled to live with is nothing like the dream.
A journey of a thousand kilometres begins with the first step, however you need to have a sense of where you are going and how to get there, otherwise you will take a thousand steps in the wrong direction. This is a core issue in Nigeria, because every argument or debate about why we are not where we want to be invariably ends up sprinting in the wrong direction. And the actions we take, based on these misdirected thoughts, become a sort of self-fulfilling loop -- we ourselves create the very thing that we thought our actions were correcting, and then we use the existence of what we in fact created as proof that what we did was necessary.
Complicated? Maybe. Not really.
Ideally, Nigeria should have a strong and effective police force (civil force), and a strong and effective defence force (military force). Ideally the federal republic's citizens should be bound to each other by a social contract, and by our shared culture and spiritual faith (underneath exterior "differences" driven more by geography than anything else, our core ways of life and moral codes are the same).
We do not really have these things. But rather than work on building these things, people seem to lend their verbal (and sometimes active) support to things they perceive to be viable alternatives, or to radical/extremist/militant voices they perceive to be fighting to change things for the better.
As a consequences there is never any energy behind the battle for natural, organic, dare I say centrist/moderate reform, so it does not happen. We instead pour all of our energy into efforts that (at best) will predictably fall short of the goal, or (at worst) lead to minor and major (e.g. the civil war) catastrophes.
Some of the most cherished, most loved, most dedicatedly-supported men and movements of years past are in fact guilty of pointing our journey-of-a-thousand-steps in the wrong direction. A lot of these popular champions believed themselves to be doing the right thing, but if they had individually and collectively done things differently, Nigeria would be a different place today. I mean, we all complain that the 2007 elections were a disgrace, but it was no less so than the elections of the 1960s. The events that ultimately led to the Nigerian Civil War started in the 1950s, when the approach of Independence reoriented us away from a shared opposition to colonial rule, and towards a deep distrust of each other. In the 10+ year run up to war, the "elections" of the 1960s, federal and regional, can only be considered part of the causative chain. Nigeria started off heading in the wrong direction (towards war), and we are even now in 2009 still dealing with the aftermath of that major conflict (and the many, many minor conflicts), talkless of trying to chart a new, more proper course for the federal republic. People are more interested in pointing the finger of blame for those events, too busy looking at the trees to notice that that entire forest was problematic; much like our current socio-politics, there was almost zero possibility of optimality emerging from the "forest" that was the socio-politics of the 1950s and 1960s. ALL of the chief decision-makers made their decisions in a context in which they were unlikely, perhaps even unable, to make the decisions that would take us where we needed to go. The same holds today.
I am starting to digress.
This bit of reflective thought was sparked by something specific, by a fellow I sort of know (indirectly). A fellow who passionately supports MEND.
Now I am the first person to tell you that there is much about our federal republic that needs to be drastically changed. And the Niger-Delta, like every other region of the country, has indeed suffered neglect. There is and has always been much injustice surrounding our drilling and exporting of crude oil. And there is nothing in the contemporary politics of Nigeria to suggest that we are on a path to transformative reform, not just for the Delta but for all of us.
But is supporting a group like MEND the right way forward?
History is littered with examples of armed movements of one kind or another, that began with a holy-sounding rationale, as well as the support and adulation of the respective mass citizenry and of certain sections of the intellectual classes. Many of these entities eventually turn to organized crime, brigandage, terror against all civilians regardless of political inclination. The rest, the ones who do seize power, tend to recreate the very system they were allegedly fighting against, the only difference being the erstwhile militants take the place of the people who used to run the system before.
More often than not, the mass of citizenry who initially supported these armed movements come to regret it. As for the intellectuals, well, many of them just keep making excuses and offering explanations for why the movement is nothing like it was advertized. Some serve in the governments these former militants set up, continuing to insist that steady progress towards change is occuring, even as nothing of real substance changes at all.
This has happened all over the world. Actually, some of the biggest and best known criminal organizations on Earth started out as freedom fighters, or as militants opposing an unjust system. In a particularly unfortunate African variant, successful anti-colonial movements more or less continued the colonial system of governance, with black faces replacing white ones.
I thought about the fellow who passionately backs MEND recently, when reading about the resurfacing of information connecting Liberian President Ellen Johnson Sirleaf to Charles Taylor's National Patriotic Front of Liberia (NPFL). Madame President Sirleaf wholeheartedly supported Charles Taylor's National Patriotic Front of Liberia in the beginning, providing money and supplies, believing it to be a force capable of freeing Liberia from the violent tyranny of the late Samuel Kanyon Doe. Alas, Taylor turned out to be worse than Doe, and Mrs Sirleaf switched sides to back LURD, a militia dedicated to overthrowing Taylor. I do not blame her really; Samuel Doe was a violent tyrant and who would not be tempted to support the only force willing to force him out? Still, what must she think of the fact that she helped bring about the regime that will forever be remembered for the "long sleave or short sleave" mutilation of Sierra Leonians via their Revolutionary United Front proxies?
This is a problem, maybe THE problem for citizens who think about bringing about reform, transformation and change. To use a simple example, I am glad the late Julius Nyerere sent in Tanzanian troops to depose the late despot Idi Amin. On the other hand, I am not so glad that the purpose of the intervention was to restore his friend, the late dictator Milton Obote. One thing led to another, and Yoweri Museveni's Patriotic Front came to power .... installing another dictatorship, albeit one marked by rigged elections.
I am not a pacifist. One of the most unfortunate truths about life on Earth is that there often (too often) comes a time when people have to fight. If there is nothing in the world that you are willing to fight for, you will end up a society of serfs, villeins, slaves and subjects. It is your willingness to stand up for your rights, violently if necessary, that enables you to have rights in the first place. It is good for leaders to be just a little bit scared of the led, to fear loss of office would follow upon any act publicly perceived as unconstitutional or tyrannic. (Of course, leaders can opt for Macchiavelian deceptions and Orwellian New Speak rather than direct coercion, but that is another story).
While I am not a pacifist, there is something to be said for the Martin Luther Kings and Mahatma Ghandis of the past, present and future. They sought to slowly and patiently build political majorities in support of their goals, rather than engage in violent campaigns. The thing with violent campaigns, small and large, is you are in control of starting it, but once it starts you are no longer in control of where it is going to go. Even so, it is hard enough to keep control of even peaceful change! What was once India would ultimately split in three on religious lines despite Ghandi's wishes; and he was assasinated because of his opposition to the split. And there is much that happened in African-American communities over the 40 years between 1968 and today that would have dismayed Dr King.
He who fails to learn from history is doomed to repeat it. The thing that worries me most about people who opt instead to support extremists and rebel militia is they do not seem to remember (or care) that the road to "failed state" designation in Africa usually passes through a critical stretch when militia of one kind or another rise up, and the official army and police lose control of swathes of territory. That is not to say that the official army and police are "good", but to say that what replaces them (the violent rule of warlords and militia) usually makes the bland stagnation of the years prior look like paradise by comparison.
It is so much easier to try to change something that is at rest, and so much more difficult to change something that is in violent, stochastic flux. And once violence crosses a threshold, the people start to prefer a restoration of Big Man rule (albeit under newly-minted, Western-powers-approved Big Men) which is usually achieved as a by-product of the peace treaties and "elections" that mark the end of the militia-consequent wars.
Positive change in Nigeria is most likely to occur if we are not in the middle of fighting each other. And the route to change lies with building a movement that patiently campaigns to build (from scratch, sadly) a large enough majority (cutting across ethnic, regional, religious and military/civilian lines) for transformative reform and change. I have spent my adult life (and to be honest, my teenage years and my latter childhood before then) hoping some sort of movement would emerge to campaign peaceably for a pro-transformation majority.
It would actually be much better if there were more than one such movement; when there is only one movement it tends to lead to a one-party state (de jure or de facto) once the old system is overthrown. Of course if there is going to be more than one movement, each would optimally be built around a particular vision of what this transformation should be or mean, as opposed to built on ethno-regional/religious pillars. As it stands, our federal republic is a place where ultra-conservative Christians and ultra-conservative Moslems agree on 95% of the issues, but would not be caught together in a single movement, an attitude that exists among all such other groups of Nigerians who should (in theory) be on the same side of any discussion about what and how to transform in Nigeria. It is part of what makes it difficult to build effective and active pan-Nigerian majorities to aggresively support anything other than the national football teams.
But I digress again.
I guess this is part of the reason I started this blog. As I said in my first blog post months ago, it doesn't matter if you agree with me on any particular issue or on any issue at all, provided we have a more substantive discussion of the issues than is usual in Nigerian political discourse. It is only in such arguments and debates that we start to discover people who share our beliefs, people who are willing to join us in fighting for particular ends.
Like Martin Luther King and Mahatma Ghandi, we have to then mobilize enough of these disparate and otherwise competing movements to rally together into a majority large enough to force change. And then these movements will have to respect each other and the citizenry enough to put their different ideas of transformation to the test in free-and-fair elections, not one "election" but a sequence of them over a critical 20-year period in which the Nigeria of today becomes the federal republic that our children and grand-children will cherish.
09 July, 2009
Good News Thursday
Lets do good news today.
Top of the list, the first coronary angioplasty and stenting procedure performed in Nigeria. This follow-up story has a picture of one of the recovering patients beside her understandably grinning husband.
Comment: Great news and best wishes to the patients as they start their recovery. The more we can handle procedures like this in Nigeria, the cheaper it will be for the ordinary citizen who cannot afford to fly abroad for surgery. We might even benefit from medical tourism to boot. Perhaps the Kanu Heart Foundation can get in touch with Reddington Hospital to do some joint fund raising (particularly for indigent patients) so heart procedures like this can become a regular, normal procedure and not a "man bites dog" event.
And here, the Federal Inland Revenue Service (FIRS) has been ordered to go after federal ministries, agencies and parastatals that failed to remit tax and other fee collections to the Federation Account. In the same article it is noted that the House of Reps has threatened to ask the NNPC to bar oil companies that refuse to give full financial accounts before teh House committee on the oil industry. There is suspicion that the numbers being reported by oil firms are not entirely accurate, and that taxes, dividends, royalties and other revenue accruing to the government may be under-stated.
Comment: In a year of fiscal deficits, it is good to see the government aggresively enforcing tax laws. It is better to fully collect the taxes you are owed at the current rates from everyone who owes, rather than raise tax rates on the few who actually pay their taxes. With that said, is governance so weak that we need extraordinary measures to get government ministries, agencies and parastatals to remit tax and revenue receipts? Seriously, if the government cannot get itself to pay, how can it get the private sector (particularly the crafty and influential oil companies) to pay? We spent 8 years hearing the word "reform" bandied about, and we are still dealing with this petty mess?
In a story that is somewhat good and somewhat problematic, the Senate has named and shamed debtors of the 50 failed banks, in an attempt to compel them to repay their debts to the National Deposit Insurance Company (NDIC), the agency in charge of making sure depositors in the failed banks get their money back. The debtors include directors in 13 of the failed banks, who are suspected of using their position to take unethical advantage of bank credit.
Comment: In a country where everyone complains about everything, but specific persons are rarely if ever held to account for anything, it is refreshing to see VIPs publicly called out in a manner tha could force them to do the right thing. On the other hand, it seems clear the Senate jumped the gun and released the NDIC list without first checking to see if the people on the list had actually paid or not. Apparently a few of the VIPs had paid, and a few are involved in litigation challenging the legitimacy of the quoted debts. Much like the above case with the FIRS, one rather hopes we can avoid having to make these "extraordinary" moves to do simple things. Ideally they would contact the principals, or their lawyers, and threaten lawsuits, prosecutions and/or public revelation of their names if they do not repay (or produce proof of prior repayment) before a certain date. Alas, in the Nigerian context, such a softly-softly initial approach would probably be met with behind the scenes manvouvering (what they call "lobbying" in the First World) by the debtors to avoid paying the debt. Indeed, this may already have happened, as the article quotes unnamed NDIC sources hinting at political bias in the selection of names revealed by the Senate -- according to thesource(s), certain names on the NDIC list were omitted from the Senate's list because the bearers of those names were "very much in the corridors of power".
Top of the list, the first coronary angioplasty and stenting procedure performed in Nigeria. This follow-up story has a picture of one of the recovering patients beside her understandably grinning husband.
Comment: Great news and best wishes to the patients as they start their recovery. The more we can handle procedures like this in Nigeria, the cheaper it will be for the ordinary citizen who cannot afford to fly abroad for surgery. We might even benefit from medical tourism to boot. Perhaps the Kanu Heart Foundation can get in touch with Reddington Hospital to do some joint fund raising (particularly for indigent patients) so heart procedures like this can become a regular, normal procedure and not a "man bites dog" event.
And here, the Federal Inland Revenue Service (FIRS) has been ordered to go after federal ministries, agencies and parastatals that failed to remit tax and other fee collections to the Federation Account. In the same article it is noted that the House of Reps has threatened to ask the NNPC to bar oil companies that refuse to give full financial accounts before teh House committee on the oil industry. There is suspicion that the numbers being reported by oil firms are not entirely accurate, and that taxes, dividends, royalties and other revenue accruing to the government may be under-stated.
Comment: In a year of fiscal deficits, it is good to see the government aggresively enforcing tax laws. It is better to fully collect the taxes you are owed at the current rates from everyone who owes, rather than raise tax rates on the few who actually pay their taxes. With that said, is governance so weak that we need extraordinary measures to get government ministries, agencies and parastatals to remit tax and revenue receipts? Seriously, if the government cannot get itself to pay, how can it get the private sector (particularly the crafty and influential oil companies) to pay? We spent 8 years hearing the word "reform" bandied about, and we are still dealing with this petty mess?
In a story that is somewhat good and somewhat problematic, the Senate has named and shamed debtors of the 50 failed banks, in an attempt to compel them to repay their debts to the National Deposit Insurance Company (NDIC), the agency in charge of making sure depositors in the failed banks get their money back. The debtors include directors in 13 of the failed banks, who are suspected of using their position to take unethical advantage of bank credit.
Comment: In a country where everyone complains about everything, but specific persons are rarely if ever held to account for anything, it is refreshing to see VIPs publicly called out in a manner tha could force them to do the right thing. On the other hand, it seems clear the Senate jumped the gun and released the NDIC list without first checking to see if the people on the list had actually paid or not. Apparently a few of the VIPs had paid, and a few are involved in litigation challenging the legitimacy of the quoted debts. Much like the above case with the FIRS, one rather hopes we can avoid having to make these "extraordinary" moves to do simple things. Ideally they would contact the principals, or their lawyers, and threaten lawsuits, prosecutions and/or public revelation of their names if they do not repay (or produce proof of prior repayment) before a certain date. Alas, in the Nigerian context, such a softly-softly initial approach would probably be met with behind the scenes manvouvering (what they call "lobbying" in the First World) by the debtors to avoid paying the debt. Indeed, this may already have happened, as the article quotes unnamed NDIC sources hinting at political bias in the selection of names revealed by the Senate -- according to thesource(s), certain names on the NDIC list were omitted from the Senate's list because the bearers of those names were "very much in the corridors of power".
07 July, 2009
A strange attack on children
Eighteen months ago, the UK newspaper Observer ran this story about child abuse in Akwa Ibom. Children were being branded as "witches" prior to being beaten (sometimes severely) and abandoned by their parents.
The report (and a television documentary) atracted enough foreign attention that the governments (federal and state) reacted. Akwa Ibom state
Today, there is a report in NEXT, about a strange and violent raid on the premises of a charity taking care of these children. The charity accuse the police of being behind the raid (which put two children in the hospital), and the police deny it.
Pay attention to the comments of the lawyer of one of the pastors, and also of the description of the raiders given by the man who runs the charity. The lawyer seems to imply police participation, while the charity boss's description hints this could be a random robbery/assault as happens in Nigeria (and elsewhere in the world).
Either way, this incident must be investigated fully. Alas, who do you trust to conduct that investigation?
The report (and a television documentary) atracted enough foreign attention that the governments (federal and state) reacted. Akwa Ibom state
Today, there is a report in NEXT, about a strange and violent raid on the premises of a charity taking care of these children. The charity accuse the police of being behind the raid (which put two children in the hospital), and the police deny it.
Pay attention to the comments of the lawyer of one of the pastors, and also of the description of the raiders given by the man who runs the charity. The lawyer seems to imply police participation, while the charity boss's description hints this could be a random robbery/assault as happens in Nigeria (and elsewhere in the world).
Either way, this incident must be investigated fully. Alas, who do you trust to conduct that investigation?
The East African on AGOA
The East African has published an interesting article on AGOA, which is in line with my blog post on African trade.
The trade accords do not protect us from the simple realities of market economics. For all the hullabaloo about giving certain African products free access to the US market:
(a) The things the USA buys from Africa are the same things it would have bought even if AGOA did not exist. Indeed, the leading African exporters of raw natural resources (South Africa, Nigeria, Angola and the Democratic Republic of Congo) reap nearly all of the "benefits" of AGOA. I put benefits in quotes, because these countries were exporting the same exact resources before AGOA, would have been exporting those resources without AGOA, and would export those resources if AGOA were cancelled today. In fact, the much-touted success of AGOA before the global credit crunch was no more than spin-doctoring; the dramatic increase in the price of crude oil (and concomitant increase in the dollar value of exports to the USA of crude producers like Nigeria and Angola) was responsible for the huge increase in African exports to the USA and not AGOA. The same principle holds true with trade agreements African countries sign with Western Europe or East Asia. They buy what they would have bought anyway. This is economic rationality that cannot be avoided by means of fancy words on fancy treaty documents.
(b) And as far as economic rationality goes, AGOA, and trade agreements like it do not protect us from efficient competition on world markets. Quite a few African countries (in my prior post, I used Uganda and Namibia as examples) expended or gave up rights to scarce public funds to subsidize and give uneconomic (downright rent-seeking) advantages to "foreign investors" to build textile plants to ostensibly take advantage of AGOA. Unfortunately for them, between changes in the USA's own policy/law and mandates from the World Trade Organization, US quota restrictions on textile imports from China and other low-cost Asian producers were lifted. The result was Asian producers (China in particular) not only dominated the US market, but began to dominate the African market too. Those African countries that directly and indirectly sank public funds into AGOA textiles-promotion have suffered losses, wasting scarce resources that could have gone into more productive uses. And this was before the credit crunch and the associated drop in global demand for everything, including African exports (as The East African article relates).
It is time we Africans stopped thinking that signing a piece of paper with European, North American, West Asian or East Asian governments will somehow free us from the responsibility of developing our internal and continental markets and associated production chains.
Trade between Africa and the rest of the world would go on even if there were no treaties. The things the world economy buys from Africa are things the world economy needs; we do not need to ask them for a special no-tariff treaty permitting us to sell them crude oil, platinum, uranium, columbite, diamonds, tanzanite, tin, iron ore, timber, natural gas and aluminium. Treaty or no, they will buy these things.
Conversely these treaties do not magically make it economically viable for African countries to produce and export the sort of things that would truly make an economic difference. In fact, as I said in the prior blog post, the only reason our trade partners have no qualms about signing 100%-tariff-free-access-for-all-goods treaties with African countries is they know those countries will not be able to actually exploit the treaty as written. If we had the capacity to exploit those treaties as advertized, we would be in the same category as China -- a competitor to be wary of, to squabble with over unfair trade practices and trade deficits, a competitor they treat with caution even as they write a million mournful articles fretting about power shifting from west to east.
The only thing these trade treaties do is get African countries to sign away any rights to forming any kind of economic or industrial policy, in exchange for nothing more than what they already get from the other side.
Not that it matters. We do not have much of an economic or industrial policy to begin with. Which is why we waste our time negotiating, then celebrating trade treaties that never achieve as much as the spin-doctoring hype.
The trade accords do not protect us from the simple realities of market economics. For all the hullabaloo about giving certain African products free access to the US market:
(a) The things the USA buys from Africa are the same things it would have bought even if AGOA did not exist. Indeed, the leading African exporters of raw natural resources (South Africa, Nigeria, Angola and the Democratic Republic of Congo) reap nearly all of the "benefits" of AGOA. I put benefits in quotes, because these countries were exporting the same exact resources before AGOA, would have been exporting those resources without AGOA, and would export those resources if AGOA were cancelled today. In fact, the much-touted success of AGOA before the global credit crunch was no more than spin-doctoring; the dramatic increase in the price of crude oil (and concomitant increase in the dollar value of exports to the USA of crude producers like Nigeria and Angola) was responsible for the huge increase in African exports to the USA and not AGOA. The same principle holds true with trade agreements African countries sign with Western Europe or East Asia. They buy what they would have bought anyway. This is economic rationality that cannot be avoided by means of fancy words on fancy treaty documents.
(b) And as far as economic rationality goes, AGOA, and trade agreements like it do not protect us from efficient competition on world markets. Quite a few African countries (in my prior post, I used Uganda and Namibia as examples) expended or gave up rights to scarce public funds to subsidize and give uneconomic (downright rent-seeking) advantages to "foreign investors" to build textile plants to ostensibly take advantage of AGOA. Unfortunately for them, between changes in the USA's own policy/law and mandates from the World Trade Organization, US quota restrictions on textile imports from China and other low-cost Asian producers were lifted. The result was Asian producers (China in particular) not only dominated the US market, but began to dominate the African market too. Those African countries that directly and indirectly sank public funds into AGOA textiles-promotion have suffered losses, wasting scarce resources that could have gone into more productive uses. And this was before the credit crunch and the associated drop in global demand for everything, including African exports (as The East African article relates).
It is time we Africans stopped thinking that signing a piece of paper with European, North American, West Asian or East Asian governments will somehow free us from the responsibility of developing our internal and continental markets and associated production chains.
Trade between Africa and the rest of the world would go on even if there were no treaties. The things the world economy buys from Africa are things the world economy needs; we do not need to ask them for a special no-tariff treaty permitting us to sell them crude oil, platinum, uranium, columbite, diamonds, tanzanite, tin, iron ore, timber, natural gas and aluminium. Treaty or no, they will buy these things.
Conversely these treaties do not magically make it economically viable for African countries to produce and export the sort of things that would truly make an economic difference. In fact, as I said in the prior blog post, the only reason our trade partners have no qualms about signing 100%-tariff-free-access-for-all-goods treaties with African countries is they know those countries will not be able to actually exploit the treaty as written. If we had the capacity to exploit those treaties as advertized, we would be in the same category as China -- a competitor to be wary of, to squabble with over unfair trade practices and trade deficits, a competitor they treat with caution even as they write a million mournful articles fretting about power shifting from west to east.
The only thing these trade treaties do is get African countries to sign away any rights to forming any kind of economic or industrial policy, in exchange for nothing more than what they already get from the other side.
Not that it matters. We do not have much of an economic or industrial policy to begin with. Which is why we waste our time negotiating, then celebrating trade treaties that never achieve as much as the spin-doctoring hype.
Correction on Trans-Saharan Pipeline
Bloomberg quoted Mohammed Meziane, head of the Algerian state-owned energy company Sonatrach, as saying the Trans-Saharan Gas Pipeline (TSGP) will begin gas deliveries to Europe in 2015. This is current as of the 2nd update of the story on their site.
But yesterday's (Nigerian) Guardian quotes Rilwanu Lukman, Nigeria's Minister of Petroleum Resources, as saying work on building the pipeline will begin in 2015. Lukman is quoted as saying the Niger-Delta crisis will have ended by then. What he did not say is 2015 is consistent with the Yar'Adua administration's pledge to postpone export-oriented gas projects until 2014 in order to give priority to domestic energy supply needs.
Much of what I wrote in my blog post remains true, though. For all I hear about "state of emergency", I do not see any real urgency in our policy-making or policy execution. Look, we need to move away from the "big grammar" about bundling and unbundling, move away from name changes (NEPA to PHCN), move away from World-Bank-and-IMF-financed facade changes in regulatory frameworks, and set aside the Obasanjo-era paddy-paddy deals of the kind that gave rise to Transcorp.
We need power plants. As many as possible, generating as much power, from as many different platforms (including nuclear) as possible.
Yes, I said nuclear too. If the current socio-political situation is not conducive for safe nuclear power generation, then perhaps we should hyper-prioritize transformative reform? In earlier posts I have mentioned the starting point to any discussion of reform. We are not even talking about the starting point. Instead we are stuck fighting each other over crumbs, and arguing about nonsense. Millions of dollars are spent searching for crude oil in the north-east of the the federal republic, when it is long past time for nuclear power plants in the northern savannah (feeding off Chadian, Nigerien and Nigerian uranium processed in Nigeria) to complement the gas-and-crude complex of the Niger-Delta.
We need an expanded national grid to move the new power generated from producer to consumer .... and to begin the process of connect the grids from Senegal in the west to Kenya in the east.
Kai, we are not even at square one!
The conversation is still about how to build infrastructure to evacuate raw natural resources to Europe, and not about infrastructure that would create an integrated nuclear power industry binding Nigeria, Chad and Niger. And yes, I know Chad and Niger are in an even bigger mess than we are, but the day Nigeria starts to value these two countries as being strategically important to our economic (and power generation) future is the day we start pursuing aggresive policies to restore stability in our next-door neighbours (instead of effectively ignoring them, while prattling about being a "Giant" that brought peace to Liberia and Sierra Leone).
Rilwanu Lukman is giving speeches about how TSGP will ensure energy security for Europe. Energy security for Europe? What about Nigeria? Africa? Our crude oil output has dropped precipitously because of instability in the Niger-Delta, and the man is talking about energy security for Europe.
Haba!
Lukman does say the TSGP will help in the development and integration of the economies of the three transit countries, but where is the development in yet another project for export raw natural resources to Europe?
Is there something they are not saying? Maybe the TSGP will take gas to industries and power plants in the Kano-Kaduna-Zaria triangle, and only the balance will continue on to Europe? If this will happen, shouldn't someone mention it?
I need to hear of a benefit to Nigeria beyond the few billion we will get for exporting raw gas ... because we stand to make hundreds of billions MORE in expanded GDP if we used that energy as an input to increase economic productivity and output in Nigeria.
I stress again that I am not opposed to international trade, or to Nigerian exports of gas. But there is a way to do it strategically, an equilibrium (in the textbook sense) where we export at a point "P" where we maximize the wealth derivable from the optimum balance of exports and imports.
But yesterday's (Nigerian) Guardian quotes Rilwanu Lukman, Nigeria's Minister of Petroleum Resources, as saying work on building the pipeline will begin in 2015. Lukman is quoted as saying the Niger-Delta crisis will have ended by then. What he did not say is 2015 is consistent with the Yar'Adua administration's pledge to postpone export-oriented gas projects until 2014 in order to give priority to domestic energy supply needs.
Much of what I wrote in my blog post remains true, though. For all I hear about "state of emergency", I do not see any real urgency in our policy-making or policy execution. Look, we need to move away from the "big grammar" about bundling and unbundling, move away from name changes (NEPA to PHCN), move away from World-Bank-and-IMF-financed facade changes in regulatory frameworks, and set aside the Obasanjo-era paddy-paddy deals of the kind that gave rise to Transcorp.
We need power plants. As many as possible, generating as much power, from as many different platforms (including nuclear) as possible.
Yes, I said nuclear too. If the current socio-political situation is not conducive for safe nuclear power generation, then perhaps we should hyper-prioritize transformative reform? In earlier posts I have mentioned the starting point to any discussion of reform. We are not even talking about the starting point. Instead we are stuck fighting each other over crumbs, and arguing about nonsense. Millions of dollars are spent searching for crude oil in the north-east of the the federal republic, when it is long past time for nuclear power plants in the northern savannah (feeding off Chadian, Nigerien and Nigerian uranium processed in Nigeria) to complement the gas-and-crude complex of the Niger-Delta.
We need an expanded national grid to move the new power generated from producer to consumer .... and to begin the process of connect the grids from Senegal in the west to Kenya in the east.
Kai, we are not even at square one!
The conversation is still about how to build infrastructure to evacuate raw natural resources to Europe, and not about infrastructure that would create an integrated nuclear power industry binding Nigeria, Chad and Niger. And yes, I know Chad and Niger are in an even bigger mess than we are, but the day Nigeria starts to value these two countries as being strategically important to our economic (and power generation) future is the day we start pursuing aggresive policies to restore stability in our next-door neighbours (instead of effectively ignoring them, while prattling about being a "Giant" that brought peace to Liberia and Sierra Leone).
Rilwanu Lukman is giving speeches about how TSGP will ensure energy security for Europe. Energy security for Europe? What about Nigeria? Africa? Our crude oil output has dropped precipitously because of instability in the Niger-Delta, and the man is talking about energy security for Europe.
Haba!
Lukman does say the TSGP will help in the development and integration of the economies of the three transit countries, but where is the development in yet another project for export raw natural resources to Europe?
Is there something they are not saying? Maybe the TSGP will take gas to industries and power plants in the Kano-Kaduna-Zaria triangle, and only the balance will continue on to Europe? If this will happen, shouldn't someone mention it?
I need to hear of a benefit to Nigeria beyond the few billion we will get for exporting raw gas ... because we stand to make hundreds of billions MORE in expanded GDP if we used that energy as an input to increase economic productivity and output in Nigeria.
I stress again that I am not opposed to international trade, or to Nigerian exports of gas. But there is a way to do it strategically, an equilibrium (in the textbook sense) where we export at a point "P" where we maximize the wealth derivable from the optimum balance of exports and imports.
05 July, 2009
Banks: Foreign ownership cap to be removed
A couple of weeks ago, the Financial Times and other sources reported new CBN Governor, Sanusi Lamido Sanusi intends to remove the 10% cap on foreign ownership of equity in Nigerian banks.
Apparently there is no federal statute forbidding foreign majority ownership of Nigerian banks; the 10% cap exists at the discretion of the Central Bank, and the current cap was introduced only in 2007 by erstwhile CBN supremo Charles Soludo as a reaction to Standard Bank of South Africa taking over IBTC Chartered Bank of Nigeria.
The ad hoc nature of the way Soludo imposed the rule leaves me uncomfortable. Such an important rule/regulation should not be subject to nothing more than the personal whim of the CBN governor. For the record, this criticism applies just as much to Sanusi's removal of the cap.
Whatever your view of foreign investment in any sector, the rules have to be clear and consistent. You can't have one set of rules in place, then a business deal happens that a regulator does not like, and overnight he just changes the rules.
Such a situation makes it difficult to achieve policy consistency, because as easily as Soludo imposed the rule, so easily can Sanusi remove it. This adds an unnecessary element of uncertainty into the investment decisions of Nigerian and foreign entrepreneurs; presented with a new set of operating facts, they still have to ask themselves "what will the next CBN governor do?"
Under these circumstances, investment decisions are less than optimal as entrepreneurs are forced to hedge against random changes, random rule creation and random rule removals, against laws that exist but are neither enforced consistly nor ignored consistenly, and against unwritten rules that are nevertheless unofficially enforced. It is why there is so much short-term thinking in the economic sector. And it is part of the reason why there is so much obsequious brown-nosing (A.G.I.P. = "Any Government In Power"), not to mention bribery and influence-peddling, in the political sector.
In some of my earliest blog posts, I discussed the effects on Nigerian banking of the global credit crunch and the (separate, it is important you recognize it as separate) market correction in the Nigerian Stock Market. I also talked about the toxic assets being held by Nigerian banks, an issue which receives very little discourse in Nigerian politics and media (though the new Sanusi CBN is moving to compel banks to become more transparent. Charles Soludo will be remembered fondly for initiating the banks consolidation exercise which Sanusi has pledged to complete, but Soludo also bears some responsibility for the lax supervision of banks that allowed the post-consolidation banks get into such a mess; he is not alone, I suppose, as his counterparts elsewhere also turned a blind eye to wuru-wuru shenanigans, so long as stock markets surged, never mind the bubble was bound to bust sooner or later).
In those early blog posts, I wondered how the Central Bank, and the federal government were going to handle the stresses on the banks, and discussed some of the things they were doing. A recurring issue was the question of where we were going to get the funds to (for lack of a better term) dissolve the toxic asset problem. The CBN was running down our external reserves defending the value of the Naira, and the federal government was going into deficit.
It seems Sanusi (a career banker who came to the CBN from the uppermost echelon of First Bank) has decided foreign funds should fill the gap. By lifting the cap on foreign ownership of our banks, and forcing transparency and accuracy into banks' financial reporting, I believe he hopes to attract enough floating funds from the global market (likely from China and the oil-rich Gulf states) to dissolve our relatively minor toxic asset problem (minor compared to North America, Western Europe and Japan); $10 billion in capital investments should do it.
With that said, Nigerian banks are vital to our economic present and our economic future. They also represent the bulk of capitalization on the Nigerian Stock Exchange. Our banks have moved aggresively and succesfully into West and Central Africa, and are now spreading their wings to East Africa; Ecobank is in Kenya, and PHB, UBA, GTB and Ecobank are in Uganda.
Human beings, as individuals, as groups, as firms and as countries, are motivated by rational self-interest. We see the world differently. We each think of ourselves as the centre of the universe, the centre of gravity. And we use our energy and intellect to basically reshape our corners of the world to better serve our needs. We are not all equally able to bend the world to our will, but whatever little influence we have over whatever little patch of world, we use.
It matters who is making the decisions. It matters how they see the world, and what they think are priorities.
When corporations from East Asia, Western Europe and North America invest in Africa, they generally invest to produce the things (mostly raw resources) that their economies need. Yes, Africa gains some benefits, but our national and continental economies remain stunted by the fact that the principal driving force behind the decision-making is NOT the creation of strong, integrated economies. Even our most basic infrastructure (roads and rail) are designed to evacuate raw resources to world markets. The biggest investment in Chad, and the only infrastructure of note in that country, exists because Western powers discovered something they needed -- crude oil.
Before you misunderstand, I am not blaming foreigners for Africa's problems; it is our decisions and actions (and sometimes the lack thereof) that keeps us trapped. I am supportive of foreign investment in Nigeria in general and in banking in particular, and supportive of global trade. And inasmuch as our banks are allowed to invest in West, Central and East Africa, we too should allow others (particularly fellow Africans) to invest in Nigerian banks. Finally, an infusion of relatively small amounts of foreign investment (oddly enough $10 billion is not much relative to global investment flows) could set our banks on a much more solid football going into the future.
With that said, there are so many opportunities for wealth creation in Africa, so much prospect for expanded intra-continental trade. The question is whether political, economic, social and cultural decision-making can shift from the current stagnation to the adoption of choices that would create the growth we want to see. Each country that achieved economic transformation did so in an environment where governmental and private sectors were deliberately and cooperatively chasing growth. There are entrepreneurial (and political) risks that only someone philosophically, ideologically and spritually inclined would bother to take; everyone else would go for the easy money option, which involves plugging into the current, limited system (limited for Africa anyway).
No country is an economic island; we are all integrated. But it still matters a lot who has preponderant decision-making power -- and what decisions that person or firm is likely to make. Our inability in Africa to chart a course to where we want to go is not helped by our tendency to transfer decision-making away from ourselves, to local Big Men, to global non-governmental organizations, to "development partners", to multilateral agencies, to everything and everyone except ourselves.
We have to engage the world and trade globally, but do so with strategic purpose and not just float like chaff anywhere more powerful countries sweep us. In fact the disparity in power between us and them is linked to their grasp of their interests and their focus on achieving those interests. Indeed, the Chinese, North Americans, Western Europeans, Australians, Brazilians, Russians, Indians, EVERYBODY monitors and manages (as well as promotes and seeks) foreign investment in strategic economic sectors.
I do not think a proper revised cap could be designed on an internet blog. It is the kind of thing that should spark discussion between industry bigwigs, regulators, academics, politicians and the wider citizenry. I am rather tired of important issues being treated in ad hoc ways. We need to go through a process before we impose significant rules, laws or changes to our political and business life (speaking of changes to our political life, the Joint Constitutional Review Committee remains no more than an elaborate joke).
The National Assembly needs to discuss, debate and pass clear statutes on foreign investment. These statutes should be consistent with whatever we feel is the long-term goal of cooperation in ECOWAS, the African Union (which like "Nollywood", needs a new name), as well as the UN/WTO. But it should also be consistent with our desire for rapid economic growth. Instead of removing the cap entirely, perhaps we should raise the cap? To 45% maybe? Or maybe create two classes of stock (a la China) with variable voting rights depending on what is being voted on?
Whatever it is, it needs to come from the Assembly. We can't have conflicting sets of rules drawn up by regulatory authorities based on the personal preferences of the regulatory boss (and on whether or not that boss has the personal favour of the sitting president). There is too much of a mish-mash between foreign corporations dominating strategic sectors, while dribbling around wishy-washy government policies ostensibly designed to promote Nigerian involvement (like the "local content" rules or the changes to the cabotage rules).
Oh, and it should come from an Assembly that is actually ELECTED, that actually represents the wishes of the citizenry, and only AFTER political parties have stated their platform on the issue so we have the chance of voting in legislators who will vote on these issues the way we want them to.
Since none of that is likely to happen anytime soon, I hope Sanusi is careful. Don't throw the cap away all at once. Set a timetable for lifting the cap, perhaps 10% at a time, until it reaches a certain point (45% maybe?). Let him then say that once it reaches that point (years later), it will be up to the democratic process and the Assembly to decide if it should go any further. If we can attract foreign funds sufficient to go from 10% to 45%, we will have attracted more than enough to deal with the toxic assets issue.
Apparently there is no federal statute forbidding foreign majority ownership of Nigerian banks; the 10% cap exists at the discretion of the Central Bank, and the current cap was introduced only in 2007 by erstwhile CBN supremo Charles Soludo as a reaction to Standard Bank of South Africa taking over IBTC Chartered Bank of Nigeria.
The ad hoc nature of the way Soludo imposed the rule leaves me uncomfortable. Such an important rule/regulation should not be subject to nothing more than the personal whim of the CBN governor. For the record, this criticism applies just as much to Sanusi's removal of the cap.
Whatever your view of foreign investment in any sector, the rules have to be clear and consistent. You can't have one set of rules in place, then a business deal happens that a regulator does not like, and overnight he just changes the rules.
Such a situation makes it difficult to achieve policy consistency, because as easily as Soludo imposed the rule, so easily can Sanusi remove it. This adds an unnecessary element of uncertainty into the investment decisions of Nigerian and foreign entrepreneurs; presented with a new set of operating facts, they still have to ask themselves "what will the next CBN governor do?"
Under these circumstances, investment decisions are less than optimal as entrepreneurs are forced to hedge against random changes, random rule creation and random rule removals, against laws that exist but are neither enforced consistly nor ignored consistenly, and against unwritten rules that are nevertheless unofficially enforced. It is why there is so much short-term thinking in the economic sector. And it is part of the reason why there is so much obsequious brown-nosing (A.G.I.P. = "Any Government In Power"), not to mention bribery and influence-peddling, in the political sector.
In some of my earliest blog posts, I discussed the effects on Nigerian banking of the global credit crunch and the (separate, it is important you recognize it as separate) market correction in the Nigerian Stock Market. I also talked about the toxic assets being held by Nigerian banks, an issue which receives very little discourse in Nigerian politics and media (though the new Sanusi CBN is moving to compel banks to become more transparent. Charles Soludo will be remembered fondly for initiating the banks consolidation exercise which Sanusi has pledged to complete, but Soludo also bears some responsibility for the lax supervision of banks that allowed the post-consolidation banks get into such a mess; he is not alone, I suppose, as his counterparts elsewhere also turned a blind eye to wuru-wuru shenanigans, so long as stock markets surged, never mind the bubble was bound to bust sooner or later).
In those early blog posts, I wondered how the Central Bank, and the federal government were going to handle the stresses on the banks, and discussed some of the things they were doing. A recurring issue was the question of where we were going to get the funds to (for lack of a better term) dissolve the toxic asset problem. The CBN was running down our external reserves defending the value of the Naira, and the federal government was going into deficit.
It seems Sanusi (a career banker who came to the CBN from the uppermost echelon of First Bank) has decided foreign funds should fill the gap. By lifting the cap on foreign ownership of our banks, and forcing transparency and accuracy into banks' financial reporting, I believe he hopes to attract enough floating funds from the global market (likely from China and the oil-rich Gulf states) to dissolve our relatively minor toxic asset problem (minor compared to North America, Western Europe and Japan); $10 billion in capital investments should do it.
With that said, Nigerian banks are vital to our economic present and our economic future. They also represent the bulk of capitalization on the Nigerian Stock Exchange. Our banks have moved aggresively and succesfully into West and Central Africa, and are now spreading their wings to East Africa; Ecobank is in Kenya, and PHB, UBA, GTB and Ecobank are in Uganda.
Human beings, as individuals, as groups, as firms and as countries, are motivated by rational self-interest. We see the world differently. We each think of ourselves as the centre of the universe, the centre of gravity. And we use our energy and intellect to basically reshape our corners of the world to better serve our needs. We are not all equally able to bend the world to our will, but whatever little influence we have over whatever little patch of world, we use.
It matters who is making the decisions. It matters how they see the world, and what they think are priorities.
When corporations from East Asia, Western Europe and North America invest in Africa, they generally invest to produce the things (mostly raw resources) that their economies need. Yes, Africa gains some benefits, but our national and continental economies remain stunted by the fact that the principal driving force behind the decision-making is NOT the creation of strong, integrated economies. Even our most basic infrastructure (roads and rail) are designed to evacuate raw resources to world markets. The biggest investment in Chad, and the only infrastructure of note in that country, exists because Western powers discovered something they needed -- crude oil.
Before you misunderstand, I am not blaming foreigners for Africa's problems; it is our decisions and actions (and sometimes the lack thereof) that keeps us trapped. I am supportive of foreign investment in Nigeria in general and in banking in particular, and supportive of global trade. And inasmuch as our banks are allowed to invest in West, Central and East Africa, we too should allow others (particularly fellow Africans) to invest in Nigerian banks. Finally, an infusion of relatively small amounts of foreign investment (oddly enough $10 billion is not much relative to global investment flows) could set our banks on a much more solid football going into the future.
With that said, there are so many opportunities for wealth creation in Africa, so much prospect for expanded intra-continental trade. The question is whether political, economic, social and cultural decision-making can shift from the current stagnation to the adoption of choices that would create the growth we want to see. Each country that achieved economic transformation did so in an environment where governmental and private sectors were deliberately and cooperatively chasing growth. There are entrepreneurial (and political) risks that only someone philosophically, ideologically and spritually inclined would bother to take; everyone else would go for the easy money option, which involves plugging into the current, limited system (limited for Africa anyway).
No country is an economic island; we are all integrated. But it still matters a lot who has preponderant decision-making power -- and what decisions that person or firm is likely to make. Our inability in Africa to chart a course to where we want to go is not helped by our tendency to transfer decision-making away from ourselves, to local Big Men, to global non-governmental organizations, to "development partners", to multilateral agencies, to everything and everyone except ourselves.
We have to engage the world and trade globally, but do so with strategic purpose and not just float like chaff anywhere more powerful countries sweep us. In fact the disparity in power between us and them is linked to their grasp of their interests and their focus on achieving those interests. Indeed, the Chinese, North Americans, Western Europeans, Australians, Brazilians, Russians, Indians, EVERYBODY monitors and manages (as well as promotes and seeks) foreign investment in strategic economic sectors.
I do not think a proper revised cap could be designed on an internet blog. It is the kind of thing that should spark discussion between industry bigwigs, regulators, academics, politicians and the wider citizenry. I am rather tired of important issues being treated in ad hoc ways. We need to go through a process before we impose significant rules, laws or changes to our political and business life (speaking of changes to our political life, the Joint Constitutional Review Committee remains no more than an elaborate joke).
The National Assembly needs to discuss, debate and pass clear statutes on foreign investment. These statutes should be consistent with whatever we feel is the long-term goal of cooperation in ECOWAS, the African Union (which like "Nollywood", needs a new name), as well as the UN/WTO. But it should also be consistent with our desire for rapid economic growth. Instead of removing the cap entirely, perhaps we should raise the cap? To 45% maybe? Or maybe create two classes of stock (a la China) with variable voting rights depending on what is being voted on?
Whatever it is, it needs to come from the Assembly. We can't have conflicting sets of rules drawn up by regulatory authorities based on the personal preferences of the regulatory boss (and on whether or not that boss has the personal favour of the sitting president). There is too much of a mish-mash between foreign corporations dominating strategic sectors, while dribbling around wishy-washy government policies ostensibly designed to promote Nigerian involvement (like the "local content" rules or the changes to the cabotage rules).
Oh, and it should come from an Assembly that is actually ELECTED, that actually represents the wishes of the citizenry, and only AFTER political parties have stated their platform on the issue so we have the chance of voting in legislators who will vote on these issues the way we want them to.
Since none of that is likely to happen anytime soon, I hope Sanusi is careful. Don't throw the cap away all at once. Set a timetable for lifting the cap, perhaps 10% at a time, until it reaches a certain point (45% maybe?). Let him then say that once it reaches that point (years later), it will be up to the democratic process and the Assembly to decide if it should go any further. If we can attract foreign funds sufficient to go from 10% to 45%, we will have attracted more than enough to deal with the toxic assets issue.
04 July, 2009
Trans-Saharan Gas Pipeline
On the 3rd day of June, 2009, the Nigerian federal government announced it would suspend major gas export projects and focus on supplying sufficient gas for domestic consumption. The suspension was to last until 2014.
A month later, on the 3rd day of July, Bloomberg and other news sources reported the government had signed an agreement with Algeria and the Niger Republic to build a $10 billion gas pipeline from the Niger-Delta across the Sahara to Algeria's gas export terminals on the Mediteranean coast. The intent is for everything to be ready for the first deliveries of gas for the European market in 2015.
There is nothing wrong with exporting natural gas (or crude oil). It brings billions of dollars in potential capital into the economy (whether we use it as capital or just consume it is another issue altogether). It pumps up the GDP, and underpins our infrastructure and incomes.
With that said, the route toward a wealthier Nigeria depends heavily on a core of improvements we need to make, one of which is an increase in the quantity and (just as importantly) quality of our energy consumption.
In terms of quantity, everyone knows we have an electricity problem. In a previous post, I mentioned South Africa is struggling to cope with 45,000 megawatts and has experienced occasional rollinig black-outs. Apartheid-era South African infrastructure was designed to fully support industry, but to only partially support domestic use (with a 10% minority enjoying First World services, and a 90% majority living in NEPA-land). As it stands, 45,000 megawatts is not enough to serve a country of just under 50 million people, with a per capita income five-times larger than Nigeria's. Given our population, rudimentary mathematics suggests 135,000 megawatts would be insufficient to support a Nigerian economy that reflected South-African-sized per capita wealth -- and South-African-sized wealth is not only smaller than the wealthiest economic powers in the world, but is also (more importantly) too small for South Africa's own post-apartheid transition.
In terms of quality, we have too many citizens who are still using charcoal, which is derived from woody plants. The worst part is use of charcoal is highest in those parts of the country that (in environmental, climatological and soil quality/protection terms) are most in need of whatever woody ground cover they can get. I was privileged some years ago to intern briefly with a non-governmental organization that gave out micro-credit loans, and the managers of the NGO told me about the loans they had given to women to start several micro businesses -- including firewood-collection and -sale businesses. It is a difficult thing to deal with, pondering the reduction in an activity that so many depend on (on both demand and supply sides) but which is problematic on so many different levels.
After centuries of internal and external distortions, the Nigerian and African economies are heavily distorted, dysfunctional, irrational and downright strange. Agriculture is the chief example of this. Agricultural products the world economy demands of African agriculture are produced in great quantity, but agricultural products necessary for domestic consumption are scarce, with continuous cycles of starvation, death, emergency "aid" and loss of dignity. If your principal exports do not earn enough to pay for necesssary imports (e.g. FOOD), then you have to shift to producing something else that either earns enough to buy you food, or that is food itself. I don't understand why we persist in committing all of our labour and capital to the production of things that have never, do not now, and will never earn us enough to fund what we need to fund on both the capital and consumption sides.
Another example, this one specific to Nigeria, is the crude oil industry. Refined fuel is a value-added product that brings a higher price than crude oil. You would think Nigeria would export refined fuel (having produced enough to meet domestic demand at market equilibrium), rather than exporting raw crude. It is not just Nigeria that would benefit (from higher prices, higher industrialization and more jobs). It is environmentally sensible (given global warming, and ocean pollution) to export full tankers of refined fuel from Nigeria, and bring back empty (hence, lighter and less-fuel-burning) tankers to Nigeria for the next load, rather than sending full tankers of raw crude away and bringing back just-as-full tankers of refined product. And the world would likely benefit from having cheaper refined fuel; if the supporting infrastructure existed, production costs of refined fuel in Nigeria would be lower than the same in the destination markets.
The system is irrational. Input must be used more logically, and choice of output must be optimal. And as far as energy is concerned, Nigeria needs more of it. I know Western Europe is looking for alternative sources of supply because of geo-political tensions with Russia. But you know what? Nigerians are people too, and we also have interests, and one of them is in a vastly increased domestic supply of energy.
Gas can fire electricity generating plants. Gas can also be used in itself for cooking. And gas can also power vehicles and industrial plants.
Nigeria has a lot of gas, but perhaps not enough to be everything to everyone including ourselves -- and our neighbours. If you try to envision an integrated African economy functioning at the full extent of its possibilities, you begin to realize countries like Nigeria would be supplying the continent with the energy to support that level of economic activity; electricity through a linked continental grid, gas through a continental network of pipes, and refined fuel through pipes as well as seaborne, road-borne and rail-borne tankers. This is inconsistent with the idea of Nigeria as a country that exists to send almost all of its raw energy output to Western Europe, East Asia and North America.
Even in an economically optimal Africa, we would still do business on the world markets beyond Africa, selling surplus energy, but probably not as much as we do now. Much more of our energy would be consumed domestically and continentally, but the laws of demand and supply (and the effects on energy prices of a world where every continent is economically strong) mean that there will still be market sufficient Nigerian exports (i.e at equilibrium conditions) on the world markets. Our energy use per capita is so much smaller than the economic giants of East Asia, North America and Western Europe; necessary adjustments for global warming and (if Africa rises) less distorted market conditions would see our per capita usage rise somewhat while theirs comes down.
Again, I have nothing against oil and gas exports. I am a big supporter of the Nigerian Liquefied Natural Gas (NLNG) project. The thing with LNG is we have a certain flexibility. Tanker ships of liquid gas can go anywhere in the world NLNG decides to send them; the Trans-Saharan pipeline will only go to Europe, the single buyer with potential monopsony power. With NLNG, if market conditions change, with effective demand from Nigeria and Africa going up, the liquid gas can be transported to Nigerian or African markets on road and rail tankers (or even to African markets on ships); after spending $10 billion to build it, the partnership (public, private or mixed) will have to guarantee a minimum flow of gas along the pipe to Europe for the project to pay for itself and remain economically viable, regardless of the growth of markets in Nigeria and Africa. Energy has to come from somewhere, and 135,000 megawatts is not enough for Nigeria alone much less continental Africa; as economic activity rises (we hope) and demand with it, by the laws of economics we would be more interested in shorter, cheaper pipes to electricity generating plants in Nigeria, except where will this gas come from when we would have committed (by default) large chunks of it to Europe?
Perhaps we should focus our investment on the more flexible NLNG platform, rather than participate in a $10 billion investment that only makes sense if the world remains exactly the way it is today, with Africa consuming no energy (and having no GDP) while Europe (as well as North America and East Asia) consume most of the world's supply.
I reiterate I am not against exporting to the world markets. I want us to re-balance our medium-term and long-term priorities so that we make better investment decisions. We are already exporting gas through NLNG and through the West African Gas Pipeline (WAGP).
I would be more excited if the Nigerian government had announced the construction of electricity generating plants sufficient to convert into electricity half or more of the gas they are right now planning to send to Europe. The Nigerian economy is hobbled by the lack of electricity and the costs of doing business are higher than necessary because industries must produce their own power; the fact is, much like the cell-phone boom a few years ago, dramatically increasing the supply of electricity to Nigeria would (almost automatically) create increases in demand.
A month later, on the 3rd day of July, Bloomberg and other news sources reported the government had signed an agreement with Algeria and the Niger Republic to build a $10 billion gas pipeline from the Niger-Delta across the Sahara to Algeria's gas export terminals on the Mediteranean coast. The intent is for everything to be ready for the first deliveries of gas for the European market in 2015.
There is nothing wrong with exporting natural gas (or crude oil). It brings billions of dollars in potential capital into the economy (whether we use it as capital or just consume it is another issue altogether). It pumps up the GDP, and underpins our infrastructure and incomes.
With that said, the route toward a wealthier Nigeria depends heavily on a core of improvements we need to make, one of which is an increase in the quantity and (just as importantly) quality of our energy consumption.
In terms of quantity, everyone knows we have an electricity problem. In a previous post, I mentioned South Africa is struggling to cope with 45,000 megawatts and has experienced occasional rollinig black-outs. Apartheid-era South African infrastructure was designed to fully support industry, but to only partially support domestic use (with a 10% minority enjoying First World services, and a 90% majority living in NEPA-land). As it stands, 45,000 megawatts is not enough to serve a country of just under 50 million people, with a per capita income five-times larger than Nigeria's. Given our population, rudimentary mathematics suggests 135,000 megawatts would be insufficient to support a Nigerian economy that reflected South-African-sized per capita wealth -- and South-African-sized wealth is not only smaller than the wealthiest economic powers in the world, but is also (more importantly) too small for South Africa's own post-apartheid transition.
In terms of quality, we have too many citizens who are still using charcoal, which is derived from woody plants. The worst part is use of charcoal is highest in those parts of the country that (in environmental, climatological and soil quality/protection terms) are most in need of whatever woody ground cover they can get. I was privileged some years ago to intern briefly with a non-governmental organization that gave out micro-credit loans, and the managers of the NGO told me about the loans they had given to women to start several micro businesses -- including firewood-collection and -sale businesses. It is a difficult thing to deal with, pondering the reduction in an activity that so many depend on (on both demand and supply sides) but which is problematic on so many different levels.
After centuries of internal and external distortions, the Nigerian and African economies are heavily distorted, dysfunctional, irrational and downright strange. Agriculture is the chief example of this. Agricultural products the world economy demands of African agriculture are produced in great quantity, but agricultural products necessary for domestic consumption are scarce, with continuous cycles of starvation, death, emergency "aid" and loss of dignity. If your principal exports do not earn enough to pay for necesssary imports (e.g. FOOD), then you have to shift to producing something else that either earns enough to buy you food, or that is food itself. I don't understand why we persist in committing all of our labour and capital to the production of things that have never, do not now, and will never earn us enough to fund what we need to fund on both the capital and consumption sides.
Another example, this one specific to Nigeria, is the crude oil industry. Refined fuel is a value-added product that brings a higher price than crude oil. You would think Nigeria would export refined fuel (having produced enough to meet domestic demand at market equilibrium), rather than exporting raw crude. It is not just Nigeria that would benefit (from higher prices, higher industrialization and more jobs). It is environmentally sensible (given global warming, and ocean pollution) to export full tankers of refined fuel from Nigeria, and bring back empty (hence, lighter and less-fuel-burning) tankers to Nigeria for the next load, rather than sending full tankers of raw crude away and bringing back just-as-full tankers of refined product. And the world would likely benefit from having cheaper refined fuel; if the supporting infrastructure existed, production costs of refined fuel in Nigeria would be lower than the same in the destination markets.
The system is irrational. Input must be used more logically, and choice of output must be optimal. And as far as energy is concerned, Nigeria needs more of it. I know Western Europe is looking for alternative sources of supply because of geo-political tensions with Russia. But you know what? Nigerians are people too, and we also have interests, and one of them is in a vastly increased domestic supply of energy.
Gas can fire electricity generating plants. Gas can also be used in itself for cooking. And gas can also power vehicles and industrial plants.
Nigeria has a lot of gas, but perhaps not enough to be everything to everyone including ourselves -- and our neighbours. If you try to envision an integrated African economy functioning at the full extent of its possibilities, you begin to realize countries like Nigeria would be supplying the continent with the energy to support that level of economic activity; electricity through a linked continental grid, gas through a continental network of pipes, and refined fuel through pipes as well as seaborne, road-borne and rail-borne tankers. This is inconsistent with the idea of Nigeria as a country that exists to send almost all of its raw energy output to Western Europe, East Asia and North America.
Even in an economically optimal Africa, we would still do business on the world markets beyond Africa, selling surplus energy, but probably not as much as we do now. Much more of our energy would be consumed domestically and continentally, but the laws of demand and supply (and the effects on energy prices of a world where every continent is economically strong) mean that there will still be market sufficient Nigerian exports (i.e at equilibrium conditions) on the world markets. Our energy use per capita is so much smaller than the economic giants of East Asia, North America and Western Europe; necessary adjustments for global warming and (if Africa rises) less distorted market conditions would see our per capita usage rise somewhat while theirs comes down.
Again, I have nothing against oil and gas exports. I am a big supporter of the Nigerian Liquefied Natural Gas (NLNG) project. The thing with LNG is we have a certain flexibility. Tanker ships of liquid gas can go anywhere in the world NLNG decides to send them; the Trans-Saharan pipeline will only go to Europe, the single buyer with potential monopsony power. With NLNG, if market conditions change, with effective demand from Nigeria and Africa going up, the liquid gas can be transported to Nigerian or African markets on road and rail tankers (or even to African markets on ships); after spending $10 billion to build it, the partnership (public, private or mixed) will have to guarantee a minimum flow of gas along the pipe to Europe for the project to pay for itself and remain economically viable, regardless of the growth of markets in Nigeria and Africa. Energy has to come from somewhere, and 135,000 megawatts is not enough for Nigeria alone much less continental Africa; as economic activity rises (we hope) and demand with it, by the laws of economics we would be more interested in shorter, cheaper pipes to electricity generating plants in Nigeria, except where will this gas come from when we would have committed (by default) large chunks of it to Europe?
Perhaps we should focus our investment on the more flexible NLNG platform, rather than participate in a $10 billion investment that only makes sense if the world remains exactly the way it is today, with Africa consuming no energy (and having no GDP) while Europe (as well as North America and East Asia) consume most of the world's supply.
I reiterate I am not against exporting to the world markets. I want us to re-balance our medium-term and long-term priorities so that we make better investment decisions. We are already exporting gas through NLNG and through the West African Gas Pipeline (WAGP).
I would be more excited if the Nigerian government had announced the construction of electricity generating plants sufficient to convert into electricity half or more of the gas they are right now planning to send to Europe. The Nigerian economy is hobbled by the lack of electricity and the costs of doing business are higher than necessary because industries must produce their own power; the fact is, much like the cell-phone boom a few years ago, dramatically increasing the supply of electricity to Nigeria would (almost automatically) create increases in demand.
Subscribe to:
Posts (Atom)