African socialism: The bad dream Nigeria can’t seem to wake up from

African socialism: The bad dream Nigeria can’t seem to wake up from

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Sometime in September 1984, my dad and his pregnant wife drove to Abeokuta with my older brother in the car, pretending to be on a family getaway. The real purpose of their trip however, was to buy the only brand of baby food that my then 18 month-old brother would eat. Just under a year ago, a certain General Muhammadu Buhari had seized power from Shehu Shagari in a coup, and one of his signature policies was to establish a top-down price control directive that penalized traders and shop owners for selling certain items above the government-directed price.

At the time, it was not uncommon to witness the absurd spectacle of soldiers dressed in full combat gear storming street markets and stores to catch and punish errant shop owners for selling so-called “Essenco” (Essential Commodities) above the prices dictated from Dodan Barracks. Regardless of cost price and the havoc wreaked by a sliding naira, selling prices were to be strictly adhered to on the pain of seizure and destruction of goods, or even prosecution.

Predictably, traders and other business people quickly caught on to the game being played and adapted in typical Nigerian fashion. Soon, shortages of all such goods became the norm as shop owners adopted the methods of drug dealers, surreptitiously letting people know how to get their contraband commodities away from the prying eyes of the military government.

One of such commodities was my brother’s preferred baby food brand, which could no longer be found in Lagos. With the benefit of being among a handful of Nigerians with a telephone at home, my parents were able to find out that the “contraband” baby food could be found in Abeokuta, and so commenced the least cheerful family roadtrip ever according to the story I was told. That was 1984, when Nelson Mandela was still imprisoned on Robben Island, and the word NITEL appeared regularly in newspaper headlines.

How much evidence do you need?

35 years after 1984, an HIV vaccine is being trialed, Elon Musk is shooting sports cars into space, China is now the world’s second largest economy, and Nigeria – amazingly – has not yet made up its mind about whether the African socialism of our parents’ generation worked or not. While some (myself included) see that era and all economic and political decisions taken therein as a dark chapter in Nigeria’s history that should only be spoken about in hushed tones out of sheer embarrassment, many Nigerians genuinely believe that we can – even should – return to an era where access to everything including food and soap was determined by government, and one could encounter the dreaded military horsewhip for the egregious crime of selling goods to make a profit.

One of such Nigerians incidentally, was my brother, who 30 years after his infant ordeal, supported the second coming of Rt. General Muhammadu Buhari in 2015. Like so many others, he believed that Nigeria needed a “strong hand” in contrast to the “weakness” of former president Goodluck Jonathan. While my brother certainly did not believe that tired and discredited economic experiments like price control and import restriction should return, a significant number of those who bought into “Buharism” also bought into this idea.

The myth of the benevolent African dictator is seemingly tied up inextricably with the myth of the benevolent, all-powerful African socialist government, which gives citizens a full, free ride from cradle to grave. When it comes to the subject of economic ideology, I believe Nigerians by and large suffer from a kind of weaponised nostalgia for a past that never actually happened the way it is often presented today. As a result of this nostalgia, the government is able to get away with flying a series of populist kites promising the return of price control boards and denouncing certain business owners as ‘unpatriotic.’ This of course, substitutes for actual economic policy and security, which are the parameters by which it should ordinarily be judged.

For the avoidance of doubt, every attempt to interfere with the market in Africa between the 1960s and the 1990s all resulted in the same things – massive shortages and artificial scarcities, large amounts of avoidable human suffering, accumulation of wealth and power into government-backed private hands instead of the economy, and a debilitating brain drain that has turned Africa into the “talent farm” of the Western world. There has been not a single success story attributed to the application of socialist economics on a macro scale anywhere on this continent – it has simply never happened.

But the Chinese and the Saudis…

Whenever the point is raised that African socialism is a long-dead and discredited idea evidenced by four decades of painful history in Nigeria and across the continent, some reflexively point to China and Saudi Arabia as proof that countries can be wealthy and powerful, while distorting their economies with a plethora of interventions, grants, subsidies, exchange rate controls and capital restrictions. The idea of a comparison between Nigeria and either of those countries is laughable for one simple reason – we simply don’t have the range.

At risk of flogging a dead horse, it must again be pointed out that Nigeria’s government has neither the finances nor the institutional capacity to interfere with the economy without producing disastrous results. Nigeria is the proverbial butterfly that thinks itself to be a bird, constantly over-regulating, over-taxing, subsidising, intervening, restricting and banning its way through existence, leaving a trail of avoidable destruction in its wake. After surviving the era of “Essenco” and ITT, we really ought to have figured out that grandiose plans made by cash strapped governments of poor, densely-populated countries always end up on the scrapheap of history.

The Chinese, who on paper run the largest of all non-capitalist economies, are able to get away with market intervention because amongst other things, by virtue of their phenomenal export figures, they hold over $3 trillion in foreign reserves – by far the largest such figure in the world. When you have an amount equivalent to one and a half years of Africa’s cumulative GDP lying around in US Treasury bills, you can probably get away with distorting your economy for political reasons, especially when you will overtake the U.S. as the world’s most powerful economy in a matter of years.

The Saudis likewise, export over 9 million barrels of crude oil per day, and hold over $504 billion in foreign reserves, with a population of just under 33 million people – roughly equal to five states in Nigeria’s Southeast. They also have one of the world’s most formidable militaries and a famously extensive and well-funded global network of diplomatic ties and bilateral relationships. In other words, the Saudis and the Chinese have a blank cheque to do whatever they want and possibly get away with it – something we clearly do not have.

African Socialism is dead: We aren’t

What we do have is a young, ambitious and hungry population that consistently shows that it produces world-beating results when placed in a suitably enabling environment. We do not need more of the same promising-and-failing sugar daddy governance which stifles the economy and grows the government, to the benefit of no one but a few thousand people in and around the government. What Nigeria’s young population needs is electricity, transport and municipal infrastructure, business friendly economic policy, security, an effective legal and law enforcement system, and investment in healthcare and education.

All a government needs to do is restrict itself to these things and leave the people to run and grow their economy. No government in the history of the world has grown the country’s economy without its citizens plugging into it. The Soviet Union tried that experiment and died of it. The Chinese instead unleashed the productive power of Chinese people. The Saudis are sitting on an ocean of oil, and are at risk of turning into Nigeria when oil becomes irrelevant. An African country is not going to become the lodestar of a 21st century socialist revolution.

Certainly not Nigeria.

 

David Hundeyin

 



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