The President and the private sector

Some weeks back, during an interview with a soft sell magazine President Buhari said matters-of-factly that he does not trust individuals in the private sector to make them members of the country’s economic team. In his words: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. Buttressing the president’s position further, the media adviser to the vice president, Laolu Akande further explained that the exclusion of private-sector actors from the President’s economic was mainly because the presidency considers economic management as purely “a government affairs”.

We are not surprised at this position by the presidency. In a way, it reflects the president’s ideological position which is yet to change since 1985 when he was removed from power. Mr Buhari is a staunch believer in a state-controlled economy and a closed state-centric policy process. His aversion for the private sector is classic and he considers private sector players as greedy, selfish, and inherently incapable of working with the government towards the development of the state. We recall that since 2003 when Mr Buhari began his quest for public office, he has always voiced his opposition to the surrendering of the “commanding heights of the economy” to the private sector and specifically, the privatisation of the largely inefficient and wasteful State Owned Enterprises that became established conduits for the siphoning of public revenues. This can be seen in how the president talks about the privatised SOEs in very nostalgic tones and never fails to excoriate past administrations for mortgaging Nigeria’s common patrimony to private and selfish individuals. That explains Mr Buhari’s push, on coming to power, to claw back the economy from the private sector, re-establish state dominance and control over the economy and position the state as the largest player in the Nigerian economy. Even when the government was forced to abolish the inefficient and wasteful policy on petrol subsidy and devalue or float the Naira, the President obviously agreed to these policies only to escape the current Venezuelan experience where the country’s outdated command and control economics have come full circle and has resulted in severe scarcity and a near total dislocation of the society and not because he believed in liberalisation as an economic policy.

This thinking by the president is deleterious to the Nigerian economy and will set the country back several decades if nothing is done to convince the president to abandon his outdated socialist ideology. The world over, economic teams are being championed by seasoned private sector players and academicians and not by government officials. As an analyst has argued, “An economic team without experts from outside government and independent challenge will fall into groupthink, be self-referential and fail to think outside the box!”

What is more; the president must realise that the government does not have the money or the wherewithal to pilot the economy, build infrastructure and provide jobs for its citizens. Just recently, the secretary to the federal government came out openly to confess that the government will be unable to implement this year’s budget because of declining revenues. Almost 35 states of the federation and the local governments have been unable to pay the salaries of their workers – who constitute less than 2 percent of the population they are supposed to cater for – not to talk about providing infrastructure and social needs for the rest of the population. The states are gearing towards offloading majority of their workers to pave room for a wage bill their declining revenues can take care of.

Furthermore, Nigeria is severely deficient in infrastructure and according to most studies and expert opinions, the only means of closing this gap is through massive private sector involvement and public private partnerships. What is more, it is common knowledge that the government is incapable of providing jobs for the millions of the unemployed and that only a vibrant private sector, led by small and medium scale enterprises could provide the massive jobs needed to revamp the economy. Sadly, these are the options the government is foreclosing and making difficult to realise by its constant ill-advised statements against members of the private sector.

We urge the president and his minders to rethink the government’s strategy towards revamping of the Nigerian economy and begin to robustly engage with and encourage the flourishing of the private sector. This is the only way the country and the economy- already in recession – can be rescued.