Nigeria’s Infinity war on the economy

Nigeria’s Infinity war on the economy

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Thanos the Titan is a fictional character from the Marvel Cinematic Universe, whose goal is to kill half of all living creatures across the universe, believing that allsocial and economic problems can be solved by killing exactly half of everything. Throughout the Avengers comic series, it is never clear why Thanos believes that committing a universal 50 percent genocide will solve everybody’s problems. In the event that he is successful, there is nothing to say that the problems will not simply recur after the populations rebound.

He never appears to think this far though, going as far as sacrificing his own daughter in his quest to end half of all existing life. When he eventually achieves his goal, he destroys the infinity gauntlet that briefly made him the most powerful being in the universe, retiring to a quiet planet to become a lowly subsistence farmer. When the Scandinavian God of Thunder Thor tracks him down and chops his head off in a fit of rage, Thanos takes his fate with equanimity. Neither his fate nor the underlying senselessness of what he has done seem to make any impression on him. He did it just because.

It may seem odd to draw parallels between the actions of a fictional genocidal maniac and the economic policy of a poor African country that can barely fund its budget, but please stay with me as I examine why Nigeria’s leadership is leading the country to the most avoidable economic disaster of all time.

This is not about MTN

Several column inches and online conversations have been expended on the subject of the government’s constant harassment of Nigeria’s largest telecoms provider. This article will not go into the mechanics of an introductory listing versus an IPO, or the alleged bad faith listing on the part of MTN, because none of this is actually about MTN. What the MTN issue does it to provide a useful microcosm of how Nigeria’s government relates with investors and business people, and why this manner of behaviour is fundamentally self-defeating and bone-headed.

In the space of barely three years, MTN alone has been hit with a multiplicity of fines totaling billions of dollars from different government agencies, in addition to having its brand name constantly associated with one alleged scandal or the other. Last week, the EFCC showed up a Yellow House in Falomo, ostensibly to greet their customers and wish them happy weekend, because as it turned out, MTN was not actually accused of any wrongdoing.

Since oil is no longer paying as it used to, Nigeria’s government has decided that instead of changing its old habits, it is better off trying to use legalized extortion as its new ‘oil money.’As my fellow columnist Feyi Fawehinmi recently pointed out, the NCAA has also got in on the legalized extortion act, threatening telecoms providers with removal of their 7,000+ masts which were apparently unsafe from the standpoint of passenger flights. Once the providers agreed to pay a requested fee however, the threat was lifted and the “dangerous” masts were suddenly fine again.

“Business Regulation” a la Nigeria.

What is more, this aggression, greed and unwarranted hostility toward Nigerian businesses goes far beyond MTN. I have a close friend who runs a media agency with a similar story. In his case, he had all his bank accounts frozen alongside an LIRS demand notice for N10 million in additional taxes. This figure was apparently arrived at by levying a flat percentage on all money that passed through his corporate account, which any tax accountant can tell you is transparent nonsense.

The obvious fact that a media agency’s income is only a tiny percentage of all the money that passes through its hands fell on deaf ears until he agreed to come up with N500,000 in cash. Magically, the freeze was restricted, despite there being no evidence that said sum was actually paid into government coffers. Unsurprisingly, he now spends most of his time in the U.S., debating whether or not to keep running his agency in Nigeria that has 11 full-time employees.

“Business regulation” a la Nigeria.

President Buhari is not Thanos but…

Unlike our fictional antihero, President Buhari does not of course, want to intentionally destroy Nigeria’s fragile economyand hurt 180 million people. What he does want to do however, is to impose his incredibly statist worldview on the economy at whatever cost, because as I have mentioned previously, his knowledge comes from an era when that was all the rage. The peak of the Cold War period was when Buhari and his contemporaries were at their most impressionable, hence to them there is still an argument between private enterprise and overbearing state control of the economy.

Those of us who are not stuck in the 1970s probably realise that this has not been a serious argument since the fall of the Soviet Union 30 odd years ago, but we have a president and an economic team who are apparently still mentally fighting the Cold War. It is not clear why they believe that state capture of the economy will solve any of Nigeria’s problems, especially as we have so much clear and recent history showing that this is simply not true. Like Thanos however, they are impelled by belief, instead of evidence.

As a result, everyone from my friend in the U.S. to MTN, to people selling phone cases on Instagram are in the cross-hairs of the government for the egregious crime of being involved in private, profit-seeking activities. It is not just about shaking down the private sector for money to feed an increasingly cash-strapped government. It is also about establishing the primacy of government over private enterprise in Nigeria’s economy. The idea is that MTN may come and go, but the government will always be here, which makes it the top dog.

“Business regulation” a la Nigeria.

Eventually we will all suffer for this mindless, emotion-driven, unscientific and ahistorical view of the economy as the investors we desperately need stop coming in – condemning one quarter of Nigerians to continued unemployment – or those who have already been here for years start to explore the option of exiting.

If we think our population gives us the ultimate trump card, we should at least acknowledge that it is getting poorer, a lot of it is already non-addressable, and it is also becoming increasingly irrelevant. Norway (population 5.2 million) has similar economic performance to Nigeria (population 180 million), with a GDP of $398bn to our $375bn. Investors can and will leave if we continue handling business regulation in a hostile, antagonistic and aggressive manner.

We are not as important as we think we are.

A pyrrhic victory is not a victory

When Nigeria successfully achieves its apparent goal of branding all private business and profit-seeking activity as “criminal” and “corrupt,” the economy will melt away into nothingness. At the snap of a finger, all productive activity and the people behind it will find their way to new homes in the U.S., Canada, Australia, New Zealand and Northern Europe. Despite the government’s insistence to the contrary, we cannot all be rice farmers after all.

Investors – local and foreign – with intellectual and financial capital will find their way to more accommodating environments because the world is much bigger than Nigeria. There will be no armed insurgency, sanctions, protests or pushback against those who want to use state power to capture the economy, and their followers who naively believe that witch-hunting capitalists will create a glorious socialist paradise filled with milk, honey and overflowing rice mills in Kano.

There won’t even be an angry Norwegian god arriving through the clouds to exact justice for persecuted business people and put us out of our collective misery.All that will happenis thatNigeria will be leftalone to enjoy its pyrrhic victory. Like Thanos, this country will become a big-for-nothing has-been, forgotten by the world as we manually toil away on our subsistence farm, digging up cocoyams and waiting to die.

“Business regulation” a la Nigeria.

 

David Hundeyin



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