Democratic Socialist Movement (DSM)

For struggle, Solidarity and Socialism in Nigeria

Newspaper of the DSM

CHAPTER THREE

THE FOUR YEARS OF CIVIL RULE

Every sober analysis points in one direction: the socio-economic plights of the working masses will become worse in the next four years.

Right now, the economic conditions of the masses are in very terrible state. A cursory glance at key economic parameters reveals a terrifying feature that over 70% of the population live below poverty level. Life expectancy has declined to 43 from 47 years a few years ago.

There is more unemployment, crimes, prostitution, fraud, treasury looting, assassinations, inter and intra ethic cum religious wars and riots, etc, in the country today, than at any time in the past history of Nigeria.

Social services such as education and health care have been worst hit. The capitalist United Nations agency, UNESCO, prescribed that 26% of every national budget be devoted to education in members countries. In year 2003, the PDP government headed by Obasanjo only voted 1.8% to this vital sector. The result is the continued decline in educational opportunities and standards. The health sector does not fair better. Many hospitals and health institutions are virtually in a state of decadence as a result of perennial underfunding.

All the infrastructures such as water, roads, rails, electricity, telecommunications, etc, are in shambles where they exist at all. Inter-bank interest rates remain prohibitively high for any worthwhile profitable ventures for those in the real, productive sectors of the economy.

However, Obasanjo government's image-makers are often heard saying that Nigerians should be grateful to Obasanjo for pulling Nigeria out of its previous pariah status. Unfortunately however, this has not impacted positively on foreign investments into the economy in the past four years. In fact, there have been unprecedented capital flights from the country in the past four years. In year 2000 alone, there was a capital flight of $11.8 billion out of Nigeria. And that is not a flippant figure. Before Obasanjo came to power, there was an analysis done by Economist (London) which says that for Nigeria to put up certain level of growth, that would be capable of reviving the economy, restore the social equilibrium, restore employment opportunity, etc, the country needs $15 billion investment annually, excluding what is being generated in the country. Instead, between 1999 and 2002, there was a capital flight of $4.663 billion annually.

The GSM "revolution" is another dubious achievement of the Obasanjo's first term in office as a civilian president. Unlike what obtains in other parts of the world where the GSM telephone system is in use, the introduction of the product in Nigeria was done to kill the normal landline telephone system, not to complement it. In consequence, users, mostly city dwellers, pay more for this "privilege" than in any part of the world, even though, on income scale ladder, Nigeria occupies the unenviable position of the poorest countries in the world!

Yes, the civilian administration led by Obasanjo increased the minimum wage by about 100% in the year 2000. Apart from the fact that this increment only benefited a tiny fraction of the poor people, it in fact amounted to peanuts when compared with the fabulous salaries and allowances paid to top government officials and their capitalist collaborators through over-inflated contracts, etc. Nonetheless, using the pretext of financial inability to effect the said new minimum wages, state governments and private employers across the country carried out mass retrenchment of their workers, thus, effectively reducing further the beneficiaries of this "benevolent" gesture. And as is usual with every capitalist "benevolent" policy, several other policies such as hike of prices of petroleum products, commercialisation of education, health, water, etc, were either introduced or stepped up pari-pasu virtually rendering the new increment economically worthless even for its few beneficiaries.

One way to know that all has not been well with the economy is the phenomenal rise in bank frauds, bankruptcies and financial malpractices. Meanwhile, the country's external and internal debts continue to mount.

Even Times (London), one of the oldest British bourgeois newspapers, in its edition of April 21, 2003 was forced to admit the reality on ground when it stated: "If the years of military dictatorship have failed the Nigerian people, four years of democracy under president Obasanjo have done little to improve their lot".

Yet, all indications are there that all these horrible features will become worse and deepen in the current dispensation.

To start with, the cost of the electoral "victories" of the PDP, ANPP and AD are so phenomenal and unprecedented such that these parties' representatives in governments at all levels cannot but loot treasuries. Just look at these samples: President Obasanjo raised N4.8 billion for his campaign; Governor Tinubu spent about N3 billion for his "re-election"; friends, associates raised a sum of N852 million for Imo State Governor Achike Udenwa's re-election; Delta State Governor Odili gave free helmets, vests, and caps to motor cyclists, etc. Needless to stress therefore, the first pre-occupation of these "new" civilian looters will be to recoup their "investments" plus the expected "profit". As was in their first term of office, masses' needs will come last.

Governments across the country have been boasting of wanting to reduce the cost of maintaining top government officials in office. Again, the reality on ground flatly contradicts this false propaganda. In the "new low profile" dispensation, each member of the House of Reps will earn a minimum total package of N3,603,450 per annum. His counterpart in the senate will earn a "modest" sum of N3,845,850 per annum. Each of the former senators and House of Representatives members who either decided not to seek re-election or have been defeated in their bid for re-election will be paid 300 percent of their annual basic salaries as "severance benefits". A sort of golden handshake for the big boys and girls of capital. Democracy on course!

PRIVATISATION

As if to further underline the calamitous socio-economic conditions that await the working masses, President Obasanjo and virtually all the state governors have severally and collectively pledged to continue with their central economic strategy of the past four years: privatisation and liberalisation of all the key sectors of the economy. According to the former transport minister, Chief Ojo Maduekwe, in a paper titled: "Re-inventing the Nigerian State", which was delivered at a forum organised by the Island Club (a Lagos based foremost capitalist social club), the "historic mission of this government (PDP-ed) is defined by the moral imperatives of a reform agenda, but also by the painful transition from a system of sharing public goods for private gains to one of creating sustainable development that truly creates wealth". This imperative, according to Maduekwe, was derived from irredeemable losses which the government had over the years incurred through billions of naira yearly spent as subventions to unproductive public enterprises. "To stem this, the Obasanjo administration set up the Bureau of Public Enterprises (BPE) for their privatisation. It is hoped and it is feasible that when fully privatised, these public agencies would offer the services for which they were created more efficiently". (The Guardian, March 3, 2003, p. 7).

Chief Maduekwe's academic sophistry notwithstanding, the past four years of the implementation of the privatisation policy has been an unmitigated disaster for the working masses and the economy in general. In consequence of privatisation, hundreds of thousands of workers have lost their jobs across the country, with only a negligible fraction of these having so far been paid their terminal benefits. Right now, the Nigerian Railway Corporation (NRC) has only 14,000 workforce left after years of persistent retrenchment. All in a bid to prepare the corporation for privatisation, 50% of its present workforce will now have to go.

Chief Maduekwe says that the central focus of privatisation is aimed at discouraging "a system of sharing public goods for private gains". This is a blatant lie, a very ridiculous one for that matter. Privatisation by nature, is a wholesale conversion of public goods for private gains. Or how else can one describe a situation wherein a company hitherto owned by Nigeria's government has now been "sold" to a private company owned by Alhaji Dangote?

One of the usual ills of public enterprises often cited as necessitating privatisation is corruption in the ways these enterprises are run. But in sheer scale and volume, privatisation and its processes in entirety is wholesale corruption. In year 2002, NITEL was put up for sale. The successful bidder was one fictitious company called Investors International London Limited (IILL). But at the end of the day, the "successful" bidder could not fulfil the sales terms due to inability to raise the purchase price. Upon examination, it was discovered that the company had no any technical expertise in telecommunications business having just been hurriedly incorporated in Britain few days before the ill-fated bidding. Two, the payment of a deposit sum of $136.7 million i.e. the equivalent of 10% of the purchase price was mostly raided from First Bank of Nigeria Plc and Continental Holding SA of Hamburg which contributed $96.2 and $10 million respectively. Suffice to note, one of the original ideas sold to the public was that these commanding heights of the economy would be sold to "core investors" who have sufficient technical know how and financial muscles.

Today, the same NITEL has been handed over to Pentascope International, a Netherlands-based management consultant firm for a "token" fee of $4 million per annum! One of the central "tasks" of this ingenious management firm (Pentascope) is to prepare NITEL for eventual sale to a "Strategic Equity Partner (SEP)".

One of the reasons given for the proposed sale of the Nigeria Railway Corporation (NRC) is that while the company generates an income of N30 million per month, its monthly expenditure on personnel is N210 million. Thus, in a recent radio programme, Obasanjo had amongst other things stated: "It was illogical for government to be collecting money on a regular basis from a productive sector to sustain an unproductive sector like Nigeria Railway". So, does this therefore, mean that the NRC will now be fully privatised? Not so fast! As usual, the government has not been able to see any "core investor" wishing to invest in an "unproductive" sector such as the Railways. So, what is to be done? The few profitable areas and assets of the NRC have been earmarked for privatisation. These are the "non-core areas" such as Rail AD (Advert section), the printing, the specialist hospital in Lagos and above all, the property company which manages the NRC vast land and property nationwide.

The proposed sale of Federal Airports Authority of Nigeria (FAAN) is one sale which again confirms the position that the privatisation agenda is nothing but a fraudulent design of the capitalist elites to convert all the profitable ventures and resources belonging to the public as the private concerns of members of the capitalist class, locally and internationally. Unlike the railways which was described as "unproductive", FAAN, by all yardsticks, has been a profitable and buoyant public company and ought not to be listed for privatisation if truly privatisation policy merely aims at ridding government of "unproductive" ventures. According to the Senior Staff Association of Utilities, Statutory Corporations and Government Companies (SSAUSGOC), "FAAN fails the test of ailing organisations since it has not received any government subsidies since its inception in 1992 and inspite of taking care of certain capital projects in the aviation sector initiated by government for socio-political reasons always returned surpluses". (The Guardian, May 20, 2003, p. 33).

If you think that the proposed sale of FAAN is a mistake or an isolated phenomenon, then, stop to ponder over this quotation: "NICON for ten years had been the most successful business. In 1999, NICON was posting a profit of N1 billion. While big insurance companies were selling out to competitors, NICON was expanding its trading interests in hotels, manufacturing and other areas in Nigeria. NICON is the largest insurance company in Africa with assets in excess of $1 billion. When the Yorkshire Insurance Company, a British firm in Nigeria, fell into bad times, NICON bought it over and made it a profitable business concern in the name of Niger Insurance Company". Why then must this company be privatised? (The Guardian, March 24, 2002, p. 42).

LIBERALISATION

If privatisation is nothing but a bold face "legal" robbery of the public to enrich a few capitalist individuals and corporations, liberalisation, its twin sister, is nothing short of an agenda for second slavery for the under-developed capitalist countries like Nigeria. According to the World Trade Organisation (WTO), World Bank, IMF and the international business monopolies, trade and investments, and through these productivity and profitability, will only flourish when there is little or no trade and economic restrictions by the different countries of the world. But in practice, this policy has proved to be more beneficial to the companies and countries of the advanced capitalist world to the utter disadvantage of the under-developed countries like Nigeria.

Under the guise of liberalisation, the nation's commanding heights of the economy are sold often at give away prices to the highest bidder, invariably a foreign company or local company backed by a foreign business concern. Simultaneously, the feeble local industries are usually destroyed by the more efficient and cheaper foreign competitors. This explains why a large proportion of the so-called local industries and corporations do little these days beyond acting as conduit pipe for the importation and sales of goods and products produced outside the country. This, if it should be stressed, is the basis of the perpetual low level of capacity utilisation, as well as massive unemployment in society.

Of course, the neo-colonial capitalists or sections of this class will always grumble and could even make occasional attempt to stand up to their foreign senior colleagues in crimes. However, this class itself is always motivated by the desire to convert what belongs to the public as its own private property. For this reason, any conflict between imperialism and members of the local capitalist class on privatisation and liberalisation can never be a principle conflict. The neo-colonial bourgeoisie in Nigeria and elsewhere see that they have no chance to compete successfully with imperialism. This explains why they do not seriously invest in production. Instead, they engage mainly in trading, financial speculations as well as looting of public treasury.

Ipso facto, the next four years of Obasanjo's capitalist government and those of its counterparts at the state and local government levels will be rapaciously dominated by the usual treasury looting and get-rich mentality of the Nigeria's neo-colonial bourgeois. Needless to stress, the counter-productive measures of privatisation and liberalisation will only worsen a very complicated situation. In a situation where massive number of jobs need to be created, these policies will only yield massive job losses. In a situation where everybody should be given affordable, qualitative education so that the overall cultural standard of the society can be raised, privatisation and liberalisation policies will only provide education to only the very few that can pay.

On an international scale, there exists presently in the universe the resources and technical capacity to provide qualitative food, housing, health care, education, telecommunications, transportation, water, electricity, etc, to every person on earth without any adverse effects on the other earth's habitats and the entire nature. However, the attainment of this end will remain a pipe dream under capitalism, especially under its neo-colonial version.

This explains why an oil producing country like Nigeria has been unable to guarantee stable supply of affordable oil products for its own internal use. The country has four refineries all of which are permanently not working or working at far below capacity. This, if it should be said, is in the best spirit of liberalisation. Now, Nigeria uses its hard earned, inadequate foreign exchange to import, at exorbitant prices, refined petrol, diesel, kerosene, gas, etc, all by-products of crude oil, from foreign capitalist corporations that are better placed to engage in processing of crude oil, while Nigeria remains a mere primary producer and exporter of crude oil.

This vicious circle will substantially remain regardless of whether the refineries are run as a joint venture between oil corporations and members of the local capitalist class or fully privatised i.e. sold to foreign business concern or local business concern backed by a foreign business concern.

On paper, Nigeria should be a very rich country. It has stupendous oil and gas reserves. It has extensive and fertile agricultural lands across the country, aside from several other resources such as coal, rubber, steel, bitumen, etc. It is endowed with abundant water resources. On top of all this, it has a population of over 120 million people. Thus it has the potential to provide for the basic needs of its citizens. Instead, the overwhelming majority of Nigerians, particularly the working masses remain in stone-age barbaric conditions as the country remains extremely backward in all key areas of civilisation such as provisions of food, water, health care, education, electricity, telecommunications, transportation, environmental protection, etc.

The authors of privatisation and liberalisation however, say that these precisely are what their policies intend to eradicate. But as has been demonstrated above, the exact opposite result the deepening of the barbaric conditions of both the masses and the economy is what will be achieved. In the first instance, the demand for privatisation and liberalisation by imperialism and its multi-national corporations was never based on the need to help develop local industries and capacities as often falsely stated but rather as a measure imposed by the dictate and demand of their own economic survival against their competitors internationally. Thus, the real development of any aspect of the local economy through privatisation and liberalisation can only be an accidental occurrence and, certainly, of a temporary character.

Right now, there is a strong bid to increase Nigeria's OPEC oil quota. Ordinarily, this prospect should bring more income into the economy. This however, is not guaranteed. One, the prevailing world economic climate does not offer a cheerful basis to assume that more oil sales will actually mean more money. The sales volume for instance, may increase but owing to slow down or sluggish performance in the world economy, there could be actual decline in revenues. In the aftermath of the defeat of the Iraqi army and the consequent practical take over of the Iraqi oil, this is a possibility that cannot be dismissed, at least in the short term. Even if, in the short run, more oil sales bring more money to Nigeria, this, as usual, will be mostly looted by the parasitic members of the local capitalist class together with their international capitalist contractors such as Julius Berger, Strabag, etc. It would be stashed away in foreign banks or invested in speculative purchases of privatised public companies and goods that have potential for fat, immediate profits.

In any event, a substantial development of the economy in the immediate and long-term basis is ruled out under the prevailing global capitalist stranglehold of the world economy and the economies of neo-colonial countries in particular. The coming years therefore can be nothing but grim for the masses. Right now, the cost of education is growing higher at all levels from nursery to the highest level. To underline the fact that no succour will come to the masses on this respect, the Obasanjo regime has deliberately refused to make any concession to the Academic Staff Union of Universities (ASUU) that went on an industrial strike action for over five months, which totally paralysed the university system. Simultaneously, the regime as at the time of writing, is poised, once again, to increase the prices of petroleum products, with all the attendant inflationary effects on all goods and services.

Meanwhile, the virtual backwardness and the historic decay of social infrastructural facilities and services such as water, electricity, roads, housing, etc represent a veritable obstacle towards any worthwhile investments and development of profitable ventures in the real sector of the economy. Therefore, to maintain its obscene and false life styles, the capitalist ruling class more and more will of necessity be compelled to shift the burden of its own economic failure and crisis unto the already over burdened back of the masses.

There will naturally be a fight back to these attacks by the working masses. The capitalist ruling class itself is very much aware of this fact. This is why none of the members of the capitalist class, in ANPP and AD, for instance, could seriously and consistently fight the Obasanjo-led PDP, despite overwhelming evidence of riggings and manipulations carried out to ensure "victory" for the PDP at the polls. Severally and collectively, these parties share common anti-poor economic views and corrupt practices. Hence their refusal to pursue the struggle against PDP's stolen mandate to its logical conclusion, lest they expose themselves to the masses as birds of the same feathers which should be plucked.

At this juncture, certain questions thus begged to be poised and answered. One, does the unanimous decision of most members of the capitalist class locally and internationally to accept the PDP stolen mandate now bring the much talked about peace and political stability? Two, will the next election (if any) be freer and fairer? What in general will be prospects for the democratic rights of the working people say in the next four years?

Chapter One: Background

Chapter Two: The 2003 Elections

Chapter Three: The Four Years Of Civil Rule

Chapter Four Political Perspectives

Chapter Five: Nationality Question

Chapter Six: A Working Class Solution Needed

Chapter Seven: Deregulation And Fuel Price Hike

Appendix: General Strike Against Fuel Price Rises The Lesson For The Working Masses