Osinbajo Is Wrong

Osinbajo Is Wrong; Private Sector Cannot Develop The Nigerian Economy

Chinedu Bosah

Nationalised planned economy under working class democratic control is the only path to Economy recovery and sustainable development

Recently, Vice President Yemi Osibanjo revealed the belief of Buhari government that it is the private sector that can develop the Nigerian economy. He said this while commissioning the Bua’s Obu three-million metric tonnes cement company in Edo State. This is obviously in line with the subscription of the administration, like the previous ones, to neo-liberal capitalist economic policies. Unfortunately, this explains why Nigerian economy has not been able to come out of the woods for decades now. All sectors of the Nigerian economy have been destroyed by the capitalist ruling class through privatization, deregulation, commercialization, cuts in government spending, austerity measures etc. All these pro-rich policies have made a few privileged rich class to become richer while the vast majority wallow in poverty. For the fact that few companies were set up does not mean that our economy will grow as we have seen many big private companies collapse in the same period

By virtue of the existing class rule, the capitalist ruling class controls politics as well as the economy and social order including determining the central policy thrust that emanate from Aso Rock, National Assembly, State Houses of Assembly, State government Houses and the local government. In other words, local and international capitalist business class are in control, politicians at all levels are just mere bell-boys who must defend policies that are laid down by their masters

It is because of this unjust socio-economic and political arrangement that made it possible for government to roll out tax policies that makes many big businesses to pay little or no tax whereas small and medium scale business including mere cart pushers are heavily taxed. Aside favourable tax policies, the big business class have devised ways of invading tax by having multiple accounting books/records and public officers know this but look the other way.

The history of Nigeria clearly shows that the private sector is incapable of playing the leading role towards economic recovery, development and industrialisation. The Nigeria economy was relatively buoyant and stable in the 1960s and early 1970’s because of the investment in agriculture in addition to oil boom of the 1970’s. It explains why then there were the groundnut pyramid, cocoa, rubber, timber, palm oil plantations. This period also saw relative achievement in provision of social infrastructure.

But when the ruling class began cutting social spending and divesting in agriculture, the private sector who rely on public sector lead could not sustain production and competition with foreign companies. Hence, the country lost its leading role in agricultural produces on a global scale and become net importer of food. Oil is the only thing still being sustained and largely by the multinational companies as governments at all levels rely on rent taking. However, today oil prices are suffering from the international capitalist crisis and major oil producers who lack basic infrastructure with backward economy base and majorly rely on oil for sustainability like Nigeria, Angola etc., are in trouble.

Examples of the failure of private sector in Nigeria are legion. As at 2007, only 10% of the companies privatized were struggling to survive. Electricity supply has gone from bad to worse since the private power companies took over in November 2013 despite increasing tariff several times. Following the 2008 and 2009 world economic crisis that was triggered by local and multinational companies including the affected Nigerian banks which overtime embarked on waste, corruption and gambling Nigerian government had to dole out public funds running over 3 trillion to bailout the Banking/financial industry. Rather than the big private companies to rescue the Nigerian economy, they are closing shops like Dunlop and Michelin living the shores of this country due to high cost of doing business.

It is not surprising that the aviation sector like other sector is in a serious crisis. The much celebrated Arik Air is enmeshed in N387 debt, something that forced Asset Management Corporation of Nigeria (AMCON) to take over it and as usual trying to revive it so that it will be sold at cheaper price to another private firm in future. Presently, Ethiopian Airline, 100% owned by the Ethiopian government is bidding to buy the airline which is the Nigeria’s biggest. Not even Richard Branson, one of the richest men in Europe could salvage the ‘Nigerian National Carrier (Virgin Nigeria)’ when he came on board in 2004. Aero contractor shut down operation for almost 4 months in 2016 and upon resumption, thousands of workers were laid off. However, the government through AMCON has come to the rescue by investing over 11 billion Naira. Etisalat was also soaked in a debt crisis that made a consortium of banks to attempt to take it over.

Electricity supply will continue to elude the vast majority because the private power companies and the Buhari-led government lack the capacity to generate, transmit and distribute electricity. The only thing the power companies are legendary for is issuance of outrageous bills despite supplying darkness. Worrisome is the fact that the Distribution Electricity Companies have become notorious for rejecting part of the electricity generated in order to make huge profit, an act that has further thrown the communities into more darkness. Between 13^th of August and 20^th of August 2017, the Distribution Companies rejected about 8300 megawatts. The loans that were taken by those who bought the power companies are running to hundreds of billion and there is no hope that a substantial amount of this loan will ever be repaid. Just to cite one example, the former Chairman of Skye Bank Plc, Tunde Ayeni took the N70 billion loan from the bank and another N80 billion from the banking industry to buy Ibadan Electricity Distribution Companies, Yola Electricity Distribution companies and NITEL/Mtel. It is doubtful that the debt will be paid. When the Central Bank of Nigeria (CBN) engaged KPMG to do a forensic audit of the bank’s IT platform and management information system, it discovered that the banks operated two sets of financial books and this is what is obtainable in the industry including insiders abuse and mostly with the connivance of the regulatory agency. Those found culpable are not arrested, prosecuted because they are the so-called captains of industry. We can go on and on with no end in sight. If government will always bail out these private companies with public funds, what is the sense in privatizing or having private sector-led economy?

So, when Vice President Osinbajo and other top bourgeois politicians say that private sector-led economy is the only way out, they are simply defending and speaking for their capitalist masters or their own private interest. This is why they run public offices for self-serving private interest at the expense of the vast majority of the people. It also explains why elections are heavily monetized and desperately contested because what is as stake is the ‘national cake’ and which section of the self-serving ruling class presides over the sharing, and not for the welfare or wellbeing of the vast majority whom have been crushed by poverty, misery and joblessness as a result of anti-poor policies.

Fundamentally, the reason why the private sector cannot develop the Nigerian economy is simply because of its backwardness and weakness compared to dominant big multinational companies who dictate the pace globally. Hence, Nigerian capitalist class in preserving its own class and status can at best be the agent or bell boys to the dominant multinational companies and imperialist states who exploit the working class people on a global scale irrespective of the country. The only way out is a working class led economy that will nationalize the commanding heights of the economy and placed under democratic control and management of workers and consumers/communities aimed at running public corporations and public administrations in a transparent manner to meet the needs of all. This is the only way profligacy and corruption in high places can be made difficult and fundamentally free resources that are presently looted for massive developmental programs.