With the crumbling of the Berlin wall, which signaled the re-unification of Germany and the subsequent disintegration of the Soviet Union, which inevitably resulted in the collapse of the Warsaw pact by 1992, capitalism eventually triumphed over communism. It was a long battle, which started in the 18th century, as a conflict of ideas and thought; Adams Smith [Wealth of Nations, 1776] and Karl Marx, Fredrieck Engels [Communist Manifestoes]. It eventually crystalised into political economic ideologies, which found expression in governments all over the world and how they conducted their business. By the end of World War) WW II, the two leading allied powers, communist Soviet Union and capitalist United States, occupied defeated Germany along their spheres of influence, which roughly corresponded to east and west of the city of Berlin. The political form and economic shape of the present and future of Germany was to be decided by the victorious powers. However, with both powers ideologically poles apart, no consensus was arrived at. The division of Germany was inevitable. From the east of Berlin emerged a Soviet Union-backed Democratic Republic of Germany [East Germany] and from the west of Berlin emerged a United States-backed Federal Republic of Germany [West Germany]. The cold war has just begun. Four decades after, in the very city of Berlin, where it all began, communism succumbed to capitalism. The cold war was over. The world has moved from a bipolar power bloc to a single capitalist bloc ably championed by the United States, unchallenged. All of the thirteen former Soviet republics, Russia inclusive, embraced capitalism.
A resurgent neo liberal economic thought pervaded the entire new world economic order. Government has no business doing business. The means of production should be transferred to private entities away from government control. This line of economic thought was echoed and amplified by multilateral finance agencies and their allied multinational conglomerates commonly referred to as ‘foreign investors’ and this resonates throughout the developing countries of southeast Asia, south America and Africa.
By 1999, the bug caught up with Nigeria. The ‘government has no business doing business’ mantra was the economic ideological basis of the PDP-led Federal Government in the last sixteen years. This is where the problem of our economy lies. Nigeria embraced this concept without reservations and as history has shown, excessive free market economy creates a cycle of boom, bubble and burst. The great depression of 1928, 1988 and 2008 were as a result of neo liberal economic practices. Nigeria’s current economic crisis is a cumulative of factors, which foundation is the extreme neo liberal economic policies of the past administrations. Regrettably the current administration of President Muhammadu Buhari is following the same path because of its inability to think out of the box on the economy.
The reason for the existence of a modern state should be more economic than political. Modern successful nations are in reality, profitable business entities. Sadly, Nigeria exists more for political than economic reasons. As with all things politics, Nigeria is a huge resource wasting away. The primary responsibility of government is the physical, fiscal and monetary security of lives and properties. Therefore, the concept of ‘government having no business doing business’ is flawed and should be rescinded going forward.
Government must do business and do it well. Government cannot abandon its economic role to private entities and just exist for politics. Self-serving individuals and entities relying on the inefficiencies and corruption in public sector, have continued to propagate this narrative and their allies in government have succumbed to them.
Nigeria’s economy is built on quicksand. The over reliance on the private sector for means of production has led us significantly into the current economic crisis. The private sector is a product of the public sector. The policies that create and shape the private sector, including regulatory laws are initiated and implemented by the public sector.
The inefficiencies and corruption of the public sector is reflected in the private sector. The public sector must be made to work as efficiently as possible to bolster the private sector. Private sector is supposed to be driven by invention and innovation, which seek to improve upon what the public sector provides. With a moribund public sector, the private sector is unchallenged and becomes a monstrous oligarchy, which adds little or no value to our economic development. This is why privatisation failed. A private sector, which thrives on government assets acquisition, by acting as proxies for government officials inevitably creates a weak and unproductive economy.
The recent call for the sale of national assets to help government raise money to spend its way out of recession is unpatriotic and self-serving. It is very certain that the proceeds from such a transaction will not be deployed to stimulate economic growth. The monies accrued from such sales will be shared among the tiers of government, under pressure from the notorious gang called the ‘governors’ forum’. The monies will inevitably be used to service the insatiable needs of the wasteful and corrupt political leadership class. Rather than sell vital national assets, government should invest in their resuscitation and make them profitable ventures. Ten of the leading global oil corporations are state-owned. Eighty per cent of all business ventures in China are financed by substantial government equity.