V20

V20:2020 and the Future of Development Planning in Nigeria (1)

Jamal Akinade

Dr Shamsudeen Usman, the minister of national planning, recently confirmed what many of us knew all along, that the vision 20:2020 remains a pipe dream. I would come back to vision 20:2020, but before that, let us delve into the debate on development planning as an instrument of economic prosperity. Development planning I must say is not limited to economic planning but extends to social and human development. From this perspective, development planning can or should be understood as economic planning to fulfill a social function – human and social development.

One might wonder about the significance of calling for planning when all government plan or should plan. This is true; more so, a budget is a plan and every government runs a budget. But, this planning confusion is often generated by economists or development experts, and can be traced to the context in which the call for planning is often based. My example here is a recent article by Odilim Enwegbara in which he called for comprehensive development planning in Nigeria. He said; “That is why moving economies like ours in the right development route should start with the full abandonment of everything neoliberal. It should begin only when we embrace planning as the secret of development because planning systematically dismantles the assumed mysteries surrounding development …That is why neoliberals are against developing countries embracing planning in their quest to development … To restart our development journey, we should quickly embrace development planning, the inevitable map to guide us in finding our way in this journey into the unknown...” (http://www.punchng.com/business/global-finance/repositioning-nigerian-economy-for-growth-1/)

I share the same view regarding the main message of Odilim’s article, however, I object to his manner and context of framing the planning debate. I do not believe that everything neoliberal and development planning are mutually exclusive. Neoliberals, in my view, are not against developing countries planning for development but they might disagree with the policy content and direction of planning. The NEEDS plan of the OBJ era was a development plan, albeit rested on neoliberal ideology of free market economics. The plan cannot be said to be entirely comprehensive, but the mission here is not to critique the plan, yet, the crux of the matter is that NEEDS was development planning. The IMF and World Bank rebranded SAP of the 1980’s into the Poverty Reduction Strategy Paper (PRSPs- this strategy paper is a document required of developing countries to access its loans. However, PRSPs must be approved by the IMF before the World Bank can grant loans. In order words, PRSPs must conform to neoliberal economics before loans can be granted to countries in need. Production of PRSPs is development planning and NEEDS was Nigeria’s PRSP not to access loans but to be granted debt relief.

Our understanding of planning is critical here, because if we view planning only in the context of a comprehensive document with all the inputs and output completely disregarding market forces, then surely neoliberals are against this sort of planning. Framing of planning in the context of the old communist era, command and control regimental planning versus modern capitalism can also be dangerous because ideologically committed people might eventually remove the head as a remedy for the headache. Extremism exists on both sides of the ideological debate and this is not the time for Nigerian intellectuals to engage in sterile debates of market forces versus state led economy and the likes. What is important is to look more inwards and determine what works for us and what does not.

I very much agree with Odilim on the need to seek creative means of development but I disagree with the view of abandoning western textbooks and everything neo-liberal. This is an extreme view and akin to throwing away the baby with the bathwater. I say this because parallels can be drawn with what extreme neoliberal ideology (market fundamentalism) did to Africa in the 1980s when almost everything not neoliberal was thrown away e.g. state development banks were privatized, interest rate liberalized, import tariffs removed while exchange rates were liberalized at the same time. We all know the devastating results of which many countries have not recovered from. What I am saying is caution is called for in planning while common sense and local context should prevail over ideology inclinations. The statement of Deng Xiaoping that; “it does not matter if a cat is black or white, as long as it catches the mice”, reflects our argument herein.

I actually do disagree with most neoliberal policies. However, policy such as a slim, efficient and more productive public service, although typically associated with neo-liberalism and proponents of new public management, is begging for implementation in Nigeria. According to Sanusi Lamido, 70 per cent of federal government revenue is spent on the civil service and political appointees. This situation, unless reversed, can never lead Nigeria to economic prosperity no matter the extent of development planning. I do not also believe that abandoning western economic textbooks because they were created to inherently favor the west is the way to go. There is no convergence of opinion in the western house of economics about the right economic development plan or even economic theory itself. If not, why do we have divergent views between Keynesians and neoclassical/neoliberal economists especially on macroeconomics? For example, Shaw and Mackinnon’s hypothesis on the relationship between savings, interest rate and investments totally contradicts Keynes’s theory on investments, savings and interest rates. What should be done is picking what suits us, leaving what does not, and creating new ideas or theories where applicable.

China is a good example of development under a developmental state model. But, China’s political economy is very much different to ours. It is interesting to note that almost all of the successful East Asian economies which utilized a developmental state model of development had outright dictators, pseudo- democracy or one party state. South Korea developed under a general, Malaysia under Mahathir who governed for about 20 years, Lee Kwan Yew of Singapore, and China’s communist party are few examples. Newer success stories like Brazil under the Lula Da-Silva implemented mixture of policies which suited Brazil’s political economy which included neoliberal policies as well as welfarist policies such as conditional transfers.

That Nigeria needs a new concrete, comprehensive and implementable plan is not in doubt. However, this document must fit our political economy and not just a document which is academically sound. Technocrats can develop a ring tight document, fantastic on paper, but it is politicians that come and go, it is politicians that are accountable to the people, and it is them that have to seek elections. It is not news that politicians will mainly implement projects which they can complete during their tenure and claim the glory, even if this project might not have any meaningful impact on the long term development of such domains.

This issue brings me to the political economy of Nigeria. The undue emphasis and importance given to technocrats who sometimes are detached from reality, in formulating development and economic policies often lead to policies which are not implementable. For example, the ‘failure’ of vision 20:2020 is not surprising as it identified a major problem in Nigeria’s quest for development without proffering a practical solution to it. It says that; “Amongst a host of debilitating impediments to Nigeria’s growth and competitiveness, one issue rests at the very root: a resource exploitation, allocation and consumption pattern that is unsustainable…The most destructive effect of this dependence on hydrocarbons is the undermining of the social contract between the government and the people. With no less than 95% of Nigeria’s federating States depending on the centre for over 90% of government income, the incentives towards internally generating revenue from taxation of economic activity are extremely weak and a culture of “sharing the national cake” has become institutionalized.” (p. 44)

In simple words, the technocrats acknowledged that concentration of power at the center is a bottleneck to Nigeria’s development. It explicitly stated that;”To achieve Vision 20: 2020 aspirations, Nigeria will reverse the above situation. A mode of fiscal decentralization that rewards economic performance at the sub-national level will be diligently pursued, and a form of development that ensures the economic viability and prosperity of each geo-political region of Nigeria will be underpinning the thrusts of Vision 20: 2020”. (p.44)

These structural defects cannot be mended by unelected technocrats because these are core political issues that only constitutional changes can fix. For example, an issue like fiscal decentralization goes beyond revenue allocation formula, it extends to the centralized accounting purse at the centre. This centralization requirement is enshrined in the constitution. From this perspective, is it not safe to conclude that vision 20:2020 was bound to fail from the very start? This is because the structural solution was outside its purview but it did well by identifying the problem. Creating policies insulated from the political economy reality and expecting the right political equation to emerge from the blues is an exercise in futility. The critique of V20:2020 will be done in detail in subsequent articles, God willing.

In order to move Nigeria on the right development track, several political issues have to be resolved. Economics does not operate in a vacuum and as such the brightest economists or development technocrats will only achieve little in the current Nigerian makeup. The solution could either be a civilian dictatorship where a leader can swiftly amend constitutional defects which impede development by decrees, but a return to dictatorship does not sound attractive especially if one witnessed the era of military. The other option is the democratic option where a political party formulates a comprehensive development plan, win elections with enough margins in the 36 states of the federation and the national assembly to effect constitutional changes seamlessly. However, Nigeria will require a minimum of 10 continuous years of diligent implementation of a sound and feasible development plan and infrastructure provision before we can start competing for top 20 economies of the world. Thus, 2015 is crucial to our future.